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 December 31, 2018June 30, 2019
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.,3151 Briarpark Drive,
4th FloorSuite 700
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)  
       
Securities registered pursuant to Section 12(b) of the Act:
 Title of each classTrading symbol(s)Symbol(s)Name of each exchange on which registered 
 Common Stock ($.01 par value)NoneN/ANone
None(1)
_______
(1) Prior to May 13, 2019, the registrant’s common stock was traded on the New York Stock Exchange.

 
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 every Interactive Data File required to be submitted 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 such files).    Yes  þ   No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o
Smaller reporting company o
Emerging growth company o
     
 
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 by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o  Yes    þ  No
Indicate by check mark whether the number shares outstanding of eachregistrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the issuer’s classesSecurities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
þ  Yes    o  No
Pursuant to an Amended Joint Plan of Reorganization (as modified, the “Plan”), Bristow Group Inc.’s existing common stock, par value $0.01 (the “Existing Common Stock”) was cancelled as of October 31, 2019. On October 31, 2019, Bristow Group Inc. issued common stock, par value $0.0001 (the “New Common Stock”), and preferred stock, par value $0.0001 (the “New Preferred Stock”), under the Plan pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended, under Section 1145 of Chapter 11 of Title 11 of the United States Code and Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder. As of November 30, 2019, there were 11,235,535 shares of New Common Stock as of June 14, 2019.
35,918,916outstanding and 6,824,582 shares of CommonNew Preferred Stock $.01 par valueoutstanding.
 


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
57
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
9387
Item 4.
Controls and Procedures
9387
PART II
Item 1.
Legal Proceedings
9590
Item 1A.
Risk Factors
9590
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
10190
Item 3.
Defaults Upon Senior Securities
10190
Item 4.
Mine Safety Disclosures
10190
Item 5.
Other Information
10190
Item 6.
Exhibits
10291
Signatures
10494

PART I — FINANCIAL INFORMATION
 
Item 1.     Financial Statements.

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
            
 
(Unaudited)
(In thousands, except per share amounts)
 
(Unaudited)
(In thousands, except per share amounts)
Revenue:            
Operating revenue from non-affiliates $303,206
 $328,944
 $963,252
 $991,655
 $304,130
 $338,466
Operating revenue from affiliates 13,885
 16,584
 39,537
 51,594
 12,446
 11,295
Reimbursable revenue from non-affiliates 14,238
 15,207
 47,091
 43,271
 16,600
 16,907
 331,329
 360,735
 1,049,880
 1,086,520
 333,176
 366,668
Operating expense:            
Direct cost 262,039
 271,894
 819,307
 842,216
 257,759
 280,051
Reimbursable expense 13,862
 14,725
 44,960
 42,365
 16,134
 15,904
Prepetition restructuring charges 13,476
 —
Depreciation and amortization 30,615
 31,682
 92,045
 94,119
 31,339
 30,941
General and administrative 40,742
 43,366
 119,682
 138,695
 34,770
 40,101
 347,258
 361,667
 1,075,994
 1,117,395
 353,478
 366,997
            
Loss on impairment —
 —
 (117,220) (1,192)
Loss on disposal of assets (16,015) (4,591) (18,986) (12,418) (3,787) (1,678)
Earnings (losses) from unconsolidated affiliates, net 780
 1,996
 (2,333) 3,394
Earnings from unconsolidated affiliates, net of losses 2,347
 (1,547)
Operating loss (31,164) (3,527) (164,653) (41,091) (21,742) (3,554)
            
Interest expense, net (27,113) (19,093) (80,690) (53,677) (26,321) (27,144)
Other income (expense), net (3,660) (736) (10,814) 235
Loss before benefit (provision) for income taxes (61,937) (23,356) (256,157) (94,533)
Benefit (provision) for income taxes (23,764) 13,419
 (5,258) (2,546)
Reorganization items (76,356) —
Loss on sale of subsidiaries (56,303) —
Other expense, net (3,873) (3,950)
Loss before benefit for income taxes (184,595) (34,648)
Benefit for income taxes 15,507
 2,851
Net loss (85,701) (9,937) (261,415) (97,079) (169,088) (31,797)
Net (income) loss attributable to noncontrolling interests (243) 1,664
 (827) 2,322
Net income attributable to noncontrolling interests (158) (67)
Net loss attributable to Bristow Group $(85,944) $(8,273) $(262,242) $(94,757) $(169,246) $(31,864)
            
Loss per common share:            
Basic $(2.40) $(0.23) $(7.34) $(2.69) $(4.71) $(0.89)
Diluted $(2.40) $(0.23) $(7.34) $(2.69) $(4.71) $(0.89)
The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
            
 
(Unaudited)
(In thousands)
 
(Unaudited)
(In thousands)
Net loss $(85,701) $(9,937) $(261,415) $(97,079) $(169,088) $(31,797)
Other comprehensive loss:            
Currency translation adjustments (6,462) (57) (43,462) 20,394
 16,899
 (29,033)
Pension liability adjustment, net of tax benefit of $0.5 million, zero, $0.5 million, and zero, respectively (2,410) —
 (2,410) —
Unrealized gain (loss) on cash flow hedges, net of tax benefit (provision) of zero, zero, $0.2 million and zero, respectively (5) —
 1,245
 —
Unrealized gain on cash flow hedges, net of tax benefit of zero and $0.3 million, respectively 474
 1,348
Total comprehensive loss (94,578) (9,994) (306,042) (76,685) (151,715) (59,482)
            
Net (income) loss attributable to noncontrolling interests (243) 1,664
 (827) 2,322
Net income attributable to noncontrolling interests (158) (67)
Currency translation adjustments attributable to noncontrolling interests (52) (17) (223) 530
 (11) (139)
Total comprehensive (income) loss attributable to noncontrolling interests (295) 1,647
 (1,050) 2,852
Total comprehensive income attributable to noncontrolling interests (169) (206)
Total comprehensive loss attributable to Bristow Group $(94,873) $(8,347) $(307,092) $(73,833) $(151,884) $(59,688)
The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 December 31, 
 2018		 March 31,  
 2018		 June 30,
 2019		 March 31,
 2019
 (Unaudited)   (Unaudited)
 (In thousands) (In thousands)
ASSETS
Current assets:        
Cash and cash equivalents $231,326
 $380,223
 $172,534
 $178,055
Restricted cash 3,234
 —
Accounts receivable from non-affiliates 204,641
 233,386
 213,515
 203,631
Accounts receivable from affiliates 13,186
 13,594
 13,558
 13,160
Inventories 115,254
 129,614
 114,997
 121,308
Assets held for sale 22,485
 30,348
 1,675
 5,350
Prepaid expenses and other current assets 48,646
 47,234
 42,803
 44,009
Total current assets 635,538
 834,399
 562,316
 565,513
Investment in unconsolidated affiliates 113,974
 126,170
 120,494
 118,203
Property and equipment – at cost:        
Land and buildings 240,201
 250,040
 241,737
 244,273
Aircraft and equipment 2,479,543
 2,511,131
 2,427,435
 2,497,622
 2,719,744
 2,761,171
 2,669,172
 2,741,895
Less – Accumulated depreciation and amortization (872,201) (693,151) (894,350) (907,715)
 1,847,543
 2,068,020
 1,774,822
 1,834,180
Right-of-use assets 187,961
 —
Goodwill 18,271
 19,907
 18,212
 18,436
Other assets 116,418
 116,506
 104,150
 116,267
Total assets $2,731,744
 $3,165,002
 $2,767,955
 $2,652,599
        
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:        
Accounts payable $91,916
 $101,270
 $85,894
 $99,573
Accrued wages, benefits and related taxes 52,073
 67,334
 34,834
 48,151
Income taxes payable 5,169
 8,453
 11,762
 3,646
Other accrued taxes 5,628
 7,378
 6,932
 6,729
Deferred revenue 9,966
 15,833
 7,917
 11,932
Accrued maintenance and repairs 26,620
 28,555
 25,788
 24,337
Accrued interest 18,317
 16,345
 11,201
 17,174
Current portion of operating lease liabilities 90,946
 —
Other accrued liabilities 38,692
 65,978
 32,773
 38,679
Short-term borrowings and current maturities of long-term debt 1,421,050
 1,475,438
 892,092
 1,418,630
Total current liabilities 1,669,431
 1,786,584
 1,200,139
 1,668,851
Long-term debt, less current maturities 9,174
 11,096
 75,789
 8,223
Accrued pension liabilities 28,036
 37,034
 22,472
 25,726
Other liabilities and deferred credits 28,573
 36,952
 8,080
 26,229
Deferred taxes 119,057
 115,192
 84,075
 111,203
Long-term operating lease liabilities 103,567
 —
Total liabilities not subject to compromise 1,494,122
 1,840,232
Liabilities subject to compromise 617,991
 —
Total liabilities 2,112,113
 1,840,232
Commitments and contingencies (Note 8) 

 
 

 
Stockholders’ investment:        
Common stock, $.01 par value, authorized 90,000,000; outstanding: 35,798,185 as of December 31, 2018 and 35,526,625 as of March 31, 2018 (exclusive of 1,291,441 treasury shares) 385
 382
Common stock, $.01 par value, authorized 90,000,000; outstanding: 35,918,916 as of June 30 and March 31 (exclusive of 1,291,441 treasury shares) 386
 386
Additional paid-in capital 860,745
 852,565
 862,844
 862,020
Retained earnings 524,846
 788,834
 286,352
 455,598
Accumulated other comprehensive loss (330,944) (286,094) (310,627) (327,989)
Treasury shares, at cost (2,756,419 shares) (184,796) (184,796) (184,796) (184,796)
Total Bristow Group stockholders’ investment 870,236
 1,170,891
 654,159
 805,219
Noncontrolling interests 7,237
 7,253
 1,683
 7,148
Total stockholders’ investment 877,473
 1,178,144
 655,842
 812,367
Total liabilities and stockholders’ investment $2,731,744
 $3,165,002
 $2,767,955
 $2,652,599
The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2019 2018
        
 
(Unaudited)
(In thousands)
 
(Unaudited)
(In thousands)
Cash flows from operating activities:        
Net loss $(261,415) $(97,079) $(169,088) $(31,797)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization 92,045
 94,119
 31,339
 30,941
Deferred income taxes (5,848) (14,665) (19,115) (6,776)
Write-off of deferred financing fees —
 1,138
 2,625
 —
Discount amortization on long-term debt 4,713
 343
 850
 1,510
Reorganization items 60,853
 —
Loss on disposal of assets 18,986
 12,418
 3,787
 1,678
Loss on impairment 117,220
 1,192
Loss on sale of subsidiaries 56,303
—
—
Deferral of lease payments 3,967
 2,423
 285
 1,568
Stock-based compensation 5,651
 8,776
 824
 1,692
Equity in earnings from unconsolidated affiliates less than (in excess of) dividends received 2,518
 (3,185) (697) 2,957
Increase (decrease) in cash resulting from changes in:        
Accounts receivable 16,063
 (3,785) (19,856) (19,833)
Inventories (3,065) (4,618) 968
 (1,496)
Prepaid expenses and other assets (1,571) 10,250
 (4,720) (1,729)
Accounts payable (1,956) (14,540) 2,621
 3,385
Accrued liabilities (47,390) (5,528) 26,394
 (21,845)
Other liabilities and deferred credits (8,820) 3,434
 (10,135) (4,374)
Net cash used in operating activities (68,902) (9,307) (36,762) (44,119)
Cash flows from investing activities:        
Capital expenditures (33,711) (36,441) (7,439) (8,895)
Proceeds from asset dispositions 9,093
 48,547
 3,204
 7,774
Proceeds from OEM cost recoveries —
 94,463
Net cash provided by (used in) investing activities (24,618) 106,569
Cash transferred in sale of subsidiaries, net of cash received (22,878) —
Net cash used in investing activities (27,113) (1,121)
Cash flows from financing activities:        
Proceeds from borrowings 387
 548,768
 75,585
 387
Debt issuance costs (2,599) (11,653) (10,016) (2,378)
Repayment of debt (49,116) (609,667) (5,821) (14,194)
Purchase of 4½% Convertible Senior Notes call option —
 (40,393)
Proceeds from issuance of warrants —
 30,259
Partial prepayment of put/call obligation (40) (36) —
 (14)
Dividends paid to noncontrolling interest (580) —
Common stock dividends paid —
 (2,465)
Issuance of common stock 2,830
 —
 —
 2,830
Repurchases for tax withholdings on vesting of equity awards (1,505) (591) —
 (1,484)
Net cash used in financing activities (50,623) (85,778)
Effect of exchange rate changes on cash and cash equivalents (4,754) 9,708
Net increase (decrease) in cash and cash equivalents (148,897) 21,192
Cash and cash equivalents at beginning of period 380,223
 96,656
Cash and cash equivalents at end of period $231,326
 $117,848
Net cash provided by (used in) financing activities 59,748
 (14,853)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,840
 (3,580)
Net decrease in cash, cash equivalents and restricted cash (2,287) (63,673)
Cash, cash equivalents and restricted cash at beginning of period 178,055
 380,223
Cash, cash equivalents and restricted cash at end of period $175,768
 $316,550
Cash paid during the period for:        
Interest $73,604
 $69,896
 $9,939
 $24,628
Income taxes $13,500
 $20,440
 $4,413
 $5,648
The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Investment
(Unaudited)
(In thousands, except share amounts)
 Total Bristow Group Stockholders’ Investment    
 
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, 2018$382
 35,526,625
 $852,565
 $788,834
 $(286,094) $(184,796) $7,253
 $1,178,144
Adoption of new accounting guidance (1)
—
 —
 —
 (1,746) —
 —
 —
 (1,746)
Issuance of common stock3
 238,650
 4,261
 —
 —
 —
 —
 4,264
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 (14) (14)
Currency translation adjustments—
 —
 —
 —
 —
 —
 (139) (139)
Net income (loss)—
 —
 —
 (32,108) —
 —
 67
 (32,041)
Other comprehensive loss—
 —
 —
 —
 (27,824) —
 —
 (27,824)
June 30, 2018385
 35,765,275
 856,826
 754,980
 (313,918) (184,796) 7,167
 1,120,644
Issuance of common stock—
 32,910
 1,983
 —
 —
 —
 —
 1,983
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 (13) (13)
Dividends paid to noncontrolling interest—
 —
 —
 —
 —
 —
 (580) (580)
Currency translation adjustments—
 —
 —
 —
 —
 —
 (32) (32)
Net income (loss)—
 —
 —
 (144,190) —
 —
 517
 (143,673)
Other comprehensive loss—
 —
 —
 —
 (8,097) —
 —
 (8,097)
September 30, 2018385
 35,798,185
 858,809
 610,790
 (322,015) (184,796) 7,059
 970,232
Issuance of common stock—
 —
 1,936
 —
 —
 —
 —
 1,936
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 (13) (13)
Currency translation adjustments—
 —
 —
 —
 —
 —
 (52) (52)
Net income (loss)—
 —
 —
 (85,944) —
 —
 243
 (85,701)
Other comprehensive loss—
 —
 —
 —
 (8,929) —
 —
 (8,929)
December 31, 2018$385
 35,798,185
 $860,745
 $524,846
 $(330,944) $(184,796) $7,237
 $877,473
 Total Bristow Group Stockholders’ Investment    
 
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, 2019$386
 35,918,916
 $862,020
 $455,598
 $(327,989) $(184,796) $7,148
 $812,367
Issuance of common stock—
 —
 824
 —
 —
 —
 —
 824
Sale of subsidiaries—
 —
 —
 —
 —
 —
 (5,612) (5,612)
Currency translation adjustments—
 —
 —
 —
 —
 —
 (11) (11)
Net income (loss)—
 —
 —
 (169,246) —
 —
 158
 (169,088)
Other comprehensive income—
 —
 —
 —
 17,362
 —
 —
 17,362
June 30, 2019$386
 35,918,916
 $862,844
 $286,352
 $(310,627) $(184,796) $1,683
 $655,842

 Total Bristow Group Stockholders’ Investment    
 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, 2018$382
 35,526,625
 $852,565
 $794,191
 $(286,094) $(184,796) $7,253
 $1,183,501
Adoption of new accounting guidance (1)
—
 —
 —
 (1,746) —
 —
 —
 (1,746)
Issuance of common stock3
 238,650
 4,261
 —
 —
 —
 —
 4,264
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 (14) (14)
Currency translation adjustments—
 —
 —
 —
 —
 —
 (139) (139)
Net income (loss)—
 —
 —
 (31,864) —
 —
 67
 (31,797)
Other comprehensive loss—
 —
 —
 —
 (27,824) —
 —
 (27,824)
June 30, 2018$385
 35,765,275
 $856,826
 $760,581
 $(313,918) $(184,796) $7,167
 $1,126,245
_____________ 
(1) 
Cumulative-effect adjustment upon the adoption of new accounting guidance related to current and deferred income taxes for intra-entity transfer of assets other than inventory. For further details, see Note 1.


BRISTOW GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Investment— (Continued)
(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, 2017$6,886
 $379
 35,213,991
 $809,995
 $986,957
 $(328,277) $(184,796) $5,025
 $1,289,283
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 income—
 —
 —
 —
 —
 10,070
 —
 —
 10,070
June 30, 20176,349
 380
 35,303,840
 813,857
 929,217
 (318,207) (184,796) 5,390
 1,245,841
Issuance of common stock—
 1
 57,696
 2,133
 —
 —
 —
 —
 2,134
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (11) (11)
Currency translation adjustments194
 —
 —
 —
 —
 —
 —
 43
 43
Net income (loss)(541) —
 —
 —
 (31,209) —
 —
 353
 (30,856)
Other comprehensive income—
 —
 —
 —
 —
 10,928
 —
 —
 10,928
September 30, 20176,002
 381
 35,361,536
 815,990
 898,008
 (307,279) (184,796) 5,775
 1,228,079
Issuance of common stock—
 —
 13,844
 2,191
 —
 —
 —
 —
 2,191
Equity component 4½% Convertible Senior Notes issued—
 —
 —
 36,778
 —
 —
 —
 —
 36,778
Purchase of 4½% Convertible Senior Notes call option—
 —
 —
 (40,393) —
 —
 —
 —
 (40,393)
Proceeds from issuance of warrants—
 —
 —
 30,259
 —
 —
 —
 —
 30,259
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (13) (13)
Currency translation adjustments37
 —
 —
 —
 —
 —
 —
 (54) (54)
Net income (loss)(2,180) —
 —
 —
 (8,273) —
 —
 516
 (7,757)
Other comprehensive loss—
 —
 —
 —
 —
 (74) —
 —
 (74)
December 31, 2017$3,859
 $381

35,375,380
 $844,825
 $889,735
 $(307,353) $(184,796) $6,224
 $1,249,016

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

65
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) 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, 20192020 is referred to as “fiscal year 20192020”. Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”(the “SEC”), 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 ourthe Company’s Annual Report on Form 10-K for the fiscal year 2018 Annual Reportended March 31, 2019 (the “fiscal year 20182019 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 December 31, 2018June 30, 2019, the consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2018June 30, 2019 and 20172018, the consolidated cash flows for the ninethree months ended December 31,June 30, 2019 and 2018, and 2017, and the consolidated statements of changes in stockholders’ investment for the three and nine months ended December 31,June 30, 2019 and 2018.
Bankruptcy and Restructuring Support Agreement and Going Concern
The Company’s liquidity outlook has recently changed resulting in substantial doubt about the Company’s ability to continue as a going concern. On May 11, 2019 (the “Petition Date”), Bristow Group Inc. and certain of its subsidiariessubsidiaries: BHNA Holdings Inc., Bristow Alaska Inc., Bristow Helicopters Inc., Bristow U.S. Leasing LLC, Bristow U.S. LLC, BriLog Leasing Ltd. and Bristow Equipment Leasing Ltd. (together, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Debtors’ Chapter 11 Cases arewere jointly administered under the caption In re: Bristow Group Inc., et al., Main Case No. 19-32713. TheDuring the pendency of the Chapter 11 Cases, the Debtors continuecontinued to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
On May 10, 2019, we entered into a restructuring support agreement (the “RSA”“Initial RSA”) with (i) certain holders (the “Supporting Secured Noteholders”) of the Company’s 8.75% Senior Secured Notes due 2023 (the “8.75% Senior Secured Notes”) and (ii) the guarantors of the 8.75% Senior Secured Notes (the “Secured Guarantors”), to support a restructuring of the Company (the “Restructuring”). On June 27, 2019, we entered into an amendment and restatement of the Initial RSA and on July 24, 2019, we entered into a second amendment and restatement thereof (as so amended and restated, the “Second Amended RSA”), with a group of holders representing approximately 99.3% of the 8.75% Senior Secured Notes (the “Supporting Secured Noteholders”), the Secured Guarantors and a group of holders representing approximately 73.6% (together with the Supporting Secured Noteholders, the “Supporting Noteholders”) of the 6¼% Senior Notes due 2022 (the “6¼% Senior Notes”) and the 4½% Convertible Senior Notes due 2023 (the “4½% Convertible Senior Notes”) combined (together, the “Unsecured Notes”). The Second Amended RSA contemplated implementation of the Restructuring on the amended terms set forth in the term sheet contained in an exhibit to the Second Amended RSA (the “Restructuring Term Sheet”). The RSA contemplates the filing of the Chapter 11 Cases to implement the Restructuring pursuant to a Chapter 11 plan of reorganization (the “Plan”) and the various related transactions set forth in or contemplated by the Restructuring Term Sheet, the term sheet for the DIP Term SheetCredit Agreement (as defined herein) and the other restructuring documents attached to the Second Amended RSA.
On August 1, 2019, the Debtors filed with the Bankruptcy Court the Joint Chapter 11 Plan of Reorganization of Bristow Group Inc. and its Debtor Affiliates and the Disclosure Statement related thereto. On August 20, 2019, the Debtors filed with the Bankruptcy Court the Amended Joint Chapter 11 Plan of Reorganization of Bristow Group Inc. and its Debtor Affiliates (as further modified on August 22, 2019, the “Amended Plan”) and the Disclosure Statement related thereto (as further modified on August 22, 2019, the “Amended Disclosure Statement”). On October 4, 2019, the Bankruptcy Court approved the Amended Disclosure Statement and indicated that it would confirm the Amended Plan. On October 8, 2019, the Bankruptcy Court entered an order approving the Amended Disclosure Statement and confirming the Amended Plan.
The RSA contains certain covenants on the part of eacheffective date of the Company and the Supporting Secured Noteholders, including limitationsAmended Plan (the “Effective Date”) occurred on the Supporting Secured Noteholders’ ability to pursue alternative transactions, commitments by the Supporting Secured Noteholders to vote in favorOctober 31, 2019.

6
Table of the Plan and commitments of the Company and the Supporting Secured Noteholders to negotiate in good faith to finalize the documents and agreements governing the Plan. The RSA also provides for certain conditions to the obligations of the parties and for termination upon the occurrence of certain events, including without limitation, the failure to achieve certain milestones and certain breaches by the parties under the RSA.Contents
The Company expects to continue operations in the normal course during the pendency of the Chapter 11 Cases.BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Bankruptcy Accounting
The condensed consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business and reflect the application of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the filing of the Chapter 11 Cases, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in reorganization items on our condensed consolidated statements of operations. In addition, prepetition unsecured and under-secured obligations that may be impacted by the bankruptcy reorganization process have been classified as liabilities subject to compromise on our condensed consolidated balance sheet as of June 30, 2019. As of June 30, 2019, these liabilities were reported at the amounts expected to be allowed as claims by the Bankruptcy Court, although some were subsequently settled for less. Where there was uncertainty about whether a secured claim would be paid or impaired pursuant to the Chapter 11 Cases, we classified the entire amount of the claim as an outstanding liability subject to compromise as of June 30, 2019. For specific discussion on balances of liabilities subject to compromise and reorganization items, see Note 2.
The accompanying condensed consolidated financial statements do not purport to reflect or provide for the consequences of the Chapter 11 Cases. In particular, the condensed consolidated financial statements do not purport to show: (i) the realizable value of assets on a liquidation basis or their availability to satisfy liabilities; (ii) the full amount of prepetition liabilities that may be allowed for claims or contingencies, or the status and priority thereof; (iii) the effect on stockholders’ investment accounts of any changes that may be made to our capitalization; or (iv) the effect on operations of any changes that may be made to our business.
Going Concern
The significant risks and uncertainties related to the Chapter 11 Cases raise substantial doubt about the Company’s ability to continue as a going concern. In addition, each of the commencement of the Chapter 11 Cases and the delivery of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, as amended by the amendment thereto (the “Amended 10-K”), with a going concern qualification or explanation constituted an event of default under certain of our secured equipment financings, giving those secured equipment lenders the right to accelerate repayment of the applicable debt, subject to Chapter 11 protections, and triggering cross-default and/or cross-acceleration provisions in substantially all of our other debt instruments should that right to accelerate repayment be exercised. The condensed consolidated financial statements included herein have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of substantial doubt as to the Company’s ability to continue as a going concern.concern uncertainty.


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


Loss on Impairment
Loss on impairment includes the following (in thousands):
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,
 2018 2017 2018 2017
Impairment of inventories$—
 $—
 $9,276
 $1,192
Impairment of property and equipment (1)
—
 —
 104,939
 —
Impairment of intangible assets—
 —
 3,005
 —
 $—
 $—
 $117,220
 $1,192
_____________ 
(1)
Includes impairment of $87.5 million for H225 aircraft and $17.5 million for Eastern Airways International Limited (“Eastern Airways”) aircraft and equipment.
Prior to the three months ended September 30, 2018, we had been actively marketing our H225 aircraft with the expectation of a substantial return of the aircraft to oil and gas service. However, market conditions and more significantly, the recent development of alternative opportunities outside of our traditional oil and gas service for our H225 aircraft and our decision to pursue those opportunities during the three months ended September 30, 2018, indicated a substantial return to oil and gas service within our operations was not likely. Therefore, during the three months ended September 30, 2018, we concluded that cash flows associated with our H225 helicopters were largely independent from the cash flows associated with the remainder of our oil and gas related property and equipment (“oil and gas asset group”) and should be tested for impairment as a stand-alone asset group. In accordance with Accounting Standard Codification (“ASC”) 360-10, we performed an impairment analysis for our stand-alone H225 asset group and determined that the forecasted cash flows over the remaining useful life of the asset group were insufficient to recover the carrying value of the asset group. We determined the fair value of the H225 asset group to be $116.4 million and recorded an impairment charge of $87.5 million. In addition, we performed a review of our H225 aircraft related inventory and recorded an impairment charge of $8.9 million to record the inventory at the lower of cost or net realizable value. These impairments are included in our Corporate and other region in Note 12. The inputs used in our fair value estimates were from Level 3 of the fair value hierarchy discussed in Note 6.
  The removal of the H225 aircraft from our oil and gas asset group and changes in our forecasted cash flows for that asset group during the three months ended September 30, 2018 indicated the need for the performance of a recoverability analysis of the oil and gas asset group. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of our oil and gas asset group, which largely consists of our oil and gas related held for use aircraft. The determination of estimated future undiscounted cash flows required us to use significant unobservable inputs, including assumptions related to projected demand for services, rates and anticipated aircraft disposal values. We determined that the estimated future undiscounted cash flows exceeded the carrying value for our oil and gas asset group as of September 30, 2018, and no impairment was recorded on these assets. Future declines in operating performance, aircraft disposal values, anticipated business outlook, or projected aircraft deliveries currently accounted for as construction in progress may reduce our estimated future undiscounted cash flows and result in impairment of our oil and gas asset group.
  In addition, changes in our forecasted cash flows during the three months ended September 30, 2018 indicated the need for the performance of a recoverability analysis for the airline related assets of Eastern Airways. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of the airline related assets of Eastern Airways for potential impairment. The determination of estimated future undiscounted cash flows required us to use significant unobservable inputs, including assumptions related to projected demand for services and rates. We determined that the estimated future undiscounted cash flows were below the carrying value for our airline related assets of Eastern Airways as of September 30, 2018.  We determined the fair value of the asset group to be $20.5 million and recorded an impairment charge of $17.5 million.  As part of our impairment review of the airline assets of Eastern Airways, we also recorded impairments of $3.0 million related to the remaining intangible assets and $0.3 million related to inventory. These impairments are included in our Europe and Caspian region in Note 12. The inputs used in our fair value estimates were from Level 3 of the fair value hierarchy discussed in Note 6.
No further triggers to review our assets for impairment exist as of December 31, 2018.
During the nine months ended December 31, 2017, as a result of changes in expected future utilization of aircraft within our training fleet we recorded a $1.2 million charge to impair inventory used on our training fleet, which is included in loss on

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


impairment on our condensed consolidated statement of operations. This impairment is included in our Corporate and other region in Note 12.
Foreign Currency
During the three and nine months ended December 31,June 30, 2019 and 2018, and 2017, 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 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
One British pound sterling into U.S. dollars            
High 1.32
 1.35
 1.43
 1.36
 1.32
 1.43
Average 1.29
 1.33
 1.32
 1.31
 1.29
 1.36
Low 1.25
 1.31
 1.25
 1.24
 1.25
 1.31
At period-end 1.27
 1.35
 1.27
 1.35
 1.27
 1.32
One euro into U.S. dollars            
High 1.16
 1.20
 1.24
 1.20
 1.14
 1.24
Average 1.14
 1.18
 1.17
 1.15
 1.12
 1.19
Low 1.13
 1.16
 1.13
 1.06
 1.11
 1.16
At period-end 1.14
 1.20
 1.14
 1.20
 1.14
 1.17
One Australian dollar into U.S. dollars            
High 0.74
 0.79
 0.78
 0.81
 0.72
 0.78
Average 0.72
 0.77
 0.74
 0.77
 0.70
 0.76
Low 0.70
 0.75
 0.70
 0.74
 0.69
 0.73
At period-end 0.70
 0.78
 0.70
 0.78
 0.70
 0.74
One Norwegian kroner into U.S. dollars            
High 0.1227
 0.1269
 0.1290
 0.1294
 0.1179
 0.1290
Average 0.1183
 0.1225
 0.1215
 0.1219
 0.1157
 0.1247
Low 0.1136
 0.1193
 0.1136
 0.1152
 0.1139
 0.1209
At period-end 0.1155
 0.1223
 0.1155
 0.1223
 0.1173
 0.1227
One Nigerian naira into U.S. dollars            
High 0.0028
 0.0028
 0.0028
 0.0033
 0.0028
 0.0028
Average 0.0027
 0.0028
 0.0028
 0.0030
 0.0028
 0.0028
Low 0.0027
 0.0028
 0.0027
 0.0027
 0.0028
 0.0028
At period-end 0.0028
 0.0028
 0.0028
 0.0028
 0.0028
 0.0028
_____________ 
Source: FactSet
Other income (expense), net, in our condensed consolidated statements of operations includes foreign currency transaction losses of $2.8$2.9 million and gains of $0.4$3.0 million for the three months ended December 31,June 30, 2019 and 2018, and 2017, respectively, and foreign currency transaction losses of $8.1 million and gains of $1.2 million for the nine months ended December 31, 2018 and 2017, 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 most significant items revalued are denominated in U.S. dollars on entities with British pound sterling Australian dollar and Nigerian naira functional currencies and denominated in British pound sterling on entities with U.S. dollar functional currencies, with transaction gains or losses primarily resulting from the strengthening or weakening of the U.S. dollar versus those other currencies.

98
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Our earnings (losses) 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 December 31,June 30, 2019 and 2018, and 2017, earnings (losses) from unconsolidated affiliates, net of losses, decreased by $0.2$0.1 million and $0.8 million, respectively, and during the nine months ended December 31, 2018 and 2017, earnings (losses) from unconsolidated affiliates, net decreased by $3.8 million and $1.6$2.6 million, 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 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
One Brazilian real into U.S. dollars            
High 0.2726
 0.3198
 0.3020
 0.3244
 0.2620
 0.3020
Average 0.2628
 0.3076
 0.2647
 0.3117
 0.2552
 0.2778
Low 0.2482
 0.3004
 0.2390
 0.2995
 0.2434
 0.2571
At period-end 0.2580
 0.3015
 0.2580
 0.3015
 0.2609
 0.2599
_____________ 
Source: FactSet
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 
 December 31, 2018		 Nine Months Ended 
 December 31, 2018
Revenue $(7,844) $(2,652)
Operating expense 10,452
 10,178
Earnings (losses) from unconsolidated affiliates, net 555
 (2,163)
Non-operating expense (3,153) (9,335)
Loss before provision for income taxes 10
 (3,972)
Benefit for income taxes 144
 1,338
Net loss 154
 (2,634)
Cumulative translation adjustment (6,514) (43,685)
Total stockholders’ investment $(6,360) $(46,319)
  Three Months Ended
 June 30, 2019
Revenue $(12,603)
Operating expense 10,830
Earnings from unconsolidated affiliates, net of losses 2,478
Other income (expense), net 99
Income before provision for income taxes 804
Provision for income taxes (630)
Net income 174
Cumulative translation adjustment 16,888
Total stockholders’ investment $17,062
Interest Expense, Net
During the three and nine months ended December 31,June 30, 2019 and 2018, and 2017, interest expense, net consisted of the following (in thousands):
Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
2018 2017 2018 2017 2019 2018
Interest income$2,269
 $144
 $3,677
 $512
 $387
 $179
Interest expense(29,382) (19,237) (84,367) (54,189) (26,708) (27,323)
Interest expense, net$(27,113) $(19,093) $(80,690) $(53,677) $(26,321) $(27,144)

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


Restricted Cash
As of June 30, 2019, restricted cash consisted of $3.2 million related to Norway withholding taxes.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.
  June 30,
 2019		 March 31,
 2019
     
  (In thousands)
Reconciliation of cash, cash equivalents and restricted cash as shown in the statements of cash flows:  
Cash and cash equivalents $172,534
 $178,055
Restricted cash 3,234
 —
Total cash, cash equivalents and restricted cash $175,768
 $178,055
Accounts Receivable
As of December 31June 30 and March 31, 2018,2019, the allowance for doubtful accounts for non-affiliates was $0.6$0.8 million and $3.3$1.6 million, respectively. There were no allowances for doubtful accounts related to accounts receivable due from affiliates as of December 31June 30 and March 31, 2018.2019. The allowance for doubtful accounts for non-affiliates as of December 31, 2018 primarily relates to various customers of Eastern Airways. The allowance for doubtful accounts for non-affiliates as ofJune 30, 2019 and March 31, 20182019 primarily relates to amounts due from a customer in Nigeria for which we no longer believed collection was probable. During the nine months ended December 31, 2018, we wrote-off $2.3 million of accounts receivable previously reserved for from this customer as no collection is expected.

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


Australia.
Inventories
As of December 31June 30 and March 31, 2018,2019, inventories were net of allowances of $21.1$19.1 million and $26.0$19.4 million, respectively. As discussed above in Loss on Impairment, we performed a review of our H225 aircraft related inventory and Eastern Airways inventory and recorded impairment charges of $8.9 million and $0.3 million, respectively, to record the inventories at the lower of cost or net realizable value during the nine months ended December 31, 2018. During the nine months ended December 31, 2017, as a result of changes in expected future utilization of aircraft within our training fleet, we recorded a $1.2 million charge to impair inventory used on our training fleet, which is included in loss on impairment on our condensed consolidated statement of operations. These impairment charges are not reflected in the allowances above.
Prepaid Expenses and Other Current Assets
As of December 31June 30 and March 31, 2018,2019, prepaid expenses and other current assets included the short-term portion of contract acquisition and pre-operating costs totaling $9.6 million and $10.8$9.8 million, respectively, related to the search and rescue (“SAR”) contracts in the U.K. and two customer contracts in Norway, which are recoverable under the contracts and will be expensed over the terms of the contracts. For the three months ended December 31,June 30, 2019 and 2018, and 2017, we expensed $2.4 million and $2.8 million, respectively, and for the nine months ended December 31, 2018 and 2017, we expensed $7.6 million and $8.5$2.7 million, respectively, related to these contracts.
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 $18.3$18.2 million and $19.9$18.4 million as of December 31June 30 and March 31, 2018,2019, respectively, related to our Asia Pacific reporting unit was as follows (in thousands):
March 31, 2018 $19,907
Foreign currency translation (1,636)
December 31, 2018 $18,271
Accumulated goodwill impairment of $50.9 million as of both December 31 and March 31, 2018 related to our reporting units were as follows (in thousands):
Europe Caspian$(33,883)
Africa(6,179)
Americas(576)
Corporate and other(10,223)
Total accumulated goodwill impairment$(50,861)


March 31, 2019$18,436
Foreign currency translation(224)
June 30, 2019$18,212

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


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):
 Customer
relationships		 Trade name and trademarks Internally developed software Licenses Total
          
 Gross Carrying Amount
March 31, 2018$12,777
 $4,878
 $1,107
 $755
 $19,517
Foreign currency translation(213) (263) (13) (2) (491)
December 31, 2018$12,564
 $4,615
 $1,094
 $753
 $19,026
          
 Accumulated Amortization
March 31, 2018$(11,372) $(1,213) $(915) $(719) $(14,219)
Impairments—
 (2,933) (72) —
 (3,005)
Amortization expense(89) (142) (107) (34) (372)
December 31, 2018$(11,461) $(4,288) $(1,094) $(753) $(17,596)
          
Weighted average remaining contractual life, in years7.0
 *
 0.0
 0.0
 7.0
_____________ 
*Trade name and trademarks relating to Airnorth were determined to have indefinite useful lives and therefore were not amortized, but instead are tested for impairment on an annual basis.
Future amortization expense of intangible assets for each of the years ending March 31 is as follows (in thousands):
2019$39
2020157
2021157
2022157
2023157
Thereafter436
 $1,103
The Bristow Norway AS and Eastern Airways acquisitions, included in our Europe Caspian region, resulted in intangible assets for customer contracts, customer relationships, trade names and trademarks, internally developed software and licenses. On May 10, 2019, we sold Eastern Airways. The Capiteq Limited, operating under the name Airnorth, acquisition included in our Asia Pacific region, resulted in intangible assets for customer contracts, customer relationships and trade name and trademarks. As discussed above in Loss on Impairment, during the nine months ended December 31, 2018, we recorded an impairment of $3.0 million related to Eastern Airways intangible assets. As of December 31, 2018, Eastern Airways has no remaining intangible assets.
Other Assets
The long-term portion of intangible assets and intangible assets with indefinite lives are included within other assets. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values. The Capiteq Limited, operating under the name Airnorth, acquisition included in our Asia Pacific region, resulted in intangible assets for customer relationships and trade name and trademarks. Intangible assets by type not fully amortized were as follows (in thousands):
 Customer
relationships		 Trade name and trademarks Total
      
 Gross Carrying Amount
March 31, 2019$2,143
 $331
 $2,474
Foreign currency translation(15) (4) (19)
June 30, 2019$2,128
 $327
 $2,455
      
 Accumulated Amortization
March 31, 2019$(1,070) $—
 $(1,070)
Amortization expense(39) —
 (39)
June 30, 2019$(1,109) $—
 $(1,109)
      
Weighted average remaining contractual life, in years6.5
 *
 6.5
_____________ 
*Trade name and trademarks relating to Airnorth were determined to have indefinite useful lives and therefore were not amortized, but instead are tested for impairment on an annual basis.
Future amortization expense of intangible assets for each of the years ending March 31 is as follows (in thousands):
2020$117
2021156
2022156
2023156
2024156
Thereafter605
 $1,346
In addition to the other intangible assets described above, other assets included the long-term portion of contract acquisition and pre-operating costs totaling $38.7$34.0 million and $50.6$37.1 million, respectively, as of December 31June 30 and March 31, 2018,2019, related to the SAR contracts in the U.K. and two customer contracts in Norway, which are recoverable under the contracts and will be expensed over the terms of the contracts.
Property and Equipment
During the three months ended June 30, 2019 and 2018, we made capital expenditures as follows:
  Three Months Ended
 June 30,
  2019
2018
   
Capital expenditures (in thousands):    
Aircraft and equipment $6,688
 $8,337
Land and buildings 751
 558
Total capital expenditures $7,439
 $8,895

1211
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Property and Equipment, Assets Held for Sale and OEM Cost Recoveries
During the three and nine months endedAs of December 31, 2018, we revised the salvage values of certain aircraft to reflect our expectation of future sales values given our disposal plans for those aircraft. We recorded additional depreciation expense of $1.4 million during the three months ended June 30, 2019 and 2017, we took deliveryexpect to record additional depreciation expense of aircraft$1.4 million during the remainder of fiscal year 2020.
The following table presents details on the property and made capital expenditures as follows:equipment sold or disposed of during the three months ended June 30, 2019 and 2018:
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,
 2018
2017 2018
2017
 (In thousands, except for number of aircraft)
Number of aircraft delivered:       
Medium (1)
1
 —
 1
 5
Total aircraft1
 —
 1
 5
Capital expenditures (in thousands):       
Aircraft and equipment (1)(2)
$15,839
 $10,311
 $28,570
 $26,800
Land and buildings570
 1,813
 5,141
 9,641
Total capital expenditures$16,409
 $12,124
 $33,711
 $36,441
  Three Months Ended
 June 30,
  2019 2018
     
  
(In thousands, except for
 number of aircraft)
Number of aircraft sold or disposed of 2
 3
Proceeds from sale or disposal of assets (1)
 $3,204
 $7,774
Loss from sale or disposal of assets (2)
 $3,787
 $1,678
_____________ 
(1)
During the threeIncludes proceeds received for sale of property and nine months ended December 31, 2018, we purchased an aircraft that was not on order that was previously leased.equipment (including aircraft) during each period.
(2)
During the nine months ended December 31, 2017, we spent $2.3 million on progress payments for aircraft to be delivered in future periods. During the three months ended December 31, 2017 and the three and nine months ended December 31, 2018, we made no progress payments for aircraft to be delivered in future periods.
The following table presents details on the aircraft sold or disposed of and impairment charges on assets held for sale and property and equipment during the three and nine months ended December 31, 2018 and 2017:
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,
 2018 2017 2018 2017
        
 (In thousands, except for number of aircraft)
Number of aircraft sold or disposed of—
 5
 3
 11
Proceeds from sale or disposal of assets$631
 $6,303
 $9,093
 $48,547
Loss from sale or disposal of assets (1)
$694
 $3,031
 $3,665
 $1,111
        
Number of held for sale aircraft impaired2
 1
 2
 5
Impairment charges on assets held for sale (1)(2)
$1,350
 $1,560
 $1,350
 $11,307
Impairment charges on property and equipment (3)
$—
 $—
 $104,939
 $—
Contract termination costs(1)(4)
$13,971
 $—
 $13,971
 $—
_____________ 
(1) 
Included in loss on disposal of assets on our condensed consolidated statements of operations. Includes gain (loss) for sale or disposal of property and equipment (including aircraft) during each period.
(2)
OEM Cost Recoveries
Includes a $6.5 million impairment of the Bristow Academy disposal group for the nine months ended December 31, 2017.
(3)
Includes an $87.5 million impairment related to H225s and a $17.5 million impairment related to Eastern Airways assets for the nine months ended December 31, 2018, included in loss on impairment on our condensed consolidated statement of operations. See Loss on Impairment above for further details.
(4)
Includes $11.7 million of progress payments and $2.3 million of capitalized interest for an aircraft purchase contract that was terminated in December 2018. For further details, see Note 8.
During fiscal year 2018, we reached agreements with original equipment manufacturers (“OEM”) to recover approximately $136.0 million related to ongoing aircraft issues, of which $125.0 million was realized during fiscal year 2018 and $11.0 million was recovered during the ninethree months ended December 31,June 30, 2018. To reflect the amount realized from these OEM cost recoveries during fiscal year 2018, we recorded a $94.5 million decrease in the carrying value of certain aircraft in our fleet through a decrease in property and equipment – at cost, reduced rent expense by $16.6 million and recorded a deferred liability of $13.9 million,

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


included in other accrued liabilities and other liabilities and deferred credits, related to a reduction in rent expense to be recorded in future periods, of which $1.0 million and $6.9$3.5 million was recognized during the three months ended June 30, 2019 and 2018 and $3.4 million was recognized during the nine months ended DecemberMarch 31, 2018, respectively.2019. We determined the realized portion of the cost recoveries related to a long-term performance issue with the aircraft, requiring a reduction of carrying value for owned aircraft and a reduction in rent expense for leased aircraft. During the three months ended June 30, 2019, we returned the remaining four leased aircraft and recognized all of the remaining deferred liability related to the leased aircraft of $6.0 million as a reduction in rent expense. For the owned aircraft, we allocated the $94.5 million as a reduction in carrying value by reducing the historical acquisition value of each affected aircraft on a pro-rata basis utilizing the historical acquisition value of the aircraft. For the leased aircraft, we will recognize the remaining deferred liability of $7.0 million as a reduction in rent expense prospectively on a straight-line basis over the remaining lease terms. This will result in a reduction to rent expense of $1.0 million during
During the three months ending March 31, 2019, $4.0 million during fiscal year 2020 and $2.0 million during fiscal year 2021.
During the nine months ended December 31,June 30, 2018, we recovered the remaining $11.0 million in OEM cost recoveries by agreeing to net certain amounts previously accrued for aircraft leases and capital expenditures against those recoveries. During the ninethree months ended December 31,June 30, 2018, we recorded a $7.6 million increase in revenue and a $3.1$1.1 million decrease in direct cost. We expect to realizerealized the remaining $0.3$2.3 million as a decrease in direct cost in the three months ending March 31,recovery during fiscal year 2019. The increase in revenue relates to compensation for lost revenue in prior periods from the late delivery of aircraft and the decreases in direct cost over fiscal year 2019 relate to prior costs we have incurred and future costs we expect to incur.
In connection with the $87.5 million impairment
12
Table of our H225 aircraft, we revised our salvage values for each H225 aircraft.  In accordance with accounting standards, we will recognize the change in depreciation due to the reduction in carrying value and revision of salvage values on a prospective basis over the remaining life of the aircraft. This resulted in an additional $1.5 million of depreciation expense during the three and nine months ended December 31, 2018 and will result in an increase of depreciation expense of $1.5 million during the remainder of fiscal year 2019, $5.9 million during fiscal year 2020, $1.9 million during fiscal year 2021 and a reduction of $10.3 million during fiscal year 2022 and beyond.Contents
As of December 31, 2018, we revised the salvage values of certain aircraft to reflect our expectation of future sales values given our disposal plans for those aircraft. We expect to record additional depreciation expense of $1.4 million during the remainder of fiscal year 2019 and $2.8 million during fiscal year 2020.BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
On November 1, 2017, we sold our 100% interest in Bristow Academy. As of September 30, 2017, we concluded the disposal group, comprised of the Bristow Academy assets and liabilities met the assets held for sale criteria under ASC 360, but did not meet the requirements for classification as discontinued operations. We evaluated the carrying value of the Bristow Academy disposal group and determined an impairment of $6.5 million, recorded within loss on disposal of assets on our condensed consolidated statement of operations, was necessary to record the disposal group at fair value based on the terms of the sale. The Bristow Academy disposal group is included in Corporate and other in Note 12NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — Segment Information.(Continued)
(Unaudited)


Other Accrued Liabilities
Other accrued liabilities of $38.7$32.8 million and $66.0$38.7 million as of December 31June 30 and March 31, 2018,2019, respectively, includes the following:
December 31, 
 2018		 March 31,  
 2018		June 30,
 2019		 March 31,
 2019
      
(In thousands)(In thousands)
Accrued lease costs$9,028
 $11,708
$1,291
 $6,017
Deferred OEM cost recovery3,997
 8,082
—
 3,997
Eastern Airways overdraft liability (1)
—
 8,989
Accrued legal and professional fees10,054
 3,070
Accrued property and equipment490
 4,874
709
 997
Deferred gain on sale leasebacks1,305
 1,305
919
 1,305
Other operating accruals23,872
 31,020
19,800
 14,437
Eastern Airways other accrued liabilities(1)
—
 8,856
$38,692
 $65,978
$32,773
 $38,679
_____________ 
(1) 
Eastern Airways overdraft liability related to its revolving credit facility, which maturedwas sold on December 31, 2018.May 10, 2019.
Loss on Sale of Subsidiaries
Loss on sale of subsidiaries includes the following for the three months ended June 30, 2019 (in thousands):
Sale of Eastern Airways$46,852
Sale of Aviashelf and Bristow Helicopters Leasing Limited9,451
 $56,303
Eastern Airways
Bristow Helicopters Limited (“Bristow Helicopters”), a subsidiary of Bristow Group, together with its legal and financial advisors, pursued various transactions to exit the Eastern Airways business, which made negative contributions to our operating income in each of the last three fiscal years, including pursuing a sales process with several third parties over an extended period. On May 10, 2019, Bristow Helicopters completed the sale of all of the shares of Eastern Airways to Orient Industrial Holdings Limited (“OIHL”), an entity affiliated with Mr. Richard Lake, a director of Bristow Helicopters, pursuant to a Sale and Purchase Agreement (the “EAIL Purchase Agreement”). Pursuant to the EAIL Purchase Agreement and related agreements, Bristow Helicopters contributed approximately £17.1 million to Eastern Airways as working capital, OIHL acquired Eastern Airways, Bristow Helicopters retained its controlling ownership of the shares in Humberside International Airport Limited that it previously held through Eastern Airways. Certain intercompany balances between Bristow Helicopters and Eastern Airways were also written off. As a result of the transaction, OIHL now owns and operates Eastern Airways, which had previously operated as a separate unit within Bristow Group, and Bristow Helicopters maintains its controlling interest in Humberside Airport, from which Bristow Helicopters provides U.K. SAR services.
The EAIL Purchase Agreement contained customary representations and warranties. OIHL agreed to certain covenants with respect to non-solicitation of directors, officers or employees of Bristow Helicopters for a period of 12 months. Pursuant to the terms of the EAIL Purchase Agreement, Bristow Helicopters has the right to appoint an observer to the board of directors of Eastern Airways for an initial period of 12 months following the sale. Eastern Airways also agreed to provide certain transition services for a minimum of 12 months from the date of the completion of the transaction.
The loss on the sale of Eastern Airways for the three months ended June 30, 2019 of $46.9 million includes the write-off of net assets of $35.0 million and write-off of cumulative translation adjustment of $11.9 million.

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


Aviashelf and Bristow Helicopters Leasing Limited
As of March 31, 2019, Bristow Aviation Holdings Limited (“Bristow Aviation”) had an indirect 48.5% interest in Aviashelf Aviation Co. (“Aviashelf”), a Russian helicopter company. Additionally, we owned 60% of two U.K. joint venture companies, Bristow Helicopters Leasing Limited (“BHLL”) and Sakhalin Bristow Air Services Ltd. These two U.K. companies lease aircraft to Aviashelf which held the client contracts for our Russian operations. Aviashelf was consolidated based on the ability of certain consolidated subsidiaries of Bristow Aviation to control the vote on a majority of the shares of Aviashelf, rights to manage the day-to-day operations of the company which were granted under a shareholders’ agreement, and our ability to acquire an additional 8.5% interest in Aviashelf under a put/call option agreement. In April 2019, we sold our 60% ownership interest in BHLL for $1.4 million. In June 2019, we sold our 48.5% ownership interest in Aviashelf for $2.6 million. The loss on the sale of Aviashelf and BHLL for the three months ended June 30, 2019 of $9.5 million includes the loss on sale of net assets of $2.3 million and write-off of cumulative translation adjustment of $7.2 million.
In August 2019, we exercised our call option to acquire an 8.5% interest in Aviashelf and subsequently sold that interest for $0.4 million.
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 replacing the existing accounting standard and industry-specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the new standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. This new standard is effective for annual reporting periods beginning after December 15, 2017. We adopted the standard as of April 1, 2018 using the modified retrospective method applied to open contracts and only to the version of the contracts in effect as of April 1, 2018. Prior period amounts have not been adjusted and continue to be reflected in accordance with our historical accounting policy. There was no impact on our condensed consolidated financial statements and no cumulative effect adjustment was recognized. For further details, see Note 3.Adopted
In February 2016, the FASB issued accounting guidance Accounting Standard Codification (“ASC”) 842 which amends ASC 840 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 accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. Additionally, this accounting guidanceASC 842 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. In JulyThe guidance was updated in March 2018 the FASB issued a practical expedientto include an amendment that would allow entitiesus to consider the option to apply the provisionsbeginning of the new lease guidance atperiod of adoption as the effective date of adoption without adjustinginitial application of the comparative periods presented. In December 2018,standard. We implemented this accounting standard with an effective date of April 1, 2019. Based on the FASB transition guidance, we do not have to apply the disclosure requirement to periods prior to adoption. We elected the package of practical expedients to not re-evaluate existing lease contracts or lease classifications and therefore will not make changes to those leases already recognized on the consolidated balance sheet under ASC 840 until the leases are fully amortized, amended, or modified. In addition, we did not reassess initial direct costs for any existing leases and elected the short-term lease exception provided certain improvements to this topic that are narrowfor in scope. We have not yet adopted thisthe standard and are currently evaluatingtherefore will only recognize right-of-use assets and lease liabilities for leases with a term greater than one year.  We elected the effectpractical expedient to not separate lease and non-lease components for all asset classes.
We completed a system implementation and have updated our accounting policies to meet the standard’s requirements. On April 1, 2019, our adoption of this accounting standard will haveresulted in recording on our financial statements.
In October 2016, the FASB issued accounting guidance related to current and deferred income taxes for intra-entity transfercondensed consolidated balance sheet right-of-use assets of assets other than inventory. This accounting 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 accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We adopted this accounting guidance effective April 1, 2018 using the modified retrospective method, through a cumulative-effect adjustment directly to retained earnings. Upon adoption, we increased deferred tax liabilities by approximately $1.7$281.0 million and recognized an offsetting decrease to retained earnings.
In January 2017, the FASB issued accounting guidance which clarifies the definitionincrease in lease liabilities of a business$285.3 million 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 adopted this accounting guidance effective April 1, 2018. This accounting guidance has had nomaterial impact on our financialconsolidated statements since adoption as we have not entered into any transactions during this period.
In March 2017, the FASB issued accounting guidance related to the presentation of net periodic pension cost and net periodic post-retirement benefit cost. The accounting 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 accounting 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 accounting 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 post-retirement benefit cost in the statement of operations and consolidated statements of cash flows. For further information on a prospective basis for the capitalization of the service cost component of net periodic pension cost

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


and net periodic post-retirement benefit in assets. We adopted this accounting guidance effective April 1, 2018, and our statement of operations was retrospectively adjusted by $0.1 million and $0.1 million with an increase in direct cost and a corresponding credit in other income (expense), net for the three and nine months ended December 31, 2017, respectively.
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 adopted this accounting guidance effective April 1, 2018, with no impact on our financial statements as there were no changes to the terms or conditions of share-based payment awards.leases, see Note 9.
In February 2018, the FASB issued new accounting guidance on income statement reporting of comprehensive income, specifically pertaining to reclassification of certain tax effects from accumulated other comprehensive income.income to retained earnings. This pronouncement is effective for fiscal years, and for interim periods within those years, beginning after December 15, 2018, with early adoption permitted, and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date.permitted. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our financial statements.April 1, 2019. We did not elect to reclassify certain tax effects from accumulated other comprehensive income to retained earnings.
In June 2018, the FASB issued an amendment to the accounting guidance related to accounting for employee share-based payments which clarifies that an entity should recognize excess tax benefits in the period in which the amount of the deduction is determined. This amendment is effective for annual periods beginning after December 15, 2018. 2018, 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 April 1, 2019 with no impact to our financial statements.
Not Yet Adopted
In August 2018, the FASB modified the disclosure requirements on fair value measurements. The amendment modifies, removes, and adds several disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The

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


amendment is effective for fiscal years ending after December 15, 2021 for public business entities and early adoption is permitted. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our disclosure requirements.    
In August 2018, the FASB modified disclosure requirements for employers that sponsor defined benefit pension plans. Certain disclosure requirements were removed and certain disclosure requirements were added. The amendment also clarifies disclosure requirements for projected benefit obligation (“PBO”) and accumulated benefit obligation (“ABO”) in excess of respective plan assets. The amendment is effective forbeginning in our fiscal years ending after December 15, 2020 for public business entitiesyear 2021 financial statements and early adoption is permitted. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our disclosure requirements.
In August 2018, the FASB issued new accounting guidance that addresses the accounting for implementation costs associated with a hosted service. The guidance provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. This guidanceThe amendment is effective for public business entities forbeginning in our fiscal years beginning after December 15, 2019,year 2021 financial statements and interim periods within those fiscal years, with early adoption is permitted. The guidance will be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our financial statements.
In October 2018, the FASB amended the guidance for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required in generally accepted accounting principles). Therefore, these amendments likely will result in more decision makers not consolidating variable interest entities (“VIEs”).VIEs. This amendment is effective beginning in our fiscal year 2021 financial statements.statements and early adoption is permitted. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our disclosure requirements.

1615
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 2 — ACQUISITIONBANKRUPTCY AND DISPOSITIONRELATED MATTERS
Columbia Helicopters — On February 11, 2019, we announced that our agreement to acquire Columbia Helicopters, Inc. (“Columbia”) had been terminated by mutual agreement of the parties. Fiscal Year 2020 Incentive Plans
Key Employee Incentive Plans
In connection with the termination, we paid $20Chapter 11 Cases, the Compensation Committee of the Board of Directors of the Company (the “Board”) adopted on behalf of the Company an Executive Key Employee Incentive Plan (the “Executive KEIP”) and a Non-Executive Key Employee Incentive Plan (“Non-Executive KEIP”), each approved by the Bankruptcy Court on August 22, 2019. The Executive KEIP is designed to incentivize ten of the Company’s senior executives by providing a total potential cash award pool of approximately $3.1 million at threshold, $6.1 million at target and up to Columbia, which$12.3 million for exceeding target, and is contingent upon achievement of certain financial targets and safety metrics, and the timing of confirmation of the Amended Plan by the Bankruptcy Court. The Non-Executive KEIP is designed to enhance retention of up to 183 other non-insider employees and provides a total potential cash award pool of approximately $7.7 million at threshold, $10.3 million at target and up to $15.4 million for exceeding target, with 50 percent of the payment contingent upon achievement of certain financial targets and safety metrics, and 50 percent of the payment being based on continued employment with the Company. The payments for the Executive KEIP will be includedmade quarterly with the first payment made in October 2019. The payments for the Non-Executive KEIP will be made quarterly with the first payment made in October 2019.
Management Incentive Plan
Effective as expenseof the Effective Date, the Compensation Committee of the Board adopted the 2019 Management Incentive Plan (the “MIP”). The MIP is an equity-based compensation plan for directors, officers and participating employees and other service providers of the Company and its affiliates, pursuant to which the Company may issue awards covering shares of the new common stock, par value $0.0001 (the “New Common Stock”), and new preferred stock, par value $0.0001 (the “New Preferred Stock” and, together with the New Common Stock, the “New Stock”), of the Company, as reorganized pursuant to the Amended Plan (the “Reorganized Company”). As adopted, the share reserve of the MIP was initially comprised of 473,218 shares of New Common Stock and 284,358 shares of New Preferred Stock, representing in the aggregate 4.0% of our outstanding New Stock on a fully diluted basis. On December 6, 2019, the Board approved an increase to the share reserve of the MIP, bringing the total share reserve to 699,890 shares of New Common Stock and 323,664 shares of New Preferred Stock, which represents in the aggregate 5.0% of our outstanding New Stock on a fully diluted basis.
Severance Plan and Participation Agreements
Effective as of the Effective Date, the Company adopted the Amended and Restated 2019 Management Severance Benefits Plan for U.S. Employees (the “Severance Plan”), which provides severance benefits to certain key employees, which are categorized into five “tiers” based on job title or job grade level, including L. Don Miller (President and Chief Executive Officer), who is a Tier 1 participant, and each of Brian J. Allman (Senior Vice President and Chief Financial Officer), Robert Phillips (Senior Vice President, Americas), Alan Corbett (Senior Vice President, EAMEA) and Victoria Lazar (Senior Vice President, General Counsel and Corporate Secretary), all of whom are Tier 2 participants (collectively, the “Specified Officers”) and those with a title of Vice President being Tier 3 participants. Each of the Tier 1, Tier 2 and Tier 3 participants will also be required to enter into a separate participation agreement to the Severance Plan (a “Participation Agreement”), which provides for certain enhanced benefits and imposes additional requirements in addition to the terms of the Severance Plan.
The Severance Plan provides participants with severance benefits in the event of a termination by the Company without Cause (as defined therein) or, in the case of Tier 1 through 3 participants, by the participant for Good Reason (as defined therein) (each, a “Qualifying Termination”), with such severance benefits consisting of the following for the Specified Officers: (i) cash severance in the form of continued base salary payments for 24 months (Tier 1 participant) or 12 months (Tier 2 participant) post-termination; (ii) subsidized COBRA coverage for 18 months post-termination (both Tier 1 and 2 participants); (iii) outplacement services for 12 months post-termination (both Tier 1 and 2 participants); and (iv) if the Qualifying Termination occurs after fiscal year 2020, a pro-rata annual bonus for the year of termination based on actual performance (both Tier 1 and 2 participants).
For Tier 1 and 2 participants (i.e., all of the Specified Officers), the Severance Plan and Participation Agreements provide for enhanced severance benefits in the event that the Qualifying Termination occurs within the two-year period following a Change in Control (as defined therein), with such enhanced severance benefits consisting of the same severance benefits as described in the preceding paragraph, subject to the following enhancements: (i) the cash severance consists of an amount equal to 2.0x (Tier 1 participant) or 1.5x (Tier 2 participants) the sum of the participant’s (x) base salary and (y) target bonus (initially 110% of base salary (Tier 1 participant) and 65% of base salary (Tier 2 participants, other than Mr. Allman, whose target bonus is initially 75%

16
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

of base salary)), payable in installments over the 24-month (Tier 1 participant) or 18-month (Tier 2 participants) post-termination period; and (ii) the pro-rata annual bonus is based on target (as opposed to actual) performance. If the Qualifying Termination occurs after the date that the Compensation Committee of the Board determines annual compensation for fiscal year 2021, then the amount in clause (i)(y) above will equal to the greatest of (x) the Specified Officer’s initial target bonus amount described above, (y) 100% of the Specified Officer’s target bonus for the fiscal year in which the Qualifying Termination occurs and (z) 100% of the Specified Officer’s target bonus for the prior fiscal year (excluding fiscal year 2020 and all prior years).
The Participation Agreements also subject Tier 1 through Tier 3 participants, including the Specified Officers, to restrictive covenants as a condition of participating therein, with such covenants consisting of the following: (i) 12-month (or, if longer, the length of the base salary continuation period) post-termination non-compete; (ii) 24-month post-termination non-solicitation/non-hire; (iii) assignment of inventions; and (iv) perpetual confidentiality and non-disparagement. The Participation Agreements also provide that the Severance Plan may not be amended in an adverse manner to the Tier 1 through Tier 3 participants during the three-year period following the Effective Date.
Liabilities Subject to Compromise
As a result of the Chapter 11 Cases, the payment of prepetition indebtedness was subject to compromise or other treatment under the Amended Plan. Generally, actions to enforce or otherwise effect payment of prebankruptcy filing liabilities are stayed. Although payment of prepetition claims is generally not permitted, the Bankruptcy Court granted the Debtors authority to pay certain prepetition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Debtor’s businesses and assets. Among other things, the Bankruptcy Court authorized the Debtors to pay certain prepetition claims relating to employee wages and benefits, customers, vendors, and suppliers in the ordinary course of business as well as certain principal and interest payments.
The Debtors have been paying and intend to continue to pay undisputed post-petition claims in the ordinary course of business. With respect to prepetition claims, the Debtors notified all known claimants of the deadline to file a proof of claim with the Bankruptcy Court. The Debtors’ liabilities subject to compromise represent the estimate as of June 30, 2019 of claims expected to be allowed under the Amended Plan. Prepetition liabilities that are subject to compromise were required to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.
Liabilities subject to compromise included in our condensed consolidated statementsbalance sheet includes the following as of operationsJune 30, 2019 (in thousands):
6¼% Senior Notes due 2022 principal and accrued interest(1)
$415,894
4½% Convertible Senior Notes due 2023 principal and accrued interest(2)
146,627
Accrued lease termination costs (3)
30,830
Milestone Omnibus Agreement (4)
22,009
Deferred compensation plan2,631
 $617,991
_____________ 
(1)
Includes $401.5 million of principal and $14.4 million of interest accrued through May 11, 2019. See Note 5 for further details.
(2)
Includes $143.8 million of principal and $2.9 million of interest accrued through May 11, 2019. See Note 5 for further details.
(3)
Relates to ten aircraft leases rejected in June 2019, including nine S-76C+s and one S-76D.
(4)
Includes costs related to the return of four leased H225s on May 6, 2019 and includes $9.7 million of lease termination costs, $9.4 million of deferred lease costs previously included as short-term debt on our condensed consolidated balance sheet, $2.8 million of additional lease return costs and $0.1 million of accrued interest.

17
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Prepetition Restructuring Charges
Prepetition restructuring charges totaling $13.5 million for the three months ended March 31, 2019. Upon terminationJune 30, 2019 include professional fees incurred prior to May 11, 2019 related to our Chapter 11 Cases.
Reorganization Items
Reorganization items included in our condensed consolidated income statement represent amounts incurred after May 11, 2019 or expected to be incurred directly resulting from the Chapter 11 Cases and consist of the acquisition agreement,following items for the financing agreementsthree months ended June 30, 2019 (in thousands):
 Professional fees$15,503
  
 
Lease termination costs (1)
26,051
  
 Write-off of discount on 4½% Convertible Senior Notes due 202330,158
  
 
Write-off of deferred financing fees (2)
4,644
  
  $76,356
  
_____________ 
(1)
Relates to ten aircraft leases rejected in June 2019, including nine S-76C+s and one S-76D.
(2)
Includes $2.4 million related to the 6¼% Senior Notes and $2.3 million related to deferred financing fees related to the 4½% Convertible Senior Notes.
Cash paid for reorganization items during the three months ended June 30, 2019 was $1.4 million and related to the acquisition also terminated pursuant to their respective terms. Due to the terminationprofessional fees.

18
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Financial Statements of the acquisition agreement,Debtors
The financial statements below represent condensed combined financial statements of the amendment toDebtors, which excludes non-debtor entities. Intercompany transactions among the indenture forDebtors have been eliminated in the 8.75% Senior Secured Notes, for whichfinancial statements contained below. Intercompany transactions among the Company obtained the requisite consent of holders of such notes in connection with the planned acquisition financing, did not become operative,Debtors and the related consent fees didnon-debtor subsidiaries have not become payable.been eliminated in the Debtors’ financial statements below.
Eastern Airways and Humberside Airport — Bristow Helicopters Limited, an indirect consolidated affiliateBRISTOW GROUP INC. (DEBTOR-IN-POSSESSION)
Unaudited Condensed Combined Statement of the Company (“Bristow Helicopters”), together with its legal and financial advisors, pursued various transactions to exit the Eastern Airways business, which made negative contributions to our Adjusted EBITDA in eachOperations
  
 Three Months Ended
 June 30, 2019
   
  (Unaudited)
  (In thousands)
Revenue $89,712
Operating expense:  
Direct cost and reimbursable expense 72,344
Prepetition restructuring charges 12,449
Depreciation and amortization 31,289
General and administrative 13,761
  129,843
   
Gain on disposal of assets 4,575
Operating loss (35,556)
Interest expense, net (21,453)
Reorganization items (75,897)
Other income, net 679
Loss before benefit for income taxes (132,227)
Benefit for income taxes 19,059
Net loss (113,168)
Net income attributable to noncontrolling interests (14)
Net loss attributable to Bristow Group $(113,182)

19
Table of the last three fiscal years, including pursuing a sales process with several third parties over an extended period. On May 10, 2019, Bristow Helicopters completed the saleContents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION)
Unaudited Condensed Combined Balance Sheet
  June 30,
 2019
  (Unaudited)
  (In thousands)
ASSETS  
Current assets:  
Cash and cash equivalents $67,024
Accounts receivable 31,628
Intercompany accounts receivable 434,501
Inventories 35,011
Assets held for sale 1,866
Prepaid expenses and other current assets 13,384
Total current assets 583,414
Intercompany investment 633,197
Intercompany notes receivable 378,986
Property and equipment, net 1,438,318
Right-of-use assets 161,454
Other assets 8,075
Total assets $3,203,444
   
LIABILITIES AND STOCKHOLDERS’ INVESTMENT  
Current liabilities:  
Accounts payable $32,326
Intercompany accounts payable 117,358
Accrued liabilities 18,636
Accrued interest 10,944
Intercompany accrued interest 3,782
Current portion of operating lease liabilities 101,971
Short-term borrowings and current maturities of long-term debt 810,388
Total current liabilities 1,095,405
Long-term debt, less current maturities 33,932
Intercompany notes payable 77,422
Other liabilities and deferred credits 4,002
Deferred taxes 66,351
Long-term operating lease liabilities 65,977
Total liabilities not subject to compromise 1,343,089
Liabilities subject to compromise 617,991
Total liabilities 1,961,080
Stockholders’ investment:  
Total Bristow Group stockholders’ investment 1,241,093
Noncontrolling interests 1,271
Total stockholders’ investment 1,242,364
Total liabilities and stockholders’ investment $3,203,444


20
Table of allContents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION)
Unaudited Condensed Combined Statement of the shares of Eastern Airways to Orient Industrial Holdings Limited (“OIHL”), an entity affiliated with Mr. Richard Lake, pursuant to a Sale and Purchase Agreement (the “EAIL Purchase Agreement”). Pursuant to the EAIL Purchase Agreement and related agreements, Bristow Helicopters contributed approximately £17.1 million to Eastern Airways as working capital, OIHL acquired Eastern Airways, Bristow Helicopters retained its controlling ownership of the shares in Humberside International Airport Limited that it previously held through Eastern Airways and certain intercompany balances between Bristow Helicopters and Eastern Airways were written off. As a result of the transaction, OIHL now owns and operates Eastern Airways, which had previously operated as a separate unit within Bristow Group, and Bristow Helicopters maintains its controlling interest in Humberside Airport, from which Bristow Helicopters provides U.K. SAR services.Cash Flows
The EAIL Purchase Agreement contained customary representations and warranties. OIHL agreed to certain covenants with respect to non-solicitation of directors, officers or employees of Bristow Helicopters for a period of 12 months. Pursuant to the terms of the EAIL Purchase Agreement, Bristow Helicopters has the right to appoint an observer to the board of directors of Eastern Airways for an initial period of 12 months following the sale. Eastern Airways also agreed to provide certain transition services for a minimum of 12 months from the date of the completion of the transaction.
   Three Months Ended
 June 30, 2019
   
  (Unaudited)
  (In thousands)
Cash flows from operating activities:  
Net loss $(113,168)
Adjustments to reconcile net loss to net cash used in operating activities:  
Depreciation and amortization 31,289
Deferred income taxes (19,219)
Write-off of deferred financing fees 1,313
Discount amortization on long-term debt 850
Reorganization items 60,853
Gain on disposal of assets (4,575)
Deferral of lease payments 285
Stock-based compensation 611
Increase (decrease) in cash resulting from changes in:  
Accounts receivable (4,194)
Inventories 319
Prepaid expenses and other assets (6,713)
Accounts payable 18,870
Accrued liabilities 23,092
Other liabilities and deferred credits, including intercompany activity (46,701)
Net cash used in operating activities (57,088)
Cash flows from investing activities:  
Capital expenditures (2,280)
Proceeds from asset dispositions 3,175
Net cash provided by investing activities 895
Cash flows from financing activities:  
Proceeds from borrowings 37,500
Debt issuance costs (5,008)
Repayment of debt (3,248)
Net cash provided by financing activities 29,244
Effect of exchange rate changes on cash and cash equivalents (211)
Net decrease in cash and cash equivalents (27,160)
Cash and cash equivalents at beginning of period 94,184
Cash and cash equivalents at end of period $67,024


21
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 3 — REVENUE RECOGNITION
Revenue Recognition
In general, we recognize revenue when a service is provided or a good is sold to a customer and there is a contract. At contract inception, we assess the goods and services promised in our contracts with customers and identify all performance obligations for each distinct promise that transfers a good or service (or bundle of goods or services) to the customer. To identify the performance obligations, we consider all goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. Revenue is recognized when control of the identified distinct goods or services have been transferred to the customer, the transaction price is determined and allocated to the performed performance obligations and we have determined that collection has occurred or is probable of occurring.
A majority of our revenue from contracts with customers is currently generated through two types of contracts: helicopter services and fixed wing services. Each contract type has a single distinct performance obligation as described below.
Helicopter services — Our customers — major integrated, national and independent offshore energy companies — charter our helicopters primarily to transport personnel between onshore bases and offshore production platforms, drilling rigs and other installations. To a lesser extent, our customers also charter our helicopters to transport time-sensitive equipment to these offshore locations. The customers for SAR services include both the oil and gas industry and governmental agencies. Revenue from helicopter services is recognized when the performance obligation is satisfied over time based on contractual rates as the related services are performed.
A performance obligation arises under contracts with customers to render services and is the unit of account under the new accounting guidance for revenue. Operating revenue from our oil and gas segment is derived mainly from fixed-term contracts with our customers, a substantial portion of which is competitively bid. A small portion of our oil and gas customer revenue is derived from providing services on an "ad-hoc"“ad-hoc” basis. Our fixed-term contracts typically have original terms of one year to seven years (subject to provisions permitting early termination by our customers). We account for services rendered separately if they are distinct and the service is separately identifiable from other items provided to a customer and if a customer can benefit from the services rendered on its own or with other resources that are readily available to the customer. A contract’s transaction price

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

is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Within this contract type for helicopter services, we determined that each contract has a single distinct performance obligation. These services include a fixed monthly rate for a particular model of aircraft, and flight hour services, which represents the variable component of a typical contract with a customer. Rates for these services vary depending on the type of services provided and can be based on a per flight hour, per day, or per month basis. Variable charges within our flight services contracts are not effective until a customer-initiated flight order is received and the actual hours flown are determined; therefore, the associated flight revenue generally cannot be reasonably and reliably estimated beforehand. A contract’s standalone selling prices are determined based upon the prices that we charge for our services rendered. Revenue is recognized as performance obligations are satisfied over time, by measuring progress towards satisfying the contracted services in a manner that best depicts the transfer of services to the customer, which is generally represented by a period of 30 days or less. We typically invoice customers on a monthly basis and the term between invoicing and when the payment is due is typically between 30 and 60 days. 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 rates when estimable and applicable, which generally includes written acknowledgment from the customers that they are in agreement with the amount of the rate escalation. Cost reimbursements from customers are recorded as reimbursable revenue with the related reimbursed costs recorded as reimbursable expense on our condensed consolidated statements of operations.
Taxes collected from customers and remitted to governmental authorities and revenue are reported on a net basis in our financial statements. Thus, we exclude taxes imposed on the customer and collected on behalf of governmental agencies to be remitted to these agencies from the transaction price in determining the revenue related to contracts with a customer.
Fixed wing services — Eastern Airways and Airnorth provideprovides fixed wing transportation services through regular passenger transport (scheduled airline service with individual ticket sales) and charter services. A performance obligation arises under contracts with customers to render services and is the unit of account under the new accounting guidance for revenue. Within fixed wing services, we determined that each contract has a single distinct performance obligation. Revenue is recognized over time 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. Both chartered and scheduled airline service revenue is recognized net of passenger taxes and discounts. Eastern Airways was sold on May 10, 2019.

22
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Contract Assets, Liabilities and Receivables
We generally satisfy performance of contract obligations by providing helicopter and fixed wing services to our customers in exchange for consideration. The timing of performance may differ from the timing of the customer’s payment, which results in the recognition of a contract asset or a contract liability. A contract asset exists when we have a contract with a customer for which revenue has been recognized (i.e., services have been performed), but customer payment is contingent on a future event (i.e. satisfaction of additional performance obligations). These contract assets are transferred to receivables when the right to consideration becomes unconditional. Contract liabilities relate to deferred revenue in which advance consideration is received from customers for contracts where revenue is recognized on future performance of services.
As of December 31June 30 and March 31, 2018,2019, receivables related to services performed under contracts with customers were $160.5$170.3 million and $176.5$164.7 million, respectively. All receivables from non-affiliates and affiliates are broken out further in our condensed consolidated balance sheets. During the ninethree months ended December 31, 2018,June 30, 2019, we recognized $9.6$7.4 million of revenue from outstanding contract liabilities as of March 31, 2018.2019. Contract liabilities related to services performed under contracts with customers was $7.9$7.3 million and $13.3$10.0 million as of December 31June 30 and March 31, 2018,2019, respectively. Contract liabilities are primarily generated by our fixed wing services where customers pay for tickets in advance of receiving our services and advanced payments from helicopter services customers. There were no contract assets as of December 31June 30 and March 31, 2018.2019.
For the three and nine months ended December 31,June 30, 2019 and 2018, there was $1.9 millionzero and $1.9$1.0 million, respectively, of revenue recognized from satisfied performance obligations related to prior periods (for example, due to changes in transaction price).
Revenue from third party customers
Total revenue related to third party customers is as follows (in thousands):
  Three Months Ended June 30,
  2019 2018
Revenue:    
Operating revenue from non-affiliates $303,733
 $325,356
Operating revenue from affiliates 4,475
 4,568
Reimbursable revenue from non-affiliates 16,600
 16,907
Revenue from Contracts with Customers 324,808
 346,831
Other revenue from non-affiliates 397
 13,110
Other revenue from affiliates 7,971
 6,727
Total Revenue $333,176
 $366,668


1823
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Adoption Impact
In accordance with the new revenue standard requirements discussed in Note 1, the disclosure of the impact of adoption on our condensed consolidated financial statements for the three and nine months ended December 31, 2018 follows (in thousands):
  Three Months Ended 
 December 31, 2018		 Nine Months Ended 
 December 31, 2018
  Balances After Adoption Balances without Adoption Effect of change Balances After Adoption Balances without Adoption Effect of change
Revenue:            
Operating revenue from non-affiliates $301,439
 $303,206
 $(1,767) $944,164
 $963,252
 $(19,088)
Operating revenue from affiliates 5,895
 13,885
 (7,990) 16,822
 39,537
 (22,715)
Reimbursable revenue from
  non-affiliates
 14,238
 14,238
 —
 47,091
 47,091
 —
Revenue from Contracts with Customers 321,572
 331,329
 (9,757) 1,008,077
 1,049,880
 (41,803)
Other revenue from non-affiliates 1,767
 —
 1,767
 19,088
 —
 19,088
Other revenue from affiliates 7,990
 —
 7,990
 22,715
 —
 22,715
Total Revenue $331,329
 $331,329
 $—
 $1,049,880
 $1,049,880
 $—
No cumulative effect adjustment to retained earnings was required upon adoption on April 1, 2018.

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

Remaining Performance Obligations
Remaining performance obligations represent firm contracts for which work has not been performed and future revenue recognition is expected. The table below discloses (1) the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period and (2) the expected timing to recognize this revenue (in thousands).:
 Remaining Performance Obligations Remaining Performance Obligations
 Three Months Ending March 31, 2019 Fiscal Year Ending March 31, Total Nine Months Ending March 31, 2020 Fiscal Year Ending March 31, Total
 2020 2021 2022 2023 and thereafter  2021 2022 2023 2024 and thereafter 
                        
Outstanding Service Revenue:                        
Helicopter contracts $130,992
 $301,475
 $211,246
 $193,589
 $481,467
 $1,318,769
 $339,665
 $229,327
 $192,800
 $186,633
 285,269
 $1,233,694
Fixed-wing contracts 1,779
 346
 —
 —
 —
 2,125
 743
 —
 —
 —
 —
 743
Total remaining performance obligation revenue $132,771
 $301,821
 $211,246
 $193,589
 $481,467
 $1,320,894
 $340,408
 $229,327
 $192,800
 $186,633
 285,269
 $1,234,437
Although substantially all of our revenue is under contract, due to the nature of our business we do not have significant remaining performance obligations as our contracts typically include unilateral termination clauses that allow our customers to terminate existing contracts with a notice period of 30 to 180 days. The table above includes performance obligations up to the point where the parties can cancel existing contracts. Any applicable cancellation penalties have been excluded. As such, our actual remaining performance obligation revenue is expected to be greater than what is reflected above. In addition, the remaining performance obligation disclosure does not include expected consideration related to performance obligations of a variable nature (i.e., flight services) as they cannot be reasonably and reliably estimated.
Other Considerations and Practical Expedients
We were awarded a government contract to provide SAR services for all of the U.K., which commenced in April 2015. We previously incurred costs related to this contract that generate or enhance the resources used to fulfill the performance obligation within the contract and the costs are expected to be recoverable. These contract acquisition and pre-operating costs qualify for capitalization. We amortize these capitalized contract acquisition and pre-operating costs related to the UKU.K. SAR contract and two customer contracts in Norway. We determined that an amortization method that allocates the capitalized costs on a relative basis to the revenue recognized is a reasonable and systematic basis for the amortization of the pre-operating costs asset. For further details on the short and long-term pre-operating cost balances, see Note 1.
We incur incremental direct costs for obtaining contracts through sales commissions paid to ticket agents to sell seats on regular public transportation flights for our fixed-wing services only. We will utilize the practical expedient allowed by the FASB that permits us to expense the incremental costs of obtaining a contract when incurred, if the amortization period of the contract asset that we otherwise would have recognized is one year or less.
In addition, we have applied the tax practical expedient to exclude all taxes in the scope of the election from the transaction price and the invoice practical expedient that allows us to recognize revenue in the amount to which we have the right to invoice the customer and corresponds directly with the value to the customer of our performance completed to date.
Note 4 — VARIABLE INTEREST ENTITIES
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 December 31, 2018June 30, 2019, 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 23 to the fiscal year 20182019 Financial Statements for a description of other investments in significant affiliates.

2024
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Bristow Aviation Holdings Limited — We own 49% of Bristow Aviation Holdings Limited’s (“Bristow Aviation”)Aviation’s common stock and a significant amount of its subordinated debt. Bristow Aviation is incorporated in England and, through its subsidiaries, holds all the outstanding shares in Bristow Helicopters. Bristow Aviation’s subsidiaries provide industrial aviation services to customers primarily in the U.K., Norway, Australia, Nigeria and Trinidad and fixed wing services primarily in the 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”) ownowned 49%, 46% and 5%, respectively, of Bristow Aviation’s total outstanding ordinary shares as of June 30, 2019, although Caledonia hashad voting control over the E.U. Investor’s shares.
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 ($115.9115.8 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 $2.3$2.7 billion as of December 31, 2018June 30, 2019.
Our operations in the U.K. are subject to the Civil Aviation Act 1982 and other similar English and E.U. statutes and regulations. We carry persons and property in our aircraft pursuant to an operating license issued by the Civil Aviation Authority (the “CAA”). The holder of an operating license must meet the ownership and control requirements of Council Regulation 2407/92. To operate under this license, the company through which we conduct operations in the U.K., Bristow Helicopters, must be owned directly or through majority ownership by E.U. nationals, and must at all times be effectively controlled by them. Our ownership of 49% of the ordinary shares of Bristow Aviation, the entity that owns Bristow Helicopters, is to comply with these restrictions.
Caledonia, the Company and the E.U. Investor also have entered into a put/call agreement under which, upon giving specified prior notice, we havehad the right to buy all the Bristow Aviation shares held by Caledonia and the E.U. Investor, who, in turn, each havehad the right to require us to purchase such shares. As discussed above, 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. In addition, the put/call agreement limits our ability to exercise the put/call option through a requirement to consult with 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. On March 14, 2019, the E.U. Investor provided notice of his intent to exercise his right to require us or a qualified E.U. investor to purchase his Bristow Aviation shares for £100,000. In addition, on April 29, 2019, Caledonia provided notice of its intent to exercise its right to require us or a qualified E.U. investor to purchase its Bristow Aviation shares for £920,000. With respect to each of the notices from the E.U. Investor£920,000, under our put/call agreement with this stockholder. As a result, in September 2019 and Caledonia, we have 180 days from receiptOctober 2019, 5% and 46%, respectively, of such notice to (i) nominate either Bristow Group Inc., a related party of Bristow Group Inc. or an E.U. investor as the purchaser of the relevant shares and (ii) confirm that we have been notifiedwere purchased by the CAA that the holding of any of our licenses granted by the CAA will not be affected as a result of such transfer. We are in the process of identifyingImpigra Aviation Holdings Limited (“Impigra”), a qualified E.U. investor, with proceeds from two loans received from Bristow Holdings Company Ltd. III (“BHC III”), a Bristow subsidiary. Impigra, is a British company owned 100% by U.K. Bristow employees and now owns 51% of the ordinary shares of Bristow Aviation. There was no material change to be the new holder of such Bristow Aviation shares.shareholders’ agreement or the put/call agreement which Impigra is now a party to. Impigra is also a VIE that we consolidate as the primary beneficiary and we eliminate the loans discussed above in consolidation. Brexit is anticipated to require a qualified U.K. investor rather than a qualified E.U. investor. Impigra is expected to meet the requirements to satisfy a qualified U.K. investor requirement.
Furthermore, the call option provides a mechanism whereby the economic risk for the other investorsinvestor 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 (£shareholder (£1.0 million as of December 31, 2018)June 30, 2019) 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 shareholdersshareholder at a rate of sterling LIBOR plus 3% or 6% (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 interest on our condensed consolidated balance sheets. Prepayments of the guaranteed return element of the call option are reflected as a reduction in noncontrolling interest on our condensed consolidated balance sheets. The other investors haveinvestor has an option to put theirits 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.

2125
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) 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):
   December 31, 
 2018		 March 31,  
 2018
 Assets    
 Cash and cash equivalents $76,432
 $90,788
 Accounts receivable 303,108
 256,735
 Inventories 80,596
 98,314
 Prepaid expenses and other current assets 39,009
 38,665
 Total current assets 499,145
 484,502
 Investment in unconsolidated affiliates 2,930
 3,608
 Property and equipment, net 278,562
 327,440
 Goodwill 18,271
 19,907
 Other assets 219,636
 231,884
 Total assets $1,018,544
 $1,067,341
 Liabilities    
 Accounts payable $413,998
 $292,893
 Accrued liabilities 106,811
 140,733
 Accrued interest 2,330,164
 2,130,433
 Current maturities of long-term debt 7,963
 23,125
 Total current liabilities 2,858,936
 2,587,184
 Long-term debt, less current maturities 460,019
 479,571
 Accrued pension liabilities 28,036
 37,034
 Other liabilities and deferred credits 5,521
 7,342
 Deferred taxes 29,431
 26,252
 Total liabilities $3,381,943
 $3,137,383
   June 30,
 2019		 March 31,
 2019
 Assets    
 Cash and cash equivalents $69,201
 $83,499
 Restricted cash 3,234
 —
 Accounts receivable 325,905
 307,864
 Inventories 80,200
 85,977
 Prepaid expenses and other current assets 29,436
 36,646
 Total current assets 507,976
 513,986
 Investment in unconsolidated affiliates 3,013
 3,087
 Property and equipment, net 248,671
 281,944
 Right-of-use assets 196,725
 —
 Goodwill 18,212
 18,436
 Other assets 226,115
 229,902
 Total assets $1,200,712
 $1,047,355
 Liabilities    
 Accounts payable $455,070
 $442,187
 Accrued liabilities 265,031
 113,905
 Accrued interest 2,707,399
 2,399,704
 Current maturities of long-term debt 81,706
 85,287
 Total current liabilities 3,509,206
 3,041,083
 Long-term debt, less current maturities 383,556
 384,369
 Accrued pension liabilities 22,472
 25,726
 Other liabilities and deferred credits 4,038
 4,810
 Deferred taxes 37,662
 37,063
 Long-term operating lease liabilities 37,591
 —
 Total liabilities $3,994,525
 $3,493,051
 
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
Revenue $292,047
 $309,461
 $935,304
 $933,387
 $295,155
 $331,469
Operating loss (9,496) (17,463) (40,642) (40,095)
Operating income 11,280
 7,364
Net loss (85,922) (79,789) (270,263) (221,039) (362,848) (69,021)
Bristow Helicopters (Nigeria) Ltd. — Bristow Helicopters (Nigeria) Ltd. (“BHNL”) is a joint venture in Nigeria in which Bristow Helicopters owns a 48% interest, a Nigerian company owned 100% by Nigerian employees owns a 50% interest and an employee trust fund owns the remaining 2% interest as of December 31, 2018.June 30, 2019. BHNL provides industrial aviation services to customers 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

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


employee-owned Nigerian entity purchased an additional 2% interest with proceeds from a loan received from BHIL. Both BATS

22
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 an interest ofa 50.17%. interest. PAAN provides industrial aviation services to customers 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.
Note 5 — DEBT
Debt as of December 31June 30 and March 31, 20182019 consisted of the following (in thousands):
 December 31, 
 2018		 March 31,  
 2018		 June 30,
 2019		 March 31,
 2019
8.75% Senior Secured Notes due 2023(1) $347,205
 $346,610
 $347,597
 $347,400
4½% Convertible Senior Notes due 2023(2) 111,514
 107,397
 143,750
 112,944
6¼% Senior Notes due 2022(2) 401,535
 401,535
 401,535
 401,535
Term Loan (1)
 75,000
 —
Lombard Debt 182,388
 211,087
 176,094
 183,450
Macquarie Debt 174,528
 185,028
 171,028
 171,028
PK Air Debt 216,637
 230,000
 210,494
 212,041
Airnorth Debt 11,738
 13,832
 10,146
 11,058
Eastern Airways Debt —
 14,519
Other Debt 7,959
 3,991
Humberside Debt 382
 —
Other Debt (2)
 9,370
 9,168
Unamortized debt issuance costs (23,280) (27,465) (22,860) (21,771)
Total debt 1,430,224
 1,486,534
 1,522,536
 1,426,853
Less amounts included in liabilities subject to compromise (554,655) —
Less short-term borrowings and current maturities of long-term debt (1,421,050) (1,475,438) (892,092) (1,418,630)
Total long-term debt $9,174
 $11,096
 $75,789
 $8,223
_____________ 
Consent Solicitation(1) These notes were settled in accordance with the Amended Plan.
(2) Reclassified to liabilities subject to compromise on our condensed consolidated balance sheet as of June 30, 2019. See Note 2 and Supplemental Indenture “— On November 21, 2018, we completed the previously announced solicitation4½% Convertible Senior Notes due 2023” and “—6¼% Convertible Senior Notes due 2023” below for further details.
(3) Unamortized debt issuance costs as of consents from holders of our outstandingJune 30, 2019 relate to 8.75% Senior Secured Notes to amend certain provisionsdue 2023, Term Loan, Lombard Debt, Macquarie Debt and PK Air Debt. Unamortized debt issuance costs as of the indenture governing theMarch 31, 2019 relate to 8.75% Senior Secured Notes pursuant to a supplemental indenture (the “Supplemental Indenture”). The Supplemental Indenture became effective upon the execution and delivery thereof, but would become operative only upon the delivery of a cash payment to eligible holders of the 8.75% Senior Secured Notes who validly delivered and did not revoke consents prior to the receipt of the consents required to effect the amendments under the Supplemental Indenture. As the cash payment was not made, the Supplemental Indenture did not become operative.
ABL Facility — On April 17, 2018, two of our subsidiaries entered into a new asset-backed revolving credit facility (the “ABL Facility”), which provides for commitments in an aggregate amount of $75 million, with a portion allocated to each borrower subsidiary, subject to an availability block of $15 million and a borrowing base calculated by reference to eligible accounts receivable. The maximum amount of the ABL Facility may be increased from time to time to a total of as much as $100 million, subject to the satisfaction of certain conditions, and any such increase would be allocated among the borrower subsidiaries. The ABL Facility matures in Aprildue 2023, subject to certain early maturity triggers related to maturity of other material debt or a change of control of the Company. Amounts borrowed under the ABL Facility are secured by certain accounts receivable owing to the borrower subsidiaries and the deposit accounts into which payments on such accounts receivable are deposited. As of December 31, 2018, there were no outstanding borrowings under the ABL Facility nor had we made any draws during the nine months ended December 31, 2018. As of December 31, 2018, we had $16.2 million in letters of credit outstanding under the ABL Facility and our available borrowing capacity under the ABL Facility was $5.6 million.

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


We amended the ABL Facility pursuant to a letter agreement, dated effective as of November 7, 2018 and made by us and agreed to by Barclays Bank PLC, on behalf of the finance parties under the ABL Facility (the “First ABL Amendment”).  The First ABL Amendment amends the ABL Facility to, among other things, provide that certain of the provisions, including covenants and events of default contained therein, will exclude unrestricted subsidiaries (as designated under the indenture governing the 8.75% Senior Secured Notes) from the requirements and defaults thereunder.
We also amended the ABL Facility pursuant to a letter agreement effective as of February 19, 2019 and made by us and agreed to by Barclays Bank PLC, on behalf of the finance parties under the ABL Facility (the “Second ABL Amendment”). Under the Second ABL Amendment, the Company received a waiver of any Default (as defined in the ABL Facility) that would otherwise exist or occur under the ABL Facility as a result of (i) our failure to provide our unaudited consolidated financial statements for the quarter ended December 31, 2018 within 45 days after the end of the quarter or (ii) certain representations and warranties not being correct when made due to the existence of any Default specified in the preceding clause (i); provided that we must provide such unaudited consolidated financial statements within 75 days after the end of the quarter. In addition, the Second ABL Amendment amends (i) the borrowing base determination provisions in the ABL Facility and (ii) the maturity date of the ABL Facility, which was previously five years from the date of the ABL Facility, to December 14, 2021 (in each case, subject to certain early maturity triggers related to maturity of other material debt or a change of control of us). The ABL Facility was further amended pursuant to the ABL Waiver (as defined herein). As discussed below under “—Waiver of Defaults,” the ABL Waiver provided that the maturity date of December 14, 2021 shall be subject to certain early maturity triggers related to a Change of Control of the Company (as such definition has been amended by the ABL Waiver) or the ABL Waiver Termination Date (as defined herein).
4½% Convertible Senior Notes due 2023, — The balances of the debt and equity components of our 4½6¼% Convertible Senior Notes due 2023 (the “4½% Convertible Senior Notes”) as of December 312022 Term Loan, Lombard Debt, Macquarie Debt and March 31, 2018 is as follows (in thousands):PK Air Debt.
  December 31, 
 2018		 March 31,  
 2018
     
Equity component - net carrying value (1)
 $36,778
 $36,778
Debt component:    
Face amount due at maturity $143,750
 $143,750
Unamortized discount (32,236) (36,353)
Debt component - net carrying value $111,514
 $107,397
_____________ 
(1) Net of equity issuance costs of $1.0 million.
The remaining debt discount is being amortized to interest expense over the term of the 4½% Convertible Senior Notes using the effective interest rate. The effective interest rate for the three and nine months ended December 31, 2018 was 11.0%. Interest expense related to our 4½% Convertible Senior Notes for the three and nine months ended December 31, 2018 was as follows (in thousands):
  Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,
  2018 2017 2018 2017
         
Contractual coupon interest $1,620
 $234
 $4,867
 $234
Amortization of debt discount 1,412
 181
 4,117
 181
Total interest expense $3,032
 $415
 $8,984
 $415
Eastern Airways Debt— All outstanding obligations under Eastern Airways’ revolving credit facility matured on December 31, 2018, and a final repayment of $7.4 million was made in December 2018. Eastern Airways’ debt also included borrowings under a term loan facility that matured on August 31, 2018, and was repaid in a principal amount of $4.9 million in August 2018.
Debt Covenants— Certain of our credit facilities which are secured by pledges of aircraft, with aggregate outstanding borrowings of $391.2 million at December 31, 2018, and certain of our aircraft leasing arrangements to which we are the lessee, contain covenants of a non-financial nature related to pledged and leased aircraft. Each aircraft pledge specifically identifies the airframes and engines of the aircraft pledged to its credit facility. Similarly, each aircraft lease specifically identifies the airframe(s) and engines of the aircraft covered by the lease. The agreements contain a requirement to maintain specific engines on each specified airframe with limited exceptions for, among other things, the repair and maintenance of the engines.  From time to time, engines are removed and replaced on an airframe. In some cases, these actions are permitted under the credit and lease agreements so long

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


as (a) a pledged or leased engine is replaced with another engine subject to the same transaction  or, in some cases, any other engine, so long as such other engine is free and clear of liens other than certain permitted liens, and/or (b) in the case of a “loaner” engine furnished by a maintenance provider temporarily replacing a pledged or leased engine, the “loaner” engine is replaced with an engine (which may be the original engine, post-maintenance) subject to the same transaction within 180 days after the removal of the original engine. During the three months ended December 31, 2018, we determined that in some instances a “loaner” engine owned by a maintenance provider and installed on a pledged or leased airframe had been on that airframe for more than 180 days after the removal of the original engine. We are reliant upon third-party maintenance providers to complete maintenance work on these subject engines; however, in some instances these maintenance providers did not complete the required maintenance work on an engine within the 180-day period permitted by the relevant agreement for the engine can be separated from the assigned airframe, and the relevant maintenance providers have been able to provide a timetable for the ultimate completion of the work on those engines. These instances, while involving a small subset of the approximately 385 helicopter engines that were then subject to our secured financings or helicopter leases, constituted defaults under the affected credit and lease agreements. All issues related to this matter were cured by December 31, 2018 for all but nine helicopter engines (relating to three agreements) where a pledged or leased engine was not returned to the pledged or leased airframe within the specified period due to delays by the relevant maintenance service provider. We obtained waivers of such non-compliance under the applicable agreements, extending the time for the return of each pledged or leased engine to the relevant pledged or leased airframe to the earlier of (i) the date that occurs 30 days after the receipt by the Company of such engine at our facility where the relevant airframe is then located or (ii) February 10, 2020.
Classification of Debt — The Company’s liquidity outlook has recently changed resulting in substantial doubt about the Company’s ability to continue as a going concern. As discussed in Note 1, on the Petition Date, the Debtors filed the Chapter 11 Cases in the Bankruptcy Court seeking relief under Chapter 11 of the Bankruptcy Code. The Debtors’ Chapter 11 Cases arewere jointly administered under the caption In re: Bristow Group Inc., et al., Main Case No. 19-32713. TheDuring the pendency of the Chapter 11 Cases, the Debtors continuecontinued to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The significant risks and uncertainties related to the Chapter 11 Cases raise substantial doubt about the Company’s ability to continue as a going

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


concern. In addition, each of the commencement of the Chapter 11 Cases and the delivery of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, as amended by the amendment thereto, with a going concern qualification or explanation included in the accompanying report of the Company’s independent registered public accounting firm constituted an event of default under certain of our secured equipment financings, giving those secured equipment lenders the right to accelerate repayment of the applicable debt, subject to Chapter 11 protections, and triggering cross-default and/or cross-acceleration provisions in substantially all of our other debt instruments should that right to accelerate repayment be exercised. As such, substantially all of our debt is in default and accelerated, but subject to stay under the Bankruptcy Code. As a result of the facts and circumstances discussed above, the Company concluded that substantially allhas classified debt balances of approximately $892.1 million and $1.4 billion as of DecemberJune 30 and March 31, 2018 should be classified2019, respectively, as short-term borrowings and current maturities of long-term debt on our condensed consolidated balance sheet.
Notice If not classified separately as liabilities subject to compromise as of DefaultJune 30, 2019, the additional $554.7 million would have been classified as current maturities of Aircraft Leases— On March 22, 2019, we receivedlong-term debt on our condensed consolidated balance sheet as a noticeresult of default with respect to four aircraft leases (the “Leases”) entered into in September 2014 by our subsidiary BriLog Leasing Ltd., as lessee. The notice of default cited failure by the lessee to comply with its obligations to maintain the aircraft leased pursuant to such Leases so as to enable the certificate of airworthiness for the aircraft to be continually maintained without restriction or limitation. Unless the lessee remedied such default within 30 days after the date of such notice, such default would mature into an Event of Default (as defined in the Leases). Prior to the end of such 30-day period, we reached a settlement with respect to such default,same facts and therefore, such default did not mature into an Event of Default.circumstances.
Waiver of Defaults — Prior to the Petition Date, we entered into waiver letters with respect to certain of our debt agreements, including the credit agreement, dated as of July 17, 2017, among Bristow Equipment Leasing Ltd., the several banks, other financial institutions and other lenders from time to time party thereto and PK AirFinance S.à r.l. (“PK AirFinance”), as agent and as security trustee (as amended, the “PK Credit Agreement”); the term loan credit agreement, dated as of February 1, 2017, among Bristow U.S. LLC, the several banks, other financial institutions and other lenders from time to time party thereto and Macquarie Bank Limited, as administrative agent and as security agent (as amended, the “Macquarie Credit Agreement”); the ABL Facility;Facility (as defined below); and certain other secured equipment financings and leases. Pursuant to such waiver letters, we received waivers of breaches, defaults or events of default under such debt agreements arising from the Company’s failure to timely provide its unaudited consolidated financial statements for the quarter ended December 31, 2018 and/or the failure to make the April 15, 2019 interest payment due on the 6¼% Senior Notes due 2022 (the “6¼% Senior Notes”) by May 15, 2019, and certain other related events of default and cross-defaults. As discussed below under “—Events of Default,” the filing of the Chapter 11 Cases constituted an event of default that accelerated the obligations under the PK Credit Agreement, the BALL Lombard Credit Agreement (as defined below) and the Macquarie Credit Agreement.

25
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


On May 10, 2019, Bristow Norway AS and Bristow Helicopters, as borrowers and guarantors, and the Company, as guarantor, entered into a waiver letter (the “ABL“First ABL Waiver”) with Barclays Bank PLC, as agent, and Credit Suisse AG, Cayman Islands Branch, as lender, with respect to the ABL Facility. The First ABL Waiver waives,waived, subject to certain conditions, any Default (as defined in the ABL Facility) or cross-defaults that would otherwise exist or occur under the ABL Facility as a result of, among other things, (i) the Company’s failure to timely provide its unaudited consolidated financial statements for the quarters ended December 31, 2018 and March 31, 2019, (ii) the amendment of the Company’s periodic reports for fiscal year 2018 as previously disclosed, (iii) the failure to make the April 15, 2019 interest payment due on the 6¼% Senior Notes, (iv) potential cross defaults under the 4½% Convertible Senior Notes and 8.75% Senior Secured Notes, (v) other events related to the Chapter 11 Cases, potential insolvency issues or possible failure to comply with certain financial covenants or (vi) certain representations and warranties not being correct when made. Such Defaults arewere waived until the date (the “ABL Waiver Termination Date”) on which the Company or its subsidiaries enter into or modify debt agreements that would materially adversely impact the ability to perform obligations under the ABL Facility, any security that is not permitted security is granted over the share capital or assets of either borrower or the Chapter 11 Cases are dismissed or converted to a case under Chapter 7 of the Bankruptcy Code, subject to certain conditions as specified in the First ABL Waiver. The First ABL Waiver contains certain amendments to the ABL Facility, including (i) expanding the definition of Change of Control to include the consummation of a plan of reorganization in connection with the commencement of a bankruptcy proceeding and (ii) providing that the maturity date of December 14, 2021 shall be subject to certain early maturity triggers related to a Change of Control of the Company (as such definition has been amended by the First ABL Waiver) or the ABL Waiver Termination Date.
On September 30, 2019, Bristow Norway AS and Bristow Helicopters, as borrowers and guarantors, and the Company, as guarantor, entered into a waiver letter (the “Second ABL Waiver”) with Barclays Bank PLC, as agent, and Credit Suisse AG, Cayman Islands Branch, as lender, with respect to the ABL Facility. The Second ABL Waiver further extended the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019.
On May 10, 2019, Bristow Aircraft Leasing Limited (“BALL”), as borrower, entered into a waiver letter (the “Lombard“First BALL Lombard Waiver”) with Lombard North Central Plc, as administrative agent and as security trustee, with respect to the term loan credit agreement, dated as of November 11, 2016 (the “BALL Lombard Credit Agreement”). IfBecause an Insolvency Proceeding (as defined in the First BALL Lombard Waiver) iswas commenced on or before May 15, 2019, the First BALL Lombard Waiver extends,extended, subject to certain conditions, the waivers received under the previous waiver letter (as described in our Current Report on Form 8-K filed with the SEC on April 15, 2019), until the earliestearlier of (a) certain events related to a plan of reorganization or

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


liquidation of the Company, Insolvency Proceeding or debtor-in-possession financing or (b) December 15, 2019 (the “Lombard Waiver Termination Date”). In addition, the First BALL Lombard Waiver waives,waived, until the Lombard Waiver Termination Date, any Default or Event of Default (each as defined in the BALL Lombard Credit Agreement) as a result of (i) the amendment of the Company’s periodic reports for fiscal year 2018, (ii) the possible commencement of an Insolvency Proceeding or any related acceleration of other material indebtedness and (iii) the possible occurrence of an Event of Default under the term loan credit agreement, dated as of November 11, 2016, among Bristow U.S. Leasing LLC, as borrower, the lenders from time to time party thereto and Lombard North Central plc, as administrative agent and as security trustee (the “BULL Lombard Credit Agreement”), subject to certain conditions.
On September 30, 2019, BALL, as borrower, entered into a waiver letter (the “Second BALL Lombard Waiver”) with Lombard North Central Plc, as administrative agent and as security trustee, with respect to the BALL Lombard Credit Agreement. In addition, BULL, as borrower, entered into a waiver letter (the “BULL Lombard Waiver”) with Lombard North Central Plc, as administrative agent and as security trustee, with respect to the BULL Lombard Credit Agreement. The Second BALL Lombard Waiver and the BULL Lombard Waiver both extended the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019.
Events of Default — The filing of the Chapter 11 Cases constituted an event of default that accelerated the obligations under the following instruments and agreements:
the Third Supplemental Indenture, dated as of October 12, 2012, to the Indenture, dated as of June 17, 2008 (the “Base Indenture”), among the Company, the guarantors named therein and Wilmington Trust, National Association, (“Wilmington Trust”), as successor trustee to U.S. Bank National Association (“U.S. Bank”), and our 6¼% Senior Notes issued thereunder;
the Sixth Supplemental Indenture to the Base Indenture, dated as of December 18, 2017, among the Company, the guarantors named therein and WilmingtonDelaware Trust Company, as successor trustee to U.S. Bank, and our 4½% Convertible Senior Notes issued thereunder;
the Indenture, dated as of March 6, 2018, among the Company, the guarantors named therein and U.S. Bank, as trustee and collateral agent (the “Secured Indenture”), and our 8.75% Senior Secured Notes issued thereunder;
the PK Credit Agreement;
the Macquarie Credit Agreement;
the BULL Lombard Credit Agreement; and
various aircraft operating leases and real estate leases.
The instruments and agreements described above provide that, as a result of the commencement of the Chapter 11 Cases, the financial obligations thereunder, including for the debt instruments any principal amount, together with accrued interest thereon, are immediately due and payable. However, any efforts to enforce payment of such financial obligations under such instruments

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


and agreements arewere automatically stayed as a result of the filing of the Chapter 11 Cases and the holders’ rights of enforcement in respect of such financial obligations arewere subject to the applicable provisions of the Bankruptcy Code.
Term Loan Agreement — On May 10, 2019, the Company entered into a Term Loan Credit Agreement, dated the same date (the “Term Loan Agreement”), by and among the Company and Bristow Holdings Company Ltd.BHC III, (“BHC III”), as borrowers, certain subsidiaries of the Company as guarantors party thereto, the lenders from time to time party thereto (initially, certain holders of the 8.75% Senior Secured Notes), and Ankura Trust Company, LLC, as administrative agent (the “Term Loan Agent”), for a senior secured term loan of $75 million (the “2019 Term Loan”). Immediately upon entering into the Term Loan Agreement, and prior to the Petition Date, the Company and BHC III borrowed the full amount thereunder, the net proceeds of which may be used only in compliance with a cash flow forecast required pursuant to the terms of the Term Loan Agreement, which the Company expects will bewere used for general corporate purposes, including to fund the working capital and liquidity requirements of the Company during the pendency of the Chapter 11 Cases. The full principal amount of the 2019 Term Loan is due May 10, 2022. At the Company’s election, borrowings under the 2019 Term Loan will bear interest at either (x) the Eurodollar Rate (as defined in the Term Loan Agreement) plus 7% or (y) the Base Rate (as defined in the Term Loan Agreement) plus 6%. The initial borrowings under the 2019 Term Loan will be Eurodollar Rate loans with monthly interest payments. The 2019 Term Loan is secured by a first lien on certain specified collateral, including, among other things, equity pledges of 35% of the equity interests in certain of the Company’s first-tier foreign subsidiaries (the remaining 65% of such entities have been previously pledged under the 8.75% Senior Secured Notes), 100% of the equity of BHC III, and Bristow

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


International Panama S. de RL, and two newly formed special-purpose vehicles, as well as a junior lien on certain collateral securing the 8.75% Senior Secured Notes. The borrowers have the option in connection with the consummation of a Reorganization Plan (as defined in the Term Loan Agreement) that is satisfactory to the lenders to require that the 2019 Term Loan be converted into equity of the Company upon consummation of such Reorganization Plan, subject to certain conditions. The Term Loan Agreement contains customary pre-payment requirements.
The Term Loan Agreement contains certain customary negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s and its subsidiaries’ incurrence of additional indebtedness or liens, mergers, dispositions of assets, investments, restricted payments, modifications to material agreements, transactions with affiliates and fundamental changes. In addition, the Term Loan Agreement requiresrequired that, on the delivery of each Variance Report (as defined in the Term Loan Agreement), total operating disbursements and total receipts of the Company and its subsidiaries for certain specified periods shall not exceed (with respect to disbursements) or be less than (with respect to total receipts) the aggregate amount forecasted therefor for such period by more (with respect to disbursements) or less (with respect to total receipts) than a specified percentage of the forecasted amount. The Term Loan Agreement also contains customary affirmative covenants and customary representations and warranties.
The Term Loan Agreement specifies certain customary events of default, including, among others, failure to pay principal or interest on the 2019 Term Loan when due, the breach of representations or warranties in any material respect, non-performance of other covenants and obligations, judgments, the occurrence of certain ERISA events and certain change of control events. The filing of the Chapter 11 Cases neither constitutes an event of default nor accelerates the maturity of the Company’s indebtedness under the Term Loan Agreement.
On June 6, 2019, we entered into Amendment No. 1 to the Term Loan Agreement (the “First Term Loan Amendment”), dated the same date, by and among the Company, BHC III and the lenders party thereto. Among other things, the First Term Loan Amendment extended the deadline for delivery to the administrative agent and the lenders of (i) the annual audit report of the borrower and its subsidiaries for the fiscal year ended March 31, 2019 from 90 days to 120 days after the end of such fiscal year and (ii) monthly unaudited consolidated financial statements of the borrower and its subsidiaries from 10 days to 20 business days after the end of each month.
On August 22, 2019, we entered into Amendment No. 2 to the Term Loan Agreement (the “Second Term Loan Amendment”), dated the same date, by and among the Company, BHC III and the Term Loan Agent. The Second Term Loan Amendment amended the Term Loan Agreement in order to clarify the definition of Pledged Aircraft under the Term Loan Agreement.
On August 26, 2019, in connection with the entry into the DIP Credit Agreement, we entered into Amendment No. 3 to the Term Loan Agreement (the “Third Term Loan Amendment”), dated the same date, by and among the Company, BHC III, the lenders party thereto and the Term Loan Agent. The Third Term Loan Amendment amended and restated the Term Loan Agreement in order to, among other things, permit the entry into the DIP Credit Agreement, the incurrence of indebtedness thereunder and the granting of related liens thereunder, and make certain other conforming changes.
On September 30, 2019, we entered into Amendment No. 4 to the Term Loan Agreement (the “Fourth Term Loan Amendment”), dated the same date, by and among the Company, BHC III and the Term Loan Agent. The Fourth Term Loan Amendment amended the Term Loan Agreement in order to extend the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019.
In connection with the Amended Plan, on October 31, 2019, we entered into Amendment No. 5 to the Term Loan Agreement (the “Fifth Term Loan Amendment”), dated the same date, by and among the Company, BHC III, the guarantors party thereto, the lenders party thereto and the Term Loan Agent. The Fifth Term Loan Amendment amended the Term Loan Agreement in order to, among other things, (i) increase the applicable margin in respect of all outstanding term loans to 8.00% in the case of Eurodollar Rate loans and 7.00% for Base Rate loans (with increases to 9.00% and 8.00%, respectively, with respect to all such term loans outstanding after the six-month anniversary of the Effective Date), (ii) release Bristow Helicopter Group Limited from all guaranty and collateral obligations in respect of the 2019 Term Loan, (iii) modify certain negative covenants to, among other things, allow for future aircraft-related financings and related liens and investments and (iv) delete certain provisions relating to the Chapter 11 Cases, in light of the occurrence of the Effective Date of the Amended Plan, including the deletion of the requirements to (x) deliver Variance Reports (as defined in the Term Loan Agreement) and (y) ensure that total operating disbursements and total receipts of the Company and its subsidiaries for certain specified periods did not exceed (with respect to disbursements) or were not less than (with respect to total receipts) the aggregate amount forecasted therefor for such period by more (with respect to disbursements) or less (with respect to total receipts) than a specified percentage of the forecasted amount.

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


Backstop Commitment Agreement — On July 24, 2019, the Company entered into a Backstop Commitment Agreement (the “Backstop Commitment Agreement”) with the other parties thereto (the “Commitment Parties”), pursuant to which the Commitment Parties agreed to backstop a total $385 million new money rights offering (the “Rights Offering”) of New Stock of the Reorganized Company. In accordance with the Amended Plan and certain Rights Offering procedures filed as part of the Amended Plan, the Company granted the Supporting Noteholders, including certain Commitment Parties who are Unsecured Noteholders (the “Unsecured Commitment Parties”) or Secured Noteholders (the “Secured Commitment Parties”), and holders of certain other unsecured claims (collectively with the Unsecured Noteholders, the “Unsecured Claims”), the right to purchase shares of New Stock of the Reorganized Company (the “Rights Offering Shares”), which were comprised of 91.825% of New Common Stock and 8.175% of New Preferred Stock, for an aggregate purchase price of, in the case of the Unsecured Claims, $347.5 million (the “Unsecured Rights Offering Amount”) and, in the case of the Secured Noteholders, $37.5 million (the “Secured Rights Offering Amount” and, together with the Unsecured Rights Offering Amount, the “Rights Offering Amount”)). Under the Backstop Commitment Agreement, the Commitment Parties agreed to purchase any Rights Offering Shares that were not duly subscribed for pursuant to the Rights Offering (the “Unsubscribed Shares”) at the Per Equity Share Purchase Price (as defined in the Backstop Commitment Agreement).
Under the Backstop Commitment Agreement, the Debtors agreed to pay (i) on the earlier of the closing date of the transactions contemplated by the Backstop Commitment Agreement or the termination of the Backstop Commitment Agreement, a backstop commitment fee (the “Backstop Commitment Fee”) in, at the election of the Commitment Parties, New Stock equal to 10% of (a) the Unsecured Rights Offering Amount to the Unsecured Commitment Parties and (b) the Secured Rights Offering Amount to the Secured Commitment Parties and (ii) both as promptly as reasonably practicable after entry of the BCA Approval Order (as defined in the Backstop Commitment Agreement) and on a monthly basis thereafter, all reasonably incurred and documented professional fees of the Commitment Parties. The Backstop Commitment Fee was paid in New Stock to the Commitment Parties pro rata based on the amount of their respective backstop commitments.
The rights to purchase Rights Offering Shares (excluding Unsubscribed Shares) in the Rights Offering were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to section 1145 of the Bankruptcy Code. A portion of the New Common Stock issued in the Rights Offering was issued in reliance upon such exemption, and a portion of the New Common Stock and all of the New Preferred Stock were issued in reliance upon the exemption from registration under the Securities Act provided by Section 4(a)(2) thereof or another available exemption from registration thereunder. The offer and sale of the Unsubscribed Shares purchased by the Commitment Parties pursuant to the Backstop Commitment Agreement were made in reliance upon the exemption from registration under the Securities Act provided by Section 4(a)(2) thereof or another available exemption from registration thereunder. As a condition to the closing of the transactions contemplated by the Backstop Commitment Agreement, the Reorganized Company entered into a registration rights agreement with certain Commitment Parties requiring the Reorganized Company, subject to the terms and conditions thereof, to register the Commitment Parties’ securities under the Securities Act.
The Commitment Parties’ commitments to backstop the Rights Offering and the other transactions contemplated by the Backstop Commitment Agreement were conditioned upon satisfaction of all applicable conditions set forth therein. The Rights Offering Shares were issued pursuant to the Rights Offering and the Backstop Commitment Agreement on the Effective Date.
On September 30, 2019, we entered into a limited waiver and amendment to the Backstop Commitment Agreement (the “BCA Amendment”), dated the same date, by and between the Company, on behalf of itself and each of the other Debtors, and certain Commitment Parties. The BCA Amendment extended the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019.
Debtor-in-Possession Commitment LetterCredit Agreement — — In connection with the Chapter 11 Cases and pursuant to a Commitment Letter, dated May 10, 2019, fromcommitment letter between the DIP Borrowers (as defined below) and the lenders party thereto, on July 25, 2019, the Debtors filed a motion seeking, among other things, interim and agreed to byfinal approval of the proposed Superpriority Secured Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”) among the Company, andas lead borrower, BHC III, as co-borrower (together with the Company, the “DIP Borrowers”), the other Debtors and guarantors party thereto and other guarantors from time to time party thereto, the financial institutions or other entities from time to time party thereto, and Ankura Trust Company, LLC, as administrative agent and collateral agent (the “DIP Agent”). On August 21, 2019, the Bankruptcy Court entered a final order, which, among other things, approved the DIP Credit Agreement, and on August 26, 2019, the Company entered into the DIP Credit Agreement. On August 27, 2019, the Company borrowed the full amount of the DIP Credit Agreement of $150 million at an ad hoc group8.5% borrowing rate, $75 million of holderswhich was used to pay down a portion of the 8.75% Senior Secured Notes has agreeddiscussed below and the remainder of which was to provide the DIP Borrowers with a superpriority senior secured debtor-in-possession credit facility (the “DIP Facility”) on the terms set forth in the DIP Facility Term Sheet attached thereto (the “DIP Term Sheet”). The DIP Term Sheet provides that, among other things, the DIP Facility shall be comprised of loans in an aggregate principal amount of $75.0 million. The availability of the DIP Facility is subject to certain conditions and milestones, including approval by the Bankruptcy Court, which has not been obtained at this time.used for general corporate purposes.


2731
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


On September 30, 2019, we entered into Amendment No. 1 to the DIP Credit Agreement (the “DIP Credit Agreement Amendment”), dated the same date, among the Company, BHC III and the DIP Agent. The DIP Credit Agreement Amendment amended the DIP Credit Agreement to extend the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019. On October 31, 2019, we repaid borrowings under the DIP Credit Agreement in exchange for New Stock of the Reorganized Company, and the DIP Credit Agreement terminated pursuant to its terms.
Consent Solicitation and Supplemental Indenture — On November 21, 2018, we completed the previously announced solicitation of consents from holders of our outstanding 8.75% Senior Secured Notes to amend certain provisions of the Secured Indenture pursuant to a supplemental indenture (the “Secured Supplemental Indenture”). The Secured Supplemental Indenture became effective upon the execution and delivery thereof, but would become operative only upon the delivery of a cash payment to eligible holders of the 8.75% Senior Secured Notes who validly delivered and did not revoke consents prior to the receipt of the consents required to effect the amendments under the Secured Supplemental Indenture. As the cash payment was not made, the Secured Supplemental Indenture did not become operative.
ABL Facility — On April 17, 2018, two of our subsidiaries entered into a new asset-backed revolving credit facility (the “ABL Facility”), which provides for commitments in an aggregate amount of $75 million, with a portion allocated to each borrower subsidiary, subject to an availability block of $15 million and a borrowing base calculated by reference to eligible accounts receivable. The maximum amount of the ABL Facility could be increased from time to time to a total of as much as $100 million, subject to the satisfaction of certain conditions, and any such increase would be allocated among the borrower subsidiaries. The ABL Facility matures in five years, subject to certain early maturity triggers related to maturity of other material debt or a change of control of the Company. Amounts borrowed under the ABL Facility are secured by certain accounts receivable owing to the borrower subsidiaries and the deposit accounts into which payments on such accounts receivable are deposited. As of June 30, 2019, there were no outstanding borrowings under the ABL Facility nor had we made any draws during the three months ended June 30, 2019. Letters of credit issued under the ABL Facility in the aggregate face amount of $14.7 million were outstanding on June 30, 2019.
The ABL Facility was amended pursuant to the ABL Waiver. As discussed above under “—Waiver of Defaults,” the ABL Waiver provided that the maturity date of December 14, 2021 shall be subject to certain early maturity triggers related to a Change of Control of the Company (as such definition has been amended by the ABL Waiver) or the ABL Waiver Termination Date.
On the Effective Date, the Company entered into an Amendment and Restatement, Confirmation and Waiver Agreement (the “ABL Amendment”) to the ABL Facility (together with the ABL Amendment, the “Amended ABL”), by and among the Company, as parent, Bristow Norway AS and Bristow Helicopters, as borrowers and guarantors, the financial institutions from time to time party thereto as lenders and Barclays Bank PLC, in its capacity as agent and security trustee. The ABL Amendment amended the ABL Facility in order to, among other things, (i) make permanent certain waivers of defaults or events of default that were previously provided during the pendency of the Chapter 11 Cases, (ii) confirm the existing maturity date of April 17, 2023, (iii) provide that the maximum amount of the Amended ABL may be increased, subject to satisfaction of certain conditions, from time to time to a total of as much as $115 million from its current aggregate of $100 million, and (iv) provide for the accession at a later date of Bristow U.S. LLC as a co-borrower under the Amended ABL and the addition of certain of its receivables to the borrowing base and the collateral for the Amended ABL.
8.75% Senior Secured Notes due 2023 — On August 12, 2019, we commenced a tender offer (the “Tender Offer”) to purchase for cash our outstanding 8.75% Senior Secured Notes, up to an aggregate principal amount that would not result in an aggregate purchase price (including accrued and unpaid interest to, but not including, the settlement date) that exceeded $75.0 million. On September 11, 2019, we completed the Tender Offer, purchasing $74.8 million aggregate principal amount of the 8.75% Senior Secured Notes for $74.8 million, plus accrued and unpaid interest of $0.2 million, using funds borrowed under the DIP Credit Agreement. In accordance with the Amended Plan, on the Effective Date, all outstanding obligations under the 8.75% Senior Secured Notes, including the indentures governing such obligations, were cancelled, except to the limited extent expressly set forth in the Amended Plan.

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


4½% Convertible Senior Notes due 2023 — The balances of the debt and equity components of our 4½% Convertible Senior Notes are as follows (in thousands):
  June 30,
 2019		 March 31,
 2019
     
Equity component - net carrying value (1)
 $36,778
 $36,778
Debt component:    
Face amount due at maturity $143,750
 $143,750
Unamortized discount —
 (30,806)
Debt component - net carrying value $143,750
 $112,944
_____________ 
(1) Net of equity issuance costs of $1.0 million.
Prior to May 11, 2019, the remaining debt discount was being amortized to interest expense over the term of the 4½% Convertible Senior Notes using the effective interest rate. The effective interest rate for the three months ended June 30, 2019 was 11.0%. Interest expense related to our 4½% Convertible Senior Notes was as follows (in thousands):
  Three Months Ended
 June 30,
  2019 2018
Contractual coupon interest $715
 $1,611
Amortization of debt discount 648
 1,313
Total interest expense $1,363
 $2,924
As of May 11, 2019, we determined that the 4½% Convertible Senior Notes were an allowed claim and therefore reclassified the balance to liabilities subject to compromise and discontinued accruing interest on these obligations. Contractual interest on the 4½% Convertible Senior Notes for the three months ended June 30, 2019 was $1.6 million, which is $0.9 million in excess of reported interest expense for the three months ended June 30, 2019. In connection with reclassifying the 4½% Convertible Senior Notes to liabilities subject to compromise, we wrote-off $30.2 million of unamortized discount and $2.3 million of deferred financing fees. See Note 2 for further details. In accordance with the Amended Plan, on the Effective Date, all outstanding obligations under the 4½% Convertible Senior Notes, including the indentures governing such obligations, were cancelled, except to the limited extent expressly set forth in the Amended Plan.
Macquarie Debt — On October 3, 2019, the Bankruptcy Court approved a term sheet (the “Macquarie Term Sheet”) among the Company, as guarantor, Bristow U.S. LLC, as borrower and lessee, BriLog Leasing Ltd., as lessee, Macquarie Bank Limited, as administrative agent and security agent, Macquarie Leasing LLC, as lender and owner participant, and Macquarie Rotorcraft Leasing Holdings Limited, as owner participant, pursuant to which, among other matters, the parties agreed to enter into definitive documentation at emergence for an amendment to the Macquarie Credit Agreement (the “Macquarie Amendment”).
The parties entered into the Macquarie Amendment on October 31, 2019. Among other things, the Macquarie Amendment (i) extended the maturity date of the loan made under the Macquarie Credit Agreement by 12 months to March 6, 2023, (ii) adjusted the loan amortization in accordance with the newly extended maturity date, (iii) confirmed that an event of default under four or more existing leases involving parties to the Macquarie Term Sheet that remains unremedied after the applicable grace period for such an event of default will constitute an event of default under the Macquarie Credit Agreement, (iv) to the extent permitted by other debt instruments, provided for the collateralization of the obligations owed under such existing leases with the liens securing the Macquarie Credit Agreement and (v) allowed for the delivery by October 31, 2019 of the annual financial statements of the Company and its subsidiaries for the fiscal year ended March 31, 2019, and by December 31, 2019 of the quarterly financial statements of the Company and its subsidiaries for the fiscal quarters of the Company ended June 30, 2019 and September 30, 2019.
PK Air Debt — On October 3, 2019, the Company entered into an Omnibus Agreement (the “Omnibus Agreement”), dated the same date, among Bristow Equipment Leasing Ltd., as borrower, PK Transportation Finance Ireland Limited (“PK Transportation”), as lender, PK AirFinance, as agent for the lender and as security trustee for the MAG Agent and the MAG Parties (each as defined in the PK Credit Agreement), PK AirFinance and PK Transportation. Pursuant to the Omnibus Agreement, among other matters, the parties have agreed, effective upon satisfaction of the conditions precedent set forth in the Omnibus Agreement (the “Omnibus Effective Date”), to amend the PK Credit Agreement to, among other things, extend the maturity date of the 24

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


loans made under the PK Credit Agreement by 18 months to January 27, 2025 and increase the principal amount of the loans in an aggregate amount of approximately $17.3 million. The Omnibus Agreement also updates the amortization schedule as of October 3, 2019 to provide that, among other things, only interest will be payable on the loans for the six months following the Omnibus Effective Date, with a balloon amount of approximately $104.2 million due on the maturity date. If the loans are refinanced by full prepayment during the six-month period following the Effective Date, no prepayment penalty will be due. Each loan is secured by an aircraft which has been pledged as collateral for the loans.
The Omnibus Agreement also provides that the Borrower Guarantee and Indemnity Cap (as defined in the PK Credit Agreement) will be reduced by the amount of increased principal when paid. In addition, the Omnibus Agreement adjusts the information covenants under the PK Credit Agreement such that the Company shall provide a copy of the annual audit report for each fiscal year for the Company and its subsidiaries as soon as available and in any event within 90 days after the end of such fiscal year of the Company (or, in the case of the fiscal year ended March 31, 2019, by October 31, 2019), and quarterly financial statements of the Company and its subsidiaries within 45 days after the end of each fiscal quarter of the Company (and, in the case of each of the fiscal quarters ended June 30, 2019 and September 30, 2019, by December 31, 2019). In the Omnibus Agreement, PK Transportation also agreed to waive certain events of default arising from breaches of covenants in other agreements as a result of the Chapter 11 Cases and failure to provide its financial statements by their required due dates.
6¼% Senior Notes due 2022 — As of May 11, 2019, we determined that the 6¼% Senior Notes were an allowed claim and therefore reclassified the balance to liabilities subject to compromise and discontinued accruing interest on these obligations. Contractual interest on the 6¼% Senior Notes for the three months ended June 30, 2019 was $6.3 million, which is $3.5 million in excess of reported interest expense for the three months ended June 30, 2019. In connection with reclassifying the 6¼% Senior Notes to liabilities subject to compromise, we wrote-off $2.4 million of deferred financing fees. See Note 2 for further details. In accordance with the Amended Plan, on the Effective Date, all outstanding obligations under the 6¼% Senior Notes, including the indentures governing such obligations, were cancelled, except to the limited extent expressly set forth in the Amended Plan.


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


Note 6 — 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.
Recurring Fair Value Measurements
The following table summarizes the financial instruments we had as of December 31, 2018,June 30, 2019, 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  
 December 31, 
 2018		 Balance  Sheet
Classification		 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,
 2019		 Balance  Sheet
Classification
Derivative financial instruments $—
 $3,174
 $—
 $3,174
 Prepaid expenses and other current assets $—
 $2,134
 $—
 $2,134
 Prepaid expenses and other current assets
Rabbi Trust investments 1,850
 —
 —
 1,850
 Other assets 2,632
 —
 —
 2,632
 Other assets
Total assets $1,850
 $3,174
 $—
 $5,024
  $2,632
 $2,134
 $—
 $4,766
 
The following table summarizes the financial instruments we had as of March 31, 2018,2019, 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,  
 2018		 Balance  Sheet
Classification		 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,
 2019		 Balance  Sheet
Classification
Derivative financial instruments $—
 $718
 $—
 $718
 Prepaid expenses and other current assets $—
 $1,845
 $—
 $1,845
 Prepaid expenses and other current assets
Rabbi Trust investments 2,296
 —
 —
 2,296
 Other assets 2,544
 —
 —
 2,544
 Other assets
Total assets $2,296
 $718
 $—
 $3,014
  $2,544
 $1,845
 $—
 $4,389
 
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 derivative financial instruments consist of foreign currency put option contracts whose fair value is determined by quoted market prices of the same or similar instruments, adjusted for counterparty risk. See Note 7 for a discussion of our derivative financial instruments.
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.
We did not have any items valued at fair value on a non-recurring basis as of June 30, 2019 and 2018.

2835
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


The following table summarizes the assets valued at fair value on a non-recurring basis during the three and nine months ended December 31, 2018 (in thousands):
  Quoted Prices in Active
Markets for
Identical Assets
(Level 1)		 Significant Other
Observable Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
Loss for the
Three Months
Ended
December 31, 2018		 Total
Loss for the
Nine Months
Ended
December 31, 2018
Inventories (1)
 $—
 $—
 $7,697
 $—
 $(9,276)
Assets held for sale (2)
 —
 —
 22,485
 (1,350) (1,350)
Aircraft and equipment (1)
 —
 —
 136,338
 —
 (104,939)
Other intangible assets (1)
 —
 —
 —
 —
 (3,005)
Total assets $—
 $—
 $166,520
 $(1,350) $(118,570)
_____________ 
(1)
Fair value as of September 30, 2018.
(2)
Fair value as of December 31, 2018.
The following table summarizes the assets valued at fair value on a non-recurring basis during the three and nine months ended December 31, 2017 (in thousands):
  Quoted Prices in Active
Markets for
Identical Assets
(Level 1)		 Significant Other
Observable Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
Loss for the
Three Months
Ended
December 31, 2017		 Total
Loss for the
Nine Months
Ended
December 31, 2017
Inventories (1)
 $—
 $—
 $1,252
 $—
 $(1,192)
Assets held for sale (2)
 —
 —
 31,038
 (1,560) (11,307)
Total assets $—
 $—
 $32,290
 $(1,560) $(12,499)
_____________ 
(1)
Fair value as of June 30, 2017.
(2)
Fair value as of December 31, 2017.
The fair value of inventories using Level 2 and 3 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 time frame 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 aircraft and equipment, using Level 3 inputs, is determined using a market approach. The market approach consisted of a thorough review of recent market activity, available transaction data involving the subject aircraft, current demand and availability on the market. We took into account the age, specifications, accrued hours and cycles, and the maintenance status of each subject aircraft.
The fair value of other intangible assets, using Level 3 inputs, is estimated using the income approach. The estimate of fair value includes unobservable inputs, including assumptions related to future performance, such as projected demand for services, rates, and levels of expenditures.
The fair value of assets held for sale using Level 3 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 nine months ended December 31, 2018 related to two aircraft held for sale. The loss for the three and nine months ended December 31, 2017 related to one and five aircraft held for sale, respectively. Additionally, the loss for the nine months ended December 31, 2017 includes a $6.5 million impairment relating to the Bristow Academy disposal group. For further details on Bristow Academy disposal group, see Note 1 to our fiscal year 2018 Financial Statements.

29
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 and has not been updated for any possible acceleration clauses.provisions in our debt instruments. The carrying and fair value of our debt, excluding unamortized debt issuance costs, are as follows (in thousands):
 December 31, 2018 March 31, 2018 June 30, 2019 March 31, 2019
 
Carrying
Value
 Fair Value 
Carrying
Value
 Fair Value 
Carrying
Value
 Fair Value 
Carrying
Value
 Fair Value
8.75% Senior Secured Notes due 2023 (1)
 $347,205
 $250,250
 $346,610
 $353,500
 $347,597
 $339,500
 $347,400
 $252,000
4½% Convertible Senior Notes due 2023 (2)
 111,514
 54,984
 107,397
 158,772
4½% Convertible Senior Notes due 2023(2) (3)
 143,750
 30,188
 112,944
 28,923
6¼% Senior Notes due 2022(3) 401,535
 140,537
 401,535
 325,243
 401,535
 83,720
 401,535
 75,288
Term Loan 75,000
 75,000
 —
 —
Lombard Debt 182,388
 182,388
 211,087
 211,087
 176,094
 176,094
 183,450
 183,450
Macquarie Debt 174,528
 174,528
 185,028
 185,028
 171,028
 171,028
 171,028
 171,028
PK Air Debt 216,637
 216,637
 230,000
 230,000
 210,494
 210,494
 212,041
 212,041
Airnorth Debt 11,738
 11,738
 13,832
 13,832
 10,146
 10,146
 11,058
 11,058
Eastern Airways Debt —
 —
 14,519
 14,519
 382
 382
 —
 —
Other Debt 7,959
 7,959
 3,991
 3,991
Other Debt(3)
 9,370
 9,370
 9,168
 9,168
 $1,453,504
 $1,039,021
 $1,513,999
 $1,495,972
 $1,545,396
 $1,105,922
 $1,448,624
 $942,956
_____________ 
(1) 
The carrying value is net of unamortized discount of $2.8$2.4 million and $3.4$2.6 million as of December 31June 30, 2019 and March 31, 2018,2019, respectively.
(2) 
The carrying value is net of unamortized discount of $32.2 millionzero and $36.4$30.8 million as of December 31June 30, 2019 and March 31, 2018,2019, respectively.
(3)
Reclassified to liabilities subject to compromise on our condensed consolidated balance sheet as of June 30, 2019. See Note 2 and Note 5 for further details.
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.


3036
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 7 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
From time to time, we enter into forward exchange contracts as a hedge against foreign currency asset and liability commitments and anticipated transaction exposures, including intercompany purchases. All derivatives are recognized as assets or liabilities and measured at fair value. We do not use financial instruments for trading or speculative purposes.
During fiscal year 20182019 and the ninethree months ended December 31, 2018,June 30, 2019, we entered into foreign currency put option contracts of £5 million per month through November 2019April 2020 to mitigate a portion of our foreign currency exposure. These derivatives were designated as cash flow hedges.
The designation of a derivative instrument as a hedge and its ability to meet relevant hedge accounting criteria determines how the change in fair value of the derivative instrument will be reflected in the consolidated financial statements. A derivative qualifies for hedge accounting if, at inception, the derivative is expected to be highly effective in offsetting the hedged item’s underlying cash flows or fair value and the documentation requirements of the accounting standard for derivative instruments and hedging activities are fulfilled at the time we enter into the derivative contract. A hedge is designated as a cash flow hedge, fair value hedge, or a net investment in foreign operations hedge based on the exposure being hedged. The asset or liability value of the derivative will change in tandem with its fair value. For derivatives designated as cash flow hedges, the changes in fair value are recorded in accumulated other comprehensive income (loss). The derivative’s gain or loss is released from accumulated other comprehensive income (loss) to match the timing of the effect on earnings of the hedged item’s underlying cash flows.
We review the effectiveness of our hedging instruments on a quarterly basis. We discontinue hedge accounting for any hedge that we no longer consider to be highly effective. Changes in fair value for derivatives not designated as hedges or those not qualifying for hedge accounting are recognized in current period earnings.
None of our derivative instruments contain credit-risk-related contingent features. Counterparties to our derivative contracts are high credit quality financial institutions.
The following table presents the balance sheet location and fair value of the portions of our derivative instruments that were designated as hedging instruments as of December 31, 2018June 30, 2019 (in thousands):
 Derivatives designated as hedging instruments Derivatives not designated as hedging instruments Gross amounts of recognized assets and liabilities Gross amounts offset in the Balance Sheet Net amounts of assets and liabilities presented in the Balance Sheet Derivatives designated as hedging instruments Derivatives not designated as hedging instruments Gross amounts of recognized assets and liabilities Gross amounts offset in the Balance Sheet Net amounts of assets and liabilities presented in the Balance Sheet
                    
Prepaid expenses and other current assets $3,174
 $—
 $3,174
 $—
 $3,174
 $2,134
 $—
 $2,134
 $—
 $2,134
Net $3,174
 $—
 $3,174
 $—
 $3,174
 $2,134
 $—
 $2,134
 $—
 $2,134
The following table presents the balance sheet location and fair value of the portions of our derivative instruments that were designated as hedging instruments as of March 31, 20182019 (in thousands):
 Derivatives designated as hedging instruments Derivatives not designated as hedging instruments Gross amounts of recognized assets and liabilities Gross amounts offset in the Balance Sheet Net amounts of assets and liabilities presented in the Balance Sheet Derivatives designated as hedging instruments Derivatives not designated as hedging instruments Gross amounts of recognized assets and liabilities Gross amounts offset in the Balance Sheet Net amounts of assets and liabilities presented in the Balance Sheet
                    
Prepaid expenses and other current assets $718
 $—
 $718
 $—
 $718
 $1,845
 $—
 $1,845
 $—
 $1,845
Net $718
 $—
 $718
 $—
 $718
 $1,845
 $—
 $1,845
 $—
 $1,845

3137
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


The following table presents the impact that derivative instruments, designated as cash flow hedges, had on our accumulated other comprehensive loss (net of tax) and our consolidated statements of operations for the three months ended December 31, 2018June 30, 2019 (in thousands):
    Financial statement location
     
Amount of loss recognized in accumulated other comprehensive loss $(5) Accumulated other comprehensive loss
Amount of loss reclassified from accumulated other comprehensive loss into earnings $—
 
Statement of operations  — Direct cost
The following table presents the impact that derivative instruments, designated as cash flow hedges, had on our accumulated other comprehensive loss (net of tax) and our consolidated statements of operations for the nine months ended December 31, 2018 (in thousands):
   Financial statement location   Financial statement location
      
Amount of gain recognized in accumulated other comprehensive loss $2,403
 Accumulated other comprehensive loss $485
 Accumulated other comprehensive loss
Amount of gain reclassified from accumulated other comprehensive loss into earnings $1,158
 
Statement of operations  — Direct cost
 $11
 Statement of operations
We estimate that $1.2$0.1 million of net gain in accumulated other comprehensive loss associated with our derivative instruments is expected to be reclassified into earnings within the next twelve months.
Note 8 — COMMITMENTS AND CONTINGENCIES
Aircraft Purchase Contracts — As shown in the table below, we expecthave obligations to make additional capital expenditures over the next seven fiscal years to purchase additional aircraft. As of December 31, 2018,June 30, 2019, we had 26 aircraft on order and no options to acquire an additional four 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.
  Three Months Ending March 31, 2019 Fiscal Year Ending March 31,  
  2020 2021 2022 
2023 and thereafter(1)
 Total
Commitments as of December 31, 2018:            
Number of aircraft:            
Large —
 —
 4
 5
 13
 22
U.K. SAR —
 4
 —
 —
 —
 4
  —
 4
 4
 5
 13
 26
Related commitment expenditures (in thousands) (2)
            
Large $2,197
 $24,310
 $74,946
 $83,195
 $188,401
 $373,049
U.K. SAR —
 59,946
 —
 —
 —
 59,946
  $2,197
 $84,256
 $74,946
 $83,195
 $188,401
 $432,995
Options as of December 31, 2018:            
Number of aircraft:            
Large 2
 2
 —
 —
 —
 4
  2
 2
 —
 —
 —
 4
             
Related option expenditures (in thousands) (2)
 $44,181
 $31,536
 $—
 $—
 $—
 $75,717
  Nine Months Ending March 31, 2020 Fiscal Year Ending March 31,  
  2021 2022 2023 2024 and thereafter Total
Commitments as of June 30, 2019:(1)
            
Number of aircraft:            
Large (2)
 —
 —
 3
 4
 15
 22
U.K. SAR (3)
 3
 1
 —
 —
 —
 4
  3
 1
 3
 4
 15
 26
Related commitment expenditures (in thousands)            
Large (2)
 $3,486
 $10,692
 $60,657
 $77,428
 $238,017
 $390,280
U.K. SAR (3)
 60,057
 —
 —
 —
 —
 60,057
  $63,543
 $10,692
 $60,657
 $77,428
 $238,017
 $450,337
_____________ 
(1) 
Includes $91.1On July 25, 2019, we entered into an amendment to our agreement for the purchase of four AW189 U.K. SAR configuration helicopters. Pursuant to the amendment, the parties mutually agreed to postpone the delivery dates for three helicopters to the second half of fiscal year 2020 and the first quarter of fiscal year 2021. The postponement in deliveries resulted in deferral of approximately $15.0 million in capital expenditures scheduled for five aircraft orders that can be cancelled prior to delivery dates. We made non-refundable depositsfiscal years 2020 into fiscal year 2021. The impact of $4.5 million related to these aircraftthis amendment is not included in prior periods.the table above.
(2) 
Includes progress paymentsIn October 2019, the Bankruptcy Court approved our agreement with Airbus Helicopters S.A.S. to reject our aircraft purchase contract for 22 large aircraft. This impact of this agreement is not included in the table above.
(3)
The four AW189 U.K. SAR configured aircraft on aircraft scheduled to be deliveredorder were being leased as of March 31, 2019. One of the AW189s was purchased in future periods only if options are exercised.August 2019 and one of the AW189s was purchased in October 2019.
We periodically purchase aircraft for which we have no orders. During the three months ended December 31, 2018, we purchased an aircraft that was not on order.

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


In December 2018, a large aircraft order was terminated and we removed $17.5 million of future commitments from the table above. We recorded contract termination costs of $14.0 million included in loss on disposal of assets on our condensed consolidated statements of operations for amounts previously included in construction in progress on our condensed consolidated balance sheets. We have an ongoing dispute with the OEM to recover a portion of these progress payments. For further details, see Note 1.
On May 1, 2019, we entered into an amendment to our agreement with Airbus Helicopters for the purchase of 22 H175 helicopters which includes five aircraft that can be cancelled by us prior to the delivery dates. Pursuant to the amendment, the parties mutually agreed to postpone the delivery dates for such helicopters for 18 months from the previous schedule with the first three helicopters now scheduled for delivery in the second half of fiscal year 2022. The postponement in deliveries resulted in various amendments to the payment terms under the purchase agreement including the deferral of approximately $110.0 million in capital expenditures scheduled for fiscal years 2019 to 2023 into fiscal years 2024 and beyond. Our capital commitments related to these H175 helicopters now total approximately $14.0 million for fiscal years 2020 and 2021. In connection with this amendment, the overall purchase price of these helicopters has been increased by $18.4 million to account for inflation. The impact of this amendment is not included in the table above.
Operating Leases — We have non-cancelable operating leases in connection with the lease of certain equipment, including leases for aircraft, and land and facilities. Rent expense incurred under all operating leases was $48.2 million and $42.6 million for the three months ended December 31, 2018 and 2017, respectively, and $147.8 million and $158.5 million for the nine months ended December 31, 2018 and 2017, respectively. Rent expense incurred under operating leases for aircraft was $42.8 million and $36.5 million for the three months ended December 31, 2018 and 2017, respectively, and $129.9 million and $137.9 million for the nine months ended December 31, 2018 and 2017, respectively.
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 December 31, 2018:
End of Lease TermNumber of Aircraft
Three months ending March 31, 2019 to fiscal year 202029
Fiscal year 2021 to fiscal year 202336
Fiscal year 2024 to fiscal year 202511
76
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 Helicopters Inc. (“Cougar”) and paid lease fees of $2.9 million and $4.7 million during the three months ended December 31, 2018 and 2017, respectively, and paid lease fees of $12.4 million and $14.4 million during the nine months ended December 31, 2018 and 2017, respectively.
In April and May 2019, we agreed to return our remaining four H225 leased aircraft and paid $4.3 million in lease return costs. We owe an additional $2.8 million in lease return costs, $9.7 million in future rent and $9.4 million in deferred rent related to these four H225 lease returns.
Separation Programs — Beginning in March 2015, we initiated involuntary separation programs (“ISPs”) in certain regions. The expense related to the ISPs for the three and nine months ended December 31, 2018 and 2017 is as follows (in thousands):
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,
 2018 2017 2018 2017
Direct cost$2,096
 $2,661
 $4,809
 $5,208
General and administrative313
 120
 2,046
 8,662
Total$2,409
 $2,781
 $6,855
 $13,870
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

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


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.
CEO Transition — On November 9, 2018, the Company announced the upcoming retirement of Jonathan E. Baliff, who served as President and Chief Executive Officer of the Company. Mr. Baliff stepped down from the position of President effective November 9, 2018, while continuing to serve as Chief Executive Officer. On February 11, 2019, the Company entered into a Retirement and Consulting Agreement (the “Retirement and Consulting Agreement”) with Mr. Baliff. Under the Retirement and Consulting Agreement, Mr. Baliff ceased to serve as Chief Executive Officer of the Company and resigned from the Board of Directors of the Company (the “Board”), effective February 28, 2019. Commencing March 1, 2019, Mr. Baliff provided consulting services to the Company through June 30, 2019 and received a monthly consulting fee of $30,000.
Mr. Baliff’s retirement constituted a separation of employment entitling him to benefits under the Company’s Management Severance Benefits Plan for U.S. Employees (the “Severance Plan”). Pursuant to the Severance Plan and subject to Mr. Baliff’s execution and non-revocation of a release of claims against the Company, upon his termination of employment, Mr. Baliff became entitled to: (a) severance of $1,442,000, equal to two times Mr. Baliff’s base salary; (b) Company payment of Mr. Baliff’s COBRA premiums for 36 months (extended from 18 months); (c) outplacement services for 12 months; (d) accelerated vesting of Company equity awards and Company performance cash awards granted in June 2016 that would have vested by their terms in June 2019; and (e) a pro-rata bonus, assuming target performance, for the portion of fiscal year 2019 during which Mr. Baliff served as Chief Executive Officer.
In consideration of Mr. Baliff’s agreement to extend the post-termination non-compete and employee non-solicitation provisions from one year to two years, the Company agreed that the following Company equity awards would remain outstanding and continue to vest, subject to Mr. Baliff’s compliance with the restrictive covenants and satisfaction of his obligations under the consulting arrangement described above: (a) options to purchase 43,503 shares of Company stock, scheduled to vest on June 5, 2019; (b) options to purchase 102,190 shares of Company stock, scheduled to vest on June 12, 2019; (c) 74,502 Company restricted stock units, scheduled to vest on June 12, 2020; and (d) 23,927 Company restricted stock units, scheduled to vest on June 5, 2021.
Effective upon Mr. Baliff’s retirement and until the appointment of a new Chief Executive Officer, the Board named Thomas N. Amonett, the Vice-Chairman of the Board and interim President of the Company, to the additional role of interim Chief Executive Officer.
On March 1, 2019, the Company announced that L. Don Miller, Senior Vice President and Chief Financial Officer of the Company, had been appointed to succeed Mr. Baliff as President and Chief Executive Officer of the Company, effective as of the close of business on February 28, 2019. Mr. Miller joined the Board concurrently with the effectiveness of his appointment as President and Chief Executive Officer. Mr. Amonett, who has been serving as the interim President of the Company, was appointed to the role of Executive Vice Chairman of the Board, effective upon the effectiveness of Mr. Miller’s appointment. Brian J. Allman, Vice President and Chief Accounting Officer of the Company, was appointed to succeed Mr. Miller as Senior Vice President and Chief Financial Officer.
Other Purchase Obligations — As of December 31, 2018,June 30, 2019, we had $52.0$25.6 million of other purchase obligations representing unfilled purchase orders for aircraft parts and non-cancelable power-by-the-hour maintenance commitments.
Sikorsky Lawsuit — On January 8, 2019, we filed suit in the District Court of Harris County, Texas against Sikorsky Aircraft Corporation (“Sikorsky”) for breach of contract, unjust enrichment and conversion as a result of Sikorsky terminating a sales

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


agreement after we sought to delay delivery of a helicopter and retaining our $11.7 million deposit as liquidated damages. We are seeking a ruling that Sikorsky be required to return the deposit and provide an accurate calculation of its damages under the sales agreement. Sikorsky has challenged venue, and discovery related thereto is underway. WithBristow recently removed the advice of counsel, we are evaluating the feasibility of transferring the matterclaim to the Bankruptcy Court for disposition.Southern District of Texas bankruptcy court based on Sikorsky’s decision to file a claim in bankruptcy related to this case. We expect a resolution in the next six to nine months.
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.
On March 10, 2019, one of our Bell 407 model aircraft was involved in an accident in the Gulf of Mexico in which one pilot and one passenger were fatally injured. The cause(s) of the accident remain unknown at this time. We continue to work with authorities in their investigation.
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 resulting in the European Aviation Safety Agency issuing airworthiness directives prohibiting

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


flight of H225LP and AS332L2 model aircraft. On July 20,November 6, 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. On July 5, 2018, the Accident Investigation Board Norway issued its final investigation report on the accident. The report cited a fatigue fracture within the epicyclic module of the main gear box as the cause of the accident, and issued safety recommendations in a number of areas, including gearbox design and certification requirements, failure tolerance, and continued airworthiness of the AS332L2 and the H225LP helicopters. We continue not to operate for commercial purposes our H225LP model aircraft, and we are carefully evaluating next steps for the H225LP model aircraft in our operations worldwide, with the safety of passengers and crews remaining our highest priority. Recent third-party market transactions and the development of alternative opportunities outside of our traditional oil and gas services for our H225 aircraft indicated a substantial return to oil and gas service within our operations was not likely. See Note 1 for further details.
The Huntington National Bank (“Huntington”) filed suit against the Company and Bristow U.S. LLC in the U.S. District Court for the Southern District of New York (the “Southern District of New York Court”). Huntington alleges violation of an addendum of a lease agreement for failure to arrange for the enrollment of the aircraft engines in a maintenance agreement and seeks approximately $2.5 million in damages. We submitted a counterclaim for approximately $100,000 of costs related to storage, maintenance and insurance of the aircraft following the expiration of the lease. On March 1, 2019, the Southern District of New York Court denied Huntington’s motion for summary judgment. We initiated discovery; however, on May 16, 2019, the proceedings were stayed as a result of the Chapter 11 Cases. Huntington filed a claim in the bankruptcy proceedings for the damages alleged in its initial lawsuit and for damages allegedly incurred as a result of Bristow returning a second leased aircraft. The Company, Bristow U.S. LLC, and Huntington entered into a Settlement Agreement on October 17, 2019 that provides a framework for resolution of Huntington’s claims with respect to both leased aircraft.  The Bankruptcy Court approved the settlement on October 23, 2019.
Two purported class action complaints, Kokareva v. Bristow Group Inc., Case No. 4:19-cv-0509 and Lilienfield v. Bristow Group Inc., Case No. 4:19-cv-1064, were filed in the U.S. District Court for the Southern District of Texas (the “Southern District of Texas Court”) on February 14, 2019 and March 21, 2019, respectively. The complaints, which also name Jonathan E. Baliff and L. Don Miller as defendants, allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), arising out of the Company’s disclosures and alleged failure to make timely disclosure of inadequate monitoring control processes related to non-financial covenants within certain of its secured financing and lease agreements. On May 17, 2019, the Southern District of Texas Court appointed BRS Investor Group as Lead Plaintiff and consolidated both actions under Kokareva v. Bristow Group Inc., Case No. 4:19-cv-0509.
When the Company filed the Chapter 11 Cases on May 11, 2019, the litigation against the Company was automatically stayed. TheWhen the Company emerged from bankruptcy, all the claims against the Company were released, but the case was not automatically stayedis still proceeding against the individual defendants. Plaintiffs filed a Consolidated Amended Complaint on November 4, 2019, and defendants but the Company intendshave until January 3, 2020 to request that the stay also extend to the individual defendants.  On May 31, 2019, the Lead Plaintiff requested that the Southern District of Texas Court schedule an initial conference, and the defendants requested that any conference be postponed until after the Bankruptcy Court decides whether the stay should extend to the individual defendants.  The Southern District of Texas Court has not yet setfile a date for an initial conference.response. The defendants believe that the claims are without merit and intend to vigorously defend against them.
On June 7, 2019, Marilyn DeVault filed a Stockholder Derivative Complaint against Thomas N. Amonett, Gaurdie Banister Jr., Ian A. Godden, Lori A. Gobillot, A. William Higgins, Thomas C. Knudson, Biggs C. Porter, Jonathan E. Baliff, Stephen A. King, Matthew Masters, David C. Gompert, Bruce H. Stover, L. Don Miller, and Brian J. Allman (the “Derivative Defendants”) in the United States District Court for the District of Delaware. The complaint alleges breaches of fiduciary duties and violations of Section 10(b) of the Securities Exchange Act of 1934 arising out of Company disclosures and failing to have adequate monitoring control processes related to non-financial covenants within certain of our secured financing and lease agreements. The complaint also alleges waste of corporate assets, gross mismanagement, and unjust enrichment. On July 19, 2019, the parties submitted a Joint Stipulation to stay the case pending the resolution of any motion to dismiss filed in the actions in the Southern District of Texas Court. The Derivative Defendants believe that the claims are without merit and intend to vigorously defend against them.
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.
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 December 31, 2018 to be approximately $3 million.

35
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


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.
See Part II. Item 1. “Legal Proceedings” included elsewhere in this Quarterly Report for a discussion

39
Table of other actions or claims pending.Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 9 — TAXESLEASES
As discussed in Note 1, we adopted ASC 842 on a prospective basis on April 1, 2019 and used the effective date as the date of initial application. Therefore, prior period financial information has not been adjusted and continues to be reflected in accordance with our historical accounting policies. The lease standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.
We estimateelected to adopt the full-year“package of practical expedients”, which allows us to carry forward historical assessments of whether existing agreements contain a lease, classification of existing lease agreements, and treatment of initial direct lease costs. We also elected to account for non-lease and lease components as a single lease component for all asset classes and exclude short-term leases (those with terms of 12 months or less) from balance sheet presentation.
The adoption of this accounting standard had the effects specified in Note 1. 
Accounting Policy for Leases
We determine if an arrangement is a lease at inception. All of our leases are operating leases and are recorded in ROU assets, accounts payable and operating lease liabilities in our condensed consolidated balance sheet as of June 30, 2019.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligations to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of a lease based on the present value of lease payments over the lease term. We use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease. The lease term includes options to extend when we are reasonably certain to exercise the option. We are not, however, reasonably certain that we will exercise any option(s) to extend at commencement of a lease as each extension would be based on the relevant facts and circumstances at the time of the decision to exercise or not exercise an extension option, and as such, they have not been included in the remaining lease terms. We will evaluate the impact of lease extensions, if and when the exercise of an extension option is probable.
Overview
We have non-cancelable operating leases in connection with the lease of certain equipment, including leases for aircraft, and land and facilities used in our operations. The related lease agreements, which range from non-cancelable and month-to-month terms, generally provide for fixed monthly rentals, and can also include renewal options. We generally pay all insurance, taxes, and maintenance expenses associated with these leases, and these costs are not included in the lease liability and are recognized in the period in which they are incurred.
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 June 30, 2019:
End of Lease TermNumber of Aircraft
Nine months ending March 31, 2019 to fiscal year 202028
Fiscal year 2021 to fiscal year 202324
Fiscal year 2024 to fiscal year 20251
53
Rent expense incurred under all operating leases was $52.2 million and $50.1 million for the three months ended June 30, 2019 and 2018, respectively. For the three months ended June 30, 2019, a portion of the total operating lease expense relating to short-term leases was $0.3 million. Rent expense incurred under operating leases for aircraft was $46.4 million and $44.1 million for the three months ended June 30, 2019 and 2018, respectively.

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


Operating leases as of June 30, 2019 were as follows (in thousands):
    
 Operating lease right-of-use assets $187,961
    
 Current portion of operating lease liabilities $90,946
 Operating lease liabilities 103,567
 Total operating lease liabilities $194,513
    
    
   Three Months Ended
 June 30, 2019
 Cash paid for operating leases $36,650
 ROU assets obtained in exchange for lease obligations $48,068
 Weighted average remaining lease term 4 years
 Weighted average discount rate 7.14%
As of June 30, 2019, aggregate future payments under all non-cancelable operating leases that have initial or remaining terms in excess of one year, including leases for 53 aircraft, are as follows (in thousands):
 Aircraft Other Total
Fiscal year ending March 31,     
2020$71,103
 $9,550
 $80,653
202139,428
 10,622
 50,050
202226,713
 9,601
 36,314
20237,479
 8,586
 16,065
2024205
 8,345
 8,550
Thereafter—
 27,748
 27,748
 $144,928
 $74,452
 $219,380
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 Helicopters Inc. (“Cougar”) and paid lease fees of $4.5 million and $5.0 million during the three months ended June 30, 2019 and 2018, respectively. Additionally, we lease a facility in Galliano, Louisiana from VIH Helicopters USA, Inc., another related party due to common ownership of Cougar, and paid $0.1 million in lease fees during both the three months ended June 30, 2019 and 2018.
In April and May 2019, we returned our remaining four H225 leased aircraft and paid $4.3 million in lease return costs. We owe an additional $2.8 million in lease return costs, $9.7 million in future rent and $9.4 million in deferred rent related to these four H225 lease returns. These amounts are included in liabilities subject to compromise in our condensed consolidated balance sheet as of June 30, 2019. Also, we reduced our right-of-use assets by $11.9 million and operating lease liabilities by $12.4 million in connection with these lease returns. For further information regarding the Omnibus Agreement, see Note 5.
In June 2019, we rejected ten aircraft leases including nine S-76C+s and one S-76D and recorded $26.1 million of lease termination costs, net. Also, in connection with these ten aircraft lease returns, we reduced our right-of-use assets by $18.6 million and operating lease liabilities by $20.2 million. On October 31, 2019, as part of the Amended Plan, we settled and paid these liabilities in full for $3.9 million.
In September 2019, we rejected the lease for our corporate headquarters in Houston, Texas. As of September 30, 2019, we recorded an allowed claim of $5.3 million, which was settled and paid in full for $0.6 million on October 31, 2019, as part of the Amended Plan. Also, in connection with the corporate lease rejection, as of September 30, 2019 we reduced our right-of-use assets by $13.2 million and operating lease liabilities by $18.9 million.

41
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 10 — TAXES
Our provision for income taxes for the interim period ended June 30, 2019 was prepared using a discrete effective tax rate method. Historically, we calculated our provision for income taxes during interim reporting periods by applying the estimated annual income tax rate for the full fiscal year to income from continuing operations, and apply this rate to our year-to-dateexcluding discrete items, for the reporting period. We determined that since small changes in estimated pre-tax 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 discretelyloss would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate of income taxes for the quarter ended June 30, 2019. We will continue to evaluate income tax estimates under the historical method in which they occur.subsequent quarters and employ a discrete effective tax rate method if warranted. During the three months ended December 31,June 30, 2019 and 2018, and 2017, our effective tax rate was (38.4)%8.4% and 57.5%, respectively, and during the nine months ended December 31, 2018 and 2017, our effective tax rate was (2.1)% and (2.7)%8.2%, respectively. The effective tax ratesrate for the three and nine months ended December 31,June 30, 2019 and 2018 and 2017 were impacted by net operating losses in certain foreign jurisdictions and valuation allowances against future realization of foreign tax credits.credits and 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 or benefit does not change proportionally with our pre-tax book income or loss. 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 change in our effective tax rate excluding discrete items for the three and nine months ended December 31, 2018June 30, 2019 compared to the three and nine months ended December 31, 2017June 30, 2018 primarily related to changes in the blend of earnings taxed in relatively high taxed jurisdictions versus low taxed jurisdictions. Additionally, we increased our valuation allowance decreased by $33.5$0.3 million and $2.1increased $1.0 million for the three months ended December 31,June 30, 2019 and 2018, and 2017, respectively, and $43.8 million and $13.4 million for the nine months ended December 31, 2018 and 2017, respectively, which also impacted our effective tax rate.
As of December 31, 2018,June 30, 2019, there were $4.3$4.0 million of unrecognized tax benefits, all of which would have an impact on our effective tax rate if recognized.
On December 22, 2017, the president of the United States signed into law tax legislation commonly known as the Tax Cuts and Jobs Act (the “Act”). The Act includes numerous changes in existing U.S. tax law, including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%. The rate reduction took effect on January 1, 2018. Further, the Act provides for a one-time “deemed repatriation” of accumulated foreign earnings of certain foreign corporations. Under U.S. generally accepted accounting principles, our net deferred tax liabilities are required to be revalued during the period in which the new tax legislation is enacted. We have completed our analysis of the income tax implications of the Act during the three months ended December 31, 2018 and recorded adjustments accordingly to previously reported provisional amounts.
Certain provisions under the Act became applicable to us on April 1, 2018 and our income tax provision for the three and nine months ended December 31, 2018 includes the tax implications of these provisions. These provisions include Global Intangible Low-Taxed Income (“GILTI”), Base Erosion and Anti-Avoidance Tax (“BEAT”), Foreign Derived Intangible Income (“FDII”), and certain limitations on the deduction of interest expense and utilization of net operating losses.


3642
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 1011 — EMPLOYEE BENEFIT PLANS
Pension Plans
The components of net periodic pension cost other than the service cost component are included in other income (expense), net on our condensed consolidated statement of operations. As discussed in Note 1, on April 1, 2018, we adopted new accounting guidance related to the presentation of net periodic pension cost. The following table provides a detail of the components of net periodic pension cost (in thousands):
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
Service cost for benefits earned during the period $207
 $214
 $636
 $632
 $159
 $219
Interest cost on pension benefit obligation 3,179
 3,230
 9,764
 9,530
 2,919
 3,364
Expected return on assets (4,191) (5,299) (12,872) (15,633) (4,005) (4,434)
Prior service costs 35
 —
Amortization of unrecognized losses 1,945
 2,040
 5,972
 6,016
 2,061
 2,057
Net periodic pension cost $1,140
 $185
 $3,500
 $545
 $1,169
 $1,206
The current estimates of our cash contributions to our defined benefit pension plans to be paid in fiscal year 20192020 are $16.3$16.1 million, of which $12.7$3.9 million was paid during the ninethree months ended December 31, 2018June 30, 2019. The weighted-average expected long-term rate of return on assets for our U.K. pension plans as of March 31, 20182019 was 3.6%3.4%.
In October 2018, the U.K. High Court ruled that the U.K. defined pension schemes will be required to equalize for the effect of unequal guaranteed minimum pensions (“GMPs”) accrued between 1990 and 1997 by adjusting other non-GMP benefits. We recorded additional pension liability of $2.9 million as of December 31, 2018 related to this ruling that will be recorded as additional service cost over the future service period of approximately 20 years.
Incentive Compensation
Stock-basedPrior to May 11, 2019, stock-based awards are currentlywere made under the Bristow Group Inc. 2007 Long-Term Incentive Plan as amended and restated on August 3, 2016 (the “2007 Plan”). A maximum of 10,646,729 shares of common stock arewere reserved. Awards granted under the 2007 Plan may bewere 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 bewere made to outside directors, employees or consultants. As of December 31, 2018June 30, 2019, 1,811,8432,286,944 shares remained available for grant under the 2007 Plan.
We have a number of other incentive and stock option plans which are described in Note 910 to our fiscal year 20182019 Financial Statements.
Total stock-based compensation expense, which includes stock options and restricted stock, totaled $1.9$0.8 million and $2.2$1.7 million duringfor the three months ended December 31,June 30, 2019 and 2018, and 2017, respectively, and $5.7 million and $8.8 million for the nine months ended December 31, 2018 and 2017, respectively. Stock-based compensation expense has been allocated to our various regions.

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


During the nine months ended December 31, 2018, we awarded 400,788 shares of restricted stock at an average grant date fair value of $12.53 per share. Also during the nine months ended December 31, 2018, 593,129 stock options were granted. The following table shows the assumptions used to compute theNo stock-based compensation expensewas awarded in fiscal year 2020 under the 2007 Plan. The 2007 Plan and all awards thereunder were cancelled effective upon emergence from bankruptcy on October 31, 2019. See Note 2 for stock options granted duringfurther details on fiscal year 2020 incentive compensation awards.
In addition to the nine months ended December 31, 2018:
Risk free interest rate2.76%
Expected life (years)5
Volatility62.8%
Dividend yield—%
Weighted average exercise price of options granted$12.19 per option
Weighted average grant-date fair value of options granted$6.71 per option
During June 2018key employee incentive plans approved by the Bankruptcy Court described in Note 2, we made retention payments in April and 2017, we awarded certain membersOctober 2019 totaling $3.2 million to non-executives and retention payments in April 2019 totaling $3.1 million to executives and made $3.5 million of management phantom restricted stock which will be paid out in cash after three years. We account for these awards as liability awards. As of December 31, 2018 and March 31, 2018, we had $0.4 million and $1.0 million, respectively, included in other liabilities and deferred credits on our condensed consolidated balance sheet accrued for these awards. Additionally, changes in the fair values of these liability awards reduced compensation expense by $1.1 million and $0.4 million during the three and nine months ended December 31, 2018, respectively, and increased compensation expense by $0.5 million and $0.9 million during the three and nine months ended December 31, 2017, respectively.
Performance cash awards granted in June 2017 and 2018 have two components. One half of each performance cash award will 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 sharepayments for the Company over the three-year performance period beginning on April 1, 2017 and 2018, as applicable. Performance cash awards grantedfirst quarter fiscal year 2020 management incentive plan in 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 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 December 31 and March 31, 2018 was $3.9 million and $7.7 million, respectively, and represents an accrual based on the fair value of the awards on those dates. The decrease in the liability during the nine months ended December 31, 2018 resulted from the payout in June 2018 of the awards granted in June 2015, partially offset by the value of the new awards granted in June 2018. 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.
Changes in the fair values of performance cash awards reduced compensation expense by $1.3 million and $0.8 million during the three months ended December 31, 2018 and 2017, respectively, and reduced compensation expense by $0.2 million and increased compensation expense by $0.6 million during the nine months ended December 31, 2018 and 2017, respectively.May 2019.

3843
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 1112 — EARNINGS PER SHARE AND ACCUMULATED OTHER COMPREHENSIVE INCOME
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 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
Options:            
Outstanding 3,447,397
 2,729,888
 2,682,918
 2,791,193
 3,197,023
 2,849,429
Weighted average exercise price $25.62
 $38.12
 $33.11
 $39.88
 $26.56
 $35.43
Restricted stock awards:            
Outstanding 671,258
 681,571
 591,808
 432,596
 684,324
 567,143
Weighted average price $9.58
 $8.67
 $11.64
 $23.25
 $8.01
 $14.54
The following table sets forth the computation of basic and diluted earnings per share:
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
Loss (in thousands):            
Loss available to common stockholders – basic $(85,944) $(8,273) $(262,242) $(94,757) $(169,246) $(31,864)
Interest expense on assumed conversion of 4½% Convertible Senior Notes, net of tax (1)
 —
 —
 —
 —
Loss available to common stockholders – diluted (85,944) (8,273) $(262,242) $(94,757) $(169,246) $(31,864)
Shares:            
Weighted average number of common shares outstanding – basic 35,798,185
 35,368,212
 35,712,735
 35,260,746
 35,918,916
 35,629,741
Assumed conversion of 4½% Convertible Senior Notes outstanding during 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 (2)
 35,798,185
 35,368,212
 35,712,735
 35,260,746
Weighted average number of common shares outstanding – diluted (1)
 35,918,916
 35,629,741
            
Basic loss per common share $(2.40) $(0.23) $(7.34) $(2.69) $(4.71) $(0.89)
Diluted loss per common share $(2.40) $(0.23) $(7.34) $(2.69) $(4.71) $(0.89)
_____________
(1)
Diluted loss per common share for three and nine months ended December 31, 2018 excludes a number of potentially dilutive shares determined pursuant to a specified formula initially issuable upon the conversion of our 4½% Convertible Senior Notes. The 4½% Convertible Senior Notes will be convertible, under certain circumstances, into cash, shares of our common stock or a combination of cash and our common stock, at our election. We have initially elected combination settlement. As of December 31, 2018 and March 31, 2018, the base conversion price of the notes was approximately $15.64, based on the base conversion rate of 63.9488 shares of common stock per $1,000 principal amount of convertible notes (subject to adjustment in certain circumstances). In general, upon conversion of a note, the holder will receive cash equal to the principal amount of the note and common stock to the extent of the note’s conversion value in excess of such principal amount. Such shares did not impact our calculation of diluted loss per share for the three and nine months ended December 31, 2018 as our average stock price during these periods did not meet or exceed the conversion requirements.
(2) 
Potentially dilutive shares issuable pursuant to our warrant transactions entered into concurrently with the issuance of our 4½% Convertible Senior Notes (the “Warrant Transactions”) were not included in the computation of diluted lossincome per share for the three and nine months ended December 31,June 30, 2019 and 2018, because to do so would have been anti-dilutive. For further details on the Warrant Transactions, see Note 45 in our fiscal year 20182019 Financial Statements.
 Pursuant to the Amended Plan, upon the Effective Date all existing equity interests in the Company were cancelled and discharged, including the options and restricted stock awards.


3944
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Accumulated Other Comprehensive Loss
The following table sets forth the changes in the balances of each component of accumulated other comprehensive loss (in thousands):
 Currency Translation Adjustments 
Pension Liability Adjustments (1)
 
Unrealized gain (loss) on cash flow hedges (2)
 Total Currency Translation Adjustments 
Pension Liability Adjustments (1)
 
Unrealized gain (loss) on cash flow hedges (2)
 Total
Balance as of March 31, 2018 $(79,066) $(206,682) $(346) $(286,094)
Balance as of March 31, 2019 $(137,867) $(189,734) $(388) $(327,989)
Other comprehensive income before reclassification (43,685) (2,410) 2,403
 (43,692) 16,888
 —
 485
 17,373
Reclassified from accumulated other comprehensive income —
 —
 (1,158) (1,158) —
 —
 (11) (11)
Net current period other comprehensive income (43,685) (2,410) 1,245
 (44,850) 16,888
 —
 474
 17,362
Foreign exchange rate impact (24,363) 24,363
 —
 —
 (5,280) 5,280
 —
 —
Balance as of December 31, 2018 $(147,114) $(184,729) $899
 $(330,944)
Balance as of June 30, 2019 $(126,259) $(184,454) $86
 $(310,627)
_____________ 
(1) 
Reclassification of amounts related to pension liability adjustments are included as a component of net periodic pension cost. For further details on additional pension liability recorded during the nine months ended December 31, 2018, see Note 10.
(2) 
Reclassification of amounts related to cash flow hedges were included as direct costs.

4045
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 1213 — SEGMENT INFORMATION
We conduct our business in one segment: industrial aviation services. The industrial aviation services global operations are conducted primarily through two hubs that include 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, 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.Asia. Prior to the sale of Bristow Academy on November 1, 2017,BHLL and Aviashelf during the three months ended June 30, 2019, we operated a training unit, Bristow Academy,had operations in Sakhalin, Russia which was previouslyis included in Corporate and other.our Asia Pacific region.
The following tables show region information for the three and nine months ended December 31, 2018June 30, 2019 and 20172018 and as of December 31June 30 and March 31, 20182019, where applicable, reconciled to consolidated totals, and prepared on the same basis as our condensed consolidated financial statements (in thousands):
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
Region revenue from external customers:            
Europe Caspian $186,537
 $196,958
 $606,584
 $592,280
 $188,594
 $218,500
Africa 43,830
 48,712
 119,638
 149,289
 49,516
 36,416
Americas 56,669
 58,468
 166,644
 173,431
 56,990
 51,367
Asia Pacific 43,829
 55,691
 155,653
 167,421
 37,811
 60,196
Corporate and other 464
 906
 1,361
 4,099
 265
 189
Total region revenue (1)
 $331,329
 $360,735
 $1,049,880
 $1,086,520
 $333,176
 $366,668
Intra-region revenue:            
Europe Caspian $1,913
 $1,481
 $5,847
 $4,000
 $1,044
 $1,680
Africa —
 —
 —
 —
 122
 —
Americas 1,262
 2,147
 3,910
 6,391
 1,311
 1,637
Asia Pacific —
 —
 —
 —
 44
 —
Corporate and other 1
 5
 2
 27
 —
 1
Total intra-region revenue $3,176
 $3,633
 $9,759
 $10,418
 $2,521
 $3,318
Consolidated revenue:            
Europe Caspian $188,450
 $198,439
 $612,431
 $596,280
 $189,638
 $220,180
Africa 43,830
 48,712
 119,638
 149,289
 49,638
 36,416
Americas 57,931
 60,615
 170,554
 179,822
 58,301
 53,004
Asia Pacific 43,829
 55,691
 155,653
 167,421
 37,855
 60,196
Corporate and other 465
 911
 1,363
 4,126
 265
 190
Intra-region eliminations (3,176) (3,633) (9,759) (10,418) (2,521) (3,318)
Total consolidated revenue (1)
 $331,329
 $360,735
 $1,049,880
 $1,086,520
 $333,176
 $366,668
_____________ 
(1) 
The above table represents disaggregated revenue from contracts with customers except for $9.8$8.4 million of revenue included in totals ($1.70.3 million from Europe Caspian, $8.0 million from Americas and $0.1 million from Asia Pacific) for the three months ended December 31, 2018June 30, 2019 and $41.8$19.8 million of revenue included in totals ($18.813.0 million from Europe Caspian, $22.8$6.7 million from Americas and $0.2$0.1 million from Asia Pacific) for the ninethree months ended December 31,June 30, 2018. For further details on revenue recognition, see Note 3.

4146
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


  Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,
  2018 2017 2018 2017
Earnings (losses) from unconsolidated affiliates, net – equity method investments:        
Europe Caspian $(2) $34
 $17
 $125
Americas 839
 2,097
 (2,052) 3,712
Corporate and other (100) (135) (341) (443)
Total earnings (losses) from unconsolidated affiliates, net – equity method investments $737
 $1,996
 $(2,376) $3,394
         
Consolidated operating loss:        
Europe Caspian $3,342
 $5,274
 $13,856
 $19,499
Africa 5,286
 10,470
 7,892
 28,353
Americas 4,412
 5,308
 (1,362) 11,535
Asia Pacific (6,654) (941) (14,613) (19,374)
Corporate and other (21,535) (19,047) (151,440) (68,686)
Loss on disposal of assets (16,015) (4,591) (18,986) (12,418)
Total consolidated operating loss (1)
 $(31,164) $(3,527) $(164,653) $(41,091)
         
Depreciation and amortization:        
Europe Caspian $13,041
 $12,771
 $37,985
 $36,789
Africa 3,732
 3,664
 10,811
 10,330
Americas 7,108
 6,909
 21,299
 20,906
Asia Pacific 3,812
 4,479
 12,221
 15,347
Corporate and other 2,922
 3,859
 9,729
 10,747
Total depreciation and amortization $30,615
 $31,682
 $92,045
 $94,119
 December 31, 
 2018		 March 31,  
 2018		 Three Months Ended
 June 30,
Identifiable assets:    
 2019 2018
Earnings from unconsolidated affiliates, net of losses – equity method
investments:
    
Europe Caspian $171
 $25
Americas 2,176
 (1,437)
Corporate and other —
 (135)
Total earnings from unconsolidated affiliates, net of losses – equity method investments $2,347
 $(1,547)
    
Consolidated operating loss:    
Europe Caspian $904,490
 $1,087,437
 $11,807
 $21,928
Africa 398,606
 374,121
 7,745
 1,141
Americas 751,981
 788,879
 3,568
 (7,343)
Asia Pacific 248,861
 342,166
 (12,434) (971)
Corporate and other (2)
 427,806
 572,399
Total identifiable assets $2,731,744
 $3,165,002
Corporate and other (28,641) (16,631)
Loss on disposal of assets (3,787) (1,678)
Total consolidated operating loss (1)
 $(21,742) $(3,554)
    
Depreciation and amortization:    
Europe Caspian $12,439
 $12,755
Africa 4,991
 3,414
Americas 6,880
 6,881
Asia Pacific 3,721
 4,355
Corporate and other 3,308
 3,536
Total depreciation and amortization $31,339
 $30,941
Investments in unconsolidated affiliates – equity method investments:    
Europe Caspian $215
 $270
Americas 104,758
 116,276
Corporate and other 2,715
 3,338
Total investments in unconsolidated affiliates – equity method investments $107,688
 $119,884
  June 30,
 2019		 March 31,
 2019
Identifiable assets:    
Europe Caspian $1,131,538
 $1,070,863
Africa 349,541
 325,502
Americas 667,639
 661,266
Asia Pacific 249,769
 255,136
Corporate and other (2)
 369,468
 339,832
Total identifiable assets $2,767,955
 $2,652,599
Investments in unconsolidated affiliates – equity method investments:    
Europe Caspian $360
 $375
Americas 111,195
 108,831
Corporate and other 2,653
 2,711
Total investments in unconsolidated affiliates – equity method investments $114,208
 $111,917
_____________ 
(1) 
Results for the three months ended December 31,June 30, 2018 were positively impacted by a reduction to rent expense of $1.0$3.5 million (included in direct costs) impacting Europe Caspian and Asia Pacific regions by $0.2$2.7 million and $0.8 million, respectively, related to OEM cost recoveries for ongoing aircraft issues. Results for the nine months ended December 31, 2018 were positively impacted by a reduction to rent expense of $6.9 million (included in direct costs) impacting Europe Caspian and Asia Pacific regions by $4.6 million and $2.3 million, respectively, related to OEM cost recoveries for ongoing aircraft issues. For further details, see Note 1.
1.
(2) 
Includes $52.9$48.8 million and $67.7$51.7 million of construction in progress within property and equipment on our condensed consolidated balance sheets as of December 31June 30 and March 31, 2018,2019, respectively, which primarily represents progress payments on aircraft to be delivered in future periods. In December 2018, a largeAs discussed in Note 8, in September 2019, we rejected our aircraft order was terminatedpurchase agreement with Airbus Helicopters S.A.S. and we recorded contract termination costswrote-off $30.6 million of $14.0 million included in loss on disposal of assets on our condensed consolidated statements of operations for amounts previously included in construction in progress on our condensed consolidated balance sheets. For further details, see Notes 1 and 8.as of September 30, 2019.



4247
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 1314 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
The Company hashad registered senior notes that the Guarantor Subsidiaries have fully, unconditionally, jointly and severally guaranteed. 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. For further details on the registered senior notes, which were discharged upon the emergence from bankruptcy, see Note 45 to the fiscal year 20182019 Financial Statements.
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.


 

4348
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Operations
Three Months Ended December 31, 2018June 30, 2019
 
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
                    
 (In thousands) (In thousands)
Revenue:                    
Gross revenue $(9) $37,253
 $294,085
 $—
 $331,329
Third party revenue $—
 $37,799
 $295,377
 $—
 $333,176
Intercompany revenue —
 26,844
 —
 (26,844) —
 —
 24,677
 —
 (24,677) —
 (9) 64,097
 294,085
 (26,844) 331,329
 —
 62,476
 295,377
 (24,677) 333,176
Operating expense:                    
Direct cost and reimbursable expense 14
 40,188
 235,699
 —
 275,901
 119
 41,624
 232,150
 —
 273,893
Intercompany expenses 5,399
 —
 21,445
 (26,844) —
 —
 —
 24,677
 (24,677) —
Prepetition restructuring charges 12,449
 —
 1,027
 —
 13,476
Depreciation and amortization 3,087
 19,175
 8,353
 —
 30,615
 3,137
 17,661
 10,541
 —
 31,339
General and administrative 16,004
 4,174
 20,564
 —
 40,742
 9,711
 3,930
 21,129
 —
 34,770
 24,504
 63,537
 286,061
 (26,844) 347,258
 25,416
 63,215
 289,524
 (24,677) 353,478
                    
Loss on disposal of assets (512) (15,321) (182) —
 (16,015) —
 (476) (3,311) —
 (3,787)
Earnings (losses) from unconsolidated affiliates, net (22,023) —
 780
 22,023
 780
Earnings from unconsolidated affiliates, net of losses (100,957) —
 2,347
 100,957
 2,347
Operating income (loss) (47,048) (14,761) 8,622
 22,023
 (31,164) (126,373) (1,215) 4,889
 100,957
 (21,742)
Interest expense, net (16,997) (5,807) (4,309) —
 (27,113) (13,367) (5,865) (7,089) —
 (26,321)
Reorganization items (49,845) (26,051) (460) —
 (76,356)
Loss on sale of subsidiaries —
 —
 (56,303) —
 (56,303)
Other income (expense), net 122
 485
 (4,267) —
 (3,660) 119
 501
 (4,493) —
 (3,873)
                    
Income (loss) before (provision) benefit for income taxes (63,923) (20,083) 46
 22,023
 (61,937)
Loss before (provision) benefit for income taxes (189,466) (32,630) (63,456) 100,957
 (184,595)
Allocation of consolidated income taxes (22,006) (463) (1,295) —
 (23,764) 20,235
 (1,176) (3,552) —
 15,507
Net loss (85,929) (20,546) (1,249) 22,023
 (85,701) (169,231) (33,806) (67,008) 100,957
 (169,088)
Net income attributable to noncontrolling interests (15) —
 (228) —
 (243) (15) —
 (143) —
 (158)
Net loss attributable to Bristow Group $(85,944) $(20,546) $(1,477) $22,023
 $(85,944) $(169,246) $(33,806) $(67,151) $100,957
 $(169,246)


4449
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Operations
Three Months Ended December 31, 2017June 30, 2018
 Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
                    
 (In thousands) (In thousands)
Revenue:                    
Gross revenue $188
 $47,377
 $313,170
 $—
 $360,735
Third party revenue $45
 $34,135
 $332,488
 $—
 $366,668
Intercompany revenue —
 28,608
 —
 (28,608) —
 —
 26,517
 —
 (26,517) —
 188
 75,985
 313,170
 (28,608) 360,735
 45
 60,652
 332,488
 (26,517) 366,668
Operating expense:                    
Direct cost and reimbursable expense 81
 49,540
 236,998
 —
 286,619
 16
 41,876
 254,063
 —
 295,955
Intercompany expenses —
 —
 28,608
 (28,608) —
 —
 —
 26,517
 (26,517) —
Depreciation and amortization 3,048
 12,489
 16,145
 —
 31,682
 3,066
 18,222
 9,653
 —
 30,941
General and administrative 13,937
 6,514
 22,915
 —
 43,366
 12,788
 3,798
 23,515
 —
 40,101
 17,066
 68,543
 304,666
 (28,608) 361,667
 15,870
 63,896
 313,748
 (26,517) 366,997
                    
Gain (loss) on disposal of assets (1,757) (3,657) 823
 —
 (4,591) (806) (1,160) 288
 —
 (1,678)
Earnings (losses) from unconsolidated affiliates, net (11,503) —
 1,996
 11,503
 1,996
Earnings from unconsolidated affiliates, net of losses (7,065) —
 (1,547) 7,065
 (1,547)
Operating income (loss) (30,138) 3,785
 11,323
 11,503
 (3,527) (23,696) (4,404) 17,481
 7,065
 (3,554)
Interest expense, net (9,480) (5,008) (4,605) —
 (19,093) (16,379) (6,830) (3,935) —
 (27,144)
Other income (expense), net (16) 227
 (947) —
 (736) 134
 1,075
 (5,159) —
 (3,950)
                    
Income (loss) before (provision) benefit for income taxes (39,634) (996) 5,771
 11,503
 (23,356)
Loss before (provision) benefit for income taxes (39,941) (10,159) 8,387
 7,065
 (34,648)
Allocation of consolidated income taxes 31,373
 (1,791) (16,163) —
 13,419
 8,092
 893
 (6,134) —
 2,851
Net loss (8,261) (2,787) (10,392) 11,503
 (9,937)
Net (income) loss attributable to noncontrolling interests (12) —
 1,676
 —
 1,664
Net loss attributable to Bristow Group $(8,273) $(2,787) $(8,716) $11,503
 $(8,273)
Net income (loss) (31,849) (9,266) 2,253
 7,065
 (31,797)
Net income attributable to noncontrolling interests (15) —
 (52) —
 (67)
Net income (loss) attributable to Bristow Group $(31,864) $(9,266) $2,201
 $7,065
 $(31,864)


4550
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Operations
Nine Months Ended December 31, 2018
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Third party revenue $81
 $108,186
 $941,613
 $—
 $1,049,880
Intercompany revenue —
 80,857
 —
 (80,857) —
  81
 189,043
 941,613
 (80,857) 1,049,880
Operating expense:          
Direct cost and reimbursable expense 50
 123,045
 741,172
 —
 864,267
Intercompany expenses 20,706
 —
 60,151
 (80,857) —
Depreciation and amortization 9,245
 55,130
 27,670
 —
 92,045
General and administrative 41,699
 13,097
 64,886
 —
 119,682
  71,700
 191,272
 893,879
 (80,857) 1,075,994
           
Loss on impairment —
 (87,474) (29,746) —
 (117,220)
Loss on disposal of assets (1,318) (16,799) (869) —
 (18,986)
Earnings (losses) from unconsolidated affiliates, net (153,319) —
 (2,333) 153,319
 (2,333)
Operating income (loss) (226,256) (106,502) 14,786
 153,319
 (164,653)
Interest expense, net (48,940) (18,552) (13,198) —
 (80,690)
Other income (expense), net 306
 1,802
 (12,922) —
 (10,814)
           
Loss before (provision) benefit for income taxes (274,890) (123,252) (11,334) 153,319
 (256,157)
Allocation of consolidated income taxes 12,691
 (746) (17,203) —
 (5,258)
Net loss (262,199) (123,998) (28,537) 153,319
 (261,415)
Net income attributable to noncontrolling interests (43) —
 (784) —
 (827)
Net loss attributable to Bristow Group $(262,242) $(123,998) $(29,321) $153,319
 $(262,242)


46
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Operations
Nine Months Ended December 31, 2017
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Third party revenue $188
 $140,104
 $946,228
 $—
 $1,086,520
Intercompany revenue —
 92,518
 —
 (92,518) —
  188
 232,622
 946,228
 (92,518) 1,086,520
Operating expense:          
Direct cost and reimbursable expense 3,350
 147,829
 733,402
 —
 884,581
Intercompany expenses —
 —
 92,518
 (92,518) —
Depreciation and amortization 8,981
 38,209
 46,929
 —
 94,119
General and administrative 50,924
 17,899
 69,872
 —
 138,695
  63,255
 203,937
 942,721
 (92,518) 1,117,395
           
Loss on impairment —
 (1,192) —
 —
 (1,192)
Gain (loss) on disposal of assets (1,757) 7,356
 (18,017) —
 (12,418)
Earnings (losses) from unconsolidated affiliates, net (22,506) —
 3,394
 22,506
 3,394
Operating income (loss) (87,330) 34,849
 (11,116) 22,506
 (41,091)
Interest expense, net (29,174) (16,811) (7,692) —
 (53,677)
Other income (expense), net (142) (529) 906
 —
 235
           
Income (loss) before provision for income taxes (116,646) 17,509
 (17,902) 22,506
 (94,533)
Allocation of consolidated income taxes 21,925
 (7,896) (16,575) —
 (2,546)
Net income (loss) (94,721) 9,613
 (34,477) 22,506
 (97,079)
Net (income) loss attributable to noncontrolling interests (36) —
 2,358
 —
 2,322
Net income (loss) attributable to Bristow Group $(94,757) $9,613
 $(32,119) $22,506
 $(94,757)


47
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 December 31, 2018
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net loss $(85,929) $(20,546) $(1,249) $22,023
 $(85,701)
Other comprehensive loss:          
Currency translation adjustments —
 (372) (9,146) 3,056
 (6,462)
Pension liability adjustment —
 —
 (2,410) —
 (2,410)
Unrealized loss on cash flow hedges —
 —
 (5) —
 (5)
Total comprehensive loss (85,929) (20,918) (12,810) 25,079
 (94,578)
           
Net income attributable to noncontrolling interests (15) —
 (228) —
 (243)
Currency translation adjustments attributable to noncontrolling interests —
 —
 (52) —
 (52)
Total comprehensive income attributable to noncontrolling interests (15) —
 (280) —
 (295)
Total comprehensive loss attributable to Bristow Group $(85,944) $(20,918) $(13,090) $25,079
 $(94,873)



48
Table of Contents
BRISTOW GROUP INC.(DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
Three Months Ended December 31, 2017June 30, 2019
 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 loss $(8,261) $(2,787) $(10,392) $11,503
 $(9,937) $(169,231) $(33,806) $(67,008) $100,957
 $(169,088)
Other comprehensive income (loss):          
Other comprehensive loss:          
Currency translation adjustments —
 (18) 1,116
 (1,155) (57) —
 (355) 14,313
 2,941
 16,899
Unrealized gain on cash flow hedges —
 —
 474
 —
 474
Total comprehensive loss (8,261) (2,805) (9,276) 10,348
 (9,994) (169,231) (34,161) (52,221) 103,898
 (151,715)
                    
Net (income) loss attributable to noncontrolling interests (12) —
 1,676
 —
 1,664
Net income attributable to noncontrolling interests (15) —
 (143) —
 (158)
Currency translation adjustments attributable to noncontrolling interests —
 —
 (17) —
 (17) —
 —
 (11) —
 (11)
Total comprehensive (income) loss attributable to noncontrolling interests (12) —
 1,659
 —
 1,647
Total comprehensive income attributable to noncontrolling interests (15) —
 (154) —
 (169)
Total comprehensive loss attributable to Bristow Group $(8,273) $(2,805) $(7,617) $10,348
 $(8,347) $(169,246) $(34,161) $(52,375) $103,898
 $(151,884)


4951
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
NineThree Months Ended December 31,June 30, 2018
 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 loss $(262,199) $(123,998) $(28,537) $153,319
 $(261,415)
Net income (loss) $(31,849) $(9,266) $2,253
 $7,065
 $(31,797)
Other comprehensive loss:                    
Currency translation adjustments —
 (1,417) (105,254) 63,209
 (43,462) —
 (886) (81,802) 53,655
 (29,033)
Pension liability adjustment —
 —
 (2,410) —
 (2,410)
Unrealized gain on cash flow hedges —
 —
 1,245
 —
 1,245
 —
 —
 1,348
 —
 1,348
Total comprehensive loss (262,199) (125,415) (134,956) 216,528
 (306,042) (31,849) (10,152) (78,201) 60,720
 (59,482)
                    
Net income attributable to noncontrolling interests (43) —
 (784) —
 (827) (15) —
 (52) —
 (67)
Currency translation adjustments attributable to noncontrolling interests —
 —
 (223) —
 (223) —
 —
 (139) —
 (139)
Total comprehensive income attributable to noncontrolling interests (43) —
 (1,007) —
 (1,050) (15) —
 (191) —
 (206)
Total comprehensive loss attributable to Bristow Group $(262,242) $(125,415) $(135,963) $216,528
 $(307,092) $(31,864) $(10,152) $(78,392) $60,720
 $(59,688)


5052
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
Nine Months Ended December 31, 2017
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net income (loss) $(94,721) $9,613
 $(34,477) $22,506
 $(97,079)
Other comprehensive income (loss):          
Currency translation adjustments —
 626
 29,686
 (9,918) 20,394
Total comprehensive income (loss) (94,721) 10,239
 (4,791) 12,588
 (76,685)
           
Net (income) loss attributable to noncontrolling interests (36) —
 2,358
 —
 2,322
Currency translation adjustments attributable to noncontrolling interests —
 —
 530
 —
 530
Total comprehensive (income) loss attributable to noncontrolling interests (36) —
 2,888
 —
 2,852
Total comprehensive income (loss) attributable to Bristow Group $(94,757) $10,239
 $(1,903) $12,588
 $(73,833)


51
Table of Contents
BRISTOW GROUP INC.(DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Balance Sheet
As of December 31, 2018June 30, 2019
 
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated 
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
                    
 (In thousands)   (In thousands)  
ASSETS
Current assets:                    
Cash and cash equivalents $155,167
 $—
 $77,660
 $(1,501) $231,326
 $63,169
 $3,454
 $105,911
 $—
 $172,534
Restricted cash —
 —
 3,234
 —
 3,234
Accounts receivable 506,745
 542,145
 293,490
 (1,124,553) 217,827
 588,466
 635,844
 300,212
 (1,297,449) 227,073
Inventories —
 34,658
 80,596
 —
 115,254
 —
 35,011
 79,986
 —
 114,997
Assets held for sale —
 18,506
 3,979
 —
 22,485
 —
 1,866
 (191) —
 1,675
Prepaid expenses and other current assets 4,520
 2,674
 41,452
 —
 48,646
 9,732
 1,785
 31,286
 —
 42,803
Total current assets 666,432
 597,983
 497,177
 (1,126,054) 635,538
 661,367
 677,960
 520,438
 (1,297,449) 562,316
Intercompany investment 1,877,133
 104,436
 128,633
 (2,110,202) —
 1,728,477
 97,435
 128,543
 (1,954,455) —
Investment in unconsolidated affiliates —
 —
 113,974
 —
 113,974
 —
 —
 120,494
 —
 120,494
Intercompany notes receivable 118,003
 9,229
 147,056
 (274,288) —
 137,245
 11,151
 115,008
 (263,404) —
Property and equipment—at cost:                    
Land and buildings 4,806
 58,204
 177,191
 —
 240,201
 4,807
 58,204
 178,726
 —
 241,737
Aircraft and equipment 155,628
 1,311,241
 1,012,674
 —
 2,479,543
 157,103
 1,311,582
 958,750
 —
 2,427,435
 160,434
 1,369,445
 1,189,865
 —
 2,719,744
 161,910
 1,369,786
 1,137,476
 —
 2,669,172
Less: Accumulated depreciation and amortization (46,012) (403,430) (422,759) —
 (872,201) (50,682) (437,973) (405,695) —
 (894,350)
 114,422
 966,015
 767,106
 —
 1,847,543
 111,228
 931,813
 731,781
 —
 1,774,822
Right-of-use assets 16,637
 59,387
 168,691
 (56,754) 187,961
Goodwill —
 —
 18,271
 —
 18,271
 —
 —
 18,212
 —
 18,212
Other assets 4,786
 2,727
 108,905
 —
 116,418
 3,762
 4,131
 96,257
 —
 104,150
Total assets $2,780,776
 $1,680,390
 $1,781,122
 $(3,510,544) $2,731,744
 $2,658,716
 $1,781,877
 $1,899,424
 $(3,572,062) $2,767,955
                    
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:                    
Accounts payable $413,795
 $476,510
 $317,229
 $(1,115,618) $91,916
 $474,168
 $566,606
 $330,896
 $(1,285,776) $85,894
Accrued liabilities 56,645
 (7,232) 116,352
 (9,300) 156,465
 51,366
 16,212
 222,915
 (68,340) 222,153
Short-term borrowings and current maturities of long-term debt 847,023
 271,279
 302,748
 —
 1,421,050
 340,597
 264,758
 286,737
 —
 892,092
Total current liabilities 1,317,463
 740,557
 736,329
 (1,124,918) 1,669,431
 866,131
 847,576
 840,548
 (1,354,116) 1,200,139
Long-term debt, less current maturities —
 —
 9,174
 —
 9,174
 33,932
 —
 41,857
 —
 75,789
Intercompany notes payable 103,449
 154,527
 17,415
 (275,391) —
 88,573
 143,233
 31,598
 (263,404) —
Accrued pension liabilities —
 —
 28,036
 —
 28,036
 —
 —
 22,472
 —
 22,472
Other liabilities and deferred credits 10,732
 8,729
 9,112
 —
 28,573
 3,893
 3
 4,184
 —
 8,080
Deferred taxes 68,416
 25,853
 24,788
 —
 119,057
 40,003
 26,348
 17,724
 —
 84,075
Long-term operating lease liabilities 16,668
 36,913
 49,986
 —
 103,567
Liabilities subject to compromise 565,153
 30,830
 22,008
 —
 617,991
Stockholders’ investment:                    
Common stock 385
 4,996
 131,317
 (136,313) 385
 386
 4,996
 131,317
 (136,313) 386
Additional paid-in-capital 860,745
 29,387
 284,048
 (313,435) 860,745
 862,844
 29,387
 284,048
 (313,435) 862,844
Retained earnings 524,846
 716,378
 278,054
 (994,432) 524,846
 286,352
 662,591
 183,182
 (845,773) 286,352
Accumulated other comprehensive income (loss) 78,306
 (37) 256,842
 (666,055) (330,944) 78,306
 —
 270,088
 (659,021) (310,627)
Treasury shares (184,796) —
 —
 —
 (184,796) (184,796) —
 —
 —
 (184,796)
Total Bristow Group stockholders’ investment 1,279,486
 750,724
 950,261
 (2,110,235) 870,236
 1,043,092
 696,974
 868,635
 (1,954,542) 654,159
Noncontrolling interests 1,230
 —
 6,007
 —
 7,237
 1,271
 —
 412
 —
 1,683
Total stockholders’ investment 1,280,716
 750,724
 956,268
 (2,110,235) 877,473
 1,044,363
 696,974
 869,047
 (1,954,542) 655,842
Total liabilities and stockholders’ investment $2,780,776
 $1,680,390
 $1,781,122
 $(3,510,544) $2,731,744
 $2,658,716
 $1,781,877
 $1,899,424
 $(3,572,062) $2,767,955

5253
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Balance Sheet
As of March 31, 20182019
 
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated 
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
                    
 (In thousands) (In thousands)
ASSETS
Current assets:                    
Cash and cash equivalents $277,176
 $8,904
 $94,143
 $—
 $380,223
 $90,586
 $3,205
 $84,264
 $—
 $178,055
Accounts receivable 211,412
 423,214
 250,984
 (638,630) 246,980
 535,502
 583,912
 287,822
 (1,190,445) 216,791
Inventories —
 31,300
 98,314
 —
 129,614
 —
 35,331
 85,977
 —
 121,308
Assets held for sale —
 26,737
 3,611
 —
 30,348
 —
 5,541
 (191) —
 5,350
Prepaid expenses and other current assets 3,367
 4,494
 41,016
 (1,643) 47,234
 3,734
 1,001
 39,274
 —
 44,009
Total current assets 491,955
 494,649
 488,068
 (640,273) 834,399
 629,822
 628,990
 497,146
 (1,190,445) 565,513
Intercompany investment 2,199,505
 104,435
 141,683
 (2,445,623) —
 1,829,271
 97,435
 131,608
 (2,058,314) —
Investment in unconsolidated affiliates —
 —
 126,170
 —
 126,170
 —
 —
 118,203
 —
 118,203
Intercompany notes receivable 183,634
 36,358
 368,575
 (588,567) —
 140,659
 11,151
 128,410
 (280,220) —
Property and equipment—at cost:                    
Land and buildings 4,806
 58,191
 187,043
 —
 250,040
 4,807
 58,204
 181,262
 —
 244,273
Aircraft and equipment 156,651
 1,326,922
 1,027,558
 —
 2,511,131
 155,667
 1,312,115
 1,029,840
 —
 2,497,622
 161,457
 1,385,113
 1,214,601
 —
 2,761,171
 160,474
 1,370,319
 1,211,102
 —
 2,741,895
Less: Accumulated depreciation and amortization (39,780) (263,412) (389,959) —
 (693,151) (47,546) (419,983) (440,186) —
 (907,715)
 121,677
 1,121,701
 824,642
 —
 2,068,020
 112,928
 950,336
 770,916
 —
 1,834,180
Goodwill —
 —
 19,907
 —
 19,907
 —
 —
 18,436
 —
 18,436
Other assets 4,966
 2,122
 109,418
 —
 116,506
 3,563
 3,410
 109,294
 —
 116,267
Total assets $3,001,737
 $1,759,265
 $2,078,463
 $(3,674,463) $3,165,002
 $2,716,243
 $1,691,322
 $1,774,013
 $(3,528,979) $2,652,599
                    
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:                    
Accounts payable $341,342
 $175,133
 $201,704
 $(616,909) $101,270
 $441,485
 $510,911
 $327,447
 $(1,180,270) $99,573
Accrued liabilities 59,070
 6,735
 166,026
 (21,955) 209,876
 51,071
 (9,807) 119,433
 (10,049) 150,648
Short-term borrowings and current maturities of long-term debt 840,485
 296,782
 338,171
 —
 1,475,438
 849,524
 268,559
 300,547
 —
 1,418,630
Total current liabilities 1,240,897
 478,650
 705,901
 (638,864) 1,786,584
 1,342,080
 769,663
 747,427
 (1,190,319) 1,668,851
Long-term debt, less current maturities —
 —
 11,096
 —
 11,096
 —
 —
 8,223
 —
 8,223
Intercompany notes payable 132,740
 370,407
 41,001
 (544,148) —
 91,664
 155,643
 32,913
 (280,220) —
Accrued pension liabilities —
 —
 37,034
 —
 37,034
 —
 —
 25,726
 —
 25,726
Other liabilities and deferred credits 14,078
 7,924
 14,950
 —
 36,952
 10,430
 8,613
 7,186
 —
 26,229
Deferred taxes 77,373
 27,794
 10,025
 —
 115,192
 59,302
 26,268
 25,633
 —
 111,203
Stockholders’ investment:                    
Common stock 382
 4,996
 131,317
 (136,313) 382
 386
 4,996
 131,317
 (136,313) 386
Additional paid-in-capital 852,565
 29,387
 284,048
 (313,435) 852,565
 862,020
 29,387
 284,048
 (313,435) 862,020
Retained earnings 788,834
 838,727
 473,712
 (1,312,439) 788,834
 455,598
 696,397
 250,333
 (946,730) 455,598
Accumulated other comprehensive income (loss) 78,306
 1,380
 363,484
 (729,264) (286,094) 78,306
 355
 255,312
 (661,962) (327,989)
Treasury shares (184,796) —
 —
 —
 (184,796) (184,796) —
 —
 —
 (184,796)
Total Bristow Group stockholders’ investment 1,535,291
 874,490
 1,252,561
 (2,491,451) 1,170,891
 1,211,514
 731,135
 921,010
 (2,058,440) 805,219
Noncontrolling interests 1,358
 —
 5,895
 —
 7,253
 1,253
 —
 5,895
 —
 7,148
Total stockholders’ investment 1,536,649
 874,490
 1,258,456
 (2,491,451) 1,178,144
 1,212,767
 731,135
 926,905
 (2,058,440) 812,367
Total liabilities and stockholders’ investment $3,001,737
 $1,759,265
 $2,078,463
 $(3,674,463) $3,165,002
 $2,716,243
 $1,691,322
 $1,774,013
 $(3,528,979) $2,652,599

5354
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Cash Flows
NineThree Months Ended December 31, 2018June 30, 2019
 
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 $(93,365) $23,819
 $2,145
 $(1,501) $(68,902) $(34,861) $10,847
 $(12,748) $—
 $(36,762)
Cash flows from investing activities:                    
Capital expenditures (2,987) (12,827) (17,897) —
 (33,711) (1,435) (2,538) (3,466) —
 (7,439)
Proceeds from asset dispositions —
 7,529
 1,564
 —
 9,093
 —
 3,175
 29
 —
 3,204
Net cash used in investing activities (2,987) (5,298) (16,333) —
 (24,618)
Cash transferred in sale of subsidiaries, net of cash received —
 —
 (22,878) —
 (22,878)
Net cash provided by (used in) investing activities (1,435) 637
 (26,315) —
 (27,113)
Cash flows from financing activities:                    
Proceeds from borrowings —
 —
 387
 —
 387
 37,500
 —
 38,085
 —
 75,585
Debt issuance costs (642) (32) (1,925) —
 (2,599) (5,008) —
 (5,008) —
 (10,016)
Repayment of debt —
 (15,709) (33,407) —
 (49,116) —
 (1,701) (4,120) —
 (5,821)
Dividends paid 162,941
 1,649
 (164,590) —
 —
Increases (decreases) in cash related to intercompany advances and debt (189,241) (13,333) 202,574
 —
 —
 (23,613) (9,534) 33,147
 —
 —
Partial prepayment of put/call obligation (40) —
 —
 —
 (40)
Dividends paid to noncontrolling interest —
 —
 (580) —
 (580)
Issuance of common stock 2,830
 —
 —
 —
 2,830
Repurchases for tax withholdings on vesting of equity awards (1,505) —
 —
 —
 (1,505)
Net cash provided by (used in) financing activities (25,657) (27,425) 2,459
 —
 (50,623) 8,879
 (11,235) 62,104
 —
 59,748
Effect of exchange rate changes on cash and cash equivalents —
 —
 (4,754) —
 (4,754)
Net decrease in cash and cash equivalents (122,009) (8,904) (16,483) (1,501) (148,897)
Cash and cash equivalents at beginning of period 277,176
 8,904
 94,143
 —
 380,223
Cash and cash equivalents at end of period $155,167
 $—
 $77,660
 $(1,501) $231,326
Effect of exchange rate changes on cash, cash equivalents and restricted cash —
 —
 1,840
 —
 1,840
Net increase (decrease) in cash, cash equivalents and restricted cash (27,417) 249
 24,881
 —
 (2,287)
Cash, cash equivalents and restricted cash at beginning of period 90,586
 3,205
 84,264
 —
 178,055
Cash, cash equivalents and restricted cash at end of period $63,169
 $3,454
 $109,145
 $—
 $175,768

 





5455
Table of Contents
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Cash Flows
NineThree Months Ended December 31, 2017June 30, 2018
 
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 $(105,817) $34,995
 $62,437
 $(922) $(9,307) $(32,865) $11,992
 $(23,246) $—
 $(44,119)
Cash flows from investing activities:                    
Capital expenditures (8,182) (7,755) (97,984) 77,480
 (36,441) (654) (1,453) (6,788) —
 (8,895)
Proceeds from asset dispositions —
 85,760
 40,267
 (77,480) 48,547
 —
 7,432
 342
 —
 7,774
Proceeds from OEM cost recoveries —
 —
 94,463
 —
 94,463
Net cash provided by (used in) investing activities (8,182) 78,005
 36,746
 —
 106,569
 (654) 5,979
 (6,446) —
 (1,121)
Cash flows from financing activities:                    
Proceeds from borrowings 318,550
 —
 230,218
 —
 548,768
 —
 —
 387
 —
 387
Debt issuance costs (2,558) (552) (8,543) —
 (11,653) (421) (32) (1,925) —
 (2,378)
Repayment of debt (569,325) (13,137) (27,205) —
 (609,667) —
 (5,262) (8,932) —
 (14,194)
Purchase of 4½% Convertible Senior Notes call option (40,393) —
 —
 —
 (40,393)
Proceeds from issuance of warrants 30,259
 —
 —
 —
 30,259
Dividends paid 110,637
 —
 (113,102) —
 (2,465)
Dividends received (paid) 162,941
 1,649
 (164,590) —
 —
Increases (decreases) in cash related to intercompany advances and debt 291,969
 (99,610) (192,359) —
 —
 (162,519) (21,716) 184,235
 —
 —
Partial prepayment of put/call obligation (36) —
 —
 —
 (36) (14) —
 —
 —
 (14)
Repurchases for tax withholdings on vesting of equity awards (591) —
 —
 —
 (591) (1,484) —
 —
 —
 (1,484)
Issuance of Common Stock 2,830
 —
 —
 —
 2,830
Net cash provided by (used in) financing activities 138,512
 (113,299) (110,991) —
 (85,778) 1,333
 (25,361) 9,175
 —
 (14,853)
Effect of exchange rate changes on cash and cash equivalents —
 —
 9,708
 —
 9,708
 —
 —
 (3,580) —
 (3,580)
Net increase (decrease) in cash and cash equivalents 24,513
 (299) (2,100) (922) 21,192
Net decrease in cash and cash equivalents (32,186) (7,390) (24,097) —
 (63,673)
Cash and cash equivalents at beginning of period 3,382
 299
 92,975
 —
 96,656
 277,176
 8,904
 94,143
 —
 380,223
Cash and cash equivalents at end of period $27,895
 $—
 $90,875
 $(922) $117,848
 $244,990
 $1,514
 $70,046
 $—
 $316,550


Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Bristow Group Inc.:
Results of Review of Interim Financial Information
We have reviewed the condensed consolidated balance sheet of Bristow Group Inc. and subsidiaries (the Company) as of December 31, 2018, the related condensed consolidated statements of operations and comprehensive loss for the three-month and nine-month periods ended December 31, 2018 and 2017, the related condensed consolidated statements of cash flows for the nine-month periods ended December 31, 2018 and 2017, and the related condensed consolidated statements of changes in stockholders’ investment for the three-month and nine-month periods ended December 31, 2018, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it 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) (PCAOB), the consolidated balance sheet of the Company as of March 31, 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ investment and redeemable noncontrolling interest, and cash flows for the year then ended (not presented herein); and in our report dated May 23, 2018, except for the going concern, Note 1 related to the bankruptcy, restructuring support agreement and immaterial corrections to prior period financial information, and Note 4 for the short-term borrowings reclassification, and the restatement as to the effectiveness of internal control over financial reporting for the material weakness related to compliance with non-financial covenants underlying the Company’s secured financing and lease agreements, as to which the date is June 19, 2019, 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, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated 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 PCAOB, 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.
/s/ KPMG LLP
Houston, Texas
June 19, 2019

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of 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, 20182019, as amended by the amendment thereto (the “Amended 10-K”) filed with the U.S. Securities and Exchange Commission (“SEC”) on June 19, 2019 (the “fiscal year 20182019 Annual Report” or the “2018 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 December 31, 2018June 30, 2019 and 20172018, respectively, and the terms “Current Period” and “Comparable Period” refer to the nine months ended December 31, 2018 and 2017, 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, 20192020 is referred to as “fiscal year 20192020.”.
Forward-Looking Statements
This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (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 customers, 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”, “forecasts”, “expects”, “plans”, “anticipates”, “intends”, “projects”, “estimates”, “may”, “might”, “will”, “would”, “could”, “should” 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:
risks and uncertainties relating to our Chapter 11 Cases (as defined herein), including but not limited to: our ability to obtain Bankruptcy Court (as defined herein) approval with respect to motions in the Chapter 11 Cases; the effects of the Chapter 11 Cases on the Company and our various constituents; the impact of Bankruptcy Court (as defined herein) rulings in the Chapter 11 Cases; our ability to develop and implement a plan of reorganization that will be approved by the Bankruptcy Court and the ultimate outcome of the Chapter 11 Cases in general; the length of time we will operate under the Chapter 11 Cases; attendant risks associated with restrictions on our ability to pursue our business strategies; risks associated with third-party motions in the Chapter 11 Cases; the potential adverse effects of the Chapter 11 Cases on our liquidity; the potential cancellation of our common stock in the Chapter 11 Cases; the potential material adverse effect of claims that are not discharged in the Chapter 11 Cases; uncertainty regarding our ability to retain key personnel; and uncertainty and continuing risks associated with our ability to achieve our stated goals and continue as a going concern;
our ability to implement operational improvement efficiencies with the objective of rightsizing our global footprint and further reduce our cost structure;
adverse changes in our ability to obtain financing or enter into definitive agreements with respect to financings on terms that are favorable to us;
the possibility that we may be unable to maintain compliance with covenants in our financing agreements;
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 possibility that we may be unable to re-deploy our aircraft to regions with greater demand;
the possibility that we may impair our long-lived assets, including goodwill, inventory, property and equipment and investments in unconsolidated affiliates;
our ability to implement operational improvement efficiencies with the objective of rightsizing our global footprint and further reducing our cost structure;
the possibility of significant changes in foreign exchange rates and controls, including as a result of voters in the U.K. having approved the exit of the U.K. (“Brexit”) from the European Union (“E.U.”);
the impact of continued uncertainty surrounding Brexit negotiations;
potential effects of increased competition;
the inability to remediate the material weaknesses identified in internal controls over financial reporting relating to our monitoring control processes;

the possibility that we may be unable to re-deploy our aircraft to regions with greater demand;
the possibility that the major oil companies do not expand internationally and offshore;
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 of changes in tax and other laws and regulations;
the possibility that we may be unable to dispose of older aircraft through sales into the aftermarket;
general economic conditions, including the capital and credit markets;
the possibility that segments of our fleet may be grounded for extended periods of time or indefinitely;
the possibility of significant changes in foreign exchange rates and controls, including as a result of voters in the U.K. having approved the exit of the U.K. (“Brexit”) from the European Union (“E.U.”);
the impact of continued uncertainty surrounding Brexit negotiations;
potential effects of increased competition;
the inability to remediate the material weaknesses identified in internal controls over financial reporting relating to our monitoring control processes;
the existence of operating risks inherent in our business, including the possibility of declining safety performance;
the possibility of political instability, war or acts of terrorism in any of the countries where we operate;
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 or our suppliers may be unable to deliver new aircraft on time or on budget;
the possibility that we may be unable to acquire additional aircraft due to limited availability or unable to exercise aircraft purchase options;
the possibility that customers may reject our aircraft due to late delivery or unacceptable aircraft design or operability;
the possibility that we may be unable to successfully execute on our strategic priorities, including STRIVE;
the significant changes in our stock price, the liquidity of the market for our common stock and the risk of future declines or fluctuations, including limitations caused by the delisting of our common stock from the New York Stock Exchange and the subsequent trading of our common stock in the less established markets;priorities; 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 20182019 Annual 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. For a discussion of the Chapter 11 Cases, please see Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
On May 11, 2019 (the “Petition Date”), Bristow Group Inc. and certain of its subsidiariessubsidiaries: BHNA Holdings Inc., Bristow Alaska Inc., Bristow Helicopters Inc., Bristow U.S. Leasing LLC, Bristow U.S. LLC, BriLog Leasing Ltd. and Bristow Equipment Leasing Ltd. (together, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Debtors’ Chapter 11 Cases arewere jointly administered under the caption In re: Bristow Group Inc., et al., Main Case No. 19-32713. TheDuring the pendency of the Chapter 11 Cases, the Debtors continuecontinued to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
During On August 1, 2019, the Debtors filed with the Bankruptcy Court the Joint Chapter 11 Cases, wePlan of Reorganization of Bristow Group Inc. and its Debtor Affiliates (the “Original Plan”) and the Disclosure Statement related thereto. On August 20, 2019, the Debtors filed with the Bankruptcy Court the Amended Joint Chapter 11 Plan of Reorganization of Bristow Group Inc. and its Debtor Affiliates (as further modified on August 22, 2019 and September 30, 2019, the “Amended Plan”) and the Disclosure Statement related thereto (as further modified on August 22, 2019, the “Amended Disclosure Statement”). On October 4, 2019, the Bankruptcy Court approved the Amended Disclosure Statement and indicated that it would confirm the Amended Plan. On October 8, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) approving the Amended Disclosure Statement and confirming the Amended Plan.
The effective date of the Amended Plan (the “Effective Date”) occurred on October 31, 2019.
We expect our financial results to continue to be volatile as restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact our consolidated financial statements. As a result, our historical financial performance is likely not indicative of our financial performance after the date of the filing of the Chapter 11 Cases. In addition, we have incurred significant professional fees and other costs in connection with preparation for the Chapter 11 Cases and expect that we will continue to incur significant professional fees and costs throughout our Chapter 11 Cases.


General
We are the leading global industrial aviation services provider based on the number of aircraft 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, RussiaGuyana and Trinidad. We provide private sectorcommercial SAR services in Australia, Canada, Guyana, 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 Nigeria and in Australia through our consolidated affiliate, Capiteq Limited, operating under the name of Airnorth. These operations support our primary industrial aviation services operations in those markets, creating a more integrated logistics solution for our customers. We also provided regional fixed wing scheduled and charter services in the U.K. through oura consolidated affiliate, Eastern Airways International Limited (“Eastern Airways”), until our disposal of Eastern Airways on May 10, 2019.
During the Current Period,Quarter, we generated approximately 66%71% of our consolidated operating revenue from external customers from oil and gas operations, approximately 18% from U.K. SAR operations and approximately 16%11% from fixed wing services, including charter and scheduled airline services that support our global helicopter operations.
We conduct our business in one segment: industrial aviation services. The industrial aviation services segment operations are conducted primarily through two hubs that include 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 customers charter our helicopters primarily to transport personnel between onshore bases and offshore production platforms, drilling rigs and other installations. To a lesser extent, our customers also charter our helicopters to transport time-sensitive equipment to these offshore locations. These customers’ 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 customers for SAR services include both the oil and gas industry, where our revenue is primarily dependent on our customers’ operating expenditures, and governmental agencies, where our revenue is dependent on a country’s desire to privatize SAR and enter into long-term contracts. As of December 31, 2018,June 30, 2019, we operated 277216 aircraft (including 191155 owned aircraft and 8661 leased aircraft; 10one of the owned aircraft areis held for sale)sale and our unconsolidated affiliates operated 108111 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 services segment as of December 31, 2018;June 30, 2019; (2) the number of helicopters which we had on order or under option as of December 31, 2018;June 30, 2019; 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 8 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
Total (2)(3)
 Total Small Medium Large
Total (2)(3)
 Total
Europe Caspian 58% —
 12
 75
 32
 119
 —
 119
 57% —
 12
 77
 —
 89
 —
 89
Africa 11% 3
 28
 7
 3
 41
 43
 84
 15% 1
 25
 7
 4
 37
 44
 81
Americas 17% 21
 40
 14
 —
 75
 65
 140
 17% 20
 30
 12
 —
 62
 67
 129
Asia Pacific 14% —
 8
 20
 14
 42
 —
 42
 11% —
 7
 7
 14
 28
 —
 28
Total 100% 24
 88
 116
 49
 277
 108
 385
 100% 21
 74
 103
 18
 216
 111
 327
Aircraft not currently in fleet: (5)
                                
On order   —
 —
 26
 —
 26
       —
 —
 26
 —
 26
    
Under option   —
 —
 4
 —
 4
       —
 —
 —
 —
 —
    
_____________ 
(1) 
Eastern Airways operates a total of 32 fixed wing aircraft in the Europe Caspian region and provides technical support for two fixed wing aircraft in the Africa region. Additionally, Airnorth operates a total of 14 fixed wing aircraft, which are included in the Asia Pacific region.  

(2) 
Includes 10one medium aircraft held for sale in our Americas region and 8661 leased aircraft as follows:
 Held for Sale Aircraft in Consolidated Fleet Leased Aircraft in Consolidated Fleet
 Helicopters   Helicopters    
 Small Medium Large
Fixed
Wing
 Total Small Medium Large
Fixed
Wing
 Total
Europe Caspian —
 1
 —
 —
 1
 —
 1
 37
 —
 38
Africa 2
 3
 —
 —
 5
 —
 1
 3
 3
 7
Americas —
 3
 —
 —
 3
 2
 4
 3
 —
 9
Asia Pacific —
 —
 —
 1
 1
 —
 2
 1
 4
 7
Total 2
 7
 —
 1
 10
 2
 8
 44
 7
 61
          
 Leased Aircraft in Consolidated Fleet
 Helicopters    
 Small Medium Large
Fixed
Wing
 Total
Europe Caspian —
 1
 36
 12
 49
Africa —
 1
 3
 —
 4
Americas 2
 13
 5
 —
 20
Asia Pacific —
 3
 6
 4
 13
Total 2
 18
 50
 16
 86
(3) 
The average age of our helicopter fleet was approximately ten years as of December 31, 2018June 30, 2019.
(4) 
The 108111 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us. Includes 4243 helicopters (primarily medium) and 2223 fixed wing aircraft owned and managed by Líder Táxi Aéreo S.A. (“Líder”), our unconsolidated affiliate in Brazil included in the Americas region, and 36 helicopters and seveneight fixed wing aircraft owned by Petroleum Air Services, (“PAS”), our unconsolidated affiliate in Egypt included in the Africa region, and one helicopter operated by Cougar Helicopters Inc. (“Cougar”), our unconsolidated affiliate in Canada included in the Americas region.
Canada.
(5) 
This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option. In October 2019, the Bankruptcy Court approved our agreement with Airbus Helicopters S.A.S. to reject our aircraft purchase contract for 22 large aircraft. The four AW189 U.K. SAR configured aircraft on order were being leased as of March 31, 2019. One of the AW189s was purchased in August 2019 and one of the AW189s was purchased in October 2019.

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 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 historical LACE and LACE rate is as follows:
     
   
Current
Period (1)
 Fiscal Year Ended March 31,
   2018 2017 2016 2015 2014
 LACE 162
 172
 174
 162
 166
 158
 LACE Rate (in millions) $6.95
 $6.80
 $6.63
 $8.85
 $9.33
 $9.34
   
Current
Quarter (1)
 Fiscal Year Ended March 31,
   2019 2018 2017 2016 2015
 LACE 145
 160
 172
 174
 162
 166
 LACE Rate (in millions) $7.87
 $6.94
 $6.74
 $6.55
 $8.60
 $9.26
_____________ 
(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 December 31, 2018June 30, 2019. 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 Caspian44
 37
 45%
 Africa16
 4
 18%
 Americas26
 12
 32%
 Asia Pacific17
 8
 31%
 Total103
 60
 37%


  LACE  
  Owned Aircraft Leased Aircraft 
Percentage
of LACE
leased
 Europe Caspian46
 38
 45%
 Africa16
 4
 18%
 Americas26
 6
 17%
 Asia Pacific9
 2
 19%
 Total96
 49
 34%
Our Strategy
Our goal is to strengthen our market position as the leading global industrial aviation services provider globally.provider. To do this, we will pursue efficiencies and new opportunities in our core markets, address oversupply and market saturation by diversifying our portfolio, and drive innovation throughout our businesses and industry.
Safety will always be our number one focus. We continue to deliver strong operational safety performance across the group and maintain a recordable injury rate that places us in the upper tier of our peer companies in oilfield services and aviation. We seek to continuously improve our safety systems and processes to allow us to become even safer and to build confidence in our industry and among our regulators with respect to the safety of helicopter transportation globally.
We continually seek to improve our balance sheet and liquidity and reduce our capital costs, with a goal of reduced financing leverage (including lower levels of debt and leases) and a return to profitability. In order to strengthen our balance sheet and achieve a more sustainable debt profile, we filed for Chapter 11 protection on the Petition Date.
We intend to pursue value-added acquisitions with a focus on oil and gas transportation and search and rescueSAR that do not just make us bigger but better; that generate cost efficiencies that position us 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 and liquidity.
We also intend to continue to utilize portfolio and fleet optimization. During the Chapter 11 Cases, we leveraged relief available to us under Chapter 11. Consistent with our ongoing process to rationalize and simplify our business and global aircraft fleet, we sold 11, 8 and 2 aircraft in fiscal years 2018 and 2019 and Current Quarter for proceeds of $48.3 million, during fiscal year 2018$11.0 million and sold three aircraft during the Current Period for proceeds of $8.1 million.$3.2 million, respectively. As of December 31, 2018,June 30, 2019, we had tenone aircraft held for sale and the average age of our fleet is approximately ten years. Since April 1, 2017,During the Current Quarter, we have returned eleven Airbusfour H225s under an agreement with a lessor and rejected and returned leases under Chapter 11 protection for nine Sikorsky S-92s to lessors.S-76C+s and one S-76D. Also, we disposed of Eastern Airways on May 10, 2019.


Market Outlook
Our core business is providing industrial aviation services primarily 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 customer diversity which helps mitigate risks associated with a single market or customer.
The oil and gas business environment has experienced significant volatility since fiscal year 2015. Brent crude oil prices declined from approximately $106 per barrel as of July 1, 2014 to a low of approximately $26 per barrel in February 2016. A recovery in Brent crude oil prices followed to approximately $77 per barrel as of June 27, 2018 with another decline to approximately $44 per barrel as of December 27, 2018. Brent crude oil prices were approximately $45$58 per barrel as of December 31, 2018.June 30, 2019. The decrease in oil prices beginning in fiscal year 2015 was driven by increased global supply primarily from unconventional oil resources in the U.S. Permian Basin and forecasts of reduced demand for crude oil resulting from weaker global economic growth in many regions of the world. The oil price decline negatively impacted the cash flow of our customers and resulted in their implementation of measures to reduce operational and capital costs, negatively impacting helicopter activity beginning in fiscal year 2015. These cost reductions have continued into fiscal year 2019 and have impacted both the offshore production and the offshore exploration activity of our customers.customers resulting in a change in the industry with continued focus on supply chain efficiencies without a similar offsetting decease to our maintenance costs. The largest share of our revenue relates to oil and gas production; however, our largest contract, the contract with the U.K. Department for Transport (the “DfT”) to provide public sector SAR services for all of the U.K. (the “U.K. SAR contract”), is not directly impacted by declining oil prices. However, theThe significant drop in the price of crude oil resulted in the rescaling, delay or cancellation of planned offshore projects whichand has negatively impacted our operations and could continue to negatively impact our operations in future periods.
To further reduce costs and make offshore drilling more financially attractive,economical, the industry is implementing technology-driven solutions that could result in increased transportation needs initially but could result in decreased activity once complete. Recently, we have seen opportunities infor market share gains rather than increased activity. Our oil and gas markets remain competitive as material cost reductions and technological improvements have taken place in the offshore supply chain. The continued volatility of oil prices combined with the excess supply of aircraft could continue to impact the price and demand for helicopters and may continue to 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 customers for our SAR services include both the oil and gas industry and governmental agencies. We are pursuing other public and oil and gas SAR opportunities for multiple aircraft in various jurisdictions around the globe and other non-SAR government aircraft logistics opportunities.
Like many of our competitors and other service providers to exploration and production companies, we responded to the constraints in the market during the past four years by implementing cost efficiencies both in our global operations as well as in our corporate headquarters, comprehensively reviewing operational and commercial dealings, exploring value-additive acquisitions and dispositions and developing strategic initiatives. We pursued a strategy of maximizing liquidity and financial flexibility through asset-level borrowings and secured equipment lease transactions. Together with revenue from operations, this additional liquidity allowed us to service our debt and provided a runway to maintain operations through the downturn.

Additionally, we took the following actions in an effort to address the downturn:
In early fiscal year 2018, we took steps to increase cost efficiency by optimizing our operations around two primary geographical hubs in key areas of our business, Europe and the Americas.
We increased our financial flexibility by entering into new secured equipment financings that resulted in aggregate proceeds of $630 million funded in fiscal years 2017 and 2018. Additionally, in fiscal year 2018, we completed the sale of $143.8 million of the 4½% Convertible Senior Notes due 2023 (the “4½% Convertible Senior Notes”) and $350 million of the 8.75% Senior Secured Notes due 2023 (the “8.75% Senior Secured Notes”). In April 2018, we entered into a new asset-backed revolving credit facility (the “ABL Facility”) as discussed in Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report and under “— Recent Events” below.
We worked with our original equipment manufacturers (“OEMs”) to defer approximately $190 million of capital expenditures relating to fiscal years 2018 through 2020 into fiscal year 2020 and beyond and more recently deferred approximately $100 million in capital expenditures for fiscal years 2019 to 2023 into fiscal year 2024 and beyond. We achieved $136 million in cost recoveries from OEMs related to ongoing aircraft issues, of which $125 million was recovered in fiscal year 2018 and $11 million was recovered in May 2018.
We took significant steps to reduce general and administrative costs that included downsizing our corporate office and the size of our senior management team. Consistent with our STRIVE strategy, we are better positioned to win contracts because we are a more nimble, regionally focused and cost efficient business.
In August 2017, we suspended our quarterly dividend as part of a broader plan of reducing costs and improving liquidity. By suspending this $0.07 per share quarterly dividend, we expect to preserve approximately $10 million of cash annually.
Ultimately, however, given the continuing challenges in the offshore oil and gas industry and other matters impacting liquidity, the rate at which ourthe Company’s cash position was declining began to increase, and wethe Company evaluated ourits strategic alternatives for the benefit of all ourits stakeholders, including ourits customers, employees, creditors and other investors. The fundamental shifts in the energy markets and in particular, offshore spending,drilling, have required usthe Company to re-think theits strategic business plan to restructure with an eye toward an inevitable consolidation in the market for helicopter services. While we havethe Company has maintained ourits leading market share, industry demand has declined precipitously, rendingrendering existing business models unsustainable and creating substantial overcapacity in the marketplace.
On the Petition Date, the Debtors filed the Chapter 11 Cases in the Bankruptcy Court seeking relief under Chapter 11 of the Bankruptcy Code. The Debtors’ Chapter 11 Cases arewere jointly administered under the caption In re: Bristow Group Inc., et al., Main Case No. 19-32713. TheDuring the pendency of the Chapter 11 Cases, the Debtors continuecontinued to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. On August 1, 2019, the Debtors filed with the Bankruptcy Court the Original Plan and the Disclosure Statement related thereto. On August 20, 2019, the Debtors filed with the Bankruptcy Court the Amended Plan and the Amended Disclosure Statement. On October 4, 2019, the Bankruptcy Court approved the Amended Disclosure Statement and indicated that it would confirm the Amended Plan. On October 8, 2019, the Bankruptcy Court entered the Confirmation Order approving the Amended Disclosure Statement and confirming the Amended Plan.
The Effective Date occurred on October 31, 2019.

The effects of offshore oil and gas market pressures have been felt by nearly all companies in the helicopter service industry. Including the Debtors’ Chapter 11 Cases, there have been five large Chapter 11 proceedings involving helicopter services and leasing companies in the last few years.
Recent Events
Restructuring Support Agreement — On May 10, 2019, we entered into a restructuring support agreement (the “RSA”(“the Initial RSA”) with (i) certain holders (the “Supporting Secured Noteholders”) of the 8.75% Senior Secured Notes due 2023 (the “8.75% Senior Secured Notes”) and (ii) the guarantors of the 8.75% Senior Secured Notes (the “Secured Guarantors”), to support a restructuring of the Company (the “Restructuring”). On June 27, 2019, we entered into an amendment and restatement of the Initial RSA. On July 24, 2019, we entered into the second amendment and restatement thereof (as so amended and restated, the “Second Amended RSA”) with a group of holders representing approximately 99.3% of the 8.75% Senior Secured Notes (the “Supporting Secured Noteholders”), the Secured Guarantors and a group of holders representing approximately 73.6% (the “Supporting Unsecured Noteholders” and, together with the Supporting Secured Noteholders, the “Supporting Noteholders”) of the 6¼% Senior Notes due 2022 (the “6¼% Senior Notes”) and the 4½% Convertible Senior Notes due 2023 (the “4½% Convertible Senior Notes”) combined (together, the “Unsecured Notes”). The Second Amended RSA contemplated implementation of the Restructuring on the amended terms set forth in the term sheet contained in an exhibit to the Second Amended RSA (the “Restructuring Term Sheet”). The RSA contemplated the filing of the Chapter 11 Cases to implement the Restructuring pursuant to a Chapter 11 plan of reorganization (the “Plan”)the Amended Plan and the various related transactions set forth in or contemplated by the Restructuring Term Sheet, the term sheet for the DIP Term SheetCredit Agreement (as defined herein) and the other restructuring documents attached to the Second Amended RSA.
Pursuant to the terms of the Second Amended RSA and the Restructuring Term Sheet:
holders of claims arising from the 8.75% Senior SecuredUnsecured Notes will(the “Unsecured Notes Claims”) would receive their pro rata share of a percentage of(i) if they are accredited investors, (x) new common stock, par value $0.0001 (the “New Common Stock”), and new preferred stock, par value $0.0001 (the “New Preferred Stock” and, together with the equity interests (the “Reorganized Equity”New Common Stock, the “New Stock”), of the Company, as reorganized pursuant to and under the Amended Plan (the “Reorganized Company”) equal to 100% minus11% of the New Stock (the “Unsecured Equity Pool”), subject to dilution for the management incentive plan and (v) up to $347.5 million of the Rights Offering (the “Unsecured Rights”), or (ii) if they are not accredited investors, the Unsecured Cash Pool (as defined below) and, in each case, the Unsecured Notes Reorganized Equity percentage (subject to dilutionwill be cancelled and discharged;
holders of claims arising from the MIP and8.75% Senior Secured Notes (the “Secured Notes Claims”) would receive payment of their Secured Notes Claims in full consisting of (i) cash equal to 97% of their Secured Notes Claims, plus (ii) their pro rata share of up to $37.5 million of the Rights Offering (each as defined herein)(the “Secured Rights”);, and the 8.75% Senior Secured Notes will be cancelled and discharged;
if the class of holders of unsecured claims (the “Unsecured Notes Claims”) arising from(other than the 6¼% Senior Notes due 2022 and the 4½% Convertible Senior Notes (together, the “Unsecured Notes”) accepts the Plan, the holders of Unsecured Notes Claims willand general unsecured trade vendor claims) (the “General Unsecured Claims”) would receive their pro rata share of (i) if they are accredited investors, at their option, (a) the ReorganizedUnsecured Equity (subject to dilution fromPool and (b) the MIP andUnsecured Rights or (ii) if they are accredited investors who decline the Rights Offering)treatment set forth in the preceding clause (i) or if they are not accredited investors, cash in an amount (the “Consensual Unsecured Notes Reorganized Equity”) to be agreed upon by the Company and the holders of at least 66 2/3% of the aggregate principal amount of the 8.75% Senior Secured Notes obligated under the RSA and which must include at least two members of the Secured

Notes Ad Hoc Group (as defined herein) (the “Required Consenting Noteholders”) and any other rights or recovery that may be agreed upon by the Company and the Required Consenting Noteholders; and ifBackstop Parties (as defined in the class of holders of Unsecured Notes Claims does not accept the Plan, the holders of Unsecured Notes Claims will receive theirSecond Amended RSA) (the “Unsecured Cash Pool”), distributed pro rata share of the percentage of the Reorganized Equity determined by the Bankruptcy Court to satisfy the best interests test;
if the class ofall holders of general unsecured claims that rank pari passu with the Unsecured Notes Claims (“Pari General Unsecured Claims”) votes in favor of the Plan, the holders of Pari General Unsecured Claims willwho opt to receive their pro rata share of the Consensual Unsecured Notes Reorganized Equity; and if the class of holders of Pari General Unsecured Claims does not vote in favor of the Plan, the holders of Pari General Unsecured Claims will receive their pro rata share of the percentage of the Reorganized Equity determined by the Bankruptcy Court to satisfy the best interests test;cash under this clause (ii);
holders of claims under the 2019 Term Loan (as defined herein) will be repaidwould either receive payment in cash in full or have their commitments with respect to the 2019 Term Loan replaced, or amended and reinstated, in any case secured by a first lien on substantially all assets of the Company, with the same maturity and interest rate as in the 2019 Term Loan, and the 2019 Term Loan will be reinstated;cancelled and discharged;
holders of claims under the New DIP Facility (as defined herein) willwere expected to be paid in cashsatisfied and discharged in full provided that,in exchange for New Stock;
an ad hoc group of holders of the DIP Facility may be converted on a dollar-for-dollar basis into the Exit Facility (as defined herein);
Unsecured Notes (the “Unsecured Notes Ad Hoc Group”) and an ad hoc group of holders of the 8.75% Senior Secured Notes (the “Secured Notes Ad Hoc Group”) has agreed to backstop $347.5 million and $37.5 million, respectively, of a $200total $385 million new money rights offering of the Reorganized Equity (the “Rights Offering”), pursuant to which participants will receive rights to purchase a percentage of the Reorganized Equity at a discount to New Stock;
the Planexisting equity value to be agreed upon byinterests in the Company would be cancelled and discharged;

the Secured Notes Ad Hoc Group and the Required Consenting Noteholders;Unsecured Notes Ad Hoc Group filed a statement affirmatively supporting the Company’s Fiscal Year 2020 Performance Incentive Plan and Fiscal Year 2020 Non-Executive Incentive Plan in the form presently before the Bankruptcy Court;
up tobetween 5% and 10% of the Reorganized EquityNew Stock on a fully diluted basis will bewere reserved for the MIP Reorganized Equity pursuant to a Management Incentive Plan (“MIP”) acceptablePlan; and
the Debtors would conduct a marketing process to the Required Consenting Noteholders; and
any exit financing for the Company will beraise a senior secured or unsecured revolving, term loan or notes facility in an aggregate principal amount and structureof at least $75 million, provided that such facility shall be used to be determined (the “Exit Facility”).
The RSA contains certain covenants onrepay the part of each of the Company and the Supporting Secured Noteholders, including limitations on the Supporting Secured Noteholders’ ability to pursue alternative transactions, commitments by the Supporting Secured Noteholders to vote2019 Term Loan in favor of the Plan and commitments of the Company and the Supporting Secured Noteholders to negotiatecash, in good faith to finalize the documents and agreements governing the Plan. The RSA also provides for certain conditions to the obligations of the parties and for termination upon the occurrence of certain events, including without limitation, the failure to achieve certain milestones and certain breaches by the parties under the RSA.full.
Term Loan Agreement — On May 10, 2019, the Companywe entered into a Term Loan Credit Agreement, dated the same date (the “Term Loan Agreement”), by and among the Company and Bristow Holdings Company Ltd. III (“BHC III”), as borrowers, certain subsidiaries of the Company as guarantors party thereto, the lenders from time to time party thereto (initially, certain holders of the 8.75% Senior Secured Notes), and Ankura Trust Company, LLC, as administrative agent (the “Term Loan Agent”), for a senior secured term loan of $75 million (the “2019 Term Loan”). Immediately upon entering into the Term Loan Agreement, and prior to the Petition Date, the Company and BHC III borrowed the full amount thereunder, the net proceeds of which may be used only in compliance with a cash flow forecast required pursuant to the terms of the Term Loan Agreement, which the Company expects will bewere used for general corporate purposes, including to fund the working capital and liquidity requirements of the Company during the pendency of the Chapter 11 Cases. The full principal amount of the 2019 Term Loan is due May 10, 2022. At the Company’s election, borrowings under the 2019 Term Loan will bear interest at either (x) the Eurodollar Rate (as defined in the Term Loan Agreement) plus 7% or (y) the Base Rate (as defined in the Term Loan Agreement) plus 6%. The initial borrowings under the 2019 Term Loan will be Eurodollar Rate loans with monthly interest payments. The 2019 Term Loan is secured by a first lien on certain specified collateral, including, among other things, equity pledges of 35% of the equity interests in certain of the Company’s first-tier foreign subsidiaries (the remaining 65% of such entities have been previously pledged under the 8.75% Senior Secured Notes), 100% of the equity of BHC III, and Bristow International Panama S. de RL, and two newly formed special-purpose vehicles, as well as a junior lien on certain collateral securing the 8.75% Senior Secured Notes. The borrowers have the option in connection with the consummation of a Reorganization Plan (as defined in the Term Loan Agreement) that is satisfactory to the lenders to require that the 2019 Term Loan be converted into equity of the Company upon consummation of such Reorganization Plan, subject to certain conditions. The Term Loan Agreement contains customary pre-payment requirements.
The Term Loan Agreement contains certain customary negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s and its subsidiaries’ incurrence of additional indebtedness or liens, mergers, dispositions of assets, investments, restricted payments, modifications to material agreements, transactions with affiliates and fundamental changes. In addition, the Term Loan Agreement requiresrequired that, on the delivery of each Variance Report (as defined in the Term Loan Agreement), total operating disbursements and total receipts of the Company and its subsidiaries for certain specified periods shall not exceed (with respect to disbursements) or be less than (with respect to total receipts) the aggregate amount forecasted therefor for such

period by more (with respect to disbursements) or less (with respect to total receipts) than a specified percentage of the forecasted amount. The Term Loan Agreement also contains customary affirmative covenants and customary representations and warranties.
The Term Loan Agreement specifies certain customary events of default, including, among others, failure to pay principal or interest on the 2019 Term Loan when due, the breach of representations or warranties in any material respect, non-performance of other covenants and obligations, judgments, the occurrence of certain ERISA events and certain change of control events. The filing of the Chapter 11 Cases neither constitutes an event of default nor accelerates the maturity of the Company’s indebtedness under the Term Loan Agreement.
On June 6, 2019, we entered into Amendment No. 1 to the Term Loan Agreement (the “First Term Loan Amendment”), dated the same date, by and among the Company, BHC III and the lenders party thereto. Among other things, the First Term Loan Amendment extended the deadline for delivery to the administrative agent and the lenders of (i) the annual audit report of the borrower and its subsidiaries for the fiscal year ended March 31, 2019 from 90 days to 120 days after the end of such fiscal year and (ii) monthly unaudited consolidated financial statements of the borrower and its subsidiaries from 10 days to 20 business days after the end of each month.
On August 22, 2019, we entered into Amendment No. 2 to the Term Loan Agreement (the “Second Term Loan Amendment”), dated the same date, by and among the Company, BHC III and the Term Loan Agent. The Second Term Loan Amendment amended the Term Loan Agreement in order to clarify the definition of Pledged Aircraft under the Term Loan Agreement.
On August 26, 2019, in connection with the entry into the DIP Credit Agreement, we entered into Amendment No. 3 to the Term Loan Agreement (the “Third Term Loan Amendment”), dated the same date, by and among the Company, BHC III, the lenders party thereto and the Term Loan Agent. The Third Term Loan Amendment amended and restated the Term Loan Agreement in order to, among other things, permit the entry into the DIP Credit Agreement, the incurrence of indebtedness thereunder and the granting of related liens thereunder, and make certain other conforming changes.

On September 30, 2019, we entered into Amendment No. 4 to the Term Loan Agreement (the “Fourth Term Loan Amendment”), dated the same date, by and among the Company, BHC III and the Term Loan Agent. The Fourth Term Loan Amendment amended the Term Loan Agreement in order to extend the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019.
In connection with the Amended Plan, on October 31, 2019, we entered into Amendment No. 5 to the Term Loan Agreement (the “Fifth Term Loan Amendment”), dated the same date, by and among the Company, BHC III, the guarantors party thereto, the lenders party thereto and the Term Loan Agent. The Fifth Term Loan Amendment amended the Term Loan Agreement in order to, among other things, (i) increase the applicable margin in respect of all outstanding term loans to 8.00% in the case of Eurodollar Rate loans and 7.00% for Base Rate loans (with increases to 9.00% and 8.00%, respectively, with respect to all such term loans outstanding after the six-month anniversary of the Effective Date), (ii) release Bristow Helicopter Group Limited from all guaranty and collateral obligations in respect of the 2019 Term Loan, (iii) modify certain negative covenants to, among other things, allow for future aircraft-related financings and related liens and investments and (iv) delete certain provisions relating to the Chapter 11 Cases, in light of the occurrence of the Effective Date of the Amended Plan, including the deletion of the requirements to (x) deliver Variance Reports (as defined in the Term Loan Agreement) and (y) ensure that total operating disbursements and total receipts of the Company and its subsidiaries for certain specified periods did not exceed (with respect to disbursements) or were not less than (with respect to total receipts) the aggregate amount forecasted therefor for such period by more (with respect to disbursements) or less (with respect to total receipts) than a specified percentage of the forecasted amount.
Rejection of HeliFleet Leases —During the Chapter 11 Cases, the Company identified cost savings to be achieved through a fleet reduction by eliminating leased helicopters that were idle, carried above-market lease payments or that could be replaced with other helicopters within Bristow’s fleet. On June 14, 2019, the Bankruptcy Court entered an order (the “HeliFleet Order”) authorizing the Debtors to reject nine separate Aircraft Lease Agreements, dated as of December 20, 2005 (as amended from time to time), entered into by Bristow U.S. LLC, as lessee, and HeliFleet 2013-01, LLC (“HeliFleet”), as lessor, expiring September 1, 2023 (the “HeliFleet Leases”). Under the HeliFleet Leases, HeliFleet was the lessor of nine S-76C+ helicopters (the “HeliFleet Helicopters”) and the engines installed thereon. Under the terms of the HeliFleet Order, Bristow U.S. LLC returned the HeliFleet Helicopters to HeliFleet.
Backstop Commitment Agreement — On July 24, 2019, the Company entered into a Backstop Commitment Agreement (the “Backstop Commitment Agreement”) with the other parties thereto (the “Commitment Parties”), pursuant to which the Commitment Parties agreed to backstop the Rights Offering of New Stock of the Reorganized Company. In accordance with the Amended Plan and certain Rights Offering procedures filed as part of the Amended Plan, the Company granted the Supporting Noteholders, including certain Commitment Parties who are Unsecured Noteholders (the “Unsecured Commitment Parties”) or Secured Noteholders (the “Secured Commitment Parties”), and holders of certain other unsecured claims (collectively with the Unsecured Noteholders, the “Unsecured Claims”), the right to purchase shares of New Stock of the Reorganized Company (the “Rights Offering Shares”), which were comprised of 91.825% of New Common Stock and 8.175% of New Preferred Stock, for an aggregate purchase price of, in the case of the Unsecured Claims, $347.5 million (the “Unsecured Rights Offering Amount”) and, in the case of the Secured Noteholders, $37.5 million (the “Secured Rights Offering Amount” and, together with the Unsecured Rights Offering Amount, the “Rights Offering Amount”)). Under the Backstop Commitment Agreement, the Commitment Parties agreed to purchase any Rights Offering Shares that were not duly subscribed for pursuant to the Rights Offering (the “Unsubscribed Shares”) at the Per Equity Share Purchase Price (as defined in the Backstop Commitment Agreement).
Under the Backstop Commitment Agreement, the Debtors agreed to pay (i) on the earlier of the closing date of the transactions contemplated by the Backstop Commitment Agreement or the termination of the Backstop Commitment Agreement, a backstop commitment fee (the “Backstop Commitment Fee”) in, at the election of the Commitment Parties, New Stock equal to 10% of (a) the Unsecured Rights Offering Amount to the Unsecured Commitment Parties and (b) the Secured Rights Offering Amount to the Secured Commitment Parties and (ii) both as promptly as reasonably practicable after entry of the BCA Approval Order (as defined in the Backstop Commitment Agreement) and on a monthly basis thereafter, all reasonably incurred and documented professional fees of the Commitment Parties. The Backstop Commitment Fee was paid in New Stock to the Commitment Parties pro rata based on the amount of their respective backstop commitments.
The rights to purchase Rights Offering Shares (excluding Unsubscribed Shares) in the Rights Offering were issued in reliance upon the exemption from the registration requirements of the Securities Act, pursuant to section 1145 of the Bankruptcy Code. A portion of the New Common Stock issued in the Rights Offering was issued in reliance upon such exemption, and a portion of the New Common Stock and all of the New Preferred Stock were issued in reliance upon the exemption from registration under the Securities Act provided by Section 4(a)(2) thereof or another available exemption from registration thereunder. The offer and sale of the Unsubscribed Shares purchased by the Commitment Parties pursuant to the Backstop Commitment Agreement were made in reliance upon the exemption from registration under the Securities Act provided by Section 4(a)(2) thereof or another

available exemption from registration thereunder. As a condition to the closing of the transactions contemplated by the Backstop Commitment Agreement, the Reorganized Company entered into a registration rights agreement with certain Commitment Parties requiring the Reorganized Company to register the Commitment Parties’ securities under the Securities Act.
The Commitment Parties’ commitments to backstop the Rights Offering and the other transactions contemplated by the Backstop Commitment Agreement were conditioned upon satisfaction of all applicable conditions set forth therein. The Rights Offering Shares were issued pursuant to the Rights Offering and the Backstop Commitment Agreement on the Effective Date.
On September 30, 2019, we entered into a limited waiver and amendment to the Backstop Commitment Agreement (the “BCA Amendment”), dated the same date, by and between the Company, on behalf of itself and each of the other Debtors, and certain Commitment Parties. The BCA Amendment extended the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019.
Debtor-in-Possession Commitment LetterCredit Agreement — In connection with the Chapter 11 Cases and pursuant to a Commitment Letter, dated May 10, 2019, fromcommitment letter between the DIP Borrowers (as defined below) and the lenders party thereto, on July 25, 2019, the Debtors filed a motion seeking, among other things, interim and agreed to byfinal approval of the proposed Superpriority Secured Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”) among the Company, andas lead borrower, BHC III, as co-borrower (together with the Company, the “DIP Borrowers”), the other Debtors and guarantors party thereto and other guarantors from time to time party thereto, the financial institutions or other entities from time to time party thereto, and Ankura Trust Company, LLC, as administrative agent and collateral agent (the “DIP Agent”). On August 21, 2019, the Bankruptcy Court entered a final order, which, among other things, approved the DIP Credit Agreement, and on August 26, 2019, the Company entered into the DIP Credit Agreement. On August 27, 2019, the Company borrowed the full amount of the DIP Credit Agreement of $150 million at an 8.5% borrowing rate, $75 million of which was used to pay down a portion of the 8.75% Senior Secured Notes Ad Hoc Group has agreeddiscussed below and the remainder of which was to providebe used for general corporate purposes.
On September 30, 2019, we entered into Amendment No. 1 to the DIP Borrowers with a superpriority senior secured debtor-in-possession credit facilityCredit Agreement (the “DIP Facility”Credit Agreement Amendment”), dated the same date, among the Company, BHC III and the DIP Agent. The DIP Credit Agreement Amendment amended the DIP Credit Agreement to extend the delivery dates (i) for the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2019 until October 31, 2019 and (ii) for the Company’s unaudited consolidated financial statements for each of the fiscal quarters ended June 30, 2019 and September 30, 2019 until December 31, 2019. On October 31, 2019, we repaid borrowings under the DIP Credit Agreement in exchange for New Stock of the Reorganized Company, and the DIP Credit Agreement terminated pursuant to its terms.
Tender Offer — On August 12, 2019, we commenced a tender offer (the “Tender Offer”) to purchase for cash our outstanding 8.75% Senior Secured Notes, up to an aggregate principal amount that would not result in an aggregate purchase price (including accrued and unpaid interest to, but not including, the settlement date) that exceeded $75.0 million. On September 11, 2019, we completed the Tender Offer, purchasing $74.8 million aggregate principal amount of the 8.75% Senior Secured Notes for $74.8 million, plus accrued and unpaid interest of $0.2 million, using funds borrowed under the DIP Credit Agreement.
Fiscal Year 2020 Incentive Plans — In connection with the Chapter 11 Cases, on August 22, 2019, the termsBankruptcy Court entered an order approving the Company’s Fiscal Year 2020 Performance Incentive Plan and Fiscal Year 2020 Non-Executive Incentive Plan. Effective as of the Effective Date, the Compensation Committee of the Board of Directors of the Company adopted the 2019 Management Incentive Plan and the Company adopted the Amended and Restated 2019 Management Severance Benefits Plan for U.S. Employees. For further details, see Note 2 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Replacement of Trustee — On May 8, 2019, pursuant to an Agreement of Resignation, Appointment and Acceptance between U.S. Bank, National Association (“U.S. Bank”) and Wilmington Trust, National Association (“Wilmington Trust”), Wilmington Trust replaced U.S. Bank as trustee, registrar, paying agent, custodian, conversion agent and bid solicitation agent under the Indenture, dated as of June 17, 2008, among the Company, the guarantors named therein and U.S. Bank (the “Base Indenture”) for both the 6¼% Senior Notes and the 4½% Convertible Senior Notes. On September 11, 2019, the Company entered into the Seventh Supplemental Indenture, dated the same date, to the Base Indenture (the “Seventh Supplemental Indenture”), pursuant to which Delaware Trust Company succeeded Wilmington Trust as trustee, registrar, paying agent, custodian, conversion agent and bid solicitation agent under the Base Indenture for the 4½% Convertible Senior Notes.
Omnibus Agreement — On October 3, 2019, the Company entered into an Omnibus Agreement (the “Omnibus Agreement”), dated the same date, among Bristow Equipment Leasing Ltd., as borrower, PK Transportation Finance Ireland Limited (“PK Transportation”), as lender, PK AirFinance S.à r.l. (“PK AirFinance”), as agent for the lender and as security trustee for the MAG Agent and the MAG Parties (each as defined in the credit agreement, dated as of July 17, 2017, among Bristow Equipment Leasing Ltd., the several banks, other financial institutions and other lenders from time to time party thereto and PK AirFinance as agent

and as security trustee (as amended, the “PK Credit Agreement”)), PK AirFinance and PK Transportation. Pursuant to the Omnibus Agreement, among other matters, the parties have agreed, effective upon satisfaction of the conditions precedent set forth in the DIP Facility Term Sheet attached theretoOmnibus Agreement (the “DIP Term Sheet”“Omnibus Effective Date”)., to amend the PK Credit Agreement to, among other things, extend the maturity date of the 24 loans made under the PK Credit Agreement by 18 months to January 27, 2025 and increase the principal amount of the loans in an aggregate amount of approximately $17.3 million. The DIP Term Sheet providesOmnibus Agreement also updates the amortization schedule as of October 3, 2019 to provide that, among other things, only interest will be payable on the DIP Facility shall be comprised of loans in an aggregate principalfor the six months following the Omnibus Effective Date, with a balloon amount of $75.0 million. approximately $104.2 million due on the maturity date. If the loans are refinanced by full prepayment during the six-month period following the Effective Date, no prepayment penalty will be due. Each loan is secured by an aircraft which has been pledged as collateral for the loans.
The availabilityOmnibus Agreement also provides that the Borrower Guarantee and Indemnity Cap (as defined in the PK Credit Agreement) will be reduced by the amount of increased principal when paid. In addition, the Omnibus Agreement adjusts the information covenants under the PK Credit Agreement such that the Company shall provide a copy of the DIP Facility is subjectannual audit report for each fiscal year for the Company and its subsidiaries as soon as available and in any event within 90 days after the end of such fiscal year of the Company (or, in the case of the fiscal year ended March 31, 2019, by October 31, 2019), and quarterly financial statements of the Company and its subsidiaries within 45 days after the end of each fiscal quarter of the Company (and, in the case of each of the fiscal quarters ended June 30, 2019 and September 30, 2019, by December 31, 2019). In the Omnibus Agreement, PK Transportation also agreed to waive certain conditionsevents of default arising from breaches of covenants in other agreements as a result of the Chapter 11 Cases and milestones, including approvalfailure to provide its financial statements by their required due dates.
Amendment of Macquarie Credit Agreement —On October 3, 2019, the Bankruptcy Court approved a term sheet (the “Macquarie Term Sheet”) among the Company, as guarantor, Bristow U.S. LLC, as borrower and lessee, BriLog Leasing Ltd., as lessee, Macquarie Bank Limited, as administrative agent and security agent, Macquarie Leasing LLC, as lender and owner participant, and Macquarie Rotorcraft Leasing Holdings Limited, as owner participant, pursuant to which, has not been obtainedamong other matters, the parties agreed to enter into definitive documentation at this time.emergence for an amendment (the “Macquarie Amendment”) to the term loan credit agreement, dated as of February 1, 2017, among Bristow U.S. LLC, the several banks, other financial institutions and other lenders from time to time party thereto and Macquarie Bank Limited, as administrative agent and as security agent (the “Macquarie Credit Agreement”).
The parties entered into the Macquarie Amendment on October 31, 2019. Among other things, the Macquarie Amendment (i) extended the maturity date of the loan made under the Macquarie Credit Agreement by 12 months to March 6, 2023, (ii) adjusted the loan amortization in accordance with the newly extended maturity date, (iii) confirmed that an event of default under four or more existing leases involving parties to the Macquarie Term Sheet that remains unremedied after the applicable grace period for such an event of default will constitute an event of default under the Macquarie Credit Agreement, (iv) to the extent permitted by other debt instruments, provided for the collateralization of the obligations owed under such existing leases with the liens securing the Macquarie Credit Agreement and (v) allowed for the delivery by October 31, 2019 of the annual financial statements of the Company and its subsidiaries for the fiscal year ended March 31, 2019, and by December 31, 2019 of the quarterly financial statements of the Company and its subsidiaries for the fiscal quarters of the Company ended June 30, 2019 and September 30, 2019.
Going Concern — The Company’s liquidity outlook has recently changed resulting insignificant risks and uncertainties related to the Chapter 11 Cases raise substantial doubt about the Company’s ability to continue as a going concern. In addition, each of the commencement of the Chapter 11 Cases and the delivery of the AmendedCompany’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, as amended by the amendment thereto (the “Amended 10-K”), with a going concern qualification or explanation constituted an event of default under certain of our secured equipment financings, giving those secured equipment lenders the right to accelerate repayment of the applicable debt, subject to Chapter 11 protections, and triggering cross-default and/or cross-acceleration provisions in substantially all of our other debt instruments should that right to accelerate repayment be exercised. The Company expects to continue operations in the normal course during the pendency of the Chapter 11 Cases. The condensed consolidated financial statements included herein have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of the going concern uncertainty.
Eastern Airways and Humberside Airport — Bristow Helicopters, an indirect consolidated affiliate of the Company, together with its legal and financial advisors, pursued various transactions to exit the Eastern Airways business, which made negative contributions to our operating income and Adjusted EBITDA in each of the last three fiscal years, including pursuing a sales process with several third parties over an extended period. On May 10, 2019, Bristow Helicopters completed the sale of all of the shares of Eastern Airways to Orient Industrial Holdings Limited (“OIHL”), an entity affiliated with Mr. Richard Lake, a director of Bristow Helicopters, pursuant to a Sale and Purchase Agreement (the “EAIL Purchase Agreement”). Pursuant to the EAIL Purchase Agreement and related agreements, Bristow Helicopters contributed approximately £17.1 million to Eastern Airways as working capital, OIHL acquired Eastern Airways, Bristow Helicopters retained its controlling ownership of the shares in Humberside International Airport Limited that it previously held through Eastern Airways and certainAirways. Certain intercompany balances between Bristow Helicopters and Eastern Airways were also written

off. As a result of the transaction, OIHL now owns and operates Eastern Airways, which had previously operated as a separate unit within Bristow Group, and Bristow Helicopters maintains its controlling interest in Humberside Airport, from which Bristow Helicopters provides U.K. search and rescue services and Eastern Airways maintains its operations.SAR services.
The EAIL Purchase Agreement contained customary representations and warranties. OIHL agreed to certain covenants with respect to non-solicitation of directors, officers or employees of Bristow Helicopters for a period of 12 months. Pursuant to the terms of the EAIL Purchase Agreement, Bristow Helicopters has the right to appoint an observer to the board of directors of Eastern Airways for an initial period of 12 months following the sale. Eastern Airways also agreed to provide certain transition services for a minimum of 12 months from the date of the completion of the transaction.
The loss on the sale of Eastern Airways for the Current Quarter of $46.9 million includes the write-off of net assets of $35.0 million and write-off of cumulative translation adjustment of $11.9 million.
Rejection and Deferral of Purchase of H175s — On May 1, 2019, we entered into an amendment to our agreement with Airbus Helicopters S.A.S. for the purchase of 22 H175 helicopters, which includes five aircraft that can be cancelled by us prior to the delivery dates. Pursuant to the amendment, the parties mutually agreed to postpone the delivery dates for such helicopters for 18 months from the previous schedule, with the first three helicopters now scheduled for delivery in the second half of fiscal year 2022. The postponement in deliveries resulted in various amendments to the payment terms under the purchase agreement including the deferral of approximately $110.0 million in capital expenditures scheduled for fiscal years 2019 to 2023 into fiscal years 2024 and beyond. Our capital commitments related to these H175 helicopters now total approximately $14.0 million for fiscal years 2020 and 2021. In connection with this amendment, the overall purchase price of these helicopters has been increased by $18.4 million to account for inflation.

CEO Transition — On November 9, 2018,September 30, 2019, the Company announcedDebtors filed a motion with the upcoming retirement of Jonathan E. Baliff, who served as President and Chief Executive OfficerBankruptcy Court to approve a settlement agreement with Airbus Helicopters S.A.S. in regards to the rejection of the Company. Mr. Baliff stepped down from the position of President effective November 9, 2018, while continuing to serve as Chief Executive Officer. Thomas N. Amonett, Vice-Chairman of the Board of Directors of Bristow (the “Board”), was appointed to serve as the interim President of the Company during the CEO transition process.purchase contract for 22 H175 helicopters. On February 11,October 3, 2019, the CompanyBankruptcy Court entered into a Retirement and Consulting Agreement (the “Retirement and Consulting Agreement”)an order approving the agreement with Mr. Baliff. UnderAirbus Helicopters S.A.S. to reject our aircraft purchase contract for the Retirement and Consulting Agreement, Mr. Baliff ceased to serve as Chief Executive Officer of the Company and resigned from the Board effective February 28, 2019. Effective upon Mr. Baliff’s retirement and until the appointment of a new Chief Executive Officer, the Board named Mr. Amonett, the Vice-Chairman of the Board and interim President of the Company, to the additional role of interim Chief Executive Officer.
On March 1, 2019, the Company announced that L. Don Miller, Senior Vice President and Chief Financial Officer of the Company, had been appointed to succeed Mr. Baliff as President and Chief Executive Officer of the Company, effective as of the close of business on February 28, 2019. Mr. Miller joined the Board concurrently with the effectiveness of his appointment as President and Chief Executive Officer. Mr. Amonett, who has been serving as the interim President of the Company, was appointed to the role of Executive Vice Chairman of the Board, effective upon the effectiveness of Mr. Miller’s appointment. Brian J. Allman, Vice President and Chief Accounting Officer of the Company, was appointed to succeed Mr. Miller as Senior Vice President and Chief Financial Officer.
For further details, see Note 8 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Columbia Transaction — On November 9, 2018, we entered into a definitive agreement to acquire Columbia Helicopters Inc. (“Columbia”) for $496.75 million in cash and 6.2 million shares of common stock of the Company. On February 11, 2019, we announced that Bristow and Columbia had mutually agreed to terminate our agreement to acquire Columbia. In connection with the termination, we paid $20 million to Columbia. Bristow, Columbia and Columbia’s shareholders agreed to release each other from all claims in connection with the purchase agreement and the related transactions. For further details, see Note 2 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.22 H175 helicopters.
Brexit — In a referendum held on June 23, 2016, voters in the U.K. approved the exit of the U.K. from the E.U. On March 29, 2017, the U.K. government commenced the exit process under Article 50 of the Treaty of theon European Union by notifying the European Council of the U.K.’s intention to leave the E.U. This notification started a two-year time period that ended on March 29, 2019 for the U.K. and the remaining E.U. Member States to negotiate a withdrawal agreement. The U.K. and the E.U. were unable to negotiateconclude and ratify a formal withdrawal agreement, and the Brexit date was extended until April 12, 2019 and further extended until October 31, 2019 and extended again until January 31, 2020, although Brexit may become effective before such date under certain specified circumstances. Negotiations remain ongoingFurther negotiations are required to determine the future terms of the U.K.’s relationship with the E.U. The impact on the Company’s business as a result of Brexit will depend, in part, on the outcome of tariff, trade, regulatory and other negotiations.
As a result of the referendum and the uncertainty that has followed, the global markets and currencies have been adversely impacted, including a sharp decline in the value of the British pound sterling as compared to the U.S. dollar. Volatility in exchange rates resulting from Brexit is expected to continue in the short term as the U.K. negotiatesseeks to ratify its terms of exit from the E.U., subject to the outcome of a U.K. general election on December 12, 2019. In addition, Brexit could 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 potentially divergent national laws and regulations as the U.K. determines which E.U. laws to replace or replicate, and those laws and regulations may be cumbersome, difficult or costly in terms of compliance. Any of these effects of Brexit, among others, could have a material adverse effect on our current business and future growth.
Loss on impairment — Prior to the three months ended September 30, 2018, we had been actively marketing our H225 aircraft with the expectation of a substantial return of the aircraft to oil and gas service. However, market conditions and more significantly, the recent development of alternative opportunities outside of our traditional oil and gas service for our H225 aircraft and our decision to pursue those opportunities during the three months ended September 30, 2018, indicated a substantial return to oil and gas service within our operations was not likely. Therefore, during the three months ended September 30, 2018, we concluded that cash flows associated with our H225 helicopters were largely independent from the cash flows associated with the remainder of our oil and gas related property and equipment (“oil and gas asset group”) and should be tested for impairment as a stand-alone asset group. In accordance with Accounting Standard Codification (“ASC”) 360-10, we performed an impairment analysis for our stand-alone H225 asset group and determined that the forecasted cash flows over the remaining useful life of the asset group were insufficient to recover the carrying value of the asset group. We determined the fair value of the H225 asset group to be $116.4 million and recorded an impairment charge of $87.5 million during the three months ended September 30, 2018. In addition, we performed a review of our H225 aircraft related inventory and recorded an impairment charge of $8.9 million during the three months ended September 30, 2018 to record the inventory at the lower of cost or net realizable value.

 The removal of the H225 aircraft from our oil and gas asset group and changes in our forecasted cash flows for that asset group during the three months ended September 30, 2018 indicated the need for the performance of a recoverability analysis of the oil and gas asset group. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of our oil and gas asset group, which largely consists of our oil and gas related held for use aircraft. The determination of estimated future undiscounted cash flows required us to use significant unobservable inputs, including assumptions related to projected demand for services, rates and anticipated aircraft disposal values. We determined that the estimated future undiscounted cash flows exceeded the carrying value for our oil and gas asset group as of September 30, 2018, and no impairment was recorded on these assets. Future declines in operating performance, aircraft disposal values, anticipated business outlook, or projected aircraft deliveries currently accounted for as construction in progress may reduce our estimated future undiscounted cash flows and result in impairment of our oil and gas asset group.
 In addition, changes in our forecasted cash flows during the three months ended September 30, 2018 indicated the need for the performance of a recoverability analysis for the airline related assets of Eastern Airways. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of the airline related assets of Eastern Airways for potential impairment. In accordance with ASC 360-10-35, we estimate future undiscounted cash flows to test the recoverability of the assets, which largely consists of our held for use aircraft and related rotable spare parts. The determination of estimated future undiscounted cash flows required us to use significant unobservable inputs, including assumptions related to projected demand for services and rates. We determined that the estimated future undiscounted cash flows were below the carrying value for our airline related assets of Eastern Airways as of September 30, 2018.  We determined the fair value of the asset group to be $20.5 million and recorded an impairment charge of $17.5 million during the three months ended September 30, 2018.  As part of our impairment review of the airline assets of Eastern Airways during the three months ended September 30, 2018, we recorded impairments of $3.0 million related to the remaining intangible assets and $0.3 million related to inventory.
No further triggers to review our assets for impairment exist as of December 31, 2018.
ABL Facility — On April 17, 2018, two of our subsidiaries entered into the ABL Facility as discussed in Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Tax Cuts and Jobs Act — In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the tax legislation commonly known as the Tax Cuts and Jobs Act (the “Act”). The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond December 22, 2018. Consistent with guidance in SAB 118, during the three months ended December 31, 2018, we made the following adjustments to the provisional amounts: (1) an additional $19.0 million of benefit from the revaluation of net deferred tax liabilities to reflect the impact of the change in the tax rate, (2) $30.7 million of additional expense related to the one-time transition tax on certain unrepatriated earnings of foreign subsidiaries, and (3) a valuation allowance against our foreign tax credits of $30.4 million resulting from unfavorable guidance recently released. As a result, we utilized $121.5 million of our existing net operating losses in lieu of foreign tax credits. We believe the provisions included in the new guidance adversely impact our ability to benefit from our existing foreign tax credit carryforwards.
Fleet updates — As previously reported, on April 29, 2016, another company’s EC 225LP (also known as an H225LP) model helicopter crashed near Turøy outside of Bergen, Norway resulting in the European Aviation Safety Agency issuing airworthiness directives prohibiting flight of H225LP and AS332L2 model aircraft. On July 20, 2017, the U.K. CAA and NCAA issued safety and operational directives which detail the conditions to apply for the safe return to service of H225LP and AS332L2 model aircraft, where operators wish to do so. On July 5, 2018, the Accident Investigation Board Norway issued its final investigation report on the accident. The report cited a fatigue fracture within the epicyclic module of the main gear box as the cause of the accident, and issued safety recommendations in a number of areas, including gearbox design and certification requirements, failure tolerance, and continued airworthiness of the AS332L2 and the H225LP helicopters. We continue not to operate for commercial purposes our H225LP model aircraft, and we are carefully evaluating next steps for the H225LP model aircraft in our operations worldwide, with the safety of passengers and crews remaining our highest priority. Recent third-party market transactions and the development of alternative opportunities outside of our traditional oil and gas services for our H225 aircraft indicated a substantial return to oil and gas service within our operations was not likely. See Loss on Impairment above for further details.
Separately, our efforts to successfully integrate AW189 aircraft into service for the U.K. SAR contract continue with the fifth and final base operational on May 1, 2019. As a result of the delays due to a product improvement plan with the aircraft, the acceptance of four AW189 aircraft were pushed to later dates. We continue to meet our contractual obligations under the U.K. SAR contract through the utilization of other aircraft.

During fiscal year 2018, we reached agreements with OEMs to recover $136.0 million related to ongoing aircraft issues mentioned above, of which $125.0 million was recovered during fiscal year 2018 and $11.0 million was recovered during the Current Period. For further details on the accounting treatment, see Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Selected Regional Perspectives
We own an approximate 20% voting interest and a 41.9% economic interest in Líder, a provider of helicopter and executive aviation services in Brazil. Brazil represents a significant part of long term helicopter industry demand due to its concentration and size of its offshore oil reserves. However, in the short term, Brazil and, specifically, Petrobras continue to evidence uncertainty as the price of oil and Petrobras’ restructuring efforts have impacted the helicopter industry. The Brazilian government has revisited the regulations on the oil and 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 all 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 (including international oil companies) to initiate drilling activities. Petrobras’ new management has implemented a five-year business and management plan focused on divestment, mostly of its non-core businesses. Overall, the long-term Brazilian market outlook has improved with future opportunities for growth although Líder faces significant competition from a number of global and local helicopter service providers.
Líder’s management has significantly decreased their future financial projections as a result of recent tender awards announced by Petrobras. Petrobras represented 64% and 66% of Líder’s operating revenue in calendar years 2017 and 2016, respectively. This significant decline in future forecasted results, coupled with previous declining financial results, triggered our review of our investment in Líder for potential impairment as of March 31, 2018. Based on the estimated fair value of our investment, we recorded an $85.7 million impairment as of March 31, 2018. 
Our remaining investment in Líder as of December 31, 2018June 30, 2019 is $52.7$52.4 million. Despite this impairment driven by an overall reduction in financial performance, Líder’s management expects to benefit from the recovery in the Brazilian market over the long-term. As of December 31, 2018,June 30, 2019, we have no aircraft on lease to Líder. In addition to uncertainty surrounding future financial performance, 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 recent years, impacting our earnings (losses) from unconsolidated affiliates. Earnings (losses) from unconsolidated affiliates, net of losses, on our consolidated statements of operations, is included in calculating adjusted EBITDA, adjusted net income (loss) and adjusted 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) the streamlining of our operations in Nigeria, including an ongoing consolidation of operations of BHNL and BGI Aviation Technical Services Nigeria Limited (“BATS”) in order to achieve cost savings and efficiencies in our operations, and (c) each of BHNL and PAAN 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.
The operating results of Airnorth have declined during fiscal year 2019. Continuing declines or negative trends in operating results could lead to an impairment of goodwill, which as of December 31, 2018, was approximately $18.3 million. Management continues to monitor and analyze the results of Airnorth and at this time has concluded that no triggering event has occurred and will reassess as of March 31, 2019.
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, 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. For further details on this exposure and the related impact on our results of operations, see “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in ourthe fiscal year 20182019 Annual Report and Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.

Results of Operations
The following table presents our operating results and other statement of operations information for the applicable periods:
 Three Months Ended 
 December 31,		 
Favorable
(Unfavorable)
 Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
 
          
 2018 2017  2019 2018 
                 
 (In thousands, except per share
amounts, percentages and flight hours)		 
(In thousands, except per share
amounts, percentages and flight hours)
 
Revenue:                 
Operating revenue $317,091
 $345,528
 $(28,437) (8.2)% $316,576
 $349,761
 $(33,185) (9.5)% 
Reimbursable revenue 14,238
 15,207
 (969) (6.4)% 16,600
 16,907
 (307) (1.8)% 
Total revenue 331,329
 360,735
 (29,406) (8.2)% 333,176
 366,668
 (33,492) (9.1)% 
                 
Operating expense:                 
Direct cost 262,039
 271,894
 9,855
 3.6 % 257,759
 280,051
 22,292
 8.0 % 
Reimbursable expense 13,862
 14,725
 863
 5.9 % 16,134
 15,904
 (230) (1.4)% 
Prepetition restructuring charges 13,476
 —
 (13,476) *
 
Depreciation and amortization 30,615
 31,682
 1,067
 3.4 % 31,339
 30,941
 (398) (1.3)% 
General and administrative 40,742
 43,366
 2,624
 6.1 % 34,770
 40,101
 5,331
 13.3 % 
Total operating expense 347,258
 361,667
 14,409
 4.0 % 353,478
 366,997
 13,519
 3.7 % 
                 
Loss on disposal of assets (16,015) (4,591) (11,424) (248.8)% (3,787) (1,678) (2,109) (125.7)% 
Earnings (losses) from unconsolidated affiliates, net 780
 1,996
 (1,216) (60.9)%
Earnings from unconsolidated affiliates, net of losses 2,347
 (1,547) 3,894
 *
 
                 
Operating loss (31,164) (3,527) (27,637) *
 (21,742) (3,554) (18,188) *
 
                 
Interest expense, net (27,113) (19,093) (8,020) (42.0)% (26,321) (27,144) 823
 3.0 % 
Reorganization items (76,356) —
 (76,356) *
 
Loss on sale of subsidiaries (56,303) —
 (56,303) *
 
Other income (expense), net (3,660) (736) (2,924) (397.3)% (3,873) (3,950) 77
 1.9 % 
                 
Loss before benefit (provision) for income taxes (61,937) (23,356) (38,581) (165.2)%
Benefit (provision) for income taxes (23,764) 13,419
 (37,183) *
Loss before benefit for income taxes (184,595) (34,648) (149,947) *
 
Benefit for income taxes 15,507
 2,851
 12,656
 *
 
       

         
Net loss (85,701) (9,937) (75,764) *
 (169,088) (31,797) (137,291) *
 
Net (income) loss attributable to noncontrolling interests (243) 1,664
 (1,907) *
Net income attributable to noncontrolling interests (158) (67) (91) (135.8)% 
Net loss attributable to Bristow Group $(85,944) $(8,273) $(77,671) *
 $(169,246) $(31,864) $(137,382) *
 
                 
Diluted loss per common share $(2.40) $(0.23) $(2.17) *
 $(4.71) $(0.89) $(3.82) *
 
Operating margin (1)
 (9.8)% (1.0)% (8.8)% *
 (6.9)% (1.0)% (5.9)% *
 
Flight hours (2)
 39,800
 44,952
 (5,152) (11.5)% 39,119
 43,203
 (4,084) (9.5)% 
                 
Non-GAAP financial measures: (3)
                 
Adjusted EBITDA $23,643
 $34,964
 $(11,321) (32.4)% $35,834
 $27,013
 $8,821
 32.7 % 
Adjusted EBITDA margin (1)
 7.5 % 10.1 % (2.6)% (25.7)% 11.3 % 7.7 % 3.6 % 46.8 % 
Adjusted net loss $(20,259) $(18,450) $(1,809) (9.8)% $(16,988) $(28,879) $11,891
 41.2 % 
Adjusted diluted loss per share $(0.57) $(0.52) $(0.05) (9.6)% $(0.47) $(0.81) $0.34
 42.0 % 
         
  Nine Months Ended 
 December 31,		 Favorable
(Unfavorable)
      
  2018 2017 
         
  (In thousands, except per share
amounts, percentages and flight hours)
Gross revenue:        
Operating revenue $1,002,789
 $1,043,249
 $(40,460) (3.9)%
Reimbursable revenue 47,091
 43,271
 3,820
 8.8 %
Total gross revenue 1,049,880
 1,086,520
 (36,640) (3.4)%
         
Operating expense:        
Direct cost 819,307
 842,216
 22,909
 2.7 %
Reimbursable expense 44,960
 42,365
 (2,595) (6.1)%
Depreciation and amortization 92,045
 94,119
 2,074
 2.2 %
General and administrative 119,682
 138,695
 19,013
 13.7 %
Total operating expense 1,075,994
 1,117,395
 41,401
 3.7 %
         
Loss on impairment (117,220) (1,192) (116,028) *
Loss on disposal of assets (18,986) (12,418) (6,568) (52.9)%
Earnings (losses) from unconsolidated affiliates, net (2,333) 3,394
 (5,727) *
         
Operating loss (164,653) (41,091) (123,562) (300.7)%
         
Interest expense, net (80,690) (53,677) (27,013) (50.3)%
Other income (expense), net (10,814) 235
 (11,049) *
         
Loss before provision for income taxes (256,157) (94,533) (161,624) (171.0)%
Benefit (provision) for income taxes (5,258) (2,546) (2,712) (106.5)%
         
Net loss (261,415) (97,079) (164,336) (169.3)%
Net income (loss) attributable to noncontrolling interests (827) 2,322
 (3,149) *
Net loss attributable to Bristow Group $(262,242) $(94,757) $(167,485) (176.8)%
         
Diluted loss per common share $(7.34) $(2.69) $(4.65) (172.9)%
Operating margin (1)
 (16.4)% (3.9)% (12.5)% (320.5)%
Flight hours (2)
 125,005
 135,124
 (10,119) (7.5)%
         
Non-GAAP financial measures: (3)
        
Adjusted EBITDA $71,722
 $82,545
 $(10,823) (13.1)%
Adjusted EBITDA margin (1)
 7.2 % 7.9 % (0.7)% (8.9)%
Adjusted net loss $(77,386) $(59,198) $(18,188) (30.7)%
Adjusted diluted loss per share $(2.17) $(1.68) $(0.49) (29.2)%
_____________ 
 * percentage change too large to be meaningful or not applicable
(1) 
Operating margin is calculated as operating income (loss)loss divided by operating revenue. Adjusted EBITDA margin is calculated as adjusted EBITDA 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 for the Current Quarterthree months ended June 30, 2019 and Comparable Quarter2018 totaling 8,1795,500 and 11,246, respectively, and totaling 28,508 and 32,923, respectively, for the Current Period and Comparable Period.10,653, 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 EBITDA is calculated by taking our net income (loss) and adjusting for interest expense, depreciation and amortization, benefit (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 EBITDA 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 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
            
 (In thousands, except percentages and per share amounts) (In thousands, except percentages and per share amounts)
Net loss $(85,701) $(9,937) $(261,415) $(97,079) $(169,088) $(31,797)
Loss on disposal of assets 16,015
 4,591
 18,986
 12,418
 3,787
 1,678
Special items (i)
 9,568
 2,810
 132,481
 16,352
 158,595
 1,719
Depreciation and amortization 30,615
 31,682
 92,045
 94,119
 31,339
 30,941
Interest expense 29,382
 19,237
 84,367
 54,189
 26,708
 27,323
(Benefit) provision for income taxes 23,764
 (13,419) 5,258
 2,546
Benefit for income taxes (15,507) (2,851)
Adjusted EBITDA $23,643
 $34,964
 $71,722
 $82,545
 $35,834
 $27,013
            
Benefit (provision) for income taxes $(23,764) $13,419
 $(5,258) $(2,546)
Tax provision (benefit) on loss on disposal of assets (3,540) (2,130) (3,840) 8,061
Tax provision (benefit) on special items 43,642
 (15,448) 37,229
 (1,272)
Adjusted benefit (provision) for income taxes $16,338
 $(4,159) $28,131
 $4,243
Benefit for income taxes $15,507
 $2,851
Tax benefit on loss on disposal of assets (100) (404)
Tax benefit on special items (12,650) (8)
Adjusted benefit for income taxes $2,757
 $2,439
            
Effective tax rate (ii)
 (38.4)% 57.5 % (2.1)% (2.7)% 8.4% 8.2%
Adjusted effective tax rate (ii)
 44.9 % (26.1)% 26.9 % 6.5 % 14.1% 7.8%
            
Net loss attributable to Bristow Group $(85,944) $(8,273) $(262,242) $(94,757) $(169,246) $(31,864)
Loss on disposal of assets (iii)
 12,475
 2,461
 15,146
 20,479
 3,687
 1,274
Special items (i) (iii)
 53,210
 (12,638) 169,710
 15,080
 148,571
 1,711
Adjusted net loss $(20,259) $(18,450) $(77,386) $(59,198) $(16,988) $(28,879)
            
Diluted loss per share $(2.40) $(0.23) $(7.34) $(2.69) $(4.71) $(0.89)
Loss on disposal of assets (iii)
 0.35
 0.07
 0.42
 0.58
 0.10
 0.04
Special items (i) (iii)
 1.49
 (0.36) 4.75
 0.43
 4.14
 0.05
Adjusted diluted loss per share (iv)
 (0.57) (0.52) (2.17) (1.68) (0.47) (0.81)
_____________ 
(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 loss. Adjusted effective tax rate is calculated by dividing adjusted benefit (provision) for income tax by adjusted pretax net loss. Tax provision (benefit) on loss on disposal of assets and tax provision (benefit) on special items is calculated using the statutory rate of the entity recording the loss on disposal of assets 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.
(iv) 
Adjusted diluted lossearnings per share is calculated using the diluted weighted average number of shares outstanding of 35,798,18535,918,916 and 35,368,21235,629,741 during the Current Quarter and Comparable Quarter, respectively, and of 35,712,735 and 35,260,746 during the Current Period and Comparable Period, respectively.
Management believes that adjusted EBITDA, adjusted benefit for income taxes, adjusted net loss and adjusted diluted 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 EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing transactions and income taxes. Adjusted EBITDA should not be considered a measure of discretionary cash available to us for investing in the growth of our business.
As prescribed by the SEC, when adjusted EBITDA is discussed in reference to performance on a consolidated basis, the most directly comparable GAAP financial measure to adjusted EBITDA is net income (loss). Management does not analyze interest expense and income taxes on a regional level; therefore, the most directly comparable GAAP financial measure to adjusted EBITDA when performance is discussed on a regional level is operating income (loss).
Adjusted net loss and adjusted diluted 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 loss and diluted loss 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 EBITDA are:
Adjusted EBITDA does not reflect our current or future cash requirements for capital expenditures;
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debts; 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 EBITDA does not reflect any cash requirements for such replacements.
The following tables present region adjusted EBITDA and adjusted EBITDA margin discussed in “— Region Operating Results,” and consolidated adjusted EBITDA and adjusted EBITDA margin for the three and nine months ended December 31, 2018June 30, 2019 and 2017:2018:
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Three Months Ended
 June 30,
 2018 2017 2018 2017 2019 2018
            
 (In thousands, except percentages) (In thousands, except percentages)
Europe Caspian $14,068
 $18,614
 $62,727
 $58,716
 $21,820
 $28,794
Africa 8,639
 14,206
 19,063
 40,206
 12,518
 5,319
Americas 11,892
 12,689
 20,446
 33,430
 10,774
 (163)
Asia Pacific (3,411) 4,797
 (4,325) 502
 1,228
 2,086
Corporate and other (7,545) (15,342) (26,189) (50,309) (10,506) (9,023)
Consolidated adjusted EBITDA $23,643
 $34,964
 $71,722
 $82,545
 $35,834
 $27,013
            
Europe Caspian 7.8 % 9.8% 10.7 % 10.3% 12.1% 13.6 %
Africa 20.9 % 29.6% 16.8 % 27.4% 26.5% 15.2 %
Americas 20.7 % 21.0% 12.1 % 18.7% 18.8% (0.3)%
Asia Pacific (8.5)% 9.5% (3.1)% 0.3% 3.6% 3.8 %
Consolidated adjusted EBITDA margin 7.5 % 10.1% 7.2 % 7.9% 11.3% 7.7 %

The following table presents reconciliation of adjusted EBITDA by region and adjusted EBITDA margin and rent expense by region for the three months ended December 31, June 30, 2019 and 2018:
 Europe Caspian Africa Americas Asia Pacific Corporate and other Loss on disposal of assets Total Europe Caspian Africa Americas Asia Pacific Corporate and other Loss on disposal of assets Total
                            
 (In thousands, except percentages) (In thousands, except percentages)
Operating income (loss) $3,342
 $5,286
 $4,412
 $(6,654) $(21,535) $(16,015) $(31,164) $11,807
 $7,745
 $3,568
 $(12,434) $(28,641) $(3,787) $(21,742)
Depreciation and amortization expense 13,041
 3,732
 7,108
 3,812
 2,922
   30,615
 12,439
 4,991
 6,880
 3,721
 3,308
   31,339
Interest income 36
 1
 —
 15
 2,217
   2,269
 33
 15
 —
 15
 324
   387
Other income (expense), net (2,949) (380) 320
 (2,343) 1,692
   (3,660) (4,723) (233) 326
 (270) 1,027
   (3,873)
Special items and loss on disposal of assets 598
 —
 52
 1,759
 7,159
 16,015
 25,583
 2,264
 —
 —
 10,196
 13,476
 3,787
 29,723
Adjusted EBITDA $14,068
 $8,639
 $11,892
 $(3,411) $(7,545) $—
 $23,643
 $21,820
 $12,518
 $10,774
 $1,228
 $(10,506) $—
 $35,834
                            
Adjusted EBITDA margin 7.8% 20.9% 20.7% (8.5)%     7.5% 12.1% 26.5% 18.8% 3.6%     11.3%
                            
Rent expense $30,262
 $2,677
 $5,641
 $7,927
 $1,648
  ��$48,155
 $28,831
 $3,676
 $4,577
 $13,770
 $1,335
   $52,189
The following table presents reconciliation of adjusted EBITDA by region and adjusted EBITDA margin and rent expense by region for the three months ended December 31, 2017:
  Europe Caspian Africa Americas Asia Pacific Corporate and other Loss on disposal of assets Total
               
  (In thousands, except percentages)
Operating income (loss) $5,274
 $10,470
 $5,308
 $(941) $(19,047) $(4,591) $(3,527)
Depreciation and amortization expense 12,771
 3,664
 6,909
 4,479
 3,859
   31,682
Interest income 3
 5
 26
 28
 82
   144
Other income (expense), net (151) (400) 358
 (276) (267)   (736)
Special items and loss on disposal of assets 717
 467
 88
 1,507
 31
 4,591
 7,401
Adjusted EBITDA $18,614
 $14,206
 $12,689
 $4,797
 $(15,342) $—
 $34,964
               
Adjusted EBITDA margin 9.8% 29.6% 21.0% 9.5%     10.1%
               
Rent expense $29,499
 $2,048
 $6,295
 $2,807
 $1,971
   $42,620


The following table presents reconciliation of adjusted EBITDA by region and adjusted EBITDA margin and rent expense by region for the nine months ended December 31, 2018:
  Europe Caspian Africa Americas Asia Pacific Corporate and other Loss on disposal of assets Total
               
  (In thousands, except percentages)
Operating income (loss) $13,856
 $7,892
 $(1,362) $(14,613) $(151,440) $(18,986) $(164,653)
Depreciation and amortization expense 37,985
 10,811
 21,299
 12,221
 9,729
   92,045
Interest income 68
 4
 2
 67
 3,536
   3,677
Other income (expense), net (11,076) 356
 249
 (6,076) 5,733
   (10,814)
Special items and loss on disposal of assets 21,894
 —
 258
 4,076
 106,253
 18,986
 151,467
Adjusted EBITDA $62,727
 $19,063
 $20,446
 $(4,325) $(26,189) $—
 $71,722
               
Adjusted EBITDA margin 10.7% 16.8% 12.1% (3.1)%     7.2%
               
Rent expense $93,437
 $6,945
 $18,573
 $24,325
 $4,547
   $147,827
The following table presents reconciliation of adjusted EBITDA by region and adjusted EBITDA margin and rent expense by region for the nine months ended December 31, 2017:
 Europe Caspian Africa Americas Asia Pacific Corporate and other Loss on disposal of assets Total Europe Caspian Africa Americas Asia Pacific Corporate and other Loss on disposal of assets Total
                            
 (In thousands, except percentages) (In thousands, except percentages)
Operating income (loss) $19,499
 $28,353
 $11,535
 $(19,374) $(68,686) $(12,418) $(41,091) $21,928
 $1,141
 $(7,343) $(971) $(16,631) $(1,678) $(3,554)
Depreciation and amortization expense 36,789
 10,330
 20,906
 15,347
 10,747
   94,119
 12,755
 3,414
 6,881
 4,355
 3,536
   30,941
Interest income 9
 88
 79
 72
 264
   512
 14
 1
 1
 18
 145
   179
Other income (expense), net 1,434
 762
 553
 789
 (3,303)   235
 (6,291) 763
 261
 (2,610) 3,927
   (3,950)
Special items and loss on disposal of assets 985
 673
 357
 3,668
 10,669
 12,418
 28,770
 388
 —
 37
 1,294
 —
 1,678
 3,397
Adjusted EBITDA $58,716
 $40,206
 $33,430
 $502
 $(50,309) $—
 $82,545
 $28,794
 $5,319
 $(163) $2,086
 $(9,023) $—
 $27,013
                            
Adjusted EBITDA margin 10.3% 27.4% 18.7% 0.3%     7.9% 13.6% 15.2% (0.3)% 3.8%     7.7%
                            
Rent expense $102,803
 $6,424
 $18,480
 $24,356
 $6,456
   $158,519
 $31,996
 $2,122
 $6,598
 $8,117
 $1,248
   $50,081


Current Quarter Compared to Comparable Quarter
Operating revenue from external customers by line of service was as follows:
Three Months Ended 
 December 31,		 
Favorable
(Unfavorable)
Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
2018 2017 2019 2018 
              
(In thousands, except percentages)(In thousands, except percentages)
Oil and gas services$216,106
 $236,655
 $(20,549) (8.7)%$224,914
 $226,545
 $(1,631) (0.7)%
U.K. SAR services54,346
 55,659
 (1,313) (2.4)%56,079
 66,320
 (10,241) (15.4)%
Fixed wing services46,173
 52,476
 (6,303) (12.0)%35,318
 56,707
 (21,389) (37.7)%
Corporate and other466
 738
 (272) (36.9)%265
 189
 76
 40.2 %
Total operating revenue$317,091
 $345,528
 $(28,437) (8.2)%$316,576
 $349,761
 $(33,185) (9.5)%
The year-over-year decrease in operating revenue was primarily driven by decreases in fixed wing services revenue and U.K. SAR services revenue in our Europe Caspian region and unfavorable changes in foreign currency exchange rates. In May 2019, we sold Eastern Airways, resulting in a $24.0 million decrease in operating revenue for our oilfixed wing services in the Current Quarter. The decrease in the U.K. SAR services revenue in the Current Quarter is primarily due to a one-time benefit of $7.6 million in original equipment manufacturer (“OEM”) cost recoveries recognized in the Comparable Quarter. Oil and gas services driven byrevenue decreased flight activityslightly from the Comparable Quarter primarily as a result of a decrease in our Asia Pacific region our Canada operations within our Americas region, and our Africa region. Also, revenue from our fixed wing serviceslargely due to a decrease in our Europe Caspian and Asia Pacific regions declined, partiallyactivity, which was mostly offset by an increase in operating revenue from our fixed wing servicesincreases in our Africa, region. Additionally,America and Europe Caspian regions. In addition to operational impacts, revenue decreased by $7.8$12.6 million in the Current Quarter compared to the Comparable Quarter due to unfavorable changes in foreign currency exchange rates, primarily in our Europe Caspian and Asia Pacific regions related to the strengtheningdepreciation of the U.S. dollar versus the British pound sterling and Australian dollar versus the U.S. dollar. See further discussion of operating revenue by region under “—Region Operating Results.”
For the Current Quarter, we reported a net loss of $85.9$169.2 million and a diluted loss per share of $2.40$4.71 compared to a net loss of $8.3$31.9 million and a diluted loss per share of $0.23$0.89 for the Comparable Quarter.
The net loss for the Current Quarter was significantly impacted by the following special items:
Organizational restructuring costs of $2.4 million ($2.4 million net of tax), or $0.07 per share, included in direct cost and general and administrative expense, resulting from separation programs across our global organization designed to increase efficiency and reduce costs,
Transaction costs of $7.2 million ($5.7 million net of tax), or $0.16 per share, included in general and administrative expense, resulting from the Columbia transaction and related financing transactions, and
Non-cash tax expense of $45.2 million, or $1.26 per share, including $33.5 million from valuation allowances on deferred tax assets and $11.7 million from the Act.
Additionally, we realized a loss on disposal of assets of $16.0 million ($12.5 million net of tax), or $0.35 per share, during the Current Quarter primarily for contract termination costs of $14.0 million for an aircraft purchase contract that was terminated in December 2018.
The year-over-year change in net loss and diluted loss per share was primarily driven by lower revenuethe following special items for the Current Quarter:
Organizational restructuring costs of $91.4 million ($78.7 million net of tax), or $2.19 per share, including the following:
◦Professional fees of $29.0 million ($29.0 million net of tax), or $0.81 per share, including $13.5 million of prepetition professional fees included in prepetition restructuring charges on the condensed consolidated statements of operations and $15.5 million of post-petition professional fees included in Reorganization items, on the condensed consolidated statements of operations;
◦Lease termination costs of $26.1 million ($20.6 million net of tax), or $0.57 per share, included in Reorganization items, on the condensed consolidated statements of operations relating to the rejection of ten aircraft leases in June 2019 including nine S-76C+s and one S-76D;
◦Debt related expenses of $34.8 million ($27.5 million net of tax), or $0.77 per share, included in Reorganization items, on the condensed consolidated statements of operations including the write-off of $30.2 million of discount on the 4½% Convertible Senior Notes and the write-off of $4.6 million of deferred financing fees related to the 6¼% Senior Notes and 4½% Convertible Senior Notes; and
◦Severance costs of $1.6 million ($1.6 million net of tax), or $0.04 per share, included in direct costs and general and administrative expense on the condensed consolidated statements of operations;
Loss on sale of subsidiaries of $56.3 million ($56.3 million net of tax), or $1.57 per share, included in loss on sale of subsidiaries on the condensed consolidated statements of operations, resulting from the sale of Eastern Airways, Bristow Helicopters Leasing Limited (“BHLL”) and Aviashelf.
H225 lease return costs of $10.8 million ($10.8 million net of tax), or $0.30 per share, included in direct cost on the condensed consolidated statements of operations, resulting from costs associated with our return of four H225 model aircraft in May 2019 including: $4.3 million paid in lease return costs in the Current Quarter as discussed above, higherand $12.5 million accrued future rent and return costs, partially offset by the write-off of $6.0 million of deferred credits for OEM settlements that were being recognized over the remaining life of the leases.
Financing fees of $2.6 million ($2.1 million net of tax), or $0.06 per share, included in interest expense higheron the condensed consolidated statements of operations related to the DIP Credit Agreement;

Non-cash tax expense of $0.7 million, or $0.02 per share, from valuation allowances on deferred tax assets.
Additionally, we realized a loss on disposal of assets higher rent expense due to less of a benefit from OEM cost recoveries in$3.8 million ($3.7 million net of tax) during the Current Quarter as discussed below, more of a negative impact from special items in the Current Quarter compared to in the Comparable Quarter, and higher tax expense primarily due to valuation allowances on deferred tax assets, partially offset by lower general and administrative expenses.
The Current Quarter results benefited from the impactsale or disposal of $2.0 million of OEM cost recoveries resulting in a $1.0 million reduction in rent expense (included in direct cost)aircraft and a $1.0 million reduction in direct cost. other equipment.
The Comparable Quarter results benefited from the impactrealization of $12.2 million of OEM cost recoveries related to ongoing aircraft issues that resultedprimarily a result of a one-time benefit of $7.6 million in U.K. SAR operating revenue as discussed above, a reduction in rent expense of $13.1 million (included in direct cost). We will recognize an additional $1.0$3.5 million reduction in rent expense and an additional $0.3a $1.1 million reduction in direct cost over the remainder of fiscal year 2019 related to these OEM cost recoveries. For further details, see Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.cost.
Excluding the special itemsorganizational restructuring costs described above and the loss on disposal of assets, discussed above, adjusted net loss and adjusted diluted loss per share were $20.3$17.0 million and $0.57,$0.47, respectively, for the Current Quarter. These adjusted results compare to adjusted net loss and adjusted diluted loss per share of $18.5$28.9 million and $0.52,$0.81, respectively, for the Comparable Quarter. AdjustedAdditionally, adjusted EBITDA decreasedimproved to $23.6$35.8 million in the Current Quarter from $35.0$27.0 million in the Comparable Quarter.
The year-over-year change inbenefit from the OEM cost recoveries described above is included within adjusted net income, adjusted earnings per share and adjusted EBITDA was primarily driven by the decline in oil and gas revenue and higher rent expense as discussed above. These unfavorable changes were partially offset by a decrease in general and administrative expense

primarily from lower salaries and benefits in the CurrentComparable Quarter. The year-over-year change in
Adjusted EBITDA, adjusted net loss and adjusted diluted loss per share was impactedbenefited from an increase in activity in our Africa region and an increase in earnings from unconsolidated affiliates compared to the Comparable Quarter. These items were partially offset by OEM cost recoveries realized in the same itemsComparable Quarter that impacted adjusted EBITDA as well as higher interest expense; however, a more favorable adjusted tax ratedid not recur in the Current Quarter more than offset these negative changes.Quarter.
The table below presents the year-over-year impact of changes in foreign currency exchange rates.
Three Months Ended 
 December 31,		 Favorable (Unfavorable)Three Months Ended
 June 30,		 Favorable (Unfavorable)
2018 2017 2019 2018 
          
(In thousands, except per share amounts)(In thousands, except per share amounts)
Revenue impact    $(7,844)    $(12,603)
Operating expense impact    10,452
    10,830
Year-over-year income statement translation    2,608
    (1,773)
          
Transaction gains (losses) included in other income (expense), net$(2,785) $368
 (3,153)
Líder foreign exchange impact included in earnings (losses) from unconsolidated affiliates(202) (757) 555
Transaction losses included in other income (expense), net$(2,930) $(3,029) 99
Líder foreign exchange impact included in earnings from unconsolidated affiliates(114) (2,592) 2,478
Total$(2,987) $(389) (2,598)$(3,044) $(5,621) 2,577
          
Pre-tax income statement impact    10
    804
Less: Foreign exchange impact on depreciation and amortization and interest expense    (73)    (99)
Adjusted EBITDA impact    $(63)    $705
          
Net income impact (tax affected)    $154
    $174
Earnings per share impact    $—
    $—
The most significant foreign exchange impactsimpact related to a $3.2$2.5 million decrease in unfavorable foreign currency exchange rate impact from our investment in Líder in Brazil and a $0.1 million favorable impact from lower transaction losses in the Current Quarter compared to transaction gains in the Comparable Quarter. ThisPartially offsetting these favorable impacts was a $1.8 million unfavorable impact was partially offset by a $2.6 million favorable impact from changes in foreign currency exchange rates in the Current Quarter primarily driven by the impact of the depreciating British pound sterling on the translation of our results in our Europe Caspian region. Additionally,During the Current Quarter, includesthe depreciation of the British pound sterling from the Comparable Quarter due to a $0.6 million less unfavorable impactmajority of foreign currency exchange rate changes from our investmentrevenue in Líderour Europe Caspian region contracted in Brazil.British pound sterling with our expense being more evenly split between U.S. dollars and British pound sterling, resulting in a significant net revenue exposure to the British pound sterling translated into lower U.S. dollar earnings for reporting purposes.
Direct cost decreased 3.6%8.0%, or $9.9$22.3 million, year-over-year primarily due to a $13.3$19.6 million decrease due to the sale of Eastern Airways in May 2019, a $4.9 million decrease in salaries and benefits primarily due to a decreaseheadcount reductions in the number of employeesour Asia Pacific region and a $2.2$1.4 million decrease in various other directfuel costs, partially offset by a $5.6 millionan increase in rent expenselease costs of $4.6 million. The increase in lease costs is primarily due to lower OEM cost recoveries,the H225 net lease return costs of $10.8 million incurred in the Current Quarter, partially offset by lower lease costs due to return of leased aircraft.aircraft and the rejection of certain leases during the Chapter 11 Cases.
Reimbursable expense decreased 5.9%, or $0.9remained mostly flat at $16.1 million primarily duefor the Current Quarter and $15.9 million for the Comparable Quarter.

Prepetition restructuring charges include professional fees incurred prior to a decline in activity inthe Petition Date related to our Asia Pacific region.Chapter 11 Cases.
Depreciation and amortization expense remained mostly flat at $30.6$31.3 million for the Current Quarter compared to $31.7$30.9 million for the Comparable Quarter.
General and administrative expense decreased 6.1%13.3%, or $2.6$5.3 million, in the Current Quarter, as compared to the Comparable Quarter primarily due to a $1.8 million decrease due to the sale of Eastern Airways in compensation expense of $6.2May 2019, a $1.4 million primarily resulting from a reduction in short-term and long-term incentive compensation costs of $4.2 million and a reduction of various other general and administrative expenses of $2.8 million, including information technology, training and travel expenses, as part of continued cost reduction efforts, partially offset by a $6.4 million increasedecrease in professional fees primarily related to the Columbia transaction and related financing transactions.a $2.1 million decrease in various other costs including salaries, information technology and travel expenses.
Loss on disposal of assets increased $11.4$2.1 million to a loss of $16.0$3.8 million for the Current Quarter from a loss of $4.6$1.7 million for the Comparable Quarter. The loss on disposal of assets in the Current Quarter included $14.0 million for contract termination costs for an aircraft purchase contract that was terminated in December 2018, $1.4 million for impairment of assets held for sale and a loss of $0.7$3.8 million from the sale or disposal of aircraft and other equipment. During the Comparable Quarter, the loss on disposal of assets included impairment charges totaling $1.6 million related to assets held for sale and a loss of $3.0$1.7 million from the sale or disposal of aircraft and other equipment.
Earnings (losses) from unconsolidated affiliates, net decreased $1.2 million toof losses, changed from a loss of $0.8 million for the Current Quarter from earnings of $2.0$1.5 million in the Comparable Quarter to earnings of $2.3 million in the Current Quarter. This decreaseimprovement primarily resulted from a $1.0 million decrease of earnings$1.8 million in losses from our investment in Líder in Brazil from the Comparable Quarter primarily due a $2.5 million favorable change in foreign exchange rates and a change in earnings from our investment in Cougar in Canada from earnings of $0.6 million in the Comparable Quarter to earnings of $2.4 million for the Current Quarter primarily due to a declinean increase in activity, partially offset by a $0.6 million less unfavorable impact of foreign currency exchange rates in the Current Quarter compared to the Comparable Quarter.

activity.
Interest expense, net, increased 42.0%decreased 3.0%, or $8.0$0.8 million, year-over-year primarily due to an increase in borrowingslower interest expense of $4.4 million on our 6¼% Senior Notes due 2022 and an increase in amortization4½% Convertible Senior Notes due 2023 as the unsecured debt was classified as liabilities subject to compromise on the Petition Date upon the filing of debt discount,the Chapter 11 Cases and we stopped accruing interest expense, partially offset by an increasefinancing fees of $2.6 million related to the DIP Credit Agreement in the Current Quarter and $1.0 million of interest income asexpense on our 2019 Term Loan which we borrowed against on May 10, 2019. For further details, see “— Recent Events” included elsewhere in this Quarterly Report.
Reorganization items represent amounts incurred directly resulting from the Chapter 11 Cases and consists of the following items for the Current Quarter:
 Professional fees$15,503
  
 
Lease termination costs (1)
26,051
  
 Write-off of discount on 4½% Convertible Senior Notes due 202330,158
  
 Write-off of deferred financing fees4,644
  
  $76,356
  
_____________ 
(1)
Relates to ten aircraft leases rejected in June 2019 including nine S-76C+s and one S-76D.
Loss on sale of subsidiaries includes a result$46.9 million loss on the sale of an increaseEastern Airways and a $9.5 million loss on the sale of Aviashelf and BHLL. For further details, see Note 1 in cash and cash invested at higher rates.the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
For further details on income tax expense, see “— Region Operating Results — Taxes” included elsewhere in this Quarterly Report.

As discussed above, our results for the Current Quarter were impacted by special items. During the Comparable Quarter, special items that impacted our results included organizational restructuring costs and tax items.costs. 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 EBITDA, adjusted net loss and adjusted diluted loss per share is as follows:
 Three Months Ended 
 December 31, 2018		 Three Months Ended
 June 30, 2019
 Adjusted
EBITDA		 
Adjusted
Net Loss
 
Adjusted
Diluted
Loss
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 $(2,409) $(2,398) $(0.07) $(91,448) $(78,670) $(2.19)
Transaction costs (7,159) (5,656) (0.16)
Tax items —
 (45,156) (1.26)
Loss on sale of subsidiaries (56,303) (56,303) (1.57)
H225 Lease Return (10,844) (10,844) (0.30)
Financing fees —
 (2,075) (0.06)
Tax Items —
 (679) (0.02)
Total special items $(9,568) $(53,210) (1.49) $(158,595) $(148,571) (4.14)
            
 Three Months Ended 
 December 31, 2017		 Three Months Ended
 June 30, 2018
 Adjusted
EBITDA		 
Adjusted
Net Loss
 
Adjusted
Diluted
Loss
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 $(2,810) $(2,501) $(0.07) $(1,719) $(1,711) $(0.05)
Tax items —
 15,139
 0.42
Total special items $(2,810) $12,638
 0.36


Current Period Compared to Comparable Period
Operating revenue from external customers by line of service was as follows:
 Nine Months Ended 
 December 31,		 
Favorable
(Unfavorable)
 2018 2017 
        
 (In thousands, except percentages)
Oil and gas services$664,957
 $715,184
 $(50,227) (7.0)%
U.K. SAR services177,594
 164,306
 13,288
 8.1 %
Fixed wing services158,876
 159,874
 (998) (0.6)%
Corporate and other1,362
 3,885
 (2,523) (64.9)%
Total operating revenue$1,002,789
 $1,043,249
 $(40,460) (3.9)%
The year-over-year decrease in revenue in the Current Period was primarily driven by a decrease in our oil and gas services driven by declines in our Africa region, Canada operations within our Americas region, our Asia Pacific region, and our Europe Caspian region. These decreases were partially offset by an increase in U.K. SAR services revenue due to additional bases coming online in fiscal year 2018, the full benefit of which was received in the Current Period. The U.K. SAR services revenue includes the one-time benefit of $7.6 million in OEM cost recoveries recognized in the Current Period. Additionally, revenue decreased by $2.7 million in the Current Period compared to the Comparable Period due to changes in foreign exchange rates, primarily in our Asia Pacific region related to the weakening of the Australian dollar versus the U.S. dollar, partially offset by our Europe Caspian region related to the strengthening of the British pound sterling versus the U.S. dollar. See further discussion of operating revenue by region under “— Region Operating Results.”
For the Current Period, we reported a net loss of $262.2 million and a diluted loss per share of $7.34 compared to a net loss of $94.8 million and a diluted loss per share of $2.69 for the Comparable Period.
The net loss for the Current Period was significantly impacted by the following special items:
Loss on impairment of $117.2 million ($101.1 million net of tax), or $2.83 per share, including:
◦$87.5 million impairment of H225 aircraft and $8.9 million impairment of H225 inventory, and
◦$20.8 million impairment of Eastern Airways assets including $17.5 million for aircraft and equipment, $3.0 million for intangible assets and $0.3 million for inventory,
Organizational restructuring costs of $6.9 million ($6.5 million net of tax), or $0.18 per share, included in direct cost and general and administrative expense, resulting from separation programs across our global organization designed to increase efficiency and reduce costs,
Transaction costs of $8.4 million ($6.6 million net of tax), or $0.19 per share, included in general and administrative expense, resulting from the Columbia transaction and related financing transactions, and
Non-cash tax expense of $55.5 million, or $1.55 per share, including $43.8 million from valuation allowances on deferred tax assets and $11.6 million from the Act.
The year-over-year change in net loss and diluted loss per share was primarily driven by a significant increase in the negative impact of special items mostly from asset impairments, lower revenue as discussed above, higher interest expense, foreign currency impact, higher loss on disposal of assets and lower earnings from unconsolidated affiliates in the Current Period. These unfavorable changes were partially offset by a decrease in salaries and benefits, rent expense and general and administrative expense.
The Current Period results benefited from the impact of $17.6 million of OEM cost recoveries realized in the Current Period resulting in a one-time benefit of $7.6 million in U.K. SAR operating revenue, a $6.9 million reduction in rent expense (included in direct cost) and a $3.1 million reduction in direct cost. The Comparable Period benefited from a reduction in rent expense of $13.1 million included in direct costs related to OEM cost recoveries. For further details, see Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Excluding the special items described above and the loss on disposal of assets, adjusted net loss and adjusted diluted loss per share were $77.4 million and $2.17, respectively, for the Current Period. These adjusted results compare to adjusted net loss and adjusted diluted loss per share of $59.2 million and $1.68, respectively, for the Comparable Period. Additionally, adjusted EBITDA decreased to $71.7 million in the Current Period from $82.5 million in the Comparable Period.

The year-over-year change in adjusted EBITDA was primarily driven by the decline in oil and gas revenue discussed above, foreign currency impact and lower earnings from unconsolidated affiliates in the Current Period. These unfavorable changes were mostly offset by a decrease in general and administrative expense primarily from lower salaries and benefits in the Current Period and lower rent expense. The year-over-year change in adjusted net loss and adjusted diluted loss per share was impacted by the same items that impacted adjusted EBITDA as well as higher interest expense; however, a more favorable adjusted tax rate in the Current Period more than offset these negative changes.
The table below presents the year-over-year impact of changes in foreign currency exchange rates.
 Nine Months Ended 
 December 31,		 Favorable (Unfavorable)
 2018 2017 
      
 (in thousands, except per share amounts)
Revenue impact    $(2,652)
Operating expense impact    10,178
Year-over-year income statement translation    7,526
      
Transaction gains (losses) included in other income (expense), net$(8,121) $1,214
 (9,335)
Líder foreign exchange impact included in earnings (losses) from unconsolidated affiliates(3,800) (1,637) (2,163)
Total$(11,921) $(423) (11,498)
      
Pre-tax income statement impact    (3,972)
Less: Foreign exchange impact on depreciation and amortization and interest expense    488
Adjusted EBITDA impact    $(3,484)
      
Net income impact (tax affected)    $(2,634)
Earnings per share impact    $(0.07)
The most significant foreign exchange impact related to a $9.3 million unfavorable impact from transaction losses in the Current Period compared to transaction gains in the Comparable Period. Additionally, results for the Current Period were impacted by a $2.2 million increase in unfavorable foreign currency exchange rate impact from our investment in Líder in Brazil. Partially offsetting these unfavorable impacts was a $7.5 million favorable impact from changes in foreign currency exchange rates in the Current Period primarily driven by the impact of the appreciating British pound sterling on the translation of our results in our Europe Caspian region, partially offset by the impact of the depreciating Australian dollar on the translation of our results in our Asia Pacific region.
Direct costs decreased 2.7%, or $22.9 million, year-over-year primarily due to lower headcount across all regions due to the benefit of organizational restructuring efforts reflected in a $28.9 million decrease in salaries and benefits and a $10.1 million decrease in rent expense primarily due to return of leased aircraft, partially offset by a $12.8 million increase in fuel primarily due to an increase in fuel prices and a $3.3 million increase in various other direct costs.
Reimbursable expense increased 6.1%, or $2.6 million, primarily due to new contracts in our Africa region.
Depreciation and amortization expense remained mostly flat at $92.0 million for the Current Period compared to $94.1 million for the Comparable Period.
General and administrative expense decreased 13.7%, or $19.0 million, in the Current Period, as compared to the Comparable Period primarily due to a $16.6 million decrease in compensation expense (primarily due to a decrease in severance costs of $6.6 million, a $8.8 million decrease in short-term and long-term incentive compensation costs and $1.2 million lower salaries and benefits due to a reduction in headcount across all regions) and a $7.2 million decrease in information technology, travel, training and various other expenses, partially offset by a $4.8 million increase in professional fees primarily related to the Columbia transaction and related financing transactions.
Loss on impairment for the Current Period includes $87.5 million for the impairment of H225 aircraft, $8.9 million for the impairment of H225 inventory, and $20.8 million for the impairment of Eastern Airways assets (including $17.5 million for aircraft and equipment, $3.0 million for intangible assets and $0.3 million for inventory). For further details, Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report. Loss on impairment for the Comparable Period includes a $1.2 million impairment charge on inventory used on our training fleet.

Loss on disposal of assets increased $6.6 million, to a loss of $19.0 million for the Current Period from a loss of $12.4 million for the Comparable Period. The loss on disposal of assets in the Current Period included $14.0 million of contract termination costs for an aircraft purchase contract that was terminated in December 2018, $1.4 million for impairment of assets held for sale and a loss of $3.7 million from the sale or disposal of aircraft and other equipment. During the Comparable Period, the loss on disposal of assets included impairment charges totaling $11.3 million related to assets held for sale (including a $7.2 million impairment and loss on disposal related to the Bristow Academy disposal group), and a loss of $1.1 million related to the sale of aircraft and other equipment.
Earnings (losses) from unconsolidated affiliates, net decreased $5.7 million to a loss of $2.3 million for the Current Period from earnings of $3.4 million in the Comparable Period. The decrease in earnings (losses) from unconsolidated affiliates, net primarily resulted from a decrease in earnings from our investment in Líder in Brazil to a loss of $0.1 million in the Current Period from earnings of $5.7 million in the Comparable Period primarily due to a decline in activity and a $2.2 million unfavorable impact of foreign currency exchange rates.
Interest expense, net, increased 50.3%, or $27.0 million, year-over-year primarily due to an increase in borrowings and an increase in amortization of debt discount, partially offset by an increase in interest income as a result of an increase in cash and cash invested at higher rates.
For further details on income tax expense, see “— Region Operating Results — Taxes” included elsewhere in this Quarterly Report.
As discussed above, our results for the Current Period were impacted by special items. During the Comparable Period, special items that impacted our results included organizational restructuring costs, loss on impairment and tax items. 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 EBITDA, adjusted net loss and adjusted diluted loss per share is as follows:
  Nine Months Ended 
 December 31, 2018
  Adjusted
EBITDA		 Adjusted
Net Loss		 Adjusted
Diluted
Loss
Per Share
       
  (In thousands, except per share amounts)
Loss on impairment $(117,220) $(101,105) $(2.83)
Organizational restructuring costs (6,855) (6,501) (0.18)
Transaction costs (8,406) (6,641) (0.19)
Tax items —
 (55,463) (1.55)
Total special items $(132,481) $(169,710) (4.75)
       
  Nine Months Ended 
 December 31, 2017
  Adjusted
EBITDA		 Adjusted
Net Loss		 Adjusted
Diluted
Loss
Per Share
       
  (In thousands, except per share amounts)
Organizational restructuring costs $(15,160) $(11,337) $(0.32)
Loss on impairment (1,192) (775) (0.02)
Tax items —
 (2,968) (0.08)
Total special items $(16,352) $(15,080) (0.43)


Region Operating Results
The following tables set forth certain operating information for the regions comprising our industrial 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.
Set forth below is a discussion of the operations of our regions. Our consolidated results are discussed under “Results of Operations” above.
Current Quarter Compared to Comparable Quarter
Europe Caspian
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 
Favorable
(Unfavorable)
 Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
  
 2018 2017 2018 2017 Quarter vs Quarter Period vs Period 2019 2018 Quarter vs Quarter
                        
 (In thousands, except percentages) (In thousands, except percentages)
Operating revenue $180,829
 $189,910
 $587,264
 $570,983
 $(9,081) (4.8)% $16,281
 2.9 % $179,868
 $210,986
 $(31,118) (14.7)%
Operating income $3,342
 $5,274
 $13,856
 $19,499
 $(1,932) (36.6)% $(5,643) (28.9)% $11,807
 $21,928
 $(10,121) (46.2)%
Operating margin 1.8% 2.8% 2.4% 3.4% (1.0)% (35.7)% (1.0)% (29.4)% 6.6% 10.4% (3.8)% (36.5)%
Adjusted EBITDA $14,068
 $18,614
 $62,727
 $58,716
 $(4,546) (24.4)% $4,011
 6.8 % $21,820
 $28,794
 $(6,974) (24.2)%
Adjusted EBITDA margin 7.8% 9.8% 10.7% 10.3% (2.0)% (20.4)% 0.4 % 3.9 % 12.1% 13.6% (1.5)% (11.0)%
Rent expense $30,262
 $29,499
 $93,437
 $102,803
 $(763) (2.6)% $9,366
 9.1 % $28,831
 $31,996
 $3,165
 9.9 %
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
Operating revenue for our Additionally, the Europe Caspian region decreasedincluded Eastern Airways fixed wing operations until the sale on May 10, 2019.
The decrease in operating revenue in the Current Quarter comparedprimarily resulted from a decrease of $24.0 million in fixed wing services revenue and a decrease of $10.2 million in U.K. SAR revenue, partially offset by an increase of $4.6 million in Norway. In May 2019, we sold Eastern Airways, resulting in the $24.0 million decrease in operating revenue for our fixed wing services in the Current Quarter. The decrease in the U.K. SAR services revenue in the Current Quarter is primarily due to a one-time benefit of $7.6 million in OEM cost recoveries recognized in the Comparable Quarter. Operating revenue in Norway improved in the Current Quarter primarily due to a decrease of $6.7 million in U.K. oil and gas revenue due to a decreasean increase in activity and short-term contracts. Additionally, revenue in this region was impacted by an unfavorable year-over-year impact of changes in foreign currency exchange rates a decrease of $5.0 million in fixed wing revenue from Eastern Airways due to a decrease in activity and unfavorable changes in foreign currency exchange rates and a decrease in U.K. SAR revenue of $1.3 million primarily due to unfavorable changes in foreign currency exchange rates. Partially offsetting these decreases is an increase in Norway operating revenue of $3.9 million driven by an increase in activity. Additionally, revenue decreased by $5.2 million in the Current Quarter compared to the Comparable Quarter due to unfavorable changes in foreign currency exchange rates.$10.1 million. Eastern Airways contributed $24.4$10.9 million and $29.5$34.8 million in operating revenue for the Current Quarter and Comparable Quarter, respectively.
A substantial portion of our operations in the Europe Caspian region are contracted in the British pound sterling, which depreciated against the U.S. dollar in the Current Quarter. We recorded foreign exchange losses of $2.1$3.8 million in the Current Quarter and foreign exchange gainslosses of $1.3$5.4 million in the Comparable Quarter from the revaluation of assets and liabilities on pound sterling functional currency entities as of December 31,June 30, 2019 and 2018, and 2017, respectively, which is recorded in other income (expense), net and included in adjusted EBITDA. The Current Quarter benefited from a $1.4 million impact from foreign currency hedging, which partially offset the negative impact from exchange rate changes. A further weakening or strengthening of the British pound sterling could result in additional foreign exchange volatility in future quarters.
The Current Quarter results benefited from OEM cost recoveries in prior periods that resulted in a $1.2 million reduction in direct cost. The Comparable Quarter benefited from OEM cost recoveries that resulted in a $7.1 million reduction in rent expenses (included in direct cost). We will recognize an additional $0.5 million reduction in direct cost over the remainder of fiscal year 2019 related to these OEM cost recoveries in our Europe Caspian region results. These items are included in operating income and adjusted EBITDA in the Current Quarter and Comparable Quarter. For further details, see Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
The decrease in operating income and operating margin from the Comparable Quarter was primarily due to lower revenue discussed above and lower OEM cost recoveries of $5.9 million, partially offset by lower salaries and benefits of $5.3 million. In addition to the items impacting operating income and operating margin, adjusted EBITDA and adjusted EBITDA margin decreased due to the foreign exchange losses from revaluation of assets and liabilities included in other income (expense), net in the Current Quarter compared to gains recorded in the Comparable Quarter. As discussed above, other income (expense) is included in adjusted EBITDA, but not in operating income. Eastern Airways contributed a negative $5.4 million and negative $4.1 million in adjusted EBITDA for the Current Quarter and Comparable Quarter, respectively.

Current Period Compared to Comparable Period
The increase in operating revenue in the Current Period compared to the Comparable Period primarily resulted from an increase of $13.3 million for U.K. SAR revenue including a one-time benefit of OEM cost recovery of $7.6 million, an increase of $3.0 million in fixed wing revenue from Eastern Airways and an increase of $6.3 million in Norway operating revenue resulting from an increase in activity, partially offset by a $6.3 million decrease in U.K. oil and gas activity due to a decline in activity. Additionally, revenue increased by $3.8 million in the Current Period compared to the Comparable Period due to favorable changes in foreign currency exchange rates. Eastern Airways contributed $90.8 million and $87.8 million in operating revenue for the Current Period and Comparable Period, respectively.
The Current Period results benefited from OEM cost recoveries realized in the Current Period related to ongoing aircraft issues that resulted in a one-time benefit of $7.6 million in U.K. SAR operating revenue, a $4.5 million reduction in rent expense and a $3.1 million reduction in direct cost. The Comparable Period benefited from OEM cost recoveries that resulted in a $7.1 million reduction in rent expense (included in direct cost).
A substantial portion of our operations in the Europe Caspian region are contracted in the British pound sterling, which depreciated against the U.S. dollar in the Current Period. We recorded foreign exchange losses of $8.4 million in the Current Period and foreign exchange gains of $2.8 million in the Comparable Period from the revaluation of assets and liabilities on British pound sterling functional currency entities as of December 31, 2018 and 2017, respectively, which is recorded in other income (expense), net and included in adjusted EBITDA. Net of the translation and revaluation impacts, adjusted EBITDA was negativelyunfavorably impacted by $9.4 million and positively impacted by $4.8$4.2 million resulting from the change in exchange rates during the Current Period and Comparable Period, respectively. The Current Period results benefited from a $2.2 million impact from foreign currency hedging, which partially offset the negative impact from exchange rate changes.Quarter. A further weakening or strengthening of the British pound sterling could result in additional foreign exchange volatility in future periods.quarters.
DuringAs discussed above, the Current Period, we recorded $20.8 million for impairment of Eastern Airways assets including $17.5 million for aircraft and equipment, $3.0 million for intangible assets and $0.3 million for inventory. For further details, Note 1Comparable Quarter results benefited from OEM cost recoveries realized in the “NotesComparable Quarter related to Condensed Consolidated Financial Statements” included elsewhereongoing aircraft issues that resulted in this Quarterly Report. The impairments are excluded froma one-time benefit of $7.6 million in U.K. SAR operating revenue, a $2.7 million reduction in rent expense and a $1.1 million reduction in direct cost.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin.
The decreasemargin were lower in operating income and operating margin from the Comparable Period wasCurrent Quarter primarily due to the $20.8 million of impairments of Eastern Airways assets mentioned above, partially offset by the increase in revenue discussed above and the larger benefit from OEM cost recoveries realized in the Current Period. Adjusted EBITDAComparable Quarter and adjusted EBITDA margin decreased in the Current Period primarily due to the unfavorable year-over-year impacts from changes in foreign currency exchange rates partially offset by the increase in operating revenue and larger benefit from OEM cost recoveries in the Current Period.changes. Eastern Airways contributed a negative $6.3$2.3 million and a negative $3.7$0.1 million in adjusted EBITDA for the Current PeriodQuarter and Comparable Period,Quarter, respectively.

Africa
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Favorable
(Unfavorable)		 Three Months Ended
 June 30,		 Favorable
(Unfavorable)
 2018 2017 2018 2017 Quarter vs Quarter Period vs Period 2019 2018 Quarter vs Quarter
                        
 (In thousands, except percentages) (In thousands, except percentages)
Operating revenue $41,394
 $47,915
 $113,545
 $146,523
 $(6,521)
(13.6)% $(32,978) (22.5)% $47,276
 $34,915
 $12,361

35.4 %
Operating income $5,286
 $10,470
 $7,892
 $28,353
 $(5,184) (49.5)% $(20,461) (72.2)% $7,745
 $1,141
 $6,604
 *
Operating margin 12.8% 21.9% 7.0% 19.4% (9.1)% (41.6)% (12.4)% (63.9)% 16.4% 3.3% 13.1% *
Adjusted EBITDA $8,639
 $14,206
 $19,063
 $40,206
 $(5,567) (39.2)% $(21,143) (52.6)% $12,518
 $5,319
 $7,199
 135.3 %
Adjusted EBITDA margin 20.9% 29.6% 16.8% 27.4% (8.7)% (29.4)% (10.6)% (38.7)% 26.5% 15.2% 11.3% 74.3 %
Rent expense $2,677
 $2,048
 $6,945
 $6,424
 $(629) (30.7)% $(521) (8.1)% $3,676
 $2,122
 $(1,554) (73.2)%
_____________ 
* percentage change too large to be meaningful or not applicable
The Africa region comprises all our operations and affiliates on the African continent, including Nigeria and Egypt.

Current Quarter Compared to Comparable Quarter
Operating revenue for Africa decreasedincreased in the Current Quarter due to an overall decreaseincrease in activity and additional aircraft on contract compared to the Comparable Quarter. Activity declined with certain customers and certain contracts ended, including a contract that expired on March 31, 2018, reducing revenue by $15.4 million, which was partially offset by an increase in activity with other customers increasing revenue by $7.4 millionQuarter and an increase in fixed wing services revenue of $1.4 million. Fixed wing services in Africa generated $3.4of $2.1 million and $2.0 million in operating revenue forfrom the Comparable Quarter to the Current Quarter and Comparable Quarter, respectively.Quarter.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin decreasedincreased as a result of the decreaseincrease in operating revenue in the Current Quarter discussed above, which was only partially offset by a decreasean increase in direct cost and general and administrative expenses. Additionally, during the Comparable Quarter, we recorded $0.5incurred $1.5 million in severance expenseof demobilization costs related to organizational restructuring efforts, which is excluded from adjusted EBITDA and adjusted EBITDA margin.
With the conclusion of the recent elections, we anticipate a measure of stability in the political environment through the medium term and increased drilling activities; however, we are also seeing increased pressure to benchmark and standardize commercial rates across multiple contracts, which may affect the profitability of contracts in Nigeria.
Current Period Compared to Comparable Period
Operating revenue for Africa decreased in the Current Period due to an overall decrease in activity compared to the Comparable Period. Activity declined with certain customers and certain contracts ended, including asignificant contract that expired on March 31, 2018, reducing revenue by $53.3 million, which was partially offset by an increase in activity with other customers increasing revenue by $17.4 million and an increase in fixed wing services revenue of $2.9 million. Fixed wing services in Africa generated $8.4 million and $5.5 million of operating revenue for the Current Period and Comparable Period, respectively.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin decreased as a result of the decrease in operating revenue in the Current Period, which was partially offset by a decrease in direct cost and general and administrative expenses. Additionally, during the Comparable Period, we recorded $0.7 million in severance expense related to organizational restructuring efforts, which is excluded from adjusted EBITDA and adjusted EBITDA margin.2018.
Americas
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 
Favorable
(Unfavorable)
 Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
 2018 2017 2018 2017 Quarter vs Quarter Period vs Period 2019 2018 Quarter vs Quarter
                        
 (In thousands, except percentages) (In thousands, except percentages)
Operating revenue $57,502
 $60,345
 $169,270
 $178,884
 $(2,843) (4.7)% $(9,614) (5.4)% $57,347
 $52,584
 $4,763
 9.1%
Earnings (losses) from unconsolidated affiliates, net $839
 $2,097
 $(2,052) $3,712
 $(1,258) (60.0)% $(5,764) *
Earnings from unconsolidated affiliates, net of losses $2,176
 $(1,437) $3,613
 *
Operating income (loss) $4,412
 $5,308
 $(1,362) $11,535
 $(896) (16.9)% $(12,897) *
 $3,568
 $(7,343) $10,911
 148.6%
Operating margin 7.7% 8.8% (0.8)% 6.4% (1.1)% (12.5)% (7.2)% *
 6.2% (14.0)% *
 *
Adjusted EBITDA $11,892
 $12,689
 $20,446
 $33,430
 $(797) (6.3)% $(12,984) (38.8)% $10,774
 $(163) $10,937
 *
Adjusted EBITDA margin 20.7% 21.0% 12.1 % 18.7% (0.3)% (1.4)% (6.6)% (35.3)% 18.8% (0.3)% 19.1% *
Rent expense $5,641
 $6,295
 $18,573
 $18,480
 $654
 10.4 % $(93) (0.5)% $4,577
 $6,598
 $2,021
 30.6%
_____________ 
 * percentage change too large to be meaningful or not applicable.
The Americas region comprises all our operations and affiliates in North America and South America, including Brazil, Canada, Guyana, Trinidad and the U.S. Gulf of Mexico.
Current Quarter Compared to Comparable Quarter
Operating revenue decreasedincreased in the Current Quarter primarily due to a decreasean increase in operating revenue of $2.8$2.4 million in CanadaTrinidad, primarily resulting from additional aircraft on contract and $0.6$2.2 million in the U.S. Gulf of Mexico resulting from lower activity, partially offset by an increase in activity with our Trinidad oil and gas customers, which increased operating revenue by $1.2 million.Guyana due to additional aircraft on contract.

Earnings (losses) from unconsolidated affiliates, net decreased $1.3of losses, increased $3.6 million primarily due to a reductionan increase in earnings from our investment in Líder in Brazil resulting fromdue to a decline in activity, partially offset by a less unfavorablefavorable change in foreign currency exchange rates.rates and an increase in earnings from our investment in Cougar in Canada. Changes in foreign currency exchange rates decreasednegatively impacted our earnings from our investment in Líder by $0.2

$0.1 million and $0.8 million, respectively, in the Current Quarter and $2.6 million in the Comparable Quarter. Additionally, earnings from our investment in Cougar in Canada changed from earnings of $0.6 million in the Comparable Quarter to earnings of $2.4 million for the Current Quarter, primarily due to an increase in activity.
See further discussion about our investment in Líder and the Brazil market in “— Executive Overview — Market Outlook” included elsewhere in this Quarterly Report.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin were all mostly flat as the decreases in earnings from unconsolidated affiliates and operating revenue discussed above were mostly offset by a $2.0 million decrease in salaries and benefits due to lower headcount and a $0.7 million decrease in rent expense. Additionally, we recorded severance expense, related to organizational restructuring efforts, of $0.1 million and $0.1 million for the Current Quarter and Comparable Quarter, respectively, which is excluded from adjusted EBITDA and adjusted EBITDA margin.
Current Period Compared to Comparable Period
Operating revenue decreased in the Current Period primarily due to a decrease in operating revenue of $10.8 million in Canada, $1.2 million in Trinidad due to lower activity and a decrease in intra-region operating revenue of $3.5 million primarily due to a decrease in activity in Africa, partially offset by an increase in activity with our U.S. Gulf of Mexico oil and gas customers, which increased operating revenue by $6.4 million.
Earnings (losses) from unconsolidated affiliates, net decreased $5.8 million in the Current Period primarily due to a reduction in earnings from our investment in Líder in Brazil resulting from a decrease in activity and more of an unfavorable impact of foreign currency exchange rates. Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin were negatively impacted by unfavorable foreign currency exchange rate changes, which decreased our earnings from our investment in Líder by $3.8 million in the Current Period and $1.6 million in the Comparable Period.
The decreasesincreases in operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin were primarily driven by the decreasesincreases in operating revenue and earnings from unconsolidated affiliates and operating revenue discussed above which was partially offset byand a $2.0 million decrease in salaries and benefits. Additionally, we recorded severancerent expense relateddue to organizational restructuring efforts,the return of $0.3 million and $0.4 million forleased aircraft or rejection of leased aircraft during the Current Period and Comparable Period, respectively, which is excluded from adjusted EBITDA and adjusted EBITDA margin.Chapter 11 Cases.
Asia Pacific
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 Favorable
(Unfavorable)		 Three Months Ended
 June 30,		 Favorable
(Unfavorable)
 2018 2017 2018 2017 Quarter vs Quarter Period vs Period 2019 2018 Quarter vs Quarter
                        
 (In thousands, except percentages) (In thousands, except percentages)
Operating revenue $40,077
 $50,248
 $141,106
 $153,365
 $(10,171) (20.2)% $(12,259) (8.0)% $34,341
 $54,404
 $(20,063) (36.9)%
Operating loss $(6,654) $(941) $(14,613) $(19,374) $(5,713) *
 $4,761
 24.6 % $(12,434) $(971) $(11,463) *
Operating margin (16.6)% (1.9)% (10.4)% (12.6)% (14.7)% *
 2.2 % 17.5 % (36.2)% (1.8)% (34.4)% *
Adjusted EBITDA $(3,411) $4,797
 $(4,325) $502
 $(8,208) *
 $(4,827) *
 $1,228
 $2,086
 $(858) (41.1)%
Adjusted EBITDA margin (8.5)% 9.5 % (3.1)% 0.3 % (18.0)% *
 (3.4)% *
 3.6 % 3.8 % (0.2)% (5.3)%
Rent expense $7,927
 $2,807
 $24,325
 $24,356
 $(5,120) (182.4)% $31
 0.1 % $13,770
 $8,117
 $(5,653) (69.6)%
_____________ 
 * percentage change too large to be meaningful or not applicable.
The Asia Pacific region comprises all our operations and affiliates in Australia and Southeast Asia, including Malaysia, Sakhalin, and our fixed wing operations through Airnorth in Australia.
Current Quarter Compared to Comparable Quarter
Operating revenue decreased in the Current Quarter primarily due to a decrease in Australia of $19.7 million due to contracts ending and decreased activity with oil and gas services revenue of $7.6customers and a $0.9 million primarilydecrease in Sakhalin due to the endsale of short-term contractsAviashelf in Australia andthe Current Quarter, partially offset by a $2.6 million decrease$0.4 increase from our fixed wing operations at Airnorth. Airnorth contributed $18.4$20.1 million and $21.0$19.7 million in operating revenue for the Current Quarter and Comparable Quarter, respectively. Additionally, revenue decreased by $2.6 million in the Current Quarter compared to the Comparable Quarter due to unfavorable changes in foreign currency exchange rates.
Operating loss increasedincome and operating margin adjusted EBITDA and adjusted EBITDA margin decreaseddeclined in the Current Quarter primarily due to athe decrease in operating revenue discussed above. Additionally,above and a $5.7 million increase to rent expense increased $5.1primarily related to lease return and termination costs for three H225 leased aircraft of $8.9 million primarily due to a decrease in OEM credits. We realized OEM credits of $0.8 million and $6.0 million, respectively, in the Current Quarter, and Comparable Quarter. These unfavorable changes were partially offset by a $5.1$12.2 million decrease in salaries and benefits, maintenance and fuel costs. Adjusted EBITDA and adjusted EBITDA margin decreased due to headcount reductions. Additionally, changes in foreign exchange rates negatively impactedthe items impacting operating income and operating margin excluding the H225 lease return costs. Adjusted EBITDA and adjusted EBITDA results by $2.1margin benefited from a $2.2 million compared to the Comparable Quarter primarily due tofavorable impact of foreign currency exchange rate losses ofchanges. Airnorth contributed $2.3 million and $0.3 million,

respectively, for the Current Quarter and Comparable Quarter. Airnorth contributed a negative $1.2 million and positive $2.2$0.2 million in adjusted EBITDA for the Current Quarter and Comparable Quarter, respectively.
Additionally, duringDuring the Current Quarter and Comparable Quarter, we recorded $1.8$1.3 million and $1.5$1.3 million, respectively, in severance expense related to organizational restructuring efforts, which is excluded fromefforts. The severance expense and H225 lease return and termination costs are not included in adjusted EBITDA andor adjusted EBITDA margin.
Current Period Compared to Comparable Period
Operating revenue decreased in the Current Period primarily due to a decrease in oil and gas services revenue of $6.7 million primarily due to the end of short-term contracts in Australia and a decrease of $6.8 million from our fixed wing operations at Airnorth, partially offset by an increase of $1.2 million in Sakhalin. Airnorth contributed $59.8 million and $66.6 million in operating revenuemargin for the Current Period andor Comparable Period, respectively. Additionally, revenue decreased by $5.9 million in the Current Period compared to the Comparable Period due to unfavorable changes in foreign currency exchange rates.Quarters.
Operating loss decreased in the Current Period primarily due to a decrease in salaries and benefits of $13.6 million due to organizational restructuring efforts, partially offset by the decrease in operating revenue discussed above and a $2.6 million increase in maintenance expense at Airnorth. Adjusted EBITDA and adjusted EBITDA margin decreased in the Current Period primarily due to an unfavorable year-over-year impact from changes in exchange rates. Changes in foreign exchange rates negatively impacted adjusted EBITDA results by $7.0 million compared to the Comparable Period primarily due to foreign exchange rate losses of $6.1 million for the Current Period compared to foreign exchange rate gains of $0.8 million for the Comparable Period. Airnorth contributed a negative $2.9 million and positive $8.6 million in adjusted EBITDA for the Current Period and Comparable Period, respectively.
Additionally, during the Current Period and Comparable Period, we recorded $4.1 million and $3.7 million, respectively, in severance expense related to organizational restructuring efforts, which is excluded from adjusted EBITDA and adjusted EBITDA margin.
Corporate and Other
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 
Favorable
(Unfavorable)
 Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
 2018 2017 2018 2017 Quarter vs Quarter Period vs Period 2019 2018 Quarter vs Quarter
                        
 (In thousands, except percentages) (In thousands, except percentages)
Operating revenue $465
 $743
 $1,363
 $3,912
 $(278) (37.4)% $(2,549) (65.2)% $265
 $190
 $75
 39.5 %
Operating loss $(21,535) $(19,047) $(151,440) $(68,686) $(2,488) (13.1)% $(82,754) (120.5)% $(28,641) $(16,631) $(12,010) (72.2)%
Adjusted EBITDA $(7,545) $(15,342) $(26,189) $(50,309) $7,797
 50.8 % $24,120
 47.9 % $(10,506) $(9,023) $(1,483) (16.4)%
Rent expense $1,648
 $1,971
 $4,547
 $6,456
 $323
 16.4 % $1,909
 29.6 % $1,335
 $1,248
 $(87) (7.0)%

Corporate and other includes our supply chain management and corporate costs that have not been allocated out to other regions and our Bristow Academy operations prior to the sale of Bristow Academy on November 1, 2017.
Current Quarter Compared to Comparable Quarterregions.
Operating revenue decreased inloss was higher for the Current Quarter primarily due to the saleinclusion of Bristow Academy.
Operating loss increased in the Current Quarter primarily due to a $2.2 million increase in general and administrative expenses primarily due to a $6.0 million increase inprepetition professional fees primarilyof $13.5 million related to the Columbia transaction and related financing transactions, partially offset by a $3.3 million decrease in compensation expense resulting from a reduction in short-term and long-term incentive compensation costs of $2.6 million. Adjusted EBITDA improved primarily due to the reduction in general and administrative expenses excluding organizational restructuring and transaction costs, and foreign currency transaction gains of $1.7 million in the Current Quarter compared to foreign currency transaction losses of $0.3 million in the Comparable Quarter.
During the Current Quarter, we recorded $7.2 million of transaction costs and during the Comparable Quarter, we recorded $0.1 million of organizational restructuring costs, both of which areis excluded from adjusted EBITDA and adjusted EBITDA margin.

Current Period Compared to Comparable Period
Operating revenue decreasedEBITDA. The prepetition professional fees are included in prepetition restructuring charges on the Current Period primarily due to the salecondensed consolidated statements of Bristow Academy.
Operating loss for the Current Period includes impairments of $87.5 million for the impairment of H225 aircraft and $8.9 million for the impairment of H225 inventory. For further details, see Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report. The impairments are excluded from adjusted EBITDA and adjusted EBITDA margin.
Operating loss increased in the Current Period primarily due to the H225 aircraft and inventory impairments and decline in revenue, partially offset by a $9.0 million reduction in general and administrative expenses, including an $8.1 million decrease in organizational restructuring costs. Additionally, during the Comparable Period, we recorded $1.2 million of inventory impairment charges related to Bristow Academy. Adjusted EBITDA improved primarily due to foreign currency transaction gains of $5.8 million for the Current Period compared to foreign currency transaction losses of $3.3 million for the Comparable Period, the sale of Bristow Academy, which generated negative adjusted EBITDA of $3.6 million in the Comparable Period, and the $9.4 million decrease in general and administrative expenses excluding organizational restructuring and transaction costs.
During the Current Period and Comparable Period, we recorded $1.4 million and $9.5 million, respectively, of organizational restructuring costs and during the Current Period, we recorded $8.4 million of transaction costs, which along with the impairment charges discussed above, are excluded from adjusted EBITDA and adjusted EBITDA margin.operations.
Interest Expense, Net
 Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 
Favorable
(Unfavorable)
 Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
 2018 2017 2018 2017 Quarter vs Quarter Period vs Period 2019 2018 Quarter vs Quarter
                        
 (In thousands, except percentages) (In thousands, except percentages)
Interest income $2,269
 $144
 $3,677
 $512
 $2,125
 *
 $3,165
 *
 $387
 $179
 $208
 116.2 %
Interest expense (26,416) (17,840) (76,400) (51,707) (8,576) (48.1)% (24,693) (47.8)% (21,597) (24,969) 3,372
 13.5 %
Amortization of debt discount (1,612) (242) (4,713) (343) (1,370) *
 (4,370) *
 (850) (1,510) 660
 43.7 %
Amortization of debt fees (1,883) (1,851) (5,239) (4,791) (32) (1.7)% (448) (9.4)% (4,411) (1,645) (2,766) (168.1)%
Capitalized interest 529
 696
 1,985
 2,652
 (167) (24.0)% (667) (25.2)% 150
 801
 (651) (81.3)%
Interest expense, net $(27,113) $(19,093) $(80,690) $(53,677) $(8,020) (42.0)% $(27,013) (50.3)% $(26,321) $(27,144) $823
 3.0 %
_____________ 
 * percentage change too large to be meaningful or not applicable.
Interest expense, net increaseddecreased in the Current Quarter compared to the Comparable Quarter primarily due to lower interest expense of $4.4 million on our 6¼% Senior Notes and 4½% Convertible Senior Notes as the unsecured debt was classified as liabilities subject to compromise on the Petition Date upon the filing of the Chapter 11 Cases and we stopped accruing interest expense, partially offset by financing fees of $2.6 million related to the DIP Credit Agreement in the Current Period compared to the Comparable Period primarily due to an increase in borrowings, partially offset by an increase in interest income as a result an increase in cash and cash invested at higher rates. Also, we issued convertible debt in December 2017 resulting in an increase in amortization of debt discount for the Current Quarter compared to the Comparable Quarter and for$1.0 million of interest expense on our 2019 Term Loan which we borrowed against on May 10, 2019. For further details on debt and liabilities subject to compromise, see Notes 2 and 5 in the Current Period compared“Notes to the Comparable Period. Additionally, during the Comparable Quarter and Comparable Period, we wrote-off $0.5 million and $1.1 million, respectively, of deferred financing fees related to early extinguishment of debt.

Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Other Income (Expense), Net
  Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 
Favorable
(Unfavorable)
  2018 2017 2018 2017 Quarter vs Quarter Period vs Period
                 
  (In thousands, except percentages)
Foreign currency gains (losses) by region:               

Europe Caspian $(2,084) $1,325
 $(8,416) $2,770
 $(3,409) (257.3)% $(11,186) *
Africa (380) (400) 356
 762
 20
 5.0 % (406) (53.3)%
Americas 320
 (22) 249
 173
 342
 *
 76
 43.9 %
Asia Pacific (2,343) (276) (6,076) 789
 (2,067) *
 (6,865) *
Corporate and other 1,702
 (259) 5,766
 (3,280) 1,961
 *
 9,046
 *
Foreign currency gains (losses) (2,785) 368
 (8,121) 1,214
 (3,153) *
 (9,335) *
Other (875) (1,104) (2,693) (979) 229
 20.7 % (1,714) (175.1)%
Other income (expense), net $(3,660) $(736) $(10,814) $235
 $(2,924) *
 $(11,049) *
_____________ 
* percentage change too large to be meaningful or not applicable.
  Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
  2019 2018 Quarter vs Quarter
         
  (In thousands, except percentages)
Foreign currency gains (losses) by region:        
Europe Caspian $(3,824) $(5,381) $1,557
 28.9 %
Africa (233) 763
 (996) (130.5)%
Americas 326
 261
 65
 24.9 %
Asia Pacific (270) (2,610) 2,340
 89.7 %
Corporate and other 1,071
 3,938
 (2,867) (72.8)%
Foreign currency losses (2,930) (3,029) 99
 3.3 %
Pension-related costs (952) (957) 5
 0.5 %
Other 9
 36
 (27) (75.0)%
Other income (expense), net $(3,873) $(3,950) $77
 1.9 %
Other income (expense), net for the Current Quarter and Comparable Quarters and Current and Comparable PeriodsQuarter were most significantlyprimarily impacted by foreign currency gains (losses). The foreign currency gains (losses) within other income (expense), net are reflected within the results (below operating income) of the regions shown in the table above.
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 most significant items revalued are denominated in U.S. dollars on entities with British pound sterling Australian dollar and Nigerian naira functional currencies and denominated in British pound sterling on entities with U.S. dollar functional currencies with transaction gains or losses primarily resulting from the strengthening or weakening of the U.S. dollar versus those other currencies.

Taxes
Three Months Ended 
 December 31,		 Nine Months Ended 
 December 31,		 
Favorable
(Unfavorable)
Three Months Ended
 June 30,		 
Favorable
(Unfavorable)
2018 2017 2018 2017 Quarter vs Quarter Period vs Period2019 2018 Quarter vs Quarter
                      
(In thousands, except percentages)    (In thousands, except percentages)
Effective tax rate(38.4)% 57.5% (2.1)% (2.7)% 95.9% *
 (0.6)% (22.2)%8.4% 8.2% (0.2)% (2.4)%
Net foreign tax expense (benefit) on non-U.S. earnings$(607) $(2,433) $(5,196) $2,747
 $(1,826) (75.1)% $7,943
 *
Net foreign tax on non-U.S. earnings$4,358
 $1,714
 $(2,644) *
Expense (benefit) of foreign earnings indefinitely reinvested abroad$2,091
 $2,484
 $10,908
 $(11,511) $393
 15.8 % $(22,419) *
$3,432
 $(226) $(3,658) *
Expense from change in tax contingency$(2,434) $180
 $(2,374) $4,874
 $2,614
 *
 $7,248
 *
$(298) $30
 $328
 *
Sale of subsidiaries$9,824
 $—
 $(9,824) *
Impact of stock based compensation$8
 $78
 $1,182
 $2,314
 $70
 89.7 % $1,132
 48.9 %$—
 $1,161
 $1,161
 100.0 %
Deduction for foreign taxes$(158) $501
 $(228) $(643) $659
 *
 $(415) (64.5)%$(49) $(21) $28
 133.3 %
Change in valuation allowance$33,518
 $2,085
 $43,824
 $13,402
 $(31,433) *
 $(30,422) (227.0)%$(344) $993
 $1,337
 *
U.S. statutory rate reduction$(19,033) $(75,636) $(19,033) $(75,636) $(56,603) (74.8)% $(56,603) (74.8)%
One-time repatriation tax$30,671
 $61,478
 $30,671
 $61,478
 $30,807
 50.1 % $30,807
 50.1 %
_____________ 
 * percentage change too large to be meaningful or not applicable

We estimateOur provision for income taxes for the full-yearinterim period ended June 30, 2019 was prepared using a discrete effective tax rate method. Historically, we calculated our provision for income taxes during interim reporting periods by applying the estimated annual income tax rate for the full fiscal year to income from continuing operations, and apply this rate to our year-to-dateexcluding discrete items, for the reporting period. We determined that since small changes in estimated pre-tax 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 discretelyloss would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate of income taxes for the quarter ended June 30, 2019. We will continue to evaluate income tax estimates under the historical method in which they occur.subsequent quarters and employ a discrete effective tax rate method if warranted.
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 or benefit does not change proportionally with our pre-tax book income or loss. 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 change in our effective tax rate excluding discrete items for the Current Quarter compared to the Comparable Quarter primarily related to changes in the blend of earnings taxed in relatively high taxed jurisdictions versus low taxed jurisdictions. Additionally, during the Current Quarter we decreased our valuation allowance by $0.3 million and during the Comparable Quarter we increased our valuation allowance by $1.0 million, respectively, which also impacted 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 assetsasset 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 certain foreign net operating losses and certain foreign tax credits. As a result, we recorded a valuation allowance of $30.4 million against foreign tax credits for the Current Quarter and $3.1 million and $2.1 million against net operating losses in certain foreign jurisdictions for the Current Quarter and Comparable Quarter, respectively. During the Current Period and Comparable Period, we recorded a valuation allowance of $30.4 million and $7.6 million, respectively, against foreign tax credits and $13.4 million and $5.8 million, respectively, against net operating losses in certain foreign jurisdictions.
On December 22, 2017, the president of the United States signed into law the Act. The Act includes numerous changes in existing U.S. tax law, including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%. The rate reduction takes effect on January 1, 2018. Further, the Act provides for a one-time “deemed repatriation” of accumulated foreign earnings of certain foreign corporations. Under U.S. generally accepted accounting principles, our net deferred tax liabilities are required to be revalued during the period in which the new tax legislation is enacted. We have completed our analysis of the income tax implications of the Act during the Current Quarter and recorded adjustments accordingly to previously reported provisional amounts.
Certain provisions under the Act became applicable to us on April 1, 2018 and our income tax provision for the Current Period includes the tax implications of these provisions. These provisions include Global Intangible Low-Taxed Income (“GILTI”), Base Erosion and Anti-Avoidance Tax (“BEAT”), Foreign Derived Intangible Income (“FDII”), and certain limitations on the deduction of interest expense and utilization of net operating losses.
Liquidity and Capital Resources
Cash Flows
Operating Activities
Net cash flows used in operating activities were $68.936.8 million and $9.3$44.1 million during the Current PeriodQuarter and Comparable Period,Quarter, respectively. The increase in net cash flows used in operating activities in the Current Period primarily resulted from OEM cost recoveries in the Comparable Period that did not recur in the Current Period and an increase in cash flow used in working capital changes. Changes in non-cash working capital usedgenerated $37.95.4 million and used $18.241.5 million in cash flows from operating activities for the Current PeriodQuarter and Comparable Period,Quarter, respectively. Cash flowsThe decrease in changes in non-cash working capital used from operations for the Comparable Period includes $30.5 million relatedQuarter to OEM cost recoveries of which $20.1 million is included in cash flows from operations beforenon-cash working capital changesgenerated in the Current Quarter is primarily due to the Chapter 11 Cases in the Current Quarter resulting in lower payments for interest, leases and $10.4 million is included in working capital changes.other miscellaneous accrued liabilities pending emergence from Chapter 11.

Investing Activities
Cash flows used in investing activities were $24.627.1 million and $1.1 million during the Current PeriodQuarter and cash flows provided by investing activities were $106.6 million during the Comparable Period.Quarter, respectively. Cash was used primarily for capital expenditures as follows:
 
  Nine Months Ended 
 December 31,		 
  2018 2017 
 Number of aircraft delivered:    
 Medium1
 5
 
 Total aircraft1
 5
 
 Capital expenditures (in thousands):    
 Aircraft and equipment$28,570
 $26,800
 
 Land and building5,141
 9,641
 
 Total capital expenditures$33,711
 $36,441
 
  Three Months Ended
 June 30,		 
  2019 2018 
 Capital expenditures (in thousands):    
 Aircraft and equipment$6,688
 $8,337
 
 Land and building751
 558
 
 Total capital expenditures$7,439
 $8,895
 
During the Current Period,Quarter, we received proceeds of $9.1$3.2 million primarily from the sale or disposal of two aircraft and certain other equipment. During the Comparable Quarter, we received $7.8 million in proceeds from the sale or disposal of three aircraft and certain other equipment. DuringIn the Current Quarter, we transferred, net of cash received, $22.9 million as part of the sales of Eastern Airways, BHLL and Aviashelf. We did not make any progress payments for aircraft or take delivery of any aircraft during the Current Quarter or Comparable Period, we received $48.5 million in proceeds from the sale or disposal of 11 aircraft and certain other equipment.Quarter.
Financing Activities
Cash flows provided by financing activities was $59.7 million during the Current Quarter and cash flows used in financing activities was $50.6 million and $85.8$14.9 million during the Current Period and Comparable Period,Quarter, respectively. During the Current Period,Quarter, we received $75.6 million in proceeds primarily for the Term Loan Agreement, used $10.0 million for debt issuance costs and used $5.8 million for debt repayments. During the Comparable Quarter, we used cash to make principal payments on our debt of $49.1$14.2 million. During the Comparable Period, we received $174.8 million from borrowings on our $400 million revolving credit facility (the “Revolving Credit Facility”), $230 million from borrowings on our term loan credit agreement with PK AirFinance S.à.r.l., as agent, and PK Transportation Finance Ireland Limited, as lender, and $143.8 million from the issuance of our 4½% Convertible Senior Notes. During the Comparable Period, we used cash to repay debt of $609.7 million (including $313.9 million related to our Revolving Credit Facility and $295.8 million related to other principal payments on debt) and pay dividends of $2.5 million on our common stock. Additionally, during the Comparable Period, we paid $40.4 million for the purchase of the 4½% Convertible Senior Notes call option, and simultaneously received $30.3 million for the issuance of warrants.

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 or are recognized as liabilities but are discounted to present value for accounting purposes 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. These minimum lease payments are recorded at present value in accordance with applicable lease accounting guidance.

The following table summarizes our significant contractual obligations and other commercial commitments on an undiscounted basis as of December 31, 2018June 30, 2019 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 December 31, 2018June 30, 2019 based on the contractual terms and has not been amended to classifyreclassify substantially all of our long-term debt as current for any possible accelerations as discussed in Note 45 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report and does not reflect the impact of Chapter 11 Cases and the resulting acceleration of substantially all of our long-term debt.Report. Additional details regarding these obligations are provided in Notes 4, 5, 78 and 910 in the “Notes to Consolidated Financial Statements” included in the fiscal year 20182019 Annual Report and in Notes 5, 6, 8 and 109 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 Payments Due by Period Payments Due by Period
   Three Months Ending March 31, 2019 Fiscal Year Ending March 31,   Nine Months Ending March 31, 2020 Fiscal Year Ending March 31,
 Total 
2020—
2021
 
2022—
2023
 
2024 and
beyond
 Total 
2021—
2022
 
2023—
2024
 
2025 and
beyond
                    
 (In thousands) (In thousands)
Contractual obligations:                    
Long-term debt and short-term borrowings:                    
Principal (1)
 $1,490,412
 $11,864
 $106,428
 $969,880
 $402,240
 $1,547,798
 $46,309
 $234,658
 $1,266,812
 $19
Interest (2)
 390,309
 24,334
 190,208
 166,586
 9,181
 361,019
 77,477
 197,004
 86,538
 —
Aircraft operating leases (3)
 260,938
 36,399
 174,063
 45,800
 4,676
 144,928
 71,103
 66,141
 7,684
 —
Other operating leases (4)
 65,400
 2,190
 16,333
 15,583
 31,294
 74,452
 9,550
 20,223
 16,931
 27,748
Pension obligations (5)
 41,393
 3,668
 32,376
 5,349
 —
 33,473
 12,277
 21,196
 —
 —
Aircraft purchase obligations (6)(7)
 432,995
 2,197
 159,202
 163,139
 108,457
 450,337
 63,543
 71,349
 165,516
 149,929
Other purchase obligations (8)
 52,019
 52,019
 —
 —
 —
 25,562
 25,562
 —
 —
 —
Total contractual cash obligations $2,733,466
 $132,671
 $678,610
 $1,366,337
 $555,848
 $2,637,569
 $305,821
 $610,571
 $1,543,481
 $177,696
Other commercial commitments:                    
Letters of credit $16,160
 $10,081
 $6,079
 $—
 $—
 $14,676
 $14,676
 $—
 $—
 $—
Total commercial commitments $16,160
 $10,081
 $6,079
 $—
 $—
 $14,676
 $14,676
 $—
 $—
 $—
_____________
(1) 
Excludes unamortized discount of $35.0$2.4 million and unamortized debt issuance costs of $23.3$22.9 million.
(2) 
Interest payments for variable interest debt are based on interest rates as of December 31, 2018.June 30, 2019.
(3) 
Represents separate operating leases for aircraft.
(4) 
Represents minimum rental payments required under non-aircraft operating leases that have initial or remaining non-cancelable lease terms in excess of one year.
(5) 
Represents expected funding for defined benefit pension plans in future periods. These amounts are undiscounted and are based on the expectation that the U.K. pension plan will be fully funded in approximately five years. As of December 31, 2018,June 30, 2019, we had recorded on our balance sheet a $28.0$22.5 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 $91.1 million for five aircraft orders that can be cancelled prior to delivery dates. As of December 31, 2018, we have made non-refundable deposits of $4.5 million related to these aircraft.
(7)
On May 1,July 25, 2019, we entered into an amendment to our agreement with Airbus Helicopters for the purchase of 22 H175 helicopters which includes five aircraft that can be cancelled by us prior to the delivery dates.four AW189 U.K. SAR configuration helicopters. Pursuant to the amendment, the parties mutually agreed to postpone the delivery dates for such helicopters for 18 months from the previous schedule with the first three helicopters now scheduled for delivery in the second half of fiscal year 2022.2020 and first quarter of fiscal year 2021. The postponement in deliveries resulted in various amendments to the payment terms under the purchase agreement including the deferral of approximately $110.0$15.0 million in capital expenditures scheduled for fiscal years 2019 to 2023year 2020 into fiscal years 2024 and beyond. In connection with this amendment, the overall purchase price of these helicopters has been increased by $18.4 million to account for inflation.year 2021. The impact of this amendment is not included in the table above. We have taken delivery and made final payments for two of the aircraft in August and October 2019.
(7)
On October 3, 2019, the Bankruptcy Court entered an order approving an agreement with Airbus Helicopters S.A.S. to reject our aircraft purchase contract for the 22 H175 helicopters totaling $390.3 million. The impact of this agreement is not included in the table above.
(8) 
Other purchase obligations primarily represent unfilled purchase orders for aircraft parts 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 20182019 Annual Report.
Subject to certain exceptions, under the Bankruptcy Code, we may assume, assign or reject certain executory contracts and unexpired leases, subject to the approval of the Bankruptcy Court and satisfaction of certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves us of performing our future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed

breach. Generally, the assumption of an executory contract or unexpired lease will require us to cure existing monetary and non-monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease in this Quarterly Report, including where applicable a quantification of the obligations under any such executory contract or unexpired lease, is qualified by any overriding assumption or rejection rights we have under the Bankruptcy Code. Further, nothing herein is or shall be deemed to be an admission with respect to any claim amounts or calculations arising from the rejection of any executory contract or unexpired lease and we expressly reserve all our rights with respect thereto.
As of the date of this Quarterly Report, we have filed motions to reject certain leases and we continue to evaluate if we will seek to assume or reject additional leases or purchase contracts in connection with the Chapter 11 Cases. Any decision to assume or reject any leases or purchase contracts will be made by our management in consideration of then-existing economic, market and legal conditions and other relevant considerations, subject to the Bankruptcy Court and potentially other approvals.
Capital Commitments and Other Uses of Cash
We have commitments and options to make capital expenditures over the next seven fiscal yearsyear 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 EBITDA margin. See Note 8 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 fiscal years by aircraft size along with the related expenditures.

As discussed under “— Executive Overview — Our Strategy”, cash may also be used in future periods to repurchase or otherwise retire debt 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 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, adequacy of bank lines of credit and our ability to attract capital on satisfactory terms.
As of December 31, 2018,June 30, 2019, approximately 34%62% 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., and any such repatriation could be subject to additional foreign taxes. As a result of the Tax Cuts and Jobs Act, we have provided for U.S. federal income taxes on undistributed foreign earnings. If cash held by non-U.S. operations is required for funding operations in the U.S., we may make a provision for additional tax in connection with repatriating this cash, which is not expected to have a significant impact on our results of operations.
The Company’s liquidity outlook has recently changed resultingchanged. Given the continuing challenges in substantial doubt aboutthe offshore oil and gas industry and other matters impacting liquidity, the rate at which the Company’s abilitycash position was declining began to continue as a going concern.increase. It became necessary for the Company to evaluate all our strategic alternatives. On May 11, 2019, the Debtors filed Chapter 11 Cases in the Bankruptcy Court seeking relief under the Bankruptcy Code. The Debtors’ Chapter 11 Cases arewere jointly administered under the caption In re: Bristow Group Inc., et al., Main Case No. 19-32713. The Debtors continuecontinued to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The significant risks and uncertainties related to the Chapter 11 Cases raised substantial doubt about the Company’s ability to continue as a going concern. In addition, each of the commencement of the Chapter 11 Cases and the delivery of the Amended 10-K with a going concern qualification or explanation constituted an event of default under certain of our secured equipment financings, giving those secured equipment lenders the right to accelerate repayment of the applicable debt, subject to Chapter 11 protections, and triggering cross-default and/or cross-acceleration provisions in substantially all of our other debt instruments should that right to accelerate repayment be exercised.
As a result of the facts and circumstances discussed above, the Company has classified substantially all debt balances of approximately $1.4 billion$892.1 million as of December 31, 2018June 30, 2019 as short-term borrowings and current maturities of long-term debt on our condensed consolidated balance sheet.sheet, except for amounts included in liabilities subject to compromise as of June 30, 2019.
On May 10, 2019, we entered into the Initial RSA with (i) Supporting Secured Noteholders and (ii) the guarantorscertain holders of the 8.75% Senior Secured Notes and (ii) the Secured Guarantors, to support the Restructuring. On July 24, 2019, we entered into the Second Amended RSA, which amended and restated the Initial RSA, with the Supporting Secured Noteholders, the Secured Guarantors and the Supporting Unsecured Noteholders. The Second Amended RSA contemplated implementation of the Restructuring on the amended terms set forth in the Restructuring Term Sheet. The RSA contemplates the filing of theSheet pursuant to a Chapter 11 Cases to implement the Restructuring pursuant to the Planplan of reorganization and the various related transactions set forth in or contemplated by the Restructuring Term Sheet, the term sheet for the DIP Term SheetCredit Agreement and the other restructuring documents attached to the RSA.
The RSA contains certain covenants on the part of each of the Company and the Supporting Secured Noteholders, including limitations on the Supporting Secured Noteholders’ ability to pursue alternative transactions, commitments by the Supporting Secured Noteholders to vote in favor of the Plan and commitments of the Company and the Supporting Secured Noteholders to

negotiate in good faith to finalize the documents and agreements governing the Plan. The RSA also provides for certain conditions to the obligations of the parties and for termination upon the occurrence of certain events, including without limitation, the failure to achieve certain milestones and certain breaches by the parties under theSecond Amended RSA.
On May 10, 2019, we entered into the Term Loan Agreement for the $75 million 2019 Term Loan. Immediately upon entering into the Term Loan Agreement, and prior to the Petition Date, the Company and BHC III borrowed the full amount thereunder, the net proceeds of which may be used only in compliance with a cash flow forecast required pursuant to the terms of the Term Loan Agreement, which the Company expects will bewere used for general corporate purposes, including to fund the working capital and liquidity requirements of the Company during the pendency of the Chapter 11 Cases. For further details, see “— Recent Events — Term Loan Agreement” above.
On February 11, 2019,Pursuant to our Amended Plan, we announced that Bristowreceived $385.0 million in cash on the Effective Date of which $270.9 million was used to payoff principal and Columbia have mutually agreed to terminateinterest on our agreement to acquire Columbia. In connection with the termination, we paid $20 million to Columbia in February 2019. Bristow, Columbia and Columbia’s shareholders have agreed to release each other from all claims in connection with the purchase agreement and the related transactions. For further details, see Note 2 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.8.75% Senior Secured Notes.
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 20182019 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 20182019 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 20182019 Annual Report and Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Item 4.    Controls and Procedures.
Material Weakness Previously Disclosed
As disclosed in an amendment (the “Amendment”) to our Annual Report on Form 10-K for the year ended March 31, 2018 (the “2018 Form 10-K” or “Amended 10-K”), we identified a material weakness in our internal controls over financial reporting for monitoring of compliance with non-financial covenants within certain secured financing and lease agreements in connection with the evaluation and procedures carried out in connection with this Quarterly Report on Form 10-Q for the quarter ended December 31, 2018.  As a result of commencing Chapter 11 Cases and updating our going concern assessment and the delivery of the Amended 10-K with such a going concern qualification or explanation, an event of default will exist under certain secured equipment financings and trigger cross-default and cross-acceleration provisions in substantially all of our debt instruments. As a result, we reclassified $1.4 billion as of March 31, 2018 from long-term to short-term on our consolidated balance sheets.
In light of this material weakness, in preparing our condensed consolidated financial statements as of and for the quarter ended December 31, 2018, we performed additional procedures including a comprehensive review of our compliance with our various debt and lease agreements designed to ensure that our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2018, have been prepared in accordance with generally accepted accounting principles.
Remediation Plan
Although certain procedures have been undertaken as a result of the material weakness, to assess compliance with non-financial covenants of certain of our secured equipment financing and lease agreements to remediate the material weakness, we will continue the implementation of our remediation plan by establishing a debt and lease compliance program with the specific objective of creating a sustainable and executable compliance process that can be repeated on a recurring basis to ensure timely monitoring of compliance with covenants and provisions. We intend to implement such compliance program by executing the following:
Development of a more complete reporting process to ensure information gathered or created by our separate control processes throughout the business are reported to the appropriate level of management with the responsibility for reporting on debt and lease agreement compliance.
Implementation of new or redesigned processes, where necessary, for compliance with collateral maintenance requirements under our debt and lease agreements, specifically, tracking the movement of collateral throughout our operations.
Establishment of procedures for reassessment of our debt and lease compliance program to ensure timely actions are taken when necessary.
We anticipate the actions to be taken, and resulting process improvements, will generally strengthen our internal controls over financial reporting, as well as our disclosure controls and procedures, and over time, will address the material weakness. The material weakness will be considered remediated once these controls have operated for a sufficient period of time for management to conclude, through testing, that these controls are operating effectively.
Evaluation of Disclosure Controls and ProceduresEVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
At the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision of and with the participation of our management, including L. Don Miller, our Chief Executive Officer (“CEO”), and Brian J. Allman, our Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange(the “Exchange Act”)). Based upon that evaluation and the evaluation of the previously identifiedresulting material weakness in our internal controls over financial reporting for monitoring of

compliance with non-financial covenants within certain secured financing and lease agreements disclosed in the Amendment,weaknesses described below, our CEO and CFO have concluded our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were not effective to provide reasonable assurance that the information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission’s rules and forms and that information relating to us (including our consolidated subsidiaries) required to be disclosed is accumulated and communicated to management, including the CEO and CFO, to allow timely decisions regarding required disclosure.
ChangesMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Exchange Act Rules13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. A company’s internal control over financial reporting includes those policies and procedures that:
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
Our management, including our CEO and CFO, with the oversight of our Board of Directors, evaluated the effectiveness of the design and operation of our internal control over financial reporting as of June 30, 2019 based on criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 in Internal Control Over Financial Reporting— Integrated Framework. Based on this evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of June 30, 2019 due to the material weaknesses described below.
Control Environment. We did not maintain an effective control environment as we had an insufficient complement of resources with an appropriate level of knowledge, expertise and skills commensurate with our financial reporting requirements in certain areas. The material weakness contributed to additional control deficiencies, as we did not maintain effective internal controls over monitoring of debt covenant compliance as described below and certain areas of asset impairment testing including the review of certain key assumptions and asset grouping determinations, none of which resulted in a misstatement of the financial statements. In addition, we determined the insufficient complement of resources, resulted in an additional material weakness within

our Risk Assessment process as described further below. This deficiency was originally disclosed in the Annual Report on Form 10-K for the year ended March 31, 2019 (the “fiscal year 2019 Annual Report”) and continues as of June 30, 2019.
Risk Assessment. We concluded, as a result of the control environment deficiency above, there exists a material weakness within our risk assessment process, specifically, the process to identify the potential for management override of controls at locations not operating on our centralized enterprise resource planning (“ERP”) system and the process to identify and assess changes that could significantly impact our system of internal control, specifically, changes within our capital structure which resulted in more onerous non-financial debt covenants. This material weakness contributed to additional control deficiencies, as the Company did not maintain effective internal controls over (i) debt covenant compliance monitoring as described above, (ii) verification of the review of journal entries are performed by individuals separate from the preparer as described further below in certain locations, and (iii) the reassessment of accounting for certain elements of our accounting for investments in unconsolidated affiliates which resulted in immaterial adjustments to certain historical balances as described elsewhere herein. This deficiency was originally disclosed in the fiscal year 2019 Annual Report and continues as of June 30, 2019.
Debt Covenant Compliance. We identified a material weakness in our internal controls over financial reporting for monitoring of compliance with non-financial covenants within certain secured financing and lease agreements. This deficiency was originally disclosed in the amendment to the Annual Report on Form 10-K for the year ended March 31, 2018 (the “Amended 10-K”) and continues as of June 30, 2019.
Journal Entries. The Company failed to design and maintain effective controls over the review, approval, and documentation of manual journal entries at two of our subsidiaries, Airnorth and Eastern Airways, which are not operating on our centralized ERP system. There were ineffective internal controls over the review of journal entries at these locations by individuals separate from the preparer. Management concluded this represented a material weakness in our internal controls over financial reporting. This deficiency was originally disclosed in the fiscal year 2019 Annual Report and continues as of June 30, 2019.
REMEDIATION PLAN FOR MATERIAL WEAKNESSES
We are continuing to evaluate the material weaknesses and develop a plan of remediation to strengthen our internal controls related to our control environment and risk assessment components of internal control over financial reporting and related deficiencies described herein.
Control Environment. In response to the material weakness described above, we are evaluating certain organizational enhancements, including: (i) augmenting our treasury and legal teams with additional internal or external professionals with the appropriate levels of knowledge, expertise, and skills in the area of non-financial debt covenant compliance monitoring, (ii) augmenting our financial planning and analysis team with additional internal or external professionals with the appropriate level of knowledge, expertise and skills to enhance the level of precision at which our internal controls over financial reporting related to asset impairment assessments are performed and (iii) augmenting our technical accounting team with additional internal or external professionals with the appropriate levels of knowledge, expertise and skills to assist in the evaluation of asset impairment assessments. In order to consider this material weakness remediated, we believe additional time is needed to evaluate and implement the organizational enhancements and demonstrate sustainability as it relates to the revised controls.
Risk Assessment. In response to the material weakness described above, we are enhancing our risk assessment process to better identify, evaluate and monitor changes that could significantly impact our system of internal control. These enhancements are expected to include the formation of a formal Enterprise Risk Assessment Committee responsible for defining and continually evaluating our enterprise risk assessment objectives, overseeing the Company’s enterprise risk assessment process and ensuring the Company responds appropriately to identified risks through the selection and development of control activities responsive to the identified risks. In order to consider this material weakness remediated, we believe additional time is needed to finalize and implement the enhanced procedures and demonstrate sustainability as it relates to the revised controls.
Debt Compliance. In response to the material weakness described above, we will continue the implementation of our remediation plan originally described in the Amended 10-K, by establishing a debt and lease compliance program with the specific objective of creating a sustainable and executable compliance process that can be repeated on a recurring basis to ensure timely monitoring of compliance with covenants and provisions. We intend to implement such compliance program by executing the following:
Development of a more complete reporting process to ensure information gathered or created by our separate control processes throughout the business are reported to the appropriate level of management with the responsibility for reporting on debt and lease agreement compliance. We are currently evaluating the use of third-party compliance services providers to assist with the development of our reporting process.

Implementation of new or redesigned processes, where necessary, for compliance with collateral maintenance requirements under our debt and lease agreements, specifically, tracking the movement of collateral throughout our operations.
Establishment of procedures for reassessment of our debt and lease compliance program in response to changes in operations or agreements, to ensure timely actions are taken when risks change.
Evaluation of the current process and expected changes to ensure a sufficient complement of resources with an appropriate level of knowledge, expertise and skills commensurate with our non-financial debt covenant compliance monitoring requirements. We expect the changes to necessitate the need to augment certain of our teams with additional internal or external professionals with the appropriate levels of knowledge, expertise, and skills in the area of non-financial debt covenant compliance monitoring.
We anticipate the actions to be taken will address the material weakness. In order to consider this material weakness remediated, we believe additional time is needed to finalize and implement the enhanced procedures and demonstrate sustainability as it relates to the revised controls.
Journal Entries. In response to the material weakness described above, we are developing enhanced procedures to be implemented at Airnorth to ensure that manual journal entries recorded in our financial records are properly reviewed and approved preventing the potential for management override of controls. In order to consider this material weakness remediated, we believe additional time is needed to finalize and implement the enhanced procedures and demonstrate sustainability as it relates to the revised controls. We expect this control to be remediated by March 31, 2020. Eastern Airways was sold May 10, 2019 and as such, there is no remediation planned for that location.
CHANGES IN INTERNAL CONTROL OVER FINACIAL REPORTING
Other than the changes resulting from the debt and lease compliance remediation activitiesmaterial weaknesses described above, our management, including the CEO and CFO, identified no change in our internal control over financial reporting that occurred during our fiscalthe quarter ended December 31, 2018,June 30, 2019, that has materially affected, or is 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 20182019 Annual Report, other than the item discussed below.Report. Developments in these previously reported matters, if any, are described in Note 8 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Sikorsky Lawsuit
On January 8, 2019, Bristow filed suit in the District Court of Harris County, Texas against Sikorsky Aircraft Corporation (“Sikorsky”) for breach of contract, unjust enrichment and conversion as a result of Sikorsky terminating a sales agreement after we sought to delay delivery of a helicopter and retaining our $11.7 million deposit as liquidated damages. We are seeking a ruling that Sikorsky be required to return the deposit and provide an accurate calculation of its damages under the sales agreement. Sikorsky has challenged venue, and discovery related thereto is underway. With the advice of counsel, we are evaluating the feasibility of transferring the matter to the Bankruptcy Court for disposition.
Huntington Lawsuit
The Huntington National Bank (“Huntington”) filed suit against the Company and Bristow U.S. LLC in the U.S. District Court for the Southern District of New York (the “Southern District of New York Court”). Huntington alleges violation of an addendum of a lease agreement for failure to arrange for the enrollment of the aircraft engines in a maintenance agreement and seeks approximately $2.5 million in damages. We submitted a counterclaim for approximately $100,000 of costs related to storage, maintenance and insurance of the aircraft following the expiration of the lease. On March 1, 2019, the Southern District of New York Court denied Huntington’s motion for summary judgment. We initiated discovery; however, on May 16, 2019, the proceedings were stayed as a result of the Chapter 11 Cases.
Federal Securities Class Action
Two purported class action complaints, Kokareva v. Bristow Group Inc., Case No. 4:19-cv-0509 and Lilienfield v. Bristow Group Inc., Case No. 4:19-cv-1064, were filed in the U.S. District Court for the Southern District of Texas (the “Southern District of Texas Court”) on February 14, 2019 and March 21, 2019, respectively. The complaints, which also name Jonathan E. Baliff and L. Don Miller as defendants, allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 arising out of the Company’s disclosures and alleged failure to make timely disclosure of inadequate monitoring control processes related to non-financial covenants within certain of its secured financing and lease agreements.  On May 17, 2019, the Southern District of Texas Court appointed BRS Investor Group as Lead Plaintiff and consolidated both actions under Kokareva v. Bristow Group Inc., Case No. 4:19-cv-0509. 
When the Company filed the Chapter 11 Cases on May 11, 2019, the litigation against the Company was automatically stayed.  The case was not automatically stayed against the individual defendants, but the Company intends to request that the stay also extend to the individual defendants.  On May 31, 2019, the Lead Plaintiff requested that the Southern District of Texas Court schedule an initial conference, and the defendants requested that any conference be postponed until after the Bankruptcy Court decides whether the stay should extend to the individual defendants.  The Southern District of Texas Court has not yet set a date for an initial conference.  The defendants believe that the claims are without merit and intend to vigorously defend against them.
Stockholder Derivative Complaint
On June 7, 2019, Marilyn DeVault filed a Stockholder Derivative Complaint against Thomas N. Amonett, Gaurdie Banister Jr., Ian A. Godden, Lori A. Gobillot, A. William Higgins, Thomas C. Knudson, Biggs C. Porter, Jonathan E. Baliff, Stephen A. King, Matthew Masters, David C. Gompert, Bruce H. Stover, L. Don Miller, and Brian J. Allman (the “Derivative Defendants”) in the United States District Court for the District of Delaware. The complaint alleges breaches of fiduciary duties and violations of Section 10(b) of the Securities Exchange Act of 1934 arising out of Company disclosures and failing to have adequate monitoring control processes related to non-financial covenants within certain of our secured financing and lease agreements. The complaint also alleges waste of corporate assets, gross mismanagement, and unjust enrichment.  The Derivative Defendants believe that the claims are without merit and intend to vigorously defend against them.



Item 1A. Risk Factors.
There have been no material changes during the three and nine months ended December 31, 2018June 30, 2019 in our “Risk Factors” as discussed in the fiscal year 20182019 Annual Report, originally filed with the SEC on May 23, 2018, or in our Quarterly Report on Form 10-Q for the three months ended September 30, 2018, originally filed with the SEC on November 9, 2018, other than the following:
Risks Related to Our Chapter 11 Cases
On May 11, 2019, Bristow and certain of its subsidiaries filed voluntary petitions commencing the Chapter 11 Cases under the Bankruptcy Code. The Chapter 11 Cases and the Restructuring may have a material adverse impact on our business, financial condition, results of operations, and cash flows. In addition, the Chapter 11 Cases and the Restructuring may have a material adverse impact on the trading price and may result in the cancellation and discharge of our securities, including our common stock. If approved by the Bankruptcy Court, the Plan will govern distributions to and the recoveries of holders of our securities. 
As previously disclosed in our Current Report on Form 8-K filed with the SEC on April 15, 2019, we engaged financial and legal advisors to assist us in, among other things, analyzing various strategic financial alternatives to address our liquidity and capital structure, including strategic financial alternatives to restructure our indebtedness. These efforts led to the execution of the RSA on May 10, 2019 and the commencement of the Chapter 11 Cases in the Bankruptcy Court on May 11, 2019.  
The Chapter 11 Cases could have a material adverse effect on our business, financial condition, results of operations and liquidity. So long as the Chapter 11 Cases continue, our management may be required to spend a significant amount of time and effort dealing with the restructuring instead of focusing on our business operations. Bankruptcy Court protection and operating as debtors in possession also may make it more difficult to retain management and the key personnel necessary to the success and growth of our business. In addition, during the pendency of the Chapter 11 Cases, our customers and suppliers might lose confidence in our ability to reorganize our business successfully and may seek to establish alternative commercial relationships, which may cause, among other things, our suppliers, vendors, counterparties and service providers to renegotiate the terms of our agreements, attempt to terminate their relationship with us or require financial assurances from us. Although we remain committed to providing safe, reliable operations and we believe that we have sufficient resources to do so, customers may lose confidence in our ability to provide them the level of service they expect, resulting in a significant decline in our revenues, profitability and cash flow.
Other significant risks include or relate to the following:
our ability to obtain the Bankruptcy Court’s approval with respect to motions or other requests made to the Bankruptcy Court in the Chapter 11 Cases, including maintaining strategic control as debtor-in-possession;
our ability to consummate a Chapter 11 plan and emerge from bankruptcy protection;
the effects of the filing of the Chapter 11 Cases on our business and the interest of various constituents, including our stockholders;
increased advisory costs to execute our reorganization;
our ability to maintain relationships with suppliers, customers, employees and other third parties as a result of the Chapter 11 Cases;
Bankruptcy Court rulings in the Chapter 11 Cases as well as the outcome of other pending litigation and the outcome of the Chapter 11 Cases in general;
the length of time that we will operate with Chapter 11 protection and the continued availability of operating capital during the pendency of the proceedings;
third-party motions in the Chapter 11 Cases, which may interfere with our ability to consummate a Chapter 11 plan; and
the potential adverse effects of the Chapter 11 Cases on our liquidity and results of operations.
Further, under Chapter 11, transactions outside the ordinary course of business are subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond in a timely manner to certain events or take advantage of certain opportunities or to adapt to changing market or industry conditions.


Because of the risks and uncertainties associated with the Chapter 11 Cases, we cannot predict or quantify the ultimate impact that events occurring during the Chapter 11 Cases may have on our business, cash flows, liquidity, financial condition and results of operations, nor can we predict the ultimate impact that events occurring during the Chapter 11 Cases may have on our corporate or capital structure. 
Delays in the Chapter 11 Cases may increase the risks of our being unable to reorganize our business and emerge from bankruptcy and increase our costs associated with the bankruptcy process.
The RSA contemplates the filing and confirmation of a Chapter 11 plan that implements the Restructuring (the “Plan”); however, certain terms of the Plan have not yet been specified and there can be no assurance that the Plan will be accepted by stakeholders that are entitled to vote or approved by the Bankruptcy Court, or that the Plan will become effective in accordance with its terms. Prolonged Chapter 11 proceedings could adversely affect our relationships with customers, suppliers and employees, among other parties, which in turn could adversely affect our business, competitive position, financial condition, liquidity and results of operations and our ability to continue as a going concern. A weakening of our financial condition, liquidity and results of operations could adversely affect our ability to implement the Plan (or any other Chapter 11 plan). If we are unable to consummate the Plan, we may be forced to liquidate our assets.
Trading in our common stock during the pendency of our Chapter 11 Cases is highly speculative and poses substantial risks.
All of our indebtedness is senior to the existing common stock in our capital structure. The treatment of holders of our existing common stock under the transactions contemplated by the RSA has not been determined; however, our common stock is likely to be cancelled under the Plan or otherwise in connection with the Chapter 11 Cases. Trading prices for our common stock may bear little or no relationship to the actual recovery, if any, by holders of our common stock in the Chapter 11 Cases. Accordingly, any trading in our common stock during the pendency of our Chapter 11 Cases is highly speculative and poses substantial risks to purchasers of our common stock.
The RSA is subject to significant conditions and milestones that may be difficult for us to satisfy. 
There are certain material conditions we must satisfy under the RSA, including the timely satisfaction of milestones in the Chapter 11 Cases, which include the consummation of the Plan. Our ability to timely complete such milestones is subject to risks and uncertainties, many of which are beyond our control.
We may not be able to obtain confirmation of the Plan.
In order to emerge successfully from the Chapter 11 Cases as a reorganized entity, we must meet certain statutory disclosure requirements with respect to adequacy of disclosure with respect to the Plan, solicit and obtain the requisite acceptances of the Plan and fulfill other statutory conditions for confirmation of the Plan, most of which have not occurred to date. The confirmation process is subject to numerous, unanticipated potential delays, including a delay in the Bankruptcy Court’s commencement of the confirmation hearing regarding the Plan. There is no assurance that the Plan, when filed, or any subsequent amendments thereto, will be confirmed and become effective.
If the Plan is not confirmed by the Bankruptcy Court, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims and equity interests against us would ultimately receive with respect thereto.
Even if a Chapter 11 plan of reorganization is consummated, we may not be able to achieve our stated goals and there is substantial doubt regarding our ability to continue as a going concern. 
Even if the Plan or any other Chapter 11 plan of reorganization is consummated, we may continue to face a number of risks, such as changes in economic conditions, changes in our industry, changes in demand for our services and increasing expenses. Some of these risks become more acute when a case under the Bankruptcy Code continues for a protracted period without indication of how or when the case may be completed. As a result of these risks and others, we cannot guarantee that any Chapter 11 plan of reorganization will achieve our stated goals. 
Furthermore, even if our debts are reduced or discharged through a plan of reorganization, we may need to raise additional funds through public or private debt or equity financing or other various means to fund our business after the completion of the Chapter 11 Cases. Our access to additional financing may be limited, if it is available at all. Therefore, adequate funds may not be available when needed or may not be available on favorable terms, or at all. 
As a result of the Chapter 11 Cases, even with certain creditor support for the restructuring under the RSA, there is substantial doubt regarding our ability to continue as a going concern. As a result, we cannot assure you of our ability to continue as a going concern. 

Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time.
We face uncertainty regarding the adequacy of our liquidity and capital resources and have extremely limited, if any, access to additional financing. In addition to the cash requirements necessary to fund ongoing operations, we have incurred significant professional fees and other costs in connection with preparation for the Chapter 11 Cases and expect that we will continue to incur significant professional fees and costs throughout our Chapter 11 Cases. We cannot assure you that cash on hand and cash flow from operations will be sufficient to continue to fund our operations and allow us to satisfy our obligations related to the Chapter 11 Cases until we are able to emerge from our Chapter 11 Cases. Although we entered into the Term Loan Agreement prior to our Chapter 11 Cases and have received commitments for a $75.0 million DIP Facility in connection with the Chapter 11 Cases and the RSA contemplates $200 million of new equity financing through the Rights Offering, we cannot assure you that such financing sources will be sufficient, that the DIP Facility will be approved by the Bankruptcy Court, that we will be able to secure additional interim financing or adequate exit financing sufficient to meet our liquidity needs (or if sufficient funds are available, that they will be offered to us on acceptable terms) or that we will successfully complete the Rights Offering.
Our liquidity, including our ability to meet our ongoing operational obligations, is dependent upon, among other things: (i) our ability to comply with the terms and conditions of any order governing the use of cash collateral that may be entered by the Bankruptcy Court in connection with the Chapter 11 Cases, (ii) our ability to maintain adequate cash on hand, (iii) our ability to generate cash flow from operations, (iv) our ability to enter into and borrow under the DIP Facility, (v) our ability to develop, confirm and consummate the Plan or other alternative restructuring transaction, and (vi) the cost, duration and outcome of the Chapter 11 Cases.
In certain instances, a Chapter 11 case may be converted to a case under Chapter 7 of the Bankruptcy Code. 
Upon a showing of cause, the Bankruptcy Court may convert our Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our creditors than those provided for in the Plan because of (i) the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than in a controlled manner and as a going concern, (ii) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (iii) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of leases and other executory contracts in connection with a cessation of operations.
As a result of the Chapter 11 Cases, our historical financial information may not be indicative of our future performance, which may be volatile. 
During the Chapter 11 Cases, we expect our financial results to continue to be volatile as restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact our consolidated financial statements. As a result, our historical financial performance is likely not indicative of our financial performance after the date of the filing of the Chapter 11 Cases. In addition, if we emerge from Chapter 11, the amounts reported in subsequent consolidated financial statements may materially change relative to our historical consolidated financial statements. We also may be required to adopt fresh start accounting, in which case our assets and liabilities will be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on our consolidated balance sheets. Our financial results after the application of fresh start accounting may be different from historical trends.
We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our financial condition and results of operations. 
The Bankruptcy Court provides that the confirmation of a plan of reorganization discharges a debtor from, among other things, substantially all debts arising prior to consummation of a plan of reorganization. With few exceptions, all claims against the Debtors that arose prior to May 11, 2019 or before consummation of the Plan (i) would be subject to compromise and/or treatment under the Plan and/or (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the Plan. Subject to the terms of the Plan and orders of the Bankruptcy Court, any claims not ultimately discharged pursuant to the Plan could be asserted against the reorganized entities and may have an adverse effect on our financial condition and results of operations on a post-reorganization basis.

We may experience employee attrition as a result of the Chapter 11 Cases. 
As a result of the Chapter 11 Cases, we may experience employee attrition, and our employees may face considerable distraction and uncertainty. A loss of key personnel or material erosion of employee morale could adversely affect our business and results of operations. Our ability to engage, motivate and retain key employees or take other measures intended to motivate and incentivize key employees to remain with us through the pendency of the Chapter 11 Cases is limited by restrictions on implementation of incentive programs under the Bankruptcy Code. The loss of services of members of our senior management team could impair our ability to execute our strategy and implement operational initiatives, which would be likely to have a material adverse effect on our financial condition, liquidity and results of operations. 
Risks Related to Our Business
We have identified a material weakness in our internal control over financial reporting, which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, investor confidence in our company and the value of our common stock.
As described in Part I. Item 4. “Controls and Procedures” of this Quarterly Report, management has concluded that the Company did not have adequate monitoring control processes in place related to non-financial covenants within certain of its secured financing and lease agreements, and this control deficiency identified represents a “material weakness” in internal controls over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As a result of such material weakness, our management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective at a reasonable assurance level as of March 31, 2018 and the reporting periods thereafter.
The determination of the existence of a control deficiency related to these matters, which has been classified as a material weakness in our internal controls over financial reporting, and the need to assess possible non-compliance with all non-financial covenants commenced when our senior management became aware that certain pledged and leased helicopter engines were not matched to specific pledged or leased helicopter airframes or returned to such airframes within specified periods, as required under certain of the secured financing and helicopter lease agreements. The removal and replacement of engines and components from helicopters is part of our normal ongoing maintenance activities; however, since certain of those helicopter engines and airframes are pledged to lenders or leased from lessors, the removal of a pledged or leased engine from a pledged or leased airframe can create issues of non-compliance with certain of the secured financing and helicopter lease agreements. All issues related to this matter were cured prior to December 31, 2018 for all but nine helicopter engines (relating to three agreements) where the pledged or leased engines were not returned to the pledged or leased airframes within specified periods due to delays with certain of our maintenance service providers. We have obtained waivers of such non-compliance under the applicable agreements related to such helicopter engines. We are in the process of remediating this material weakness, but our remediation efforts are not yet complete. There can be no assurance as to when the remediation plan will be fully implemented or whether the remediation efforts will be successful.
Until our remediation plan is fully implemented, our management will continue to devote time and attention to these efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plans are inadequate, our future consolidated financial statements could contain errors that may be undetected. The existence of a material weakness in the effectiveness of our internal controls could also affect our ability to obtain financing or could increase the cost of any financing we obtain. The identification of the material weakness could also cause investors to lose confidence in the reliability of our financial statements and could result in a decrease in the value of our common stock.

The consolidated financial statements included in our Amended 10-K and in this Quarterly Report do, and the consolidated financial statements to be included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2019 will, contain disclosures that express substantial doubt about our ability to continue as a going concern, indicating the possibility that we may not be able to operate in the future.
The consolidated financial statements included in the Amended 10-K and in this Quarterly Report have been, and the consolidated financial statements to be included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2019 will be, prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and other commitments in the normal course of business and does not include any adjustments that might result from uncertainty about our ability to continue as a going concern. Such assumption may not be justified. Our liquidity has been negatively impacted by the prolonged downturn in the offshore oil and gas market, our levels of indebtedness, lease and aircraft purchase commitments and certain other commercial contracts. In addition, we have substantial interest payment obligations related to our debt and substantial lease and aircraft purchase commitments over the next twelve months. If we are unable to execute transactions to improve our financial condition, we do not believe we will have sufficient liquidity to conduct our business operations based on existing conditions and estimates during the next twelve months. If we become insolvent, investors in our common stock may lose the entire value of their investment in our business. The inclusion of disclosures that express substantial doubt about our ability to continue as a going concern may negatively impact the trading price of our common stock and have an adverse impact on our relationship with third parties with whom we do business, including our customers, vendors and employees, and could make it challenging and difficult for us to raise additional debt or equity financing to the extent needed, on attractive terms or at all, all of which could have a material adverse impact on our business, financial condition and results of operations.
Our common stock has been delisted from the New York Stock Exchange.
Our common stock was previously listed on the New York Stock Exchange (the “NYSE”) under the symbol “BRS.” As a result of our failure to satisfy the continued listing requirements of the NYSE, on May 13, 2019, our common stock was delisted from the NYSE. Since May 14, 2019, our common stock has been trading on the OTC Pink Marketplace maintained by the OTC Markets Group, Inc. under the symbol “BRSWQ.” We can provide no assurance that our common stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our common stock on this market, whether the trading volume of our common stock will be sufficient to provide for an efficient trading market or whether quotes for our common stock will continue on this market in the future. See “— Risks Related to Our Chapter 11 Cases — Trading in our common stock during the pendency of our Chapter 11 Cases is highly speculative and poses substantial risks.”
If certain transactions occur with respect to our capital stock, limitations may be imposed on our ability to utilize net operating loss carryforwards to reduce our income taxes.
Under federal income tax law, a corporation generally is permitted to carry forward net operating losses from prior tax years to offset taxable income, and correspondingly reduce federal income tax liability, in later tax years. We estimate having net operating loss carryforwards for federal income tax purposes of approximately $145.0 million as of March 31, 2019. Our ability to utilize our net operating loss carryforwards to offset future taxable income and reduce federal income tax liability is subject to certain requirements and restrictions. In particular, if we experience an “ownership change,” as defined in section 382 of the U.S. Internal Revenue Code, then our ability to use our net operating loss carryforwards may be substantially limited, which could have a negative impact on our financial position and results of operations. Generally, there is an “ownership change” if one or more shareholders owning 5% or more of a corporation’s common stock have aggregate increases in their ownership of such stock of more than 50% over a rolling three-year period. Thus, if certain transactions occur with respect to our capital stock (including issuances, redemptions, recapitalizations, exercises of options, conversions of convertible debt, purchases or sales by 5%-or-greater shareholders and similar transactions) that result in a cumulative change of more than 50% of the ownership of capital stock over the relevant three-year period, an annual limitation would be imposed with respect to the ability to utilize our net operating loss carryforwards that existed at the time of the ownership change.
Under section 382 of the U.S. Internal Revenue Code, absent an application exception (including any exception available for ownership changes occurring in connection with a bankruptcy reorganization), if a corporation undergoes an “ownership change,” the amount of its net operating losses existing as of the time of the ownership change that may be utilized to offset future taxable income generally will be subject to an annual limitation equal to the value of its stock immediately prior to the ownership change multiplied by the long-term tax-exempt rate (plus an additional amount calculated based on certain “built in gains” in our assets that may be deemed to be realized within a 5-year period following any ownership change). Because the value of our stock can be subject to significant fluctuations in value, it is possible an ownership change would materially limit our ability to utilize our substantial net operating loss carryforwards in the future. As such, there can be no assurance that we will be able to utilize our net operating loss carryforwards to offset future taxable income.

On May 14, 2019, in connection with our Chapter 11 Cases, the Bankruptcy Court entered an order approving certain notification and hearing procedures for transfers of, and declarations of worthlessness with respect to, beneficial ownership of common stock (the “Order”). The Order is designed to protect our net operating loss carryforwards from the effect of a premature ownership change under section 382 of the Internal Revenue Code, and to preserve our ability to rely on certain favorable rules that can apply to ownership changes occurring in connection with the implementation of a bankruptcy plan of reorganization. The Order requires “substantial shareholders” and “50-percent shareholders” (each as defined therein), and certain persons that might become a substantial shareholder or 50-percent shareholder, to provide notice before making certain transfers of beneficial ownership of common stock or declaring its beneficial ownership of stock worthless for U.S. federal income tax purposes, respectively. After receiving notice, we are permitted to object, whereupon such action remains ineffective pending final resolution. Any action taken in violation of such procedures is void ab initio.Report.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities
Not applicable.There were no unregistered sales of the Company’s equity securities during the three months ended June 30, 2019.
Item 3.    Defaults Upon Senior Securities
For details on defaults of senior securities, see Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Item 4.    Mine Safety Disclosures
Not applicable.
Item 5.    Other Information
None.


Item 6.    Exhibits
The following exhibits are filed as part of this Quarterly Report:
Exhibit
Number
 Description of Exhibit
   
2.1 
Stock Purchase Agreement,Amended Joint Chapter 11 Plan of Reorganization, dated as of November  9, 2018, by and among Bear Acquisition I, LLC, Bristow Group Inc. (solely for the limited purposes set forth therein), Columbia Helicopters, Inc., the Shareholders (as defined therein), and Nancy C. Lematta (solely in her capacity as the Shareholder Representative)September 30, 2019 (incorporated herein by reference to Exhibit 2.1 into the Company’s Form 8-K filed on NovemberOctober 9, 2018)2019).
   
2.23.1 
Termination Agreement, dated asAmended and Restated Certificate of February 11, 2019, by and amongIncorporation of Bristow Group Inc., Bear Acquisition I, LLC, Columbia Helicopters, Inc., the Shareholders (as defined therein) and Nancy C. Lematta (solely in her capacity as the Shareholder Representative) (incorporated herein by reference to Exhibit 10.13.1 to the Company’s Form 8-K filed on February 12,November 6, 2019).
3.2
Amended and Restated Bylaws of Bristow Group Inc. (incorporated herein by reference to Exhibit 3.2 to the Company’s Form 8-K filed on November 6, 2019).
3.3*
Certificate of Designations of 10.000% Series A Convertible Preferred Stock of Bristow Group Inc., dated October 31, 2019.
   
4.1 
FirstSeventh Supplemental Indenture, dated as of November 21, 2018, by and among Bristow Group Inc.,September 11, 2019, to the guarantors named therein and U.S. Bank National Association, as the trustee and collateral agent2008 Base Indenture (incorporated herein by reference to Exhibit 4.2 to4.10 for the Company’s Form 8-K10-K filed on November 23, 2018).
4.2*
Agreement of Resignation, Appointment and Acceptance, dated as of May 8, 2019, by and among Bristow Group Inc., Wilmington Trust, National Association, as successor trustee, and U.S. Bank National Association.
10.1
Stockholders Agreement, dated as of November 9, 2018, by and among Bristow Group Inc. and the stockholders that are party to such agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 9, 2018).
10.2
Commitment Letter, dated as of November 9, 2018, by and among Bristow Group Inc., Bear Acquisition I, LLC and Jefferies Finance LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on November 9, 2018).
10.3
Commitment Letter, dated as of November 9, 2018, by and among Bristow Group Inc. and certain private investors (incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed on November 9, 2018).
10.4
Form of Subscription Agreement, Form A (incorporated herein by reference to Exhibit 10.4 to the Company’s Form 8-K filed on November 9, 2018).
10.5
Form of Subscription Agreement, Form B (incorporated herein by reference to Exhibit 10.5 to the Company’s Form 8-K filed on November 9, 2018).
10.6
Amendment, dated as of November 7, 2018, to ABL Facilities Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 14, 2018).
10.7
Securities Purchase Agreement, dated as of November 27, 2018, by and between Bristow Group Inc. and the purchasers listed therein (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on NovemberOctober 28, 2018).
10.8†
First Amendment to the Bristow Group Inc. Deferred Compensation Plan, effective as of December 31, 2018 (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on December 26, 2018).
10.9
Retirement and Consulting Agreement, dated as of February 11, 2019, between Bristow Group Inc. and Jonathan E. Baliff (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on February 12, 2019).
   
10.10
Amendment to ABL Facilities Agreement, effective as of February 19, 2019 (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on February 19, 2019).
10.11
Waiver Letter, effective as of February 14, 2019, by and among Bristow Equipment Leasing Ltd., as borrower, Bristow Group Inc., as guarantor, and PK AirFinance S.à r.l., as agent and security trustee (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 18, 2019).
10.12
Limited Waiver, effective as of February 14, 2019, by and among Bristow U.S. LLC, as borrower, the lenders party thereto and Macquarie Bank Limited, as administrative agent (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on March 18, 2019).
10.13 
Restructuring Support Agreement, dated May 10, 2019, by and among Bristow Group Inc., certain subsidiaries of Bristow Group Inc. party thereto and the holders of the 8.75% Senior Secured Notes due 2023 party thereto (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on May 13, 2019).
   
10.1410.2 
Term Loan Credit Agreement, dated May 10, 2019, by and among Bristow Group Inc. and Bristow Holdings Company Ltd. III, as borrowers, certain subsidiary guarantors party thereto, the lenders from time to time party thereto, and Ankura Trust Company, LLC, as administrative agent (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on May 13, 2019).

Exhibit
Number
Description of Exhibit
   
10.1510.3 
Commitment Letter, dated May 10, 2019, by and among Bristow Group Inc., Bristow Holdings Company Ltd. III and the lenders party thereto (incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed on May 13, 2019).
   
10.4
Amendment No. 1 to Credit Agreement, dated June 6, 2019, by and among Bristow Group Inc. and Bristow Holdings Company Ltd. III, as borrowers, and the lenders from time to time party thereto (incorporated herein by reference to Exhibit 10.83 to the Company’s Form 10-K filed on October 28, 2019).
10.5
Amended and Restated Restructuring Support Agreement, dated June 27, 2019, by and among Bristow Group Inc., certain subsidiaries of Bristow Group Inc. party thereto and the holders of the 8.75% Senior Secured Notes due 2023, the 6.25% Senior Secured Notes due 2023, the 6.25% Senior Notes due 2022 and the 4.50% Convertible Senior Notes due 2023 party thereto (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 28, 2019).
10.6
Commitment Letter, dated June 27, 2019, by and among Bristow Group Inc., Bristow Holdings Company Ltd. III and the lenders party thereto incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on June 28, 2019).
10.7
First Amendment to Amended and Restated Restructuring Support Agreement, dated as of July 24, 2019, by and among Bristow Group Inc., certain subsidiaries of Bristow Group Inc. party thereto and the holders of the 8.75% Senior Secured Notes due 2023, the 6.25% Senior Notes due 2022 and the.4.50% Convertible Senior Notes due 2023 party thereto (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on July 26, 2019).
10.8
Backstop Commitment Agreement, dated as of July 24, 2019, among Bristow Group Inc. and the commitment parties party thereto (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on July 26, 2019).
10.9
Amendment No. 2 to Credit Agreement, dated August 22, 2019, by and among Bristow Group Inc. and Bristow Holdings Company Ltd. III, as borrowers, and Ankura Trust Company, LLC, as administrative agent (incorporated herein by reference to Exhibit 10.88 to the Company’s Form 10-K filed on October 28, 2019).
10.10†
Fiscal Year 2020 Performance Incentive Plan, dated August 22, 2019 (incorporated herein by reference to Exhibit 10.89 to the Company’s Form 10-K filed on October 28, 2019).
10.11†
Fiscal Year 2020 Non-Executive Incentive Plan, dated August 22, 2019 (incorporated herein by reference to Exhibit 10.90 to the Company’s Form 10-K filed on October 28, 2019).

10.12
Superpriority Secured Debtor-in-Possession Credit Agreement, dated as of August 26, 2019, among Bristow Group Inc., as lead borrower, Bristow Holdings Company Ltd. II, as co-borrower, the other debtors and guarantors party thereto, the financial institutions or other entities party thereto, and Ankura Trust Company, LLC, as administrative agent and collateral agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 28, 2019).
10.13
Amendment No. 3 to Credit Agreement, dated August 26, 2019, by and among Bristow Group Inc. and Bristow Holdings Company Ltd. III, as borrowers, the lenders from time to time party thereto, and Ankura Trust Company, LLC, as administrative agent (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on August 28, 2019).
10.14
Amendment No. 4 to Term Loan Credit Agreement, dated as of September 30, 2019, by and among Bristow Group Inc. and Bristow Holdings Company Ltd. III, as borrowers, the lenders from time to time party thereto, and Ankura Trust Company, LLC, as administrative agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 2, 2019).
10.15
Amendment No. 1 to Superpriority Secured Debtor-In-Possession Credit Agreement, dated as of September 30, 2019, by and among Bristow Group Inc. and Bristow Holdings Company Ltd. III, as borrowers, the lenders from time to time party thereto, and Ankura Trust Company, LLC, as administrative agent (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on October 2, 2019).
10.16
Limited Waiver and Amendment to Backstop Commitment Agreement, dated as of September 30, 2019, among Bristow Group Inc. and the commitment parties party thereto (incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed on October 2, 2019).
10.17
Omnibus Agreement, dated as of October 3, 2019, among Bristow Equipment Leasing Ltd., as borrower, Bristow Group Inc., PK Transportation Finance Ireland Limited, as lender, PK AirFinance S.à r.l., in its capacity as agent, and PK AirFinance S.à r.l., in its capacity as security trustee (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 9, 2019).
10.18
Amendment No. 5 to the Term Loan Credit Agreement, dated May 10, 2019, by and among Bristow Group Inc. and Bristow Holdings Company Ltd. III, as borrowers, certain subsidiaries of Bristow Group Inc. as guarantors party thereto, the lenders from time to time party thereto and Ankura Trust Company, LLC, as administrative agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 6, 2019).
10.19
Amendment to the Term Loan Credit Agreement, dated as of February 1, 2017, among the Company, as guarantor, Bristow U.S. LLC, as borrower and lessee, BriLog Leasing Ltd., as lessee, Macquarie Bank Limited, as administrative agent and security agent, Macquarie Leasing LLC, as lender and owner participant, and Macquarie Rotorcraft Leasing Holdings Limited, as owner participant (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on November 6, 2019).
10.20
Amendment and Restatement, Confirmation and Waiver Agreement to the ABL Facilities Agreement dated April 17, 2018, by and among Bristow Norway AS and Bristow Helicopters Limited, as borrowers and guarantors, Bristow Group Inc., the financial institutions from time to time party thereto as lenders and Barclays Bank PLC, in its capacity as agent and security trustee (incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed on November 6, 2019).
10.21
Stockholders Agreement, dated as of October 31, 2019, by and among Bristow Group Inc. and the stockholders listed therein (incorporated herein by reference to Exhibit 10.4 to the Company’s Form 8-K filed on November 6, 2019).
10.22
Registration Rights Agreement, dated as of October 31, 2019, by and among Bristow Group Inc. and the other parties signatory thereto (incorporated herein by reference to Exhibit 10.5 to the Company’s Form 8-K filed on November 6, 2019).
10.23†
Bristow Group Inc. Amended and Restated 2019 Management Severance Benefits Plan for U.S. Employees, dated as of October 31, 2019 (incorporated herein by reference to Exhibit 10.7 to the Company’s Form 8-K filed on November 6, 2019).
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 RegistrantRegistrant.
  
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.
99.1
Joint Chapter 11 Plan of Reorganization, dated August 1, 2019 (incorporated herein by reference to Exhibit 99.2 to the Company’s Form 8-K filed on August 2, 2019).

99.2
Disclosure Statement, dated August 1, 2019 (incorporated herein by reference to Exhibit 99.3 to the Company’s Form 8-K filed on August 2, 2019).
99.3
Amended Joint Chapter 11 Plan of Reorganization, dated August 20, 2019 (incorporated herein by reference to Exhibit 99.1 to the Company’s Form 8-K filed on August 26, 2019).
99.4
Amended Disclosure Statement, dated August 20, 2019 (incorporated herein by reference to Exhibit 99.2 to the Company’s Form 8-K filed on August 26, 2019).
99.5
Order Confirming Amended Joint Chapter 11 Plan of Reorganization, dated October 8, 2019 (incorporated herein by reference to Exhibit 99.1 to the Company’s Form 8-K filed on October 9, 2019).
99.6
Amended Plan Supplement, filed with the Bankruptcy Court on October 2, 2019 (incorporated herein by reference to Exhibit 99.2 to the Company’s Form 8-K filed on October 9, 2019).
  
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.
   
†Compensatory Plan or Arrangement.
* 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/ Brian J. Allman
  
Brian J. Allman
Senior Vice President and
Chief Financial Officer
 
 By:/s/ Chris Gillette
  
Chris Gillette

Chief Accounting Officer
June 19,December 27, 2019

10494