Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 ________________________________________
FORM 10-Q
________________________________________ 
(Mark One)
ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018March 31, 2019              or             
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_________to_________             
Commission file number 1-35701
Era Group Inc.
(Exact Name of Registrant as Specified in Its Charter)
________________________________________ 
Delaware 72-1455213
(State or Other Jurisdiction of
Incorporation or Organization)
 
(IRS Employer
Identification No.)
   
818 Town & Country Blvd., Suite 200  
Houston, Texas 77024
(Address of Principal Executive Offices) (Zip Code)
713-369-4700
(Registrant’s Telephone Number, Including Area Code)
________________________________________ 
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  ý    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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý     No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
¨
 
Accelerated filer
ý

 
Non-accelerated filer
¨

 
Smaller reporting company
¨
 
Emerging growth company
ý¨

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.
ý¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨    No  ý
The total number of shares of common stock, par value $0.01 per share, outstanding as of November 2, 2018May 3, 2019 was 21,761,823.22,220,676. The Registrant has no other class of common stock outstanding.

ERA GROUP INC.
Table of Contents
 
Part I.
   
 Item 1.
   
  
   
  
   
  
    
  
   
  
   
  
   
 Item 2.
   
 Item 3.
   
 Item 4.
   
Part II.
   
 Item 1A.
    
 Item 2.
    
 Item 6.


PART I—FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
ERA GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 March 31,
2019
 December 31,
2018
 (unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents (including $359 and $1,745 from VIEs in 2019 and 2018, respectively)(1)
$49,612
 $50,753
Receivables:   
Trade, operating, net of allowance for doubtful accounts of $261 in 2019 and 2018, (including $9,703 and $5,565 from VIEs in 2019 and 2018, respectively)34,732
 33,306
Trade, dry-leasing2,446
 3,803
Tax receivables (including $2,843 and $3,187 from VIEs in 2019 and 2018, respectively)2,843
 3,187
Other (including $27 and $340 from VIEs in 2019 and 2018, respectively)7,204
 2,343
Inventories, net (including $35 and $40 from VIEs in 2019 and 2018, respectively)20,893
 20,673
Prepaid expenses (including $32 and $10 from VIEs in 2019 and 2018, respectively)2,233
 1,807
Total current assets119,963
 115,872
Property and equipment (including $1,455 and $1,375 from VIEs in 2019 and 2018, respectively)918,252
 917,161
Accumulated depreciation (including $525 and $485 from VIEs in 2019 and 2018, respectively)(327,444) (317,967)
Property and equipment, net590,808
 599,194
Operating lease right-of-use (including $1,143 from VIEs in 2019)8,460
 
Equity investments and advances24,427
 27,112
Intangible assets1,102
 1,107
Other assets (including $102 and $96 from VIEs in 2019 and 2018, respectively)21,081
 21,578
Total assets$765,841
 $764,863
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST
 AND STOCKHOLDERS’ EQUITY
   
Current liabilities:   
Accounts payable and accrued expenses (including $1,534 and $1,522 from VIEs in 2019 and 2018, respectively)$12,643
 $13,161
Accrued wages and benefits (including $1,425 and $1,429 from VIEs in 2019 and 2018, respectively)5,524
 9,267
Accrued interest3,376
 569
Accrued income taxes2,874
 973
Accrued other taxes (including $421 and $500 from VIEs in 2019 and 2018, respectively)1,414
 1,268
Accrued contingencies (including $656 and $630 from VIEs in 2019 and 2018, respectively)656
 630
Current portion of long-term debt (including $275 and $395 from VIEs in 2019 and 2018, respectively)1,938
 2,058
Other current liabilities (including $444 and $0 from VIEs in 2019 and 2018, respectively)3,092
 878
Total current liabilities31,517
 28,804
Long-term debt159,961
 160,217
Deferred income taxes104,824
 108,357
Operating lease liabilities (including $699 from VIEs in 2019)6,773
 
Other liabilities721
 747
Total liabilities303,796
 298,125
Commitments and contingencies (see Note 8)
 
Redeemable noncontrolling interest3,160
 3,302
Equity:   
Era Group Inc. stockholders’ equity:   
Common stock, $0.01 par value, 60,000,000 shares authorized; 22,220,676 and 21,765,404 outstanding in 2019 and 2018, respectively, exclusive of treasury shares224
 219
Additional paid-in capital448,690
 447,298
Retained earnings12,342
 18,285
Treasury shares, at cost; 157,267 and 156,737 shares in 2019 and 2018, respectively(2,481) (2,476)
Accumulated other comprehensive income, net of tax110
 110
Total equity458,885
 463,436
Total liabilities, redeemable noncontrolling interest and stockholders’ equity$765,841
 $764,863
ERA GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 September 30,
2018
 December 31,
2017
 (unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents (including $1,007 and $1,699 from VIEs in 2018 and 2017, respectively)(1)
$47,631
 $13,583
Receivables:   
Trade, operating, net of allowance for doubtful accounts of $854 and $1,196 in 2018 and 2017, respectively (including $5,834 and $5,854 from VIEs in 2018 and 2017, respectively)
35,655
 33,840
Trade, dry-leasing3,833
 5,124
Tax receivables (including $3,117 and $2,828 from VIEs in 2018 and 2017, respectively)
3,117
 2,829
Other (including $51 and $257 from VIEs in 2018 and 2017, respectively)
2,701
 1,623
Inventories, net (including $31 and $39 from VIEs in 2018 and 2017, respectively)
20,157
 21,112
Prepaid expenses (including $130 and $40 from VIEs in 2018 and 2017, respectively)
2,367
 1,203
Escrow deposits
 3,250
Total current assets115,461
 82,564
Property and equipment (including $2,477 and $1,951 from VIEs in 2018 and 2017, respectively)
927,477
 972,942
Accumulated depreciation (including $443 and $487 from VIEs in 2018 and 2017, respectively)
(314,736) (299,028)
Property and equipment, net612,741
 673,914
Equity investments and advances26,600
 30,056
Intangible assets1,111
 1,122
Other assets (including $84 and $61 from VIEs in 2018 and 2017, respectively)
18,421
 4,441
Total assets$774,334
 $792,097
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST
 AND STOCKHOLDERS’ EQUITY
   
Current liabilities:   
Accounts payable and accrued expenses (including $1,519 and $1,807 from VIEs in 2018 and 2017, respectively)
$10,438
 $16,421
Accrued wages and benefits (including $1,541 and $1,397 from VIEs in 2018 and 2017, respectively)
8,605
 8,264
Accrued interest3,404
 606
Accrued income taxes2,993
 28
Accrued other taxes (including $361 and $600 from VIEs in 2018 and 2017, respectively)
2,396
 1,810
Accrued contingencies (including $1,014 and $858 from VIEs in 2018 and 2017, respectively)
1,014
 859
Current portion of long-term debt (including $495 and $1,073 from VIEs in 2018 and 2017, respectively)
2,158
 2,736
Other current liabilities (including $0 and $8 from VIEs in 2018 and 2017, respectively)
1,033
 1,720
Total current liabilities32,041
 32,444
Long-term debt (including $0 and $1,903 from VIEs in 2018 and 2017, respectively)
160,476
 202,174
Deferred income taxes108,138
 106,598
Other liabilities1,753
 1,434
Total liabilities302,408
 342,650
Commitments and contingencies (see Note 8)
 
Redeemable noncontrolling interest3,456
 3,766
Equity:   
Era Group Inc. stockholders’ equity:   
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,761,823 and 21,319,150 outstanding in 2018 and 2017, respectively, exclusive of treasury shares219
 215
Additional paid-in capital447,013
 443,944
Retained earnings24,079
 4,363
Treasury shares, at cost; 215,141 shares in 2018 and 2017(2,951) (2,951)
Accumulated other comprehensive income, net of tax110
 110
Total equity468,470
 445,681
Total liabilities, redeemable noncontrolling interest and stockholders’ equity$774,334
 $792,097
(1) Refer to footnote 5 for more detail on variable interest entities (“VIE”) 
The accompanying notes are an integral part of these condensed consolidated financial statements.

ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share amounts)
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share amounts)
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share amounts)
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
Three Months Ended 
 March 31,
2018 2017 2018 20172019 2018
Revenues:

          
Operating revenues$51,894
 $58,753
 $161,116
 $161,077
$47,830
 $54,750
Dry-leasing revenues2,716
 2,632
 8,544
 12,713
3,463
 2,572
Total revenues54,610
 61,385
 169,660
 173,790
51,293
 57,322
Costs and expenses:          
Operating36,513
 43,987
 114,505
 123,079
36,696
 37,660
Administrative and general8,837
 10,928
 35,714
 31,211
8,875
 12,071
Depreciation and amortization9,541
 12,103
 30,011
 35,635
9,450
 10,354
Total costs and expenses54,891
 67,018
 180,230
 189,925
55,021
 60,085
Gains (losses) on asset dispositions, net(148) (122) 2,269
 5,048
(124) 4,414
Litigation settlement proceeds42,000
 
 42,000
 
Loss on impairment
 (117,018) 
 (117,018)
Operating income (loss)41,571
 (122,773) 33,699
 (128,105)(3,852) 1,651
Other income (expense):          
Interest income732
 206
 1,224
 641
752
 146
Interest expense(3,549) (4,097) (11,646) (11,620)(3,461) (4,576)
Foreign currency gains (losses), net(94) 12
 (1,095) (96)(126) 74
Gain on debt extinguishment
 
 175
 

 175
Other, net15
 (33) 21
 (29)(11) (8)
Total other income (expense)(2,896) (3,912) (11,321) (11,104)(2,846) (4,189)
Income (loss) before income taxes and equity earnings38,675
 (126,685) 22,378
 (139,209)
Income tax expense (benefit)7,861
 (45,237) 4,549
 (48,066)
Income (loss) before equity earnings30,814
 (81,448) 17,829
 (91,143)
Equity earnings, net of tax465
 233
 1,577
 1,069
Net income (loss)31,279
 (81,215) 19,406
 (90,074)
Net loss (income) attributable to noncontrolling interest in subsidiary10
 (233) 310
 219
Net income (loss) attributable to Era Group Inc.$31,289
 $(81,448) $19,716
 $(89,855)
Loss before income taxes and equity earnings(6,698) (2,538)
Income tax benefit(1,588) (738)
Loss before equity earnings(5,110) (1,800)
Equity earnings (losses), net of tax(975) 443
Net loss(6,085) (1,357)
Net loss attributable to noncontrolling interest in subsidiary142
 163
Net loss attributable to Era Group Inc.$(5,943) $(1,194)
          
Income (loss) per common share:       
Basic$1.44
 $(3.91) $0.91
 $(4.34)
Diluted$1.44
 $(3.91) $0.91
 $(4.34)
Loss per common share, basic and diluted$(0.28) $(0.06)
          
Weighted average common shares outstanding:       
Basic21,215,576
 20,844,376
 21,139,212
 20,715,686
Diluted21,239,189
 20,844,376
 21,156,466
 20,715,686
Weighted average common shares outstanding, basic and diluted21,323,312
 21,003,777








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

ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)
 Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
 2018 2017 2018 2017 2019 2018
Net income (loss) $31,279
 $(81,215) $19,406
 $(90,074)
Net loss $(6,085) $(1,357)
Other comprehensive loss:            
Foreign currency translation adjustments 
 
 (5) (2) 
 (5)
Total other comprehensive loss 
 
 (5) (2) 
 (5)
Comprehensive income (loss) 31,279
 (81,215) 19,401
 (90,076)
Comprehensive loss (income) attributable to noncontrolling interest in subsidiary 10
 (233) 310
 219
Comprehensive income (loss) attributable to Era Group Inc. $31,289
 $(81,448) $19,711
 $(89,857)
Comprehensive loss (6,085) (1,362)
Comprehensive loss attributable to noncontrolling interest in subsidiary 142
 163
Comprehensive loss attributable to Era Group Inc. $(5,943) $(1,199)







































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

ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
(unaudited, in thousands)

Three Months Ended September 30, 2018             
                
     Era Group Inc. Stockholders’ Equity
  Redeemable Noncontrolling Interest  Common
Stock
 Additional
Paid-In
Capital
 Retained Earnings Treasury
Shares
 Accumulated
Other
Comprehensive
Income
 Total
Equity
June 30, 2018 $3,466
  $219
 $445,885
 $(7,210) $(2,951) $105
 $436,048
Issuance of common stock:               
Employee Stock Purchase Plan 
  
 409
 
 
 
 409
Share award amortization 
  
 719
 
 
 
 719
Net income 
  
 
 31,279
 
 
 31,279
Net loss attributable to redeemable noncontrolling interest (10)  
 
 10
 
 
 10
Currency translation adjustments, net of tax 
  
 
 
 
 5
 5
September 30, 2018 $3,456
  $219
 $447,013
 $24,079
 $(2,951) $110
 $468,470



ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
(unaudited, in thousands)

Three Months Ended March 31, 2019             
                
     Era Group Inc. Stockholders’ Equity
  Redeemable Noncontrolling Interest  Common
Stock
 Additional
Paid-In
Capital
 Retained Earnings Treasury
Shares
 Accumulated
Other
Comprehensive
Income
 Total
Equity
December 31, 2018 $3,302
  $219
 $447,298
 $18,285
 $(2,476) $110
 $463,436
Issuance of common stock:               
Restricted stock grants 
  4
 (4) 
 
 
 
Employee Stock Purchase Plan 
  1
 589
 
 
 
 590
Share award amortization 
  
 807
 
 
 
 807
Purchase of treasury shares 
  
 
 
 (5) 
 (5)
Net loss 
  
 
 (6,085) 
 
 (6,085)
Net loss attributable to redeemable noncontrolling interest (142)  
 
 142
 
 
 142
March 31, 2019 $3,160
  $224
 $448,690
 $12,342
 $(2,481) $110
 $458,885



Three Months Ended September 30, 2017             
                
     Era Group Inc. Stockholders’ Equity
  Redeemable Noncontrolling Interest  Common
Stock
 Additional
Paid-In
Capital
 Retained Earnings Treasury
Shares
 Accumulated
Other
Comprehensive
Income
 Total
Equity
June 30, 2017 $3,769
  $215
 $441,595
 $24,117
 $(2,968) $90
 $463,049
Issuance of common stock:               
Employee Stock Purchase Plan 
  
 373
 
 
 
 373
Share award amortization 
  
 975
 
 
 
 975
Cancellation of restricted stock 
  
 5
 
 (5) 
 
Net loss 
  
 
 (81,215) (1) 
 (81,216)
Net income attributable to redeemable noncontrolling interest 233
  
 
 (233) 
 
 (233)
September 30, 2017 $4,002
  $215
 $442,948
 $(57,331) $(2,974) $90
 $382,948



Nine Months Ended September 30, 2018             
                
     Era Group Inc. Stockholders’ Equity
  Redeemable Noncontrolling Interest  
Common
Stock
 
Additional
Paid-In
Capital
 Retained Earnings 
Treasury
Shares
 
Accumulated
Other
Comprehensive
Income
 
Total
Equity
December 31, 2017 $3,766
  $215
 $443,944
 $4,363
 $(2,951) $110
 $445,681
Issuance of common stock:              
Restricted stock grants 
  3
 (3) 
 
 
 
Employee Stock Purchase Plan 
  1
 892
 
 
 
 893
Share award amortization 
  
 2,180
 
 
 
 2,180
Net income (loss) 
  
 
 19,406
 
 
 19,406
Net loss attributable to redeemable noncontrolling interest (310)  
 
 310
 
 
 310
September 30, 2018 $3,456

 $219
 $447,013
 $24,079
 $(2,951) $110
 $468,470





Nine Months Ended September 30, 2017             
                
     Era Group Inc. Stockholders’ Equity
  Redeemable Noncontrolling Interest  Common
Stock
 Additional
Paid-In
Capital
 Retained Earnings Treasury
Shares
 Accumulated
Other
Comprehensive
Income
 Total
Equity
December 31, 2016 $4,221
  $211
 $438,489
 $32,524
 $(2,899) $92
 $468,417
Issuance of common stock:               
Restricted stock grants 
  3
 (3) 
 
 
 
Employee Stock Purchase Plan 
  1
 835
 
 
 
 836
Share award amortization 
  
 3,604
 
 
 
 3,604
Cancellation of restricted stock 
  
 23
 
 (23) 
 
Purchase of treasury shares 
  
 
 
 (52) 
 (52)
Net loss 
  
 
 (90,074) 
 
 (90,074)
Net loss attributable to redeemable noncontrolling interest (219)  
 
 219
 
 
 219
Currency translation adjustments, net of tax 
  
 
 
 
 (2) (2)
September 30, 2017 $4,002
  $215
 $442,948
 $(57,331) $(2,974) $90
 $382,948









Three Months Ended March 31, 2018             
                
     Era Group Inc. Stockholders’ Equity
  Redeemable Noncontrolling Interest  Common
Stock
 Additional
Paid-In
Capital
 Retained Earnings Treasury
Shares
 Accumulated
Other
Comprehensive
Income
 Total
Equity
December 31, 2017 $3,766
  $215
 $443,944
 $4,363
 $(2,951) $110
 $445,681
Issuance of common stock:               
Restricted stock grants 
  3
 (3) 
 
 
 
Employee Stock Purchase Plan 
  1
 483
 
 
 
 484
Share award amortization 
  
 750
 
 
 
 750
Net loss 
  
 
 (1,357) 
 
 (1,357)
Net loss attributable to redeemable noncontrolling interest (163)  
 
 163
 
 
 163
Currency translation adjustments, net of tax 
  
 
 
 
 (5) (5)
March 31, 2018 $3,603
  $219
 $445,174
 $3,169
 $(2,951) $105
 $445,716

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

ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 Nine Months Ended 
 September 30,
 2018 2017
Cash flows from operating activities:   
Net income (loss)$19,406
 $(90,074)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization30,011
 35,635
Share-based compensation2,180
 3,604
Bad debt expense, net
 47
Interest income(614) 
Non-cash penalty and interest expenses607
 
Gains on asset dispositions, net(2,269) (5,048)
Debt discount amortization188
 174
Amortization of deferred financing costs1,173
 850
Foreign currency losses, net1,097
 47
Gain on debt extinguishment, net(175) 
Loss on impairment
 117,018
Deferred income tax benefit1,541
 (48,057)
Equity earnings, net of tax(1,577) (1,069)
Changes in operating assets and liabilities:   
Increase in receivables(2,390) (5,107)
Decrease in prepaid expenses and other assets393
 828
Increase in accounts payable, accrued expenses and other liabilities781
 9,080
Net cash provided by operating activities50,352
 17,928
Cash flows from investing activities:   
Purchases of property and equipment(7,686) (13,121)
Proceeds from disposition of property and equipment29,520
 5,690
Investments in and advances to equity investees
 (126)
Dividends received from equity investees1,000
 
Principal payments on notes due from equity investees401
 564
Principal payments on third party notes receivable620
 94
Net cash provided by (used in) investing activities23,855
 (6,899)
Cash flows from financing activities:   
Proceeds from Revolving Credit Facility
 9,000
Long-term debt issuance costs(1,295) 
Payments on long-term debt(42,562) (24,745)
Proceeds from share award plans893
 836
Purchase of treasury shares
 (52)
Net cash used in financing activities(42,964) (14,961)
Effects of exchange rate changes on cash and cash equivalents(445) 101
Net increase (decrease) in cash, cash equivalents and restricted cash30,798
 (3,831)
Cash, cash equivalents and restricted cash, beginning of period16,833
 30,727
Cash, cash equivalents and restricted cash, end of period$47,631

$26,896
Supplemental cash flow information:   
Cash paid for interest$7,867
 $8,249
Interest capitalized during the period$97
 $451
Interest, net of amounts capitalized$7,770
 $7,798
Cash paid for income taxes63
 427



ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 Three Months Ended 
 March 31,
 2019 2018
Cash flows from operating activities:   
Net loss$(6,085) $(1,357)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization9,450
 10,354
Share-based compensation807
 750
Interest income(157) 
Non-cash penalty and interest expenses
 607
Gains (losses) on asset dispositions, net124
 (4,414)
Debt discount amortization67
 61
Amortization of deferred financing costs239
 704
Foreign currency losses (gains), net126
 (107)
Gain on debt extinguishment, net
 (175)
Deferred income tax benefit(3,533) (737)
Equity (earnings) losses, net of tax975
 (443)
Changes in operating assets and liabilities:   
Decrease (increase) in receivables493
 (2,783)
Increase in prepaid expenses and other assets(452) (1,502)
Increase (decrease) in accounts payable, accrued expenses and other liabilities581
 (1,988)
Net cash provided by (used in) operating activities2,635
 (1,030)
Cash flows from investing activities:   
Purchases of property and equipment(1,312) (3,784)
Proceeds from disposition of property and equipment
 19,497
Purchase of investments(5,000) 
Principal payments on notes due from equity investees2,334
 54
Principal payments on third party notes receivable104
 76
Net cash provided by (used in) investing activities(3,874) 15,843
Cash flows from financing activities:   
Long-term debt issuance costs
 (1,295)
Payments on long-term debt(542) (14,259)
Proceeds from share award plans590
 484
Purchase of treasury shares(5) 
Net cash provided by (used in) financing activities43
 (15,070)
Effects of exchange rate changes on cash and cash equivalents55
 (23)
Net increase (decrease) in cash, cash equivalents and restricted cash(1,141) (280)
Cash, cash equivalents and restricted cash, beginning of period50,753
 16,833
Cash, cash equivalents and restricted cash, end of period$49,612

$16,553
Supplemental cash flow information:   
Cash paid for interest$353
 $1,080
Interest capitalized during the period
 97
Interest, net of amounts capitalized$353
 $983
Cash paid for income taxes14
 






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

ERA GROUP INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
1.BASIS OF PRESENTATION AND ACCOUNTING POLICY
The condensed consolidated financial statements include the accounts of Era Group Inc. and its consolidated subsidiaries. Unless the context otherwise indicates, any reference in this Quarterly Report on Form 10-Q to the “Company” refers to Era Group Inc. and its consolidated subsidiaries, and any reference to “Era Group” refers to Era Group Inc. without its subsidiaries. The condensed consolidated financial information for the three and nine months ended September 30, 2018March 31, 2019 and 20172018 has been prepared by the Company and has not been audited by its independent registered public accounting firm. In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made to fairly present the Company’s financial position as of September 30, 2018March 31, 2019, its results of operations for the three and nine months ended September 30, 2018March 31, 2019 and 20172018, its comprehensive income for the three and nine months ended September 30, 2018March 31, 2019 and 20172018, its changes in equity for the three and ninethree months ended September 30, 2018March 31, 2019, and 2017,2018, and its cash flows for the ninethree months ended September 30, 2018March 31, 2019 and 20172018. Results of operations for the interim periods presented are not necessarily indicative of operating results for the full year or any future periods.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20172018.
Certain of the Company’s operations are subject to seasonal factors. Operations in the U.S. Gulf of Mexico are often at their highest levels from April to September, as daylight hours increase, and are at their lowest levels from November toDecember through February, as daylight hours decrease. The Company’s Alaskan operations also see an increase during May to September, as its firefighting operations occur during this time and daylight hours are significantly longer.
Basis of ConsolidationConsolidation.. The consolidated financial statements include the accounts of Era Group Inc., its wholly and majority-owned subsidiaries and entities that meet the criteria of Variable Interest Entities (“VIEs”)VIEs of which the Company is the primary beneficiary. Aeróleo Taxi Aereo S/A (“Aeróleo”) is a VIE of which the Company is the primary beneficiary. All significant inter-company accounts and transactions are eliminated in consolidation.
Reclassification. Certain amounts reported for prior periods in the consolidated financial statements have been reclassified to conform with the current period’s presentation.
Supplemental Cash Flow Information. The following table sets forth the Company’s reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows (in thousands):
September 30, 2018 December 31, 2017 September 30, 2017 December 31, 2016March 31, 2019 December 31, 2018 March 31, 2018 December 31, 2017
Cash and cash equivalents$47,631
 $13,583
 $26,896
 $26,950
$49,612
 $50,753
 $16,553
 $13,583
Restricted cash (1)

 3,250
 
 3,777

 
 
 3,250
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows$47,631
 $16,833
 $26,896
 $30,727
$49,612
 $50,753
 $16,553
 $16,833
(1) Restricted cash represents amounts deposited in escrow accounts at the end of each period. Escrow deposits are shown as a separate line item in the consolidated balance sheet.
Revenue Recognition. The Company recognizes revenues for flight services and emergency response services with the passing of each day as the Company has the right to consideration from its customers in an amount that corresponds directly with the value to the Company’s customer of the performance completed to date. Therefore, the Company has elected to exercise the right to invoice practical expedient in its adoption of ASC 606. The right to invoice represents a method for recognizing revenue over time using the output measure of “value to the customer” which is an objective measure of an entity’s performance in a contract. The Company typically invoices its customers on a monthly basis for revenues earned during the prior month with payment terms of 30 days. The Company’s customer arrangements do not contain any significant financing component for its customers.
Trade ReceivablesReceivables.. Customers are primarily international, independent and major integrated exploration, development and production companies, internationalthird party helicopter operators and the U.S. government. Customers are typically granted credit on a short-term basis, and related credit risks are considered minimal. The Company routinely reviews its trade receivables and makes provisions for probable doubtful accounts; however, those provisions are estimates. Actual results could differ from those estimates, and those differences may be material.
Leases. The Company determines if an arrangement is a lease at inception or during modification or renewal of an existing lease. Operating leases are maintained for a number of fixed assets including land, hangars, buildings, fuel tanks and tower sites.

The right-of-use (“ROU”) assets associated with these leases are reflected under long-term assets; the current portion of the long-term payables are reflected under other current liabilities; and the payables on lease agreements past one year are recorded as long-term liabilities on the Company’s consolidated balance sheets. For those contracts with terms of twelve months or less, the lease expense is recognized on a straight-line basis over the lease term and recorded in operating expenses on the consolidated statement of operations.  As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on the information available at commencement date is used to determine the present value of future payments. Most of the Company’s lease agreements allow the option of renewal or extension, which are considered a part of the lease term. When it is reasonably certain that a lease will be extended, this is incorporated into the calculations.
New Accounting Standards - Adopted. The Company adoptedIn February 2016, the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers,” and its amendments issued by the provisions of ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Identifying Performance Obligations and Licensing,” ASU No. 2016-12, “Narrow-Scope Improvements and Practical Expedients,” and ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue From Contracts with Customers,” collectively Accounting Standards Codification (ASC) Topic 606 beginning January 1, 2018.  ASC Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from all contracts with customers except where revenues are in scope of another accounting standard.  The ASU superseded the revenue recognition requirements in ASC Topic 605, “Revenue Recognition,” and most industry-specific guidance.  ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized.  Under the model, an entity will be required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services.  The adoption of ASC Topic 606 did not have a material impact on the Company’s consolidated financial statements.  See Note 10 - Revenues for additional information relating to Revenue from Contracts with Customers. 
The Company adopted the provisions of FASB ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” beginning January 1, 2018.  This ASU clarifies how certain cash receipts and cash payments should be classified and presented in the statement of cash flows.  The Company has made an accounting policy election to classify distributions received from equity method investees using the nature of the distribution approach which classifies distributions received from investees as either cash inflows from operating activities or cash inflows from investing activities based on the nature of the activities of the investee that generated the distribution.  Adoption of this ASU did not have a material impact on the Company’s historical financial statements.
In October 2016, the FASB issued ASU 2016-16 - Income Taxes, which requires entities to recognize income tax consequences of intra-entity transfers of assets, other than inventory, when the transfer occurs rather than when the asset is sold to a third party as is the case under current GAAP. ASU 2016-16 will be effective for annual reporting periods beginning after December 15, 2017 including interim periods within that period. The Company adopted ASU 2016-16 effective January 1, 2018, and such adoption did not have a material impact on its consolidated financial statements.
The Company adopted the provisions of FASB ASU No. 2016-18, “Restricted Cash,” beginning January 1, 2018.  This ASU requires amounts deemed restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows, and presentation should permit a reconciliation when cash, cash equivalents and restricted cash are presented in more than one line item on the balance sheet.  The Company had amounts deposited in escrow accounts as discussed further below in Note 3. These amounts are deemed restricted cash and are included in the “Escrow deposits” line of our consolidated balance sheet.  The impact of adopting this ASU has been included as adjustments in the prior period statement of cash flows.
In May 2017, the FASB issued ASU 2017-09 - Compensation - Stock Compensation: Scope of Modification Accounting, which is designed to reduce diversity in practice and complexity when accounting for changes in the terms of a share-based payment award. ASU 2017-09 will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that period, and early adoption is permitted for any interim period for which financial statements have not yet been issued. The Company adopted ASU 2017-09 effective January 1, 2018, and such adoption did not have a material impact on its consolidated financial statements.
New Accounting Standards - Not Yet Adopted. In February 2016, the FASB(“ FASB”) issued ASU No. 2016-02, “Leases” (ASU No. 2016-02), which establishes comprehensive accounting and financial reporting requirements for leasing arrangements.  This ASU supersedes the existing requirements in FASB ASC Topic 840, “Leases,” and requires lessees to recognize substantially all lease assets and lease liabilities on the balance sheet.  The provisions of ASU No. 2016-02 also modify the definition of a lease and outline requirements for recognition, measurement, presentation and disclosure of leasing arrangements by both lessees and lessors.  TheThis ASU is effective for interim and annual periods beginning after December 15, 2018, and early adoption of the standard is permitted.  Entities are required to adopt the ASU using a modified retrospective approach, subject to certain optional practical expedients, and apply the provisions of ASU No. 2016-02 to leasing arrangements existing at or entered into after the earliest comparative period presented in the financial statements.  In July 2018, the ASU No. 2016-02 was further amended by the provisions of ASU No. 2018-11, “Targeted Improvements” to Topic 842 whereby the FASB decided to provide an alternate transition method by allowing entities to initially apply the new leases standard at the adoption date (such as January 1, 2019, for calendar year-end public business entities) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption consistent with preparers’ requests. The Company currently plans to adopt this standard in the first quarter ofadopted ASU No. 2016-02, as amended, effective January 1, 2019, using the current-period adjustment method and will recognizehas recognized a cumulative-effect adjustment to the opening balance of retained earnings in that period. The Company has identified the relevant lease contracts and the review and evaluation of these is substantially complete. While the Company’s evaluation of ASU 2016-02 is still ongoing, the Company expects the adoption of the ASU will have a material impact on the consolidated balance sheet. The Company will electelected an optional practical expedient

to retain its current classification of leases, and as a result, anticipates that the initial impact of adopting this new standard onhas not been material to its consolidated statementfinancial statements. The cumulative effect of incomethe adoption on retained earrings is less than $0.1 million. Additionally, the Company elected not to bifurcate and consolidated statement of cash flows will not be material. separately account for non lease components contained in a single contract. See note 4 - Leases for additional information related to the Company’s operating leases.
New Accounting Standards - Not Yet Adopted.In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (ASU No. 2016-13), which sets forth the current expected credit loss model, a new forward-looking impairment model for certain financial instruments based on expected losses rather than incurred losses.  The ASU is effective for interim and annual periods beginning after December 15, 2019, and early adoption of the standard is permitted.  Entities are required to adopt ASU No. 2016-13 using a modified retrospective approach, subject to certain limited exceptions.  The Company is currently evaluating the potential impact of the adoption of this ASU on its consolidated financial statements.
In August 2018, the FASB issued ASU-2018-15,ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software” (Subtopic 350-40), providing guidance addressing a customer's accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is considered a service contract. Under the new guidance, implementation costs for a CCA should be evaluated for capitalization using the same approach as implementation costs associated with internal-use software and should be expensed over the term of the hosting arrangement, which includes any reasonably certain renewal periods. The new guidance is effective for fiscal years beginning after December 15, 2019 for calendar year-end public business entities. Early adoption is permitted, including adoption in any interim period. The Company is evaluating the potential impact of the adoption of ASU-2018-15 on its consolidated financial statements.
In August 2018, the FASB issued ASU-2018-13,ASU No. 2018-13, “Fair Value Measurements” (ASU No.2018-13,No. 2018-13, update to topic ASC-820), providing guidance for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. ASU-2018-13ASU No. 2018-13 will be effective for interim and annual periods beginning after December 15, 2019. The Company has not adopted ASU-2018-13ASU No. 2018-13 and believes such adoption will not have a material impact on its consolidated financial statements.
2.
FAIR VALUE MEASUREMENTS
The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted

prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs derived from observable market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
As of September 30, 2018March 31, 2019 and December 31, 2017,2018, the Company did not have any assets or liabilities that are measured at fair value on a recurring basis.
The estimated fair values of the Company’s other financial assets and liabilities as of September 30, 2018March 31, 2019 and December 31, 20172018 were as follows (in thousands): 
Carrying
Amount
 Level 1 Level 2 Level 3
Carrying
Amount
 Level 1 Level 2 Level 3
September 30, 2018       
March 31, 2019       
ASSETS       
Investments, included in other current assets$5,000
 $
 $4,648
 $
       
LIABILITIES              
Long-term debt, including current portion$162,634
 $
 $163,638
 $
$161,899
 $
 $162,766
 $
              
December 31, 2017       
December 31, 2018       
LIABILITIES              
Long-term debt, including current portion$204,910
 $
 $203,938
 $
$162,275
 $
 $159,367
 $
The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value. The fair value of the Company’s long-term debt was estimated using discounted cash flow analysis based on estimated current rates for similar types of arrangements. Considerable judgment was required in developing certain of the estimates of fair value, and, accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
3.ESCROW DEPOSITS
Prior toInvestments. During the change in the U.S. tax code at the end of 2017,three months ended March 31, 2019, the Company periodically, entered into Qualified Exchange Accommodation Agreements with third parties to meetpurchased $5.0 million of corporate securities. This investment is recorded on the like-kind exchange requirements of Section 1031 of the Internal Revenue Code1986,balance sheet under other current assets as amended (the “Code”) and the provisions of Revenue Procedure 2000-37. In accordance with these provisions, the Company was permitted to deposit proceeds from the sale of assets into escrow accounts for the purpose of acquiring other assets

and qualifying for the temporary deferral of taxable gains realized. Consequently, the Company established escrow accounts with financial institutions for the deposit of funds received on sales of equipment, which were designated for replacement propertyits stated maturity date is within a specified period of time. As of December 31, 2017, the Company had $3.3 million deposited in a like-kind exchange escrow account. During the nine months ended September 30, 2018, the Company used $2.8 million of the balance to make a final payment on a S92 heavy helicopter which completed the like-kind exchange transaction, and the remaining $0.5 million was returned to the Company.year.
4.3.ACQUISITIONS AND DISPOSITIONS
Capital Expenditures. During the ninethree months ended September 30, 2018,March 31, 2019, capital expenditures were $7.7$1.3 million and consisted primarily of helicopter acquisitions, spare helicopter parts and leasehold improvements. During the ninethree months ended September 30,March 31, 2019, the Company did not capitalize any interest. During the three months ended March 31, 2018, and 2017, the Company capitalized interest of $0.1 million and $0.5 million, respectively.million. As of September 30, 2018March 31, 2019 and December 31, 2017,2018, construction in progress, which is a component of property and equipment, included capitalized interest of $0.7 million and $1.9 million, respectively.million. A summary of changes to the Company’s operating helicopter fleet is as follows:
Equipment Additions - During the ninethree months ended September 30,March 31, 2019, the Company did not place any helicopters into service. During the three months ended March 31, 2018, the Company placed one S92 heavy helicopter into service. During the nine months ended September 30, 2017, the Company placed two AW189 heavy helicopters and one S92 heavy helicopter into service. The Company places helicopters in service once completion work has been finalized and the helicopters are ready for use.
Equipment Dispositions - During the ninethree months ended September 30,March 31, 2019, the Company did not sell or dispose of any material assets. During the three months ended March 31, 2018, the Company sold or otherwise disposed of twentytwelve helicopters, two operating facilities, and related property and equipment for proceeds of $29.5 million and receivables of $14.3 million, payable over a two year period, resulting in gains of $2.3$19.5 million.

4.LEASES
IncludedThe Company leases land, hangars, buildings, fuel tanks and tower sites under operating lease agreements. The Company determines if an arrangement is a lease at inception, and many of these leases offer an option for renewal or extension. The adoption of ASC 842 allows the Company to retain its current classification of leases, and the optional practical expedience rule has allowed the use of the current-period adjustment method to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the proceedscurrent period rather than the restatement of $29.5 million was $1.2 million related toprior year lease amounts. The majority of the sales-type leasesbases from which the Company operates are leased, with current remaining terms between one and sixty years. The lease expense on those contracts with initial terms of five H225 heavy helicopters, for whichtwelve months or less are recognized on a $3.6 million loss was recognized atstraight-line basis over the lease commencement.term and are not recorded on the balance sheet. The Company does not currently maintain any finance leases and is only engaged in operating lease agreements.

The Company’s maturity analysis of lease payments under operating leases that had a remaining term in excess of one year as of December 31, 2018 were as follows (in thousands):
  Maturity of Lease Liabilities
2019 $1,573
2020 1,530
2021 987
2022 562
2023 495
Years subsequent to 2023 7,952
Total future minimum lease payments $13,099
The Company’s maturity analysis of lease payments under operating leases that have a remaining term in excess of one year as of March 31, 2019 were as follows (in thousands):
  Maturity of Lease Liabilities
2019 (excluding the three months ended March 31, 2019) $1,591
2020 2,072
2021 1,081
2022 657
2023 633
Years subsequent to 2023 8,959
Total future minimum lease payments 14,993
Less: imputed interest 6,533
Present value of lease liabilities $8,460
During the ninethree months ended September 30, 2017,March 31, 2019, the Company sold or otherwise disposedrecognized $0.9 million of property and equipmentoperating lease expense. Included in this amount was $0.3 million for proceedscontracts with remaining terms of $5.7 million and recognized gainsless than one year.
Reported balances:  
Other current liabilities $1,687
Long-term lease liabilities 6,773
Total operating lease liabilities $8,460
Other information related to these leases is as follows:
  2019
Weighted average remaining lease term 11 years
Weighted average discount rate 4.46%
Cash paid for amounts included in the measurement of lease liabilities during the three months ended March 31, 2019 (in thousands) $513
As of $5.0March 31, 2019, the Company had an additional operating lease, for a new office facility that has not yet commenced, for total future minimum lease payments of $1.5 million. This lease is expected to commence during 2019, with a lease term of five years.
5.
VARIABLE INTEREST ENTITIES
Aeróleo. The Company acquired a 50% economic and 20% voting interest in Aeróleo in 2011. As a result of liquidity issues experienced by Aeróleo, it is unable to adequately finance its activities without additional financial support from the Company, making it a VIE. The Company has the ability to direct the activities that most significantly affect Aeróleo’s financial performance, making the Company the primary beneficiary. As a result, the Company consolidates Aeróleo’s financial results.
The Company’s condensed consolidated balance sheets at September 30, 2018March 31, 2019 and December 31, 20172018 include assets of Aeróleo totaling $11.4$15.4 million and $11.5$11.9 million, respectively. The distribution of these assets to Era Group and its subsidiaries other than Aeróleo is subject to restrictions. The Company’s condensed consolidated balance sheets at September 30, 2018March 31, 2019 and December 31, 20172018 include liabilities of Aeróleo of $4.9$5.5 million and $7.6$4.5 million, respectively. The creditors for such liabilities do not have recourse to Era Group or its subsidiaries other than Aeróleo.

6.
INCOME TAXES
During the three months ended September 30,March 31, 2019 and 2018, the Company recorded an income tax expense of $7.9 million, of which $3.0 million is current tax expense, resulting in an effective tax rate of 20.3%. During the three months ended September 30, 2017, the Company recorded an income tax benefit of $45.2$1.6 million and $0.7 million, respectively, resulting in an effective tax rate of 35.7%.23.7% and 29.1%, respectively.
During the ninethree months ended September 30,March 31, 2019, and 2018, the Company recorded an income tax expense of $4.5 million, resulting in an effective tax rate of 20.3%. During the nine months ended September 30, 2017, the Company recorded an income tax benefit of $48.1 million, resulting in an effective tax rate of 34.5%.
During the nine months ended September 30, 2018, and 2017, there were no new uncertain tax positions identified. The Company’s 2015 federal income tax return is currently under examination by the Internal Revenue Service.
Amounts accrued for interest and penalties associated with unrecognized income tax benefits are included in other expense on the condensed consolidated statements of operations. As of September 30, 2018March 31, 2019 and December 31, 2017,2018, the gross amount of liability for accrued interest and penalties related to unrecognized tax benefits was $0.1 million.
As of September 30, 2018, the Company considers the accounting for the transition tax and other items to remain incomplete due to the forthcoming guidance and its ongoing analysis of its tax positions. As of September 30, 2018, the Company has not elected an accounting policy for the newly enacted global intangible low-taxed income (“GILTI”). Recent FASB guidance

indicates that accounting for GILTI either as part of deferred taxes or as a period cost are both applicable methods. Once further information is gathered and interpretation and analysis of the tax legislation evolves, the Company will make an appropriate accounting election. The Company expects to complete its analysis within the measurement period in accordance with SAB 118.
7.LONG-TERM DEBT
The Company’s borrowings as of September 30, 2018March 31, 2019 and December 31, 20172018 were as follows (in thousands):
 September 30, 2018 December 31, 2017 March 31, 2019 December 31, 2018
7.750% Senior Notes (excluding unamortized discount) $144,828
 $144,828
 $144,828
 $144,828
Senior secured revolving credit facility 
 39,000
 
 
Promissory notes 20,395
 21,642
 19,564
 19,980
Other 495
 2,976
 275
 395
Total principal balance on borrowings 165,718
 208,446
 164,667
 165,203
Portion due within one year (2,158) (2,736) (1,938) (2,058)
Unamortized debt issuance costs (1,803) (2,067) (1,619) (1,712)
Unamortized discount, net (1,281) (1,469) (1,149) (1,216)
Long-term debt $160,476
 $202,174
 $159,961
 $160,217
7.750% Senior Notes. On December 7, 2012, Era Group issued $200.0 million aggregate principal amount of its 7.750% senior unsecured notes due December 15, 2022 (the “7.750% Senior Notes”) and received net proceeds of $191.9 million. Interest on the 7.750% Senior Notes is payable semi-annually in arrears on June 15th and December 15th of each year.
Revolving Credit Facility. On March 31, 2014, Era Group entered into the amended and restated senior secured revolving credit facility (the “Amended and Restated Revolving Credit Facility”). On March 7, 2018, Era Group entered into a Consent and Amendment No. 4 to the Amended and Restated Senior Secured Revolving Credit Facility Agreement (the “Amendment No. 4” and the Amended and Restated Revolving Credit Facility, as amended by Amendment No. 4, is referred to herein as the “Revolving Credit Facility”) that, among other things, (a) reduced the aggregate principal amount of revolving loan commitments from $200.0 million to $125.0 million, (b) extended the agreement’s maturity until March 31, 2021, (c) revised the definition of EBITDA to permit an add-back for certain litigation expenses related to the H225 helicopters, and (d) adjusted the maintenance covenant requirements to maintain an interest coverage ratio of not less than 1.75:1.00 and a senior secured leverage ratio of not more than 3.25:1.00.
The Revolving Credit Facility provides Era Group with the ability to borrow up to $125.0 million, with a sub-limit of up to $50.0 million for letters of credit, and matures in March 2021. Subject to the satisfaction of certain conditions precedent and the agreement by the lenders, the Revolving Credit Facility includes an “accordion” feature which, if exercised, will increase total commitments by up to $50.0 million.

Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to, at Era Group’s election, either a base rate or LIBOR, each as defined in the Revolving Credit Facility, plus an applicable margin. The applicable margin is based on the Company’s ratio of funded debt to EBITDA, as defined in the Revolving Credit Facility, and ranges from 1.25% to 2.50% on the base rate margin and 2.25% to 3.50% on the LIBOR margin and has increased by 50 basis points at each tier from the previous amendment.margin. The applicable margin as of September 30, 2018March 31, 2019 was 1.50%1.25% on the base rate margin and 2.50%2.25% on the LIBOR margin. In addition, the Company is required to pay a quarterly commitment fee based on the unfunded portion of the committed amount at a rate based on the Company’s ratio of funded debt to EBITDA, as defined in the Revolving Credit Facility, that ranges from 0.375% to 0.500%. As of September 30, 2018,March 31, 2019, the commitment fee was 0.375%.
The obligations under the Revolving Credit Facility are secured by a portion of the Company’s helicopter fleet and the Company’s other tangible and intangible assets and are guaranteed by Era Group’s wholly owned U.S. subsidiaries. The Revolving Credit Facility contains various restrictive covenants including an interest coverage ratio, a senior secured leverage ratio and an asset coverage ratio, each as defined in the Revolving Credit Facility, as well as other customary covenants including certain restrictions on the Company’s ability to enter into certain transactions, including those that could result in the incurrence of additional indebtedness and liens, the making of loans, guarantees or investments, sales of assets, payments of dividends or repurchases of capital stock, and entering into transactions with affiliates.
As of September 30, 2018March 31, 2019, Era Group had no outstanding borrowings under the Revolving Credit Facility and issued letters of credit of $1.1$0.7 million. In connection with Amendment No. 4 entered into in 2018, the Company wrote off previously incurred debt issuance costs of $0.4 million and incurred additional debt issuance costs of $1.3 million. Such costs are included

in other assets on the condensed consolidated balance sheets and are amortized to interest expense in the condensed consolidated statements of operations over the life of the Revolving Credit Facility.
Aeróleo Debt. During the ninethree months ended September 30, 2018,March 31, 2019, the Company did not enter into any new debt arrangements in Brazil. During the nine months ended September 30, 2017, the Company settled certain tax disputes for installment payments in Brazil totaling $0.2 million. Such amounts are included in other debt in the table above and bear interest at a rate equal to the overnight rate as published by the Central Bank of Brazil.
During 2017, the Company settled certain tax disputes in Brazil under the Tax Regularization Settlement Special Program (known as Programa Especial de Regularização Tributária or “PERT”) and has agreed to make installment payments on the amounts due to the applicable taxing authorities. The installments are payable in Brazilian reals, and bear interest at a rate equal to the overnight rate as published by the Central Bank of Brazil and will be paid over the next tenfour months as of September 30, 2018.March 31, 2019. Such amounts are included in other debt in the table above. During the ninethree months ended September 30, 2018,March 31, 2019, the Company made payments, including scheduled payments of $2.3$0.1 million.
Promissory Notes. During the ninethree months ended September 30,March 31, 2019 and 2018, and 2017, the Company made scheduled payments on other long-term debt of $1.20.4 million and $1.2$0.6 million, respectively. During the nine months ended September 30, 2018, the Company amended the promissory notes to remove one helicopter and add two helicopters for a total of three helicopters providing cross-collateralization such that each helicopter now secures both promissory notes.
8.
COMMITMENTS AND CONTINGENCIES
Fleet. During the nine months ended September 30, 2018, the Company canceled two helicopter purchase agreements and recognized $0.5 million of penalties on cancellation.
The Company’s unfunded capital commitments as of September 30, 2018March 31, 2019 consisted primarily of agreements to purchase helicopters and totaled $82.3$80.1 million, which is payable beginning in 2019 and through 2020. The Company also had $1.3 million of deposits paid on options not yet exercised. All of the Company’s capital commitments (inclusive of deposits paid on options not yet exercised) may be terminated without further liability other than aggregate liquidated damages of $2.1 million.
Included in these commitments are orders to purchase three AW189 heavy helicopters and five AW169 light twin helicopters. The AW189 helicopters are scheduled to be delivered in 2019 and 2020. Delivery dates for the AW169 helicopters have yet to be determined. In addition, the Company had outstanding options to purchase up to ten additional AW189 helicopters. If these options are exercised, the helicopters would be scheduled for delivery in 2020 and 2021.
Brazilian Tax Disputes. In connection with its ownership of Aeróleo and its operations in Brazil, the Company has several ongoing legal disputes related to the local, municipal and federal taxation requirements in Brazil, including assessments associated with the import and re-export of its helicopters in Brazil. The Company is disputinglegal disputes are related to: (i) municipal tax assessments of approximately $9.6 millionarising under the authorities in taxes, penalties and interest levied by the municipal authorities of Rio de Janeiro (for the period between 2000 toand 2005), and Macaé (for the period between 2001 to 2006), and Cabo Frio (for the period 2012) (collectively, the “Municipal Assessments”Tax Disputes”). The Company believes that, based on its interpretation of tax legislation supported by clarifying guidance provided by the Supreme Court of Brazil with respect to the issue in a 2006 ruling, it is in compliance with all applicable tax legislation, has paid all applicable taxes, penalties and interest and plans to defend these claims vigorously at the administrative levels in each jurisdiction. In the event the Municipal Assessments are upheld at the last administrative level, it may be necessary for the Company to deposit the amounts at issue as security to pursue further appeals. At September 30, 2018, it is not possible to determine the outcome of the Municipal Assessments, but the Company does not expect that the outcome would have a material adverse effect on its business, financial position or results of operations. In addition, it is not possible to reasonably estimate the likelihood or potential amount of assessments that may be issued for any subsequent periods.
The Company is disputing responsibility for $2.5 million of employer; (ii) social security contributions required to have been remitted bythat one of its customers relatingwas required to the periodremit from 1995 to 1998. Although the Company may be deemed co-responsible for such remittances under the local regulatory regime, the customer’s payments1998; (iii) penalties assessed due to the Company against presented invoices were made net of the specific remittances required to have been made by the customer and at issue in the claim. As such, the Company plans to defend this claim vigorously. At September 30, 2018, it is not possible to determine the outcome of this matter, but the Company does not expect that the outcome would have a material adverse effect on its business, financial position or results of operations.
The Company is disputing certain penalties that are being assessed by the State of Rio de Janeiro in respect of the Company’s alleged failure to submit accurate documentation and to fully comply with filing requirements with respect to certain value-added taxes. The Company elected to make payments of $0.2 million in installments over time to satisfy a portion of these penalties. Upon confirming with the asserting authority that the originally proposed penalties of $1.6 million with respect to the balance of the assessments were calculated based on amounts containing a typographical error, the aggregate penalties that remain in dispute total $0.5 million. At September 30, 2018, it is not possible to determine the outcome of this matter, but the Company does not expect that the outcome would have a material adverse effect on its business, financial position or results of operations.

The Company is disputing the imposition of $0.2 million in fines levied by the Brazilian customs authorities. These fines relate to the Company’s alleged failure to comply with certain deadlines underrelated to the temporary regime pursuant to which it imports helicopters into Brazil. In order to dispute such fines and pursue its legal remedies within the judicial system, the Company depositedimports and exports in and out of Brazil; and (iv) fines sought by taxing authorities in Brazil related to its use of certain amountstax credits used to offset certain social tax liabilities (collectively, the “Tax Disputes”).
The aggregate amount at issue for the Tax Disputes is $14.8 million. The Municipal Tax Disputes are the largest contributor to the total amount being sought from Aeróleo, with approximately $10.4 million at issue.
In addition to the foregoing Tax Disputes (and unrelated thereto), Aeróleo is engaged in two additional civil litigation matters relating to: (i) a dispute with its former tax consultant who has alleged that $0.5 million is due and payable as a contingency fee related to execution of certain tax strategies; and (ii) a fatal accident that occurred in 1983 that was previously settled with the

plaintiffs’ in the U.S. (the “Civil Disputes”). With respect to the fatal accident, the plaintiffs are seeking to collect additional amounts in Brazil despite the previous settlement agreed upon by the parties in the U.S.
The Company continues to evaluate and assess various legal strategies for each of the Tax Disputes and the Civil Disputes. As is customary for certain legal matters in Brazil, Aeróleo has already deposited amounts as security into an escrow account with the presiding judgeto pursue further legal appeals in the matters who controls the release of such funds pending the outcome. The Company believes its documentation evidences its timely compliance with the relevant deadlines. As such, the Company plans to defend these claims vigorously. At September 30, 2018, it is not possible to determine the outcome of these matters, but the Company does not expect that the outcome would have a material adverse effect on its business, financial position or results of operations.
The Company is disputing fines of $0.3 million sought by taxing authorities in Brazil following the final adjudication to disallow certain tax credits applied by the Company to offset certain social tax liabilities.  The fine is calculated as 50%several of the incremental tax liability resulting fromTax Disputes and the disallowanceCivil Disputes. As of March 31, 2019, the tax credits and has been applied without taking into account the circumstances relating to the disallowance of such tax credits.  The constitutionality of such fines is under review by the Supreme Court in Brazil.  There are a number of cases in which taxpayers have received favorable rulings due to the lack of constitutionality of the law.  As such, the Company plans to defend this claim vigorously.  At September 30, 2018, it is not possible to determine the outcome, but the Company does not expect that it would have a material adverse impact on its business, financial position or results of operations. 
The Company is disputing contingent fees of $0.5 million sought by its former tax consultant that have been calculated based on unrealized tax savings attributed to the consultant’s suggested tax strategies. The Company contends that fees are due only upon realized tax savings. At September 30, 2018, it is not possible to determine the outcome of these matters, but the Company does not expect that the outcome would have a material adverse effect on its business, financial position or results of operations.
In the normal course of business, the Company may become involved in various employment-related litigation matters.   At September 30, 2018, it is not possible to determine the outcome of several of these claims wherein an aggregate amount equal to the Company’s established accrual is being sought.  The Company does not expect that the outcome with respect to such claims would have a material adverse effect on its business, financial position or results of operations.
The Company is also disputing claims from the Brazilian tax authorities with respect to federal customs taxes levied upon the helicopters leased by the Company and imported into Brazil under a temporary regime and subject to reexport. In order to dispute such assessments and pursue its available legal remedies within the judicial system, the Company deposited the amounts at issue as security into an escrow account that serves as security and with the presiding judge in the matters controlling the release of such funds. The Company believes that, based on its interpretation of tax legislation and well established aviation industry practice, it is not required to pay such taxes and plans to defend these claims vigorously. At September 30, 2018, it is not possible to determine the outcome of this matter, but the Company does not expect that the outcome would have a material adverse effect on its business, financial position or results of operations.
As it relates to the specific cases referred to above, the Company currently anticipates that any administrative fine or penalty ultimately would not have a material effect on its business, financial position or results of operations. The Company has deposited $6.7$5.4 million into escrow accounts controlled by the court with respect to certain of the cases described aboveTax Disputes and the Civil Disputes, and the Company has fully reserved such amounts subject to final determination and the judicial release of such escrow deposits. These estimated liabilitiesestimates are based on the Company’sits assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s intentions and experience.
Other. On November 21, 2016, Aeróleo plans to defend the cases vigorously. As of March 31, 2019, it is not possible to determine the outcome of the Tax Disputes or the Civil Disputes, but the Company fileddoes not expect that an outcome would have a lawsuit inmaterial adverse effect on its business, financial position or results of operations.
General Litigation and Disputes
In the District Courtnormal course of Dallas County, Texas against Airbus Helicopters, Inc. and Airbus Helicopters S.A.S. (collectively, “Airbus”) alleging breaches of various contracts between us, fraudulent inducement and unjust enrichment in connection with the sale by Airbus of H225 model helicopters to the Company. On October 26, 2017,business, the Company addedis involved in various litigation matters including, among other things, claims against Airbusby third parties for fraudalleged property damages and negligent misrepresentation, and on December 28, 2017, the Company amended its complaint to seek damages attributable to the impact of Airbus’ unlawful acts on the value of a H225 that the Company purchasedpersonal injuries. In addition, from another helicopter operator.
On July 3, 2018, the Company entered into a litigation settlement agreement (the “Settlement Agreement”) with Airbus to settle all claims made by the Company against Airbus related to Airbus' marketing and sale, and the Company's purchase, of eleven H225 model helicopters. Pursuant to the Settlement Agreement, Airbus has agreed to pay the Company $42.0 million in cash and provide it with certain trade account credits that the Company may use for up to five years. The Company has agreed to release Airbus from any and all liabilities, claims, counterclaims, demands, complaints, costs, losses and expenses relating to the action and to dismiss the action with prejudice without any party admitting fault.
From time to time, the Company is involved in tax and other disputes with various legal actions incidentalgovernment agencies. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its business, including actions relatingfinancial statements related thereto as appropriate. It is possible that a change in its estimates related to employee claims, actions relating to medical malpractice claims, various tax issues, grievance hearings before labor regulatory agencies, and miscellaneous third party tort actions. The outcome of these proceedings is not predictable. However, based on current circumstances,exposures could occur, but the Company does not believe that the ultimate resolution of these proceedings, after considering available

defenses and any insurance coverage or indemnification rights, willexpect such changes in estimated costs would have a material adverse effect on its business, consolidated financial position or results of operations or cash flows.operations.
9.
EARNINGS (LOSS) PER COMMON SHARE
Basic earnings per common share of the Company are computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted earnings per common share of the Company are computed based on the weighted average number of common shares issued and outstanding plus the effect of potentially dilutive securities through the application of the if-converted method and/or treasury method. Dilutive securities for this purpose assume all common shares have been issued and outstanding during the relevant periods pursuant to the exercise of outstanding stock options.
Computations of basic and diluted earnings per common share of the Company for the three and nine months ended September 30,March 31, 2019 and 2018 and 2017 were as follows (in thousands, except share and per share data):
 Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
 2018 2017 2018 2017 2019 2018
Net income (loss) attributable to Era Group Inc. $31,289
 $(81,448) $19,716
 $(89,855)
Net loss attributable to Era Group Inc. $(5,943) $(1,194)
Less: Net income attributable to participating securities 714
 
 425
 
 
 
Net income (loss) attributable to fully vested common stock $30,575
 $(81,448) $19,291
 $(89,855) $(5,943) $(1,194)
            
Weighted average common shares outstanding:            
Basic 21,215,576
 20,844,376
 21,139,212
 20,715,686
 21,323,312
 21,003,777
Diluted(1)

 21,239,189
 20,844,376
 21,156,466
 20,715,686
 21,323,312
 21,003,777
Income (loss) per common share:        
Basic $1.44
 $(3.91) $0.91
 $(4.34)
Diluted $1.44
 $(3.91) $0.91
 $(4.34)
Loss per common share:    
Loss per common share, basic and diluted $(0.28) $(0.06)
____________________
(1)Excludes weighted average common shares of 224,769203,612 and 275,824235,900 for the three months ended September 30,March 31, 2019 and 2018, and 2017, respectively, and 223,921 and 278,740 for the nine months ended September 30, 2018 and 2017, respectively, for certain share awards as the effect of their inclusion would have been antidilutive.
10.REVENUES
The Company derives its revenues primarily from oil and gas flight services, emergency response services and leasing activities. Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which the entityCompany expects to be entitled in exchange for those goods or services.

The following table presents the Company’s operating revenues disaggregated by geographical region in which services are provided:
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
Three Months Ended 
 March 31,
2018 2017 2018 20172019 2018
Operating revenues:          
United States$38,229
 $41,989
 $117,673
 $112,862
$34,214
 $39,133
Foreign13,665
 16,764
 43,443
 48,215
International13,616
 15,617
Total operating revenues$51,894
 $58,753
 $161,116
 $161,077
$47,830
 $54,750
The following table presents the Company’s total revenues earned by service line:
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
Three Months Ended 
 March 31,
2018 2017 2018 20172019 2018
Revenues:          
Oil and gas flight services:          
U.S.$35,473
 $36,567
 $109,778
 $98,914
$32,466
 $36,536
International13,665
 16,764
 43,443
 48,215
13,616
 15,617
Total oil and gas49,138
 53,331
 153,221
 147,129
46,082
 52,153
Emergency response services2,756
 2,487
 7,895
 8,877
1,748
 2,597
Flightseeing
 2,935
 ��
 5,071
Total operating revenues$51,894
 $58,753
 $161,116
 $161,077
$47,830
 $54,750
Dry-leasing revenues:          
U.S.1,142
 486
 2,984
 1,015
451
 571
International1,574
 2,146
 5,560
 11,698
3,012
 2,001
Total revenues$54,610
 $61,385
 $169,660
 $173,790
$51,293
 $57,322
The Company determines revenue recognition by applying the following steps:
1.Identify the contract with a customer;
2.Identify the performance obligations in the contract;
3.Determine the transaction price;
4.Allocate the transaction price to the performance obligations; and
5.Recognize revenue as the performance obligations are satisfied.
The Company earns the majority of its revenue through master service agreements or subscription agreements, which typically include a fixed monthly or daily fee, incremental fees based on hours flown and fees for ancillary items such as fuel, security, charter services, etc. The Company’s arrangements to serve its customers represent a promise to stand-readystand ready to provide services at the customer’s discretion.
The Company recognizes revenue for flight services and emergency response services with the passing of each day as the Company has the right to consideration from its customers in an amount that corresponds directly with the value to the customer of performance completed to date. Therefore, the Company has elected to exercise the right to invoice practical expedient in its adoption of ASC 606. The right to invoice represents a method for recognizing revenue over time using the output measure of “value to the customer” which is an objective measure of an entity’s performance in a contract. The Company typically invoices customers on a monthly basis for revenues earned during the prior month, with payment terms of 30 days. The Company’s customer arrangements do not contain any significant financing component for customers. Amounts for taxes collected from customers and remitted to governmental authorities are reported on a net basis.

Practical Expedients and Exemptions
The Company does not incur any material incremental costs to obtain or fulfill customer contracts that require capitalization under the new revenue standard and has elected the practical expedient afforded by the new revenue standard to expense such costs as incurred upon adoption. These costs are included as operating expenses in the consolidated statements of operations.
The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.
11.RELATED PARTY TRANSACTIONS
Mr. Charles Fabrikant, Chairman of the Board and Director of the Company, is also the Executive Chairman and Chief Executive Officer of SEACOR Holdings Inc. (“SEACOR”). The Company leases office space from SEACOR Holdings Inc. (“SEACOR”) whose CEO is Chairman of the Company’s board of directors. DuringSEACOR. For each of the three months ended September 30,March 31, 2019 and 2018, and 2017, the Company incurred $0.1 million in rent and utilities, and during each of the nine months ended September 30, 2018 and 2017, the Company incurred $0.3 million in rent and utilities. Such costs are included in administrative and general expense in the condensed consolidated statements of operations.
The Company purchased products and services from its Dart Holding Company Ltd. (“Dart”) joint venture totaling $0.4$0.6 million and $0.1$0.7 million during the three months ended September 30,March 31, 2019 and 2018, and 2017, respectively. The Company purchased products from Dart totaling $1.7 million and $0.4 million during the nine months ended September 30, 2018 and 2017, respectively. The Company also hashad a note receivable from Dart, which had balancesa balance of $2.4 million and $2.9$2.3 million as of September 30, 2018 and December 31, 2017, respectively.2018. The note was paid in full during the three months ended March 31, 2019 in preparation for the sale of Dart. Purchases from Dart are included in operating expenses on the consolidated statements of income, and the note receivable iswas included in equity investments and advances on the consolidated balance sheets.
During the three months ended September 30, 2018,March 31, 2019, the Company received dividends of $1.0 million fromin conjunction with its 50% joint venture partner entered into an agreement to sell Dart. The transaction closed on April 1, 2019.
During the three months ended September 30,March 31, 2018, and 2017, the Company incurred fees of less than $0.1 million and $0.1 million, respectively, for simulator services from its Era Training Center, LLC (“ETC”) joint venture, and during each of the three months ended September 30,March 31, 2018, and 2017, the Company provided helicopter, management and other services to ETC of less than $0.1 million. During the nine months ended September 30, 2018 and 2017, the Company incurred fees of $0.2 million and $0.5 million, respectively, for simulator services from ETC, and during each of the nine months ended September 30, 2018 and 2017 the Company provided helicopter, management and other services to ETC of $0.1 million and $0.2 million, respectively. Revenues from ETC arewere recorded in operating revenues, and expenses incurred arewere recorded in operating expenses on the consolidated statements of operations.
During ETC was dissolved in the three months ended September 30, 2018, the Company entered into an agreement to dissolve ETC in exchange for the settlementthird quarter of an existing promissory note with an outstanding principal amount of $3.6 million by acquiring the assets of the joint venture. The agreement included the sale of three simulators to the Company for $2.9 million, partial ownership in a fourth simulator for $0.4 million and a note receivable from the Company’s partner in ETC for $0.4 million.2018.
12.
SHARE-BASED COMPENSATION
Restricted Stock Awards. The number of shares and weighted average grant price of restricted stock awards during the ninethree months ended September 30, 2018March 31, 2019 were as follows:
Number of Shares Weighted Average Grant PriceNumber of Shares Weighted Average Grant Price
Non-vested as of December 31, 2017382,873
 $12.68
Non-vested as of December 31, 2018513,766
 $10.28
Restricted stock awards granted:      
Non-employee directors37,272
 $9.00
34,488
 $10.35
Employees291,599
 $9.00
361,056
 $10.35
Vested(201,059) $14.05
(242,850) $10.36
Forfeited(500) $9.66

 $
Non-vested as of September 30, 2018510,185
 $9.77
Non-vested as of March 31, 2019666,460
 $10.29
The total fair value of shares vested during the ninethree months ended September 30,March 31, 2019 and 2018, and 2017, determined using the closing price on the grant date, was $2.8$2.5 million and $4.7$2.8 million, respectively.
Stock Options. The Company did not grant any stock options during the ninethree months ended September 30, 2018March 31, 2019.

Employee Stock Purchase Plan (“ESPP”). During the ninethree months ended September 30, 2018,March 31, 2019, the Company issued 114,38560,258 shares under the ESPP. As of September 30, 2018, 222,378March 31, 2019, 162,120 shares remain available for issuance under the ESPP.
Total share-based compensation expense, which includes stock options, restricted stock and the ESPP, was $2.2 million and $3.6$0.8 million for each of the ninethree months ended September 30, 2018March 31, 2019 and 20172018, respectively..
13.GUARANTORS OF SECURITIES
On December 7, 2012, Era Group issued the 7.750% Senior Notes. Era Group’s payment obligations under the 7.750% Senior Notes are jointly and severally guaranteed by all of its existing 100% owned U.S. subsidiaries that guarantee the Revolving Credit Facility and any future U.S. subsidiaries that guarantee the Revolving Credit Facility or other material indebtedness Era
Group may incur in the future (the “Guarantors”). All the Guarantors currently guarantee the Revolving Credit Facility, and the guarantees of the Guarantors are full and unconditional and joint and several.
As a result of the agreement by these subsidiariesthe Guarantors to guarantee the 7.750% Senior Notes, the Company is presentingpresents the following condensed consolidating balance sheets and statements of operations, comprehensive income and cash flows for Era Group (“Parent”), the Guarantors and the Company’s other subsidiaries (“Non-guarantors”). These statements should be read in conjunction with the unaudited condensedaccompanying consolidated financial statements and notes of the Company. 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.

Supplemental Condensed Consolidating Balance Sheet as of September 30, 2018March 31, 2019
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands, except share data)(in thousands, except share data)
ASSETS                  
Current assets:                  
Cash and cash equivalents$46,351
 $
 $1,280
 $
 $47,631
$48,876
 $
 $736
 $
 $49,612
Receivables:                  
Trade, operating, net of allowance for doubtful accounts of $854
 29,135
 6,520
 
 35,655
Trade, operating, net of allowance for doubtful accounts of $261
 24,741
 9,991
 
 34,732
Trade, dry-leasing
 3,833
 
 
 3,833

 2,446
 
 
 2,446
Tax receivable
 
 3,117
 
 3,117

 6
 2,837
 
 2,843
Other
 2,154
 547
 
 2,701
5,000
 1,863
 341
 
 7,204
Inventories, net
 20,124
 33
 
 20,157

 20,858
 35
 
 20,893
Prepaid expenses501
 1,560
 306
 
 2,367
726
 1,292
 215
 
 2,233
Total current assets46,852
 56,806
 11,803
 
 115,461
54,602
 51,206
 14,155
 
 119,963
Property and equipment
 910,730
 16,747
 
 927,477

 901,547
 16,705
 
 918,252
Accumulated depreciation
 (311,342) (3,394) 
 (314,736)
 (323,733) (3,711) 
 (327,444)
Property and equipment, net
 599,388
 13,353
 
 612,741

 577,814
 12,994
 
 590,808
Operating lease right-of-use
 7,317
 1,143
 
 8,460
Equity investments and advances
 26,600
 
 
 26,600

 24,427
 
 
 24,427
Investments in consolidated subsidiaries165,005
 
 
 (165,005) 
171,671
 
 
 (171,671) 
Intangible assets
 
 1,111
 
 1,111

 
 1,102
 
 1,102
Deferred income taxes21,185
 
 
 (21,185) 
11,513
 
 
 (11,513) 
Intercompany receivables375,131
 
 
 (375,131) 
358,653
 
 
 (358,653) 
Other assets1,398
 16,939
 84
 
 18,421
1,106
 19,873
 102
 
 21,081
Total assets$609,571
 $699,733
 $26,351
 $(561,321) $774,334
$597,545
 $680,637
 $29,496
 $(541,837) $765,841
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY                  
Current liabilities:                  
Accounts payable and accrued expenses$130
 $8,606
 $1,702
 $
 $10,438
$584
 $10,378
 $1,681
 $
 $12,643
Accrued wages and benefits
 7,008
 1,597
 
 8,605
5
 4,060
 1,459
 
 5,524
Accrued interest3,337
 67
 
 
 3,404
3,307
 69
 
 
 3,376
Accrued income taxes2,970
 
 23
 
 2,993
69
 2,800
 5
 
 2,874
Accrued other taxes244
 1,791
 361
 
 2,396
306
 687
 421
 
 1,414
Accrued contingencies
 
 1,014
 
 1,014

 
 656
 
 656
Current portion of long-term debt
 1,663
 495
 
 2,158

 1,663
 275
 
 1,938
Other current liabilities817
 199
 17
 
 1,033
469
 2,167
 456
 
 3,092
Total current liabilities7,498
 19,334
 5,209
 
 32,041
4,740
 21,824
 4,953
 
 31,517
Long-term debt133,743
 26,733
 
 
 160,476
134,060
 25,901
 
 
 159,961
Deferred income taxes
 128,073
 1,250
 (21,185) 108,138

 115,091
 1,245
 (11,512) 104,824
Intercompany payables
 322,117
 53,047
 (375,164) 

 298,659
 60,026
 (358,685) 
Operating lease liabilities
 6,074
 699
 
 6,773
Other liabilities
 1,753
 
 
 1,753

 721
 
 
 721
Total liabilities141,241
 498,010
 59,506
 (396,349) 302,408
138,800
 468,270
 66,923
 (370,197) 303,796
Redeemable noncontrolling interest
 3
 3,453
 
 3,456

 3
 3,157
 
 3,160
Equity:                  
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,761,823 outstanding, exclusive of treasury shares219
 
 
 
 219
Common stock, $0.01 par value, 60,000,000 shares authorized; 22,220,676 outstanding, exclusive of treasury shares224
 
 
 
 224
Additional paid-in capital447,014
 100,305
 4,562
 (104,868) 447,013
448,692
 100,306
 4,561
 (104,869) 448,690
Retained earnings24,048
 101,305
 (41,170) (60,104) 24,079
12,310
 111,948
 (45,145) (66,771) 12,342
Treasury shares, at cost, 215,141 shares(2,951) 
 
 
 (2,951)
Treasury shares, at cost, 157,267 shares(2,481) 
 
 
 (2,481)
Accumulated other comprehensive income, net of tax

 110
 
 
 110


 110
 
 
 110
Total equity468,330
 201,720
 (36,608) (164,972) 468,470
458,745
 212,364
 (40,584) (171,640) 458,885
Total liabilities, redeemable noncontrolling interest and stockholders’ equity$609,571
 $699,733
 $26,351
 $(561,321) $774,334
$597,545
 $680,637
 $29,496
 $(541,837) $765,841

Supplemental Condensed Consolidating Balance Sheet as of December 31, 20172018
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands, except share data)(in thousands, except share data)
ASSETS                  
Current assets:                  
Cash and cash equivalents$10,800
 $
 $2,783
 $
 $13,583
$48,396
 $
 $2,357
 $
 $50,753
Receivables:                  
Trade, operating, net of allowance for doubtful accounts of $1,196
 27,968
 5,872
 
 33,840
Trade, operating, net of allowance for doubtful accounts of $261
 27,509
 5,797
 
 33,306
Trade, dry-leasing
 5,124
 
 
 5,124

 3,803
 
 
 3,803
Tax receivables
 
 2,829
 
 2,829

 6
 3,181
 
 3,187
Other
 1,126
 497
 
 1,623

 1,949
 394
 
 2,343
Inventories, net
 20,746
 366
 
 21,112

 20,633
 40
 
 20,673
Prepaid expenses349
 721
 133
 
 1,203
398
 1,219
 190
 
 1,807
Escrow deposits
 3,250
 
 
 3,250
Total current assets11,149
 58,935
 12,480
 
 82,564
48,794
 55,119
 11,959
 
 115,872
Property and equipment
 956,918
 16,024
 
 972,942

 900,611
 16,550
 
 917,161
Accumulated depreciation
 (296,573) (2,455) 
 (299,028)
 (314,567) (3,400) 
 (317,967)
Net property and equipment
 660,345
 13,569
 
 673,914

 586,044
 13,150
 
 599,194
Equity investments and advances
 30,056
 
 
 30,056

 27,112
 
 
 27,112
Investments in consolidated subsidiaries161,350
 
 
 (161,350) 
172,950
 
 
 (172,950) 
Intangible assets
 
 1,122
 
 1,122

 
 1,107
 
 1,107
Deferred income taxes19,600
 
 
 (19,600) 
9,904
 
 
 (9,904) 
Intercompany receivables426,806
 
 
 (426,806) 
366,541
 
 
 (366,541) 
Other assets1,011
 3,370
 60
 
 4,441
1,251
 20,231
 96
 
 21,578
Total assets$619,916
 $752,706
 $27,231
 $(607,756) $792,097
$599,440
 $688,506
 $26,312
 $(549,395) $764,863
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY                  
Current liabilities:                  
Accounts payable and accrued expenses$638
 $13,655
 $2,128
 $
 $16,421
$136
 $11,357
 $1,668
 $
 $13,161
Accrued wages and benefits
 6,804
 1,460
 
 8,264
43
 7,743
 1,481
 
 9,267
Accrued interest549
 57
 
 
 606
500
 69
 
 
 569
Accrued income taxes
 24
 4
 
 28
918
 6
 49
 
 973
Accrued other taxes18
 1,192
 600
 
 1,810

 768
 500
 
 1,268
Accrued contingencies
 
 859
 
 859

 
 630
 
 630
Current portion of long-term debt
 1,663
 1,073
 
 2,736

 1,663
 395
 
 2,058
Other current liabilities848
 835
 37
 
 1,720
647
 220
 11
 
 878
Total current liabilities2,053
 24,230
 6,161
 
 32,444
2,244
 21,826
 4,734
 
 28,804
Long-term debt172,292
 27,979
 1,903
 
 202,174
133,900
 26,317
 
 
 160,217
Deferred income taxes
 124,948
 1,250
 (19,600) 106,598

 117,015
 1,245
 (9,903) 108,357
Intercompany payables
 381,660
 45,146
 (426,806) 

 310,727
 55,847
 (366,574) 
Other liabilities
 1,435
 (1) 
 1,434

 720
 27
 
 747
Total liabilities174,345
 560,252
 54,459
 (446,406) 342,650
136,144
 476,605
 61,853
 (376,477) 298,125
Redeemable noncontrolling interest
 4
 3,762
 
 3,766

 3
 3,299
 
 3,302
Equity:                  
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,319,150 shares outstanding, exclusive of treasury shares
215
 
 
 
 215
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,765,404 shares outstanding, exclusive of treasury shares
219
 
 
 
 219
Additional paid-in capital443,944
 100,306
 4,562
 (104,868) 443,944
447,299
 100,306
 4,562
 (104,869) 447,298
Retained earnings4,363
 92,034
 (35,552) (56,482) 4,363
18,254
 111,482
 (43,402) (68,049) 18,285
Treasury shares, at cost, 215,141 shares(2,951) 
 
 
 (2,951)
Treasury shares, at cost, 156,737 shares(2,476) 
 
 
 (2,476)
Accumulated other comprehensive income, net of tax
 110
 
 
 110

 110
 
 
 110
Total equity445,571
 192,450
 (30,990) (161,350) 445,681
463,296
 211,898
 (38,840) (172,918) 463,436
Total liabilities, redeemable noncontrolling interest and stockholders’ equity$619,916
 $752,706
 $27,231
 $(607,756) $792,097
$599,440
 $688,506
 $26,312
 $(549,395) $764,863


Supplemental Condensed Consolidating Statements of Operations for the Three Months Ended September 30, 2018March 31, 2019
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands)(in thousands)
Revenues$
 $48,631
 $13,623
 $(7,644) $54,610
$
 $45,314
 $13,617
 $(7,638) $51,293
Costs and expenses:                  
Operating
 29,888
 14,302
 (7,677) 36,513

 30,049
 14,285
 (7,638) 36,696
Administrative and general901
 6,957
 979
 
 8,837
1,242
 6,672
 961
 
 8,875
Depreciation
 9,316
 225
 
 9,541

 9,197
 253
 
 9,450
Total costs and expenses901
 46,161
 15,506
 (7,677) 54,891
1,242
 45,918
 15,499
 (7,638) 55,021
Losses on asset dispositions, net
 (148) 
 
 (148)
 (124) 
 
 (124)
Litigation settlement proceeds42,000
 
 
 
 42,000
Operating income (loss)41,099
 2,322
 (1,883) 33
 41,571
(1,242) (728) (1,882) 
 (3,852)
Other income (expense):                  
Interest income171
 448
 113
 
 732
196
 504
 52
 
 752
Interest expense(3,330) (204) (15) 
 (3,549)(3,241) (213) (7) 
 (3,461)
Foreign currency losses, net(10) (16) (68) 
 (94)(40) (49) (37) 
 (126)
Other, net
 21
 (6) 
 15

 (1) (10) 
 (11)
Total other income (expense)(3,169) 249
 24
 
 (2,896)(3,085) 241
 (2) 
 (2,846)
Income (loss) before income taxes and equity earnings37,930
 2,571
 (1,859) 33
 38,675
(4,327) (487) (1,884) 
 (6,698)
Income tax expense3,928
 3,933
 
 
 7,861
336
 (1,924) 
 
 (1,588)
Income (loss) before equity earnings34,002
 (1,362) (1,859) 33
 30,814
(4,663) 1,437
 (1,884) 
 (5,110)
Equity in earnings (losses) of subsidiaries(2,747) 465
 
 2,747
 465
(1,280) (975) 
 1,280
 (975)
Net income (loss)31,255
 (897) (1,859) 2,780
 31,279
(5,943) 462
 (1,884) 1,280
 (6,085)
Net loss attributable to noncontrolling interest in subsidiary
 
 10
 
 10

 
 142
 
 142
Net income (loss) attributable to Era Group Inc.$31,255
 $(897) $(1,849) $2,780
 $31,289
$(5,943) $462
 $(1,742) $1,280
 $(5,943)

Supplemental Condensed Consolidating Statements of Operations for the Three Months Ended September 30, 2017
 Parent Guarantors Non-guarantors Eliminations Consolidated
 (in thousands)
Revenues$
 $51,919
 $16,729
 $(7,263) $61,385
Costs and expenses:         
Operating
 35,826
 15,424
 (7,263) 43,987
Administrative and general2,305
 7,306
 1,317
 
 10,928
Depreciation
 11,851
 252
 
 12,103
Total costs and expenses2,305
 54,983
 16,993
 (7,263) 67,018
Gains on asset dispositions, net
 (122) 
 
 (122)
Loss on impairment
 (116,586) (432) 
 (117,018)
Operating income (loss)(2,305) (119,772) (696) 
 (122,773)
Other income (expense):         
Interest income47
 102
 57
 
 206
Interest expense(3,838) (170) (89) 
 (4,097)
Foreign currency gains (losses), net66
 85
 (139) 
 12
Other, net
 (1) (32) 
 (33)
Total other income (expense)(3,725) 16
 (203) 
 (3,912)
Income (loss) before income taxes and equity earnings(6,030) (119,756) (899) 
 (126,685)
Income tax expense (benefit)(2,114) (43,276) 153
 
 (45,237)
Income (loss) before equity earnings(3,916) (76,480) (1,052) 
 (81,448)
Equity earnings, net of tax
 233
 
 
 233
Equity in earnings (losses) of subsidiaries(77,532) 
 
 77,532
 
Net income (loss)(81,448) (76,247) (1,052) 77,532
 (81,215)
Net loss attributable to noncontrolling interest in subsidiary
 
 (233) 
 (233)
Net income (loss) attributable to Era Group Inc.$(81,448) $(76,247) $(1,285) $77,532
 $(81,448)


Supplemental Condensed Consolidating Statements of Operations for the Nine Months Ended September 30,March 31, 2018
 Parent Guarantors Non-guarantors Eliminations Consolidated
 (in thousands)
Revenues$
 $148,512
 $42,252
 $(21,104) $169,660
Costs and expenses:         
Operating
 92,317
 43,325
 (21,137) 114,505
Administrative and general14,087
 18,182
 3,445
 
 35,714
Depreciation
 29,283
 728
 
 30,011
Total costs and expenses14,087
 139,782
 47,498
 (21,137) 180,230
Gains on asset dispositions, net
 2,269
 
 
 2,269
Litigation settlement proceeds42,000
 
 
 
 42,000
Operating income (loss)27,913
 10,999
 (5,246) 33
 33,699
Other income (expense):         
Interest income180
 878
 166
 
 1,224
Interest expense(10,925) (595) (126) 
 (11,646)
Foreign currency losses, net(66) (141) (888) 
 (1,095)
Gain on debt extinguishment
 
 175
 
 175
Other, net
 31
 (10) 
 21
Total other income (expense)(10,811) 173
 (683) 
 (11,321)
Income (loss) before income taxes and equity earnings17,102
 11,172
 (5,929) 33
 22,378
Income tax expense1,075
 3,474
 
 
 4,549
Income (loss) before equity earnings16,027
 7,698
 (5,929) 33
 17,829
Equity in earnings (losses) of subsidiaries3,655
 1,577
 
 (3,655) 1,577
Net income (loss)19,682
 9,275
 (5,929) (3,622) 19,406
Net loss attributable to noncontrolling interest in subsidiary
 
 310
 
 310
Net income (loss) attributable to Era Group Inc.$19,682
 $9,275
 $(5,619) $(3,622) $19,716

Supplemental Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2017
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands)(in thousands)
Revenues$
 $151,550
 $46,132
 $(23,892) $173,790
$
 $49,832
 $14,467
 $(6,977) $57,322
Costs and expenses:                  
Operating
 98,117
 48,854
 (23,892) 123,079

 29,770
 14,867
 (6,977) 37,660
Administrative and general5,280
 21,648
 4,283
 
 31,211
4,313
 6,373
 1,385
 
 12,071
Depreciation
 34,898
 737
 
 35,635

 10,094
 260
 
 10,354
Total costs and expenses5,280
 154,663
 53,874
 (23,892) 189,925
4,313
 46,237
 16,512
 (6,977) 60,085
Gains on asset dispositions, net
 5,048
 
 
 5,048

 4,414
 
 
 4,414
Loss on impairment
 (116,586) (432)   (117,018)
Operating income (loss)(5,280) (114,651) (8,174) 
 (128,105)(4,313) 8,009
 (2,045) 
 1,651
Other income (expense):                  
Interest income96
 320
 225
 
 641
4
 96
 46
 
 146
Interest expense(10,800) (627) (193) 
 (11,620)(4,303) (182) (91) 
 (4,576)
Foreign currency gains (losses), net220
 253
 (569) 
 (96)55
 30
 (11) 
 74
Gain on debt extinguishment
 
 175
 
 175
Other, net
 
 (29) 
 (29)
 
 (8) 
 (8)
Total other income (expense)(10,484) (54) (566) 
 (11,104)(4,244) (56) 111
 
 (4,189)
Income (loss) before income taxes and equity earnings(15,764) (114,705) (8,740) 
 (139,209)(8,557) 7,953
 (1,934) 
 (2,538)
Income tax expense (benefit)(5,297) (43,282) 513
 
 (48,066)(1,536) 798
 
 
 (738)
Income (loss) before equity earnings(10,467) (71,423) (9,253) 
 (91,143)(7,021) 7,155
 (1,934) 
 (1,800)
Equity earnings, net of tax
 1,069
 
 
 1,069

 443
 
 
 443
Equity in earnings (losses) of subsidiaries(79,388) 
 
 79,388
 
5,827
 
 
 (5,827) 
Net income (loss)(89,855) (70,354) (9,253) 79,388
 (90,074)(1,194) 7,598
 (1,934) (5,827) (1,357)
Net loss attributable to noncontrolling interest in subsidiary
 
 219
 
 219

 
 163
 
 163
Net income (loss) attributable to Era Group Inc.$(89,855) $(70,354) $(9,034) $79,388
 $(89,855)$(1,194) $7,598
 $(1,771) $(5,827) $(1,194)


Supplemental Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2018March 31, 2019
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands)(in thousands)
Net income (loss)$31,255
 $(897) $(1,859) $2,780
 $31,279
$(5,943) $462
 $(1,884) $1,280
 $(6,085)
Comprehensive income (loss)31,255
 (897) (1,859) 2,780
 31,279
(5,943) 462
 (1,884) 1,280
 (6,085)
Comprehensive income attributable to noncontrolling interest in subsidiary
 
 10
 
 10
Comprehensive loss attributable to noncontrolling interest in subsidiary
 
 142
 
 142
Comprehensive income (loss) attributable to Era Group Inc.$31,255
 $(897) $(1,849) $2,780
 $31,289
$(5,943) $462
 $(1,742) $1,280
 $(5,943)

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2017
 Parent Guarantors Non-guarantors Eliminations Consolidated
 (in thousands)
Net income (loss)$(81,448) $(76,247) $(1,052) $77,532
 $(81,215)
Comprehensive income (loss)(81,448) (76,247) (1,052) 77,532
 (81,215)
Comprehensive loss attributable to noncontrolling interest in subsidiary
 
 (233) 
 (233)
Comprehensive income (loss) attributable to Era Group Inc.$(81,448) $(76,247) $(1,285) $77,532
 $(81,448)


Supplemental Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30,March 31, 2018
 Parent Guarantors Non-guarantors Eliminations Consolidated
 (in thousands)
Net income (loss)$19,682
 $9,275
 $(5,929) $(3,622) $19,406
Other comprehensive loss:         
Foreign currency translation adjustments
 (5) 
 
 (5)
Total other comprehensive loss
 (5) 
 
 (5)
Comprehensive income (loss)19,682
 9,270
 (5,929) (3,622) 19,401
Comprehensive loss attributable to noncontrolling interest in subsidiary
 
 310
 
 310
Comprehensive income (loss) attributable to Era Group Inc.$19,682
 $9,270
 $(5,619) $(3,622) $19,711

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2017
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands)(in thousands)
Net income (loss)$(89,855) $(70,354) $(9,253) $79,388
 $(90,074)$(1,194) $7,598
 $(1,934) $(5,827) $(1,357)
Other comprehensive loss:         
Other comprehensive income (loss):         
Foreign currency translation adjustments
 (2) 
 
 (2)
 (5) 
 
 (5)
Total other comprehensive loss
 (2) 
 
 (2)
 (5) 
 
 (5)
Comprehensive income (loss)(89,855) (70,356) (9,253) 79,388
 (90,076)(1,194) 7,593
 (1,934) (5,827) (1,362)
Comprehensive loss attributable to noncontrolling interest in subsidiary
 
 219
 
 219

 
 163
 
 163
Comprehensive income (loss) attributable to Era Group Inc.$(89,855) $(70,356) $(9,034) $79,388
 $(89,857)$(1,194) $7,593
 $(1,771) $(5,827) $(1,199)


Supplemental Condensed Consolidating Statements of Cash Flows for the NineThree Months Ended September 30, 2018March 31, 2019
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands)(in thousands)
Net cash provided by provided by operating activities$35,550
 $13,319
 $1,483
 $
 $50,352
$5,477
 $(1,386) $(1,456) $
 $2,635
Cash flows from investing activities:                  
Purchases of property and equipment
 (7,461) (225) 
 (7,686)
 (1,221) (91) 
 (1,312)
Proceeds from disposition of property and equipment
 29,520
 
 
 29,520
Dividends received from equity investees


 1,000
 
 
 1,000
Purchase of investments(5,000) 
 
 
 (5,000)
Principal payments on notes due from equity investees
 401
 
 
 401

 2,334
 
 
 2,334
Principal payments on third party notes receivable
 620
 
 
 620

 104
 
 
 104
Net cash used in investing activities
 24,080
 (225) 
 23,855
(5,000) 1,217
 (91) 
 (3,874)
Cash flows from financing activities:                  
Long-term debt issuance costs
 
 
 (1,295) (1,295)
Payments on long-term debt
 (1,247) (2,315) (39,000) (42,562)
 (416) (126) 
 (542)
Proceeds from share award plans
 
 
 893
 893

 
 
 590
 590
Purchase of treasury shares
 
 
 (5) (5)
Borrowings and repayments of intercompany debt
 (39,402) 
 39,402
 

 585
 
 (585) 
Net cash used in financing activities
 (40,649) (2,315) 
 (42,964)
 169
 (126) 
 43
Effects of exchange rate changes on cash and cash equivalents
 
 (445) 
 (445)
 
 55
 
 55
Net increase (decrease) in cash and cash equivalents35,550
 (3,250) (1,502) 
 30,798
477
 
 (1,618) 
 (1,141)
Cash, cash equivalents and restricted cash, beginning of period10,800
 3,250
 2,783
 
 16,833
48,396
 
 2,357
 
 50,753
Cash, cash equivalents and restricted cash, end of period$46,350
 $
 $1,281
 $
 $47,631
$48,873
 $
 $739
 $
 $49,612


Supplemental Condensed Consolidating Statements of Cash Flows for the NineThree Months Ended September 30, 2017March 31, 2018
Parent Guarantors Non-guarantors Eliminations ConsolidatedParent Guarantors Non-guarantors Eliminations Consolidated
(in thousands)(in thousands)
Net cash provided by (used in) operating activities$(267) $17,477
 $718
 $
 $17,928
$3,387
 $(5,761) $1,344
 $
 $(1,030)
Cash flows from investing activities:                  
Purchases of property and equipment
 (13,013) (108) 
 (13,121)
 (3,746) (38) 
 (3,784)
Proceeds from disposition of property and equipment
 5,690
 
 
 5,690

 19,497
 
 
 19,497
Investments in and advances to equity investees
 (126) 
 
 (126)
Principal payments on notes due from equity investees
 564
 
 
 564

 54
 
 
 54
Principal payments on third party notes receivable
 94
 
 
 94

 76
 
 
 76
Net cash provided by (used in) investing activities
 (6,791) (108) 
 (6,899)
Net cash used in investing activities
 15,881
 (38) 
 15,843
Cash flows from financing activities:                  
Proceeds from Revolving Credit Facility
 
 
 9,000
 9,000
Payments on long-term debt
 (1,247) (498) (23,000) (24,745)
 (554) (1,705) (12,000) (14,259)
Revolving Credit Facility issuance costs
 
 
 (1,295) (1,295)
Proceeds from share award plans
 
 
 836
 836

 
 
 484
 484
Purchase of treasury shares
 
 
 (52) (52)
Borrowings and repayments of intercompany debt
 (13,216) 
 13,216
 

 (12,811) 
 12,811
 
Net cash used in financing activities
 (14,463) (498) 
 (14,961)
 (13,365) (1,705) 
 (15,070)
Effects of exchange rate changes on cash and cash equivalents27
 
 74
 
 101
8
 (5) (26) 
 (23)
Net increase (decrease) in cash and cash equivalents(240) (3,777) 186
 
 (3,831)3,395
 (3,250) (425) 
 (280)
Cash, cash equivalents and restricted cash, beginning of period25,474
 3,777
 1,476
 
 30,727
10,800
 3,250
 2,783
 
 16,833
Cash, cash equivalents and restricted cash, end of period$25,234
 $
 $1,662
 $
 $26,896
$14,195
 $
 $2,358
 $
 $16,553


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 should be read in conjunction with the accompanying unaudited consolidated financial statements as of September 30, 2018March 31, 2019 and for the three and nine months ended September 30, 2018March 31, 2019 and 20172018, included elsewhere herein, and with our Annual Report on Form 10-K for the year ended December 31, 2017.2018.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements concerning management’s expectations, strategic objectives, business prospects, anticipated performance and financial condition and other similar matters involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others:
the Company’s dependence on, and the cyclical and volatile nature of, offshore oil and gas exploration, development and production activity, and the impact of general economic conditions and fluctuations in worldwide prices of, and demand for, oil and natural gas on such activity levels;
the Company’s reliance on a smalllimited number of customers and the reduction of its customer base resulting fromas a result of bankruptcies or consolidation;
risks that the Company’s customers reduce or cancel contracted services or tender processes or obtain comparable services through other forms of transportation;
the Company’s dependence on U.S. government agency contracts that are subject to budget appropriations;
cost savings initiatives implemented by the Company’s customers;
risks inherent in operating helicopters;
the Company’s ability to maintain an acceptable safety record and level of reliability;
the impact of increased United States (“U.S.”) and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities;
the impact of a grounding of all or a portion of the Company’s fleet for extended periods of time or indefinitely on the Company’s business, including its operations and ability to service customers, results of operations or financial condition and/or the market value of the affected helicopter(s);helicopters;
the Company’s ability to successfully expand into other geographic and aviation service markets;
risks associated with political instability, governmental action, war, acts of terrorism and changes in the economic condition in any foreign country where the Company does business, which may result in expropriation, nationalization, confiscation or deprivation of the Company’s assets or result in claims of a force majeure situation;
the impact of declines in the global economy and financial markets;
the impact of fluctuations in foreign currency exchange rates on the Company’s asset values and cost to purchase helicopters, spare parts and related services;
risks related to investing in new lines of aviation service without realizing the expected benefits;
risks of engaging in competitive processes or expending significant resources for strategic opportunities, with no guaranty of recoupment;
the Company’s reliance on a smalllimited number of helicopter manufacturers and suppliers;
the Company’s ongoing need to replace aging helicopters;
the Company’s reliance on the secondary helicopter market to dispose of used helicopters and parts;
the Company’s reliance on information technology;technology related risks;
the impact of allocation of risk between the Company and its customers;
the liability, legal fees and costs in connection with providing emergency response services;
adverse weather conditions and seasonality;
risks associated with the Company’s debt structure;
the Company’s counterparty credit risk exposure;
the impact of operational and financial difficulties of the Company’s joint ventures and partners and the risks associated with identifying and securing joint venture partners when needed;
conflict with the other owners of the Company’s non-wholly owned subsidiaries and other equity investees;
adverse results of legal proceedings;
the incurrence of significant costs in connection with the Company’s pursuit of legal remedies;
risks associated with significant increases in fuel costs;

the Company’s ability to obtain insurance coverage and the adequacy and availability of such coverage;
the Company’s ability to remediate the material weaknesses it has identified in its internal controls over financial reporting described herein and in its Annual Report on Form 10-K for the year ended December 31, 2017;
the possibility of labor problems;

the attraction and retention of qualified personnel;
restrictions on the amount of foreign ownership of the Company’s common stock; and
various other matters and factors, many of which are beyond the Company’s control.
It is not possible to predict or identify all such factors. Consequently, the foregoing should not be considered a complete discussion of all potential risks or uncertainties. The words “estimate,” “project,” “intend,” “believe,” “plan” and similar expressions are intended to identify forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. The forward-looking statements in this Quarterly Report on Form 10-Q should be evaluated together with the many uncertainties that affect the Company’s businesses, particularly those discussed in greater detail elsewhere herein and in Part I, Item 1A, “Risk Factors” of Era Group’s Annual Report on Form 10-K for the year ended December 31, 20172018 and Era Group’s subsequent Quarterly Reports on Form 10-Q and periodic reporting on Form 8-K (if any).
Overview
We are one of the largest helicopter operators in the world and the longest serving helicopter transport operator in the U.S., which is our primary area of operations. Our helicopters are primarily used to transport personnel to, from and between offshore oil and gas production platforms, drilling rigs and other installations. In addition to serving the oil and gas industry, we provide emergency response services and utility services, among other activities. We also provide helicopters and related services to third-party helicopter operators. We currently have customers in the U.S., Argentina, Brazil, Colombia, the Dominican Republic, India, Mexico, Spain, and Spain.Suriname.
We charter the majority of our helicopters through master service agreements, subscription agreements, long-term contracts, day-to-day charter arrangements and dry-leases. Master service agreements and subscription agreements typically require a fixed monthly fee plus incremental payments based on hours flown. These agreements have fixed terms ranging from one month to five years and generally may be canceled without penalty upon 30-90 days’ notice. Generally, these contracts do not commit our customers to acquire specific amounts of services or minimum flight hours and permit our customers to decrease the number of helicopters under contract with a corresponding decrease in the fixed monthly payments without penalty. Day-to-day charter arrangements call for either a combination of a daily fixed fee plus a charge based on hours flown or an hourly rate with a minimum number of hours to be charged. Dry-leases require a fixed monthly fee for the customer’s right to use the helicopter and, where applicable, a charge based on hours flownadditional charges as compensation for any maintenance, parts, and/or personnel support that we may provide to the customer. Dry-leases have fixed terms from several months to five years and, in limited circumstances, may be canceled without penalty upon written notice. Emergency response services consist of services provided under contracts with hospitals or underon a subscription basis directly with the end users.users as well as charter services on an ad hoc basis.
Certain of our operations are subject to seasonal factors. Operations in the U.S. Gulf of Mexico are often at their highest levels from April to September, as daylight hours increase, and are at their lowest levels from NovemberDecember to February, as daylight hours decrease. Our Alaskan operations also see an increase during May to September, as our firefighting activities occur during this time and daylight hours are significantly longer. 
Recent Developments
On September 12, 2018, the Company entered into a new teaming agreement for the North Sea region in Europe with Bel Air Aviation, the only Danish owned offshore helicopter company servicing the oil and gas and offshore wind markets. The cooperation will combine Bel Air Aviation’s operating expertise in the North Sea Region with more flexible fleet solutions afforded by our large and diverse helicopter fleet.




Results of Operations
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended March 31,
2018 2017 2018 20172019 2018
(in thousands) % (in thousands) % (in thousands) % (in thousands) %(in thousands) % (in thousands) %
Revenues:                      
United States$39,371
 72
 $42,475
 69
 $120,657
 71
 $113,877
 66
$34,665
 68
 $39,704
 69
Foreign15,239
 28
 18,910
 31
 49,003
 29
 59,913
 34
International16,628
 32
 17,618
 31
Total revenues54,610
 100
 61,385
 100
 169,660
 100
 173,790
 100
51,293
 100
 57,322
 100
Costs and Expenses:                      
Operating:                      
Personnel13,935
 26
 16,096
 26
 41,716
 25
 47,195
 27
13,029
 25
 14,134
 25
Repairs and maintenance10,823
 20
 15,296
 25
 36,125
 21
 39,309
 23
12,710
 25
 10,761
 19
Insurance and loss reserves1,244
 2
 1,303
 2
 3,893
 2
 3,723
 2
1,204
 2
 1,307
 2
Fuel3,695
 7
 3,219
 5
 11,056
 7
 8,880
 5
3,402
 7
 3,671
 6
Leased-in equipment51
 
 272
 
 584
 
 846
 
50
 
 285
 
Other6,765
 12
 7,801
 13
 21,131
 12
 23,126
 13
6,301
 12
 7,502
 13
Total operating expenses36,513
 67
 43,987
 71
 114,505
 67
 123,079
 70
36,696
 72
 37,660
 66
Administrative and general8,837
 16
 10,928
 18
 35,714
 21
 31,211
 18
8,875
 17
 12,071
 21
Depreciation and amortization9,541
 17
 12,103
 20
 30,011
 18
 35,635
 21
9,450
 18
 10,354
 18
Total costs and expenses54,891
 100
 67,018
 109
 180,230
 106
 189,925
 109
55,021
 107
 60,085
 105
Gains (losses) on asset dispositions, net(148) 
 (122) 
 2,269
 1
 5,048
 3
(124) 
 4,414
 8
Litigation settlement proceeds42,000
 77
 
 
 42,000
 25
 
 
Loss on impairment
 
 (117,018) (191) 
 
 (117,018) (67)
Operating income (loss)41,571
 76
 (122,773) (200) 33,699
 20
 (128,105) (74)(3,852) (8) 1,651
 3
Other income (expense):                      
Interest income732
 1
 206
 
 1,224
 1
 641
 
752
 1
 146
 
Interest expense(3,549) (6) (4,097) (7) (11,646) (7) (11,620) (7)(3,461) (7) (4,576) (8)
Foreign currency gains (losses), net(94) 
 12
 
 (1,095) (1) (96) 
(126) 
 74
 
Gain on debt extinguishment
 
 
 
 175
 
 
 

 
 175
 
Other, net15
 
 (33) 
 21
 
 (29) 
(11) 
 (8) 
Total other income (expense)(2,896) (5) (3,912) (7) (11,321) (7) (11,104) (7)(2,846) (6) (4,189) (7)
Income (loss) before income taxes and equity earnings38,675
 71
 (126,685) (206) 22,378
 13
 (139,209) (80)
Income tax expense (benefit)7,861
 14
 (45,237) (74) 4,549
 3
 (48,066) (28)
Income (loss) before equity earnings30,814
 57
 (81,448) (132) 17,829
 10
 (91,143) (52)
Equity earnings, net of tax465
 1
 233
 
 1,577
 1
 1,069
 1
Net income (loss)31,279
 58
 (81,215) (132) 19,406
 11
 (90,074) (51)
Net loss (income) attributable to noncontrolling interest in subsidiary10
 
 (233) 
 310
 
 219
 
Net income (loss) attributable to Era Group Inc.$31,289
 57
 $(81,448) (133) $19,716
 12
 $(89,855) (52)
Loss before income taxes and equity earnings(6,698) (13) (2,538) (4)
Income tax benefit(1,588) (3) (738) (1)
Loss before equity earnings(5,110) (10) (1,800) (3)
Equity earnings (losses), net of tax(975) (2) 443
 1
Net loss(6,085) (12) (1,357) (2)
Net loss attributable to noncontrolling interest in subsidiary142
 
 163
 
Net loss attributable to Era Group Inc.$(5,943) (12) $(1,194) (2)

Revenues by Service Line. The table below sets forth the revenues earned by service line for the three and nine months ended September 30, 2018March 31, 2019 and 2017.2018.
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended March 31,
2018 2017 2018 20172019 2018
(in thousands) % (in thousands) % (in thousands) % (in thousands) %(in thousands) % (in thousands) %
Revenues:            
Oil and gas: (1)
            
U.S.$35,473
 65 $36,567
 60 $109,778
 65 $98,914
 57$32,466
 63 $36,536
 64
International13,665
 25 16,764
 27 43,443
 25 48,215
 2813,616
 27 15,617
 27
Total oil and gas49,138
 90 53,331
 87 153,221
 90 147,129
 8546,082
 90 52,153
 91
Dry-leasing (2)
2,716
 5 2,632
 4 8,544
 5 12,713
 73,463
 7 2,572
 4
Emergency response services(3)
2,756
 5 2,487
 4 7,895
 5 8,877
 51,748
 3 2,597
 5
Flightseeing
  2,935
 5 
  5,071
 3
$54,610
 100 $61,385
 100 $169,660
 100 $173,790
 100$51,293
 100 $57,322
 100
____________________
(1)Primarily oil and gas activities, but also includes revenues from utility services, such as firefighting, and VIP transport.firefighting.
(2)Includes property rental income for the three and nine months ended September 30, 2017 of approximately $0.1 million and $0.3 million, respectively, that was previously included in emergency response services and oil and gas service lines.
(3)Includes search and rescue and air medical services.




Current Quarter compared to Prior Year Quarter
Operating Revenues. Operating revenues were $6.8$6.0 million lower in the three months ended September 30, 2018March 31, 2019 (the “Current Quarter”) compared to the three months ended September 30, 2017March 31, 2018 (the “Prior Year Quarter”).
Operating revenues from U.S. oil and gas operations were $1.1$4.1 million lower in the Current Quarter. Operating revenues from single engine,medium, light twin, and mediumsingle engine helicopters were $1.6$2.9 million, $1.1 million, and $0.6$0.9 million lower, respectively, primarily due to lower utilization. These decreases were partially offset by a $2.2$0.9 million increase in operating revenues from heavy helicopters primarily due to higher utilization.
Operating revenues from international oil and gas operations were $3.1$2.0 million lower in the Current Quarter. Operating revenues in ColombiaSuriname were $1.5$1.1 million lower primarily due to lower utilization.the end of a contract. Operating revenues in Brazil were $1.5$0.7 million lower primarily due to the weakening of the Brazilian real relative to the U.S. dollar anddollar. Operating revenues in Colombia were $0.2 million lower primarily due to lower utilization.
Revenues from dry-leasing activities were consistent with$0.9 million higher primarily due to the commencement of new contracts subsequent to the Prior Year Quarter.
Operating revenues from emergency response services were $0.3$0.9 million higher in the Current Quarterlower primarily due to increased charter flights.
Operating revenues from flightseeing activities were $2.9 million lower thanthe conclusion of a contract subsequent to the Prior Year Quarter due to the sale of flightseeing assets in the current year.Quarter.
Operating Expenses. Operating expenses were $7.5$1.0 million lower in the Current Quarter. Repairs and maintenance expenses were $4.5 million lower primarily due to a $2.8 million decrease related to the timing of repairs, a $0.8 million decrease related to the return of leased-in helicopters, the recognition of $0.7 million in vendor credits in the Current Quarter, and a $0.2 million decrease in power-by-the-hour (“PBH”) expense. Personnel costs were $2.2$1.1 million lower primarily due to a reduction in headcount. Other operatingFuel expense was $0.3 million lower primarily due to a decrease in flight hours. Leased-in equipment expenses were $1.0$0.2 million lower primarily due to the absenceend of costshelicopter leases. Other operating expenses were $1.2 million lower primarily due to the recognition of $0.5 million in penalties on the cancellation of two helicopter purchase agreements in the Prior Year Quarter and a decrease of $0.5 million related to flightseeing activities andpart sales in the reversal of a previously reserved deposit following a favorable decision on a Brazilian tax dispute.Prior Year Quarter. These decreases were partially offset by an increase in repairs and maintenance expense of $1.9 million primarily due to a $0.5$1.8 million increase in fuelpower-by-the-hour (“PBH”) expense and a $0.8 million increase related to the timing of repairs, partially offset by a net increase in the recognition of vendor credits of $0.6 million. The increase in PBH expense was primarily due to an increasethe recognition of credits in the average fuel price.Prior Year Quarter related to the removal of helicopters from PBH programs following their sale.
Administrative and General. Administrative and general expenses were $2.1$3.2 million lower in the Current Quarter primarily due to a $2.0 million decrease inthe absence of professional services fees and a $0.7 million decrease in other taxes related to the correction of immaterial errors in the Prior Year Quarter. These decreases were partially offset by a $0.7 million increase in personnel expenses.litigation that has now been settled.
Depreciation and Amortization. Depreciation and amortization expense was $2.6$0.9 million lower in the Current Quarter primarily due to the sale of helicoptersassets that became fully depreciated subsequent to the Prior Year Quarter.
Litigation Settlement Proceeds. Gains (Losses) on Asset Dispositions, Net.Litigation settlement proceeds of $42.0 million related to a settlement There were no significant asset dispositions in the Current Quarter.
Loss on Impairment. In the Prior Year Quarter, the Company recorded a loss on impairment of $117.0 million related to the Company’s H225 helicopters.
Operating Income (Loss). Operating income as a percentage of revenues was 76% in the Current Quarter compared to operating loss as a percentage of revenues of 200% in the Prior Year Quarter. The increase in operating income as a percentage of revenues was primarily due to the recognition of litigation settlement proceeds in the Current Quarter and the absence of the loss on impairment recorded in the Prior Year Quarter.
Interest Income. Interest income was $0.5 million higher in the Current Quarter primarily due to interest earned on the Company’s sales-type leases.
Interest Expense. Interest expense was $0.5 million lower in the Current Quarter due to lower debt balances.
Income Tax Benefit (Expense). Income tax expense was $7.9 million in the Current Quarter primarily due to the recognition of litigation settlement proceeds. Income tax benefit was $45.2 million in the Prior Year Quarter primarily due to the recognition of the loss on impairment.
Current Nine Months compared to Prior Nine Months
Operating Revenues. Operating revenues were $4.1 million lower in the nine months ended September 30, 2018 (the “Current Nine Months”) compared to the nine months ended September 30, 2017 (the “Prior Nine Months”).
Operating revenues from oil and gas operations in the U.S. were $10.9 million higher in the Current Nine Months. Operating revenues from heavy and medium helicopters were $10.7 million and $4.6 million higher, respectively, primarily due to higher utilization. Operating revenues from single engine and light twin helicopters were $2.5 million and $1.8 million lower, respectively, primarily due to lower utilization.

Operating revenues from international oil and gas operations were $4.8 million lower in the Current Nine Months. Operating revenues in Brazil were $2.7 million lower primarily due to the weakening of the Brazilian real relative to the U.S. dollar and lower utilization. Operating revenues from Colombia were $1.1 million lower primarily due to a short term contract in the Prior Nine Months. Operating revenues in Suriname were $0.9 million lower due to the end of contracts.
Revenues from dry-leasing activities were $4.2 million lower in the Current Nine Months primarily due to $3.7 million of lease return charges on helicopters returned to the Company upon the conclusion of lease contracts in the Prior Nine Months and contracts that have ended. These decreases were partially offset by the recognition of a bankruptcy settlement during the Current Nine Months.
Operating revenues from emergency response services were $1.0 million lower in the Current Nine Months primarily due to the end of air medical contracts in the Prior Nine Months, partially offset by increased charter flights.
Operating revenues from flightseeing activities were $5.1 million lower in the Current Nine Months due to the sale of flightseeing assets.
Operating Expenses. Operating expenses were $8.6 million lower in the Current Nine Months. Personnel costs were $5.5 million lower primarily due to a reduction in headcount. Repairs and maintenance expenses were $3.2 million lower primarily due to a $1.7 million decrease related to the timing of repairs, the recognition of $0.7 million in vendor credits, a $0.4 million credit related to the return of leased-in helicopters, and a $0.4 million decrease in PBH expense. Other operating expenses were $2.0 million lower primarily due to the absence of costs related to flightseeing activities and the reversal of previously reserved deposits following a favorable decision on Brazilian customs and tax disputes during the Current Nine Months. These decreases were partially offset by an increase in fuel expense of $2.2 million primarily due to a higher average fuel price and increased flight hours in oil and gas operations.
Administrative and General. Administrative and general expenses were $4.5 million higher in the Current Nine Months primarily due to an increase of $7.0 million in professional services fees. This increase was partially offset by a $1.1 million decrease in personnel costs primarily due to reductions in headcount and changes in senior management in the Prior Nine Months, a $0.7 million decrease in other taxes related to the correction of immaterial errors in the Prior Nine Months, a $0.3 million decrease related to changes in allowance for doubtful accounts and a $0.4 million decrease related to other expenses.
Depreciation and Amortization. Depreciation and amortization expense was $5.6 million lower in the Current Nine Months primarily due to the sale of helicopters subsequent to the Prior Nine Months.
Gains/(losses) on Asset Dispositions, Net.  In the Current Nine Months, the Company sold its flightseeing assets in Alaska (which consisted of eight single engine helicopters, two operating facilities, and related property and equipment), two additional single engine helicopters, two light twin helicopters seven heavy helicopters, one medium helicopter and other equipment for proceeds of $29.5 million and receivables of $14.3$19.5 million, resulting in net gains of $2.3$4.4 million. During the Prior Nine Months, the Company sold or otherwise disposed of a hangar in Alaska, two helicopters, capital parts and other assets for gains of $5.0 million.
Litigation Settlement Proceeds. Litigation settlement proceeds of $42.0 million related to a settlement in the Current Nine Months.
Loss on Impairment. In the Prior Nine Months, the Company recorded a loss on impairment of $117.0 million related to the Company’s H225 helicopters.
Operating Income (Loss). Operating loss as a percentage of revenues was 8% in the Current Quarter compared to operating income as a percentage of revenues was 20% in the Current Nine Months compared to operating loss as a percentage of revenues of 74%3% in the Prior Nine Months.Year Quarter. The increasedecrease in operating income as a percentage of revenues was primarily due to gains on asset dispositions recognized in the recognition of litigation settlement proceedsPrior Year Quarter and higher repairs and maintenance expenses in the Current Nine Months and the absence of the loss on impairment recorded in the Prior Nine Months.Quarter.
Interest Income. Interest income was $0.6 million higher in the Current Nine MonthsQuarter primarily due to interest earned on the Company’s sales-type leases.
Foreign Currency Gains (Losses), net.Interest Expense. Foreign currency losses wereInterest expense was $1.1 million lower in the Current Nine Months primarilyQuarter due to lower debt balances and the weakeningwrite-off of deferred debt issuance costs related to the amendment of the Brazilian real relative toCompany’s Amended and Restated Senior Secured Revolving Credit Facility in the U.S. dollar.Prior Year Quarter.
Income Tax Benefit (Expense).Income tax expensebenefit was $4.5$1.6 million in the Current Nine Months primarily dueQuarter compared to the recognition of litigation settlement proceeds. Income tax benefit was $48.1$0.7 million in the Prior Nine MonthsYear Quarter primarily due to lower pre-tax income.
Equity Earnings (Losses), net of tax. Equity earnings were $1.4 million lower in the recognition ofCurrent Quarter primarily due to losses from the loss on impairment.Dart joint venture.

Fleet Count
The following shows details of our helicopter fleet as of September 30, 2018.March 31, 2019. We own and control all 108 of our helicopters.
 Owned Leased-in Total 
Max.
Pass.(1)
 
Cruise
Speed
(mph)
 
Approx.
Range
(miles)
 
Average
  Age(2) (years)
 Helicopters 
Max.
Pass.(1)
 
Cruise
Speed
(mph)
 
Approx.
Range
(miles)
 
Average
  Age (years)
Heavy:                        
S92 4
 
 4
 19
 175
 620
 2
 4
 19
 175
 620
 3
H225 2
 
 2
 19
 162
 582
 9
 1
 19
 162
 582
 11
AW189 4
 
 4
 16
 173
 490
 2
 4
 16
 173
 490
 3
 10
 
 10
         9
        
                        
Medium:                        
AW139 36
 
 36
 12
 173
 426
 9
 36
 12
 173
 426
 9
S76 C+/C++ 5
 
 5
 12
 161
 348
 12
 5
 12
 161
 348
 12
B212 5
 
 5
 11
 115
 299
 39
 5
 11
 115
 299
 40
 46
 
 46
         46
        
                        
Light—twin engine:                        
A109 7
 
 7
 7
 161
 405
 12
 7
 7
 161
 405
 13
EC135 13
 2
 15
 7
 138
 288
 10
 13
 7
 138
 288
 11
BO105 3
 
 3
 4
 138
 276
 29
 3
 4
 138
 276
 30
 23
 2
 25
         23
        
                        
Light—single engine:                        
A119 13
 
 13
 7
 161
 270
 12
 13
 7
 161
 270
 12
AS350 17
 
 17
 5
 138
 361
 21
 17
 5
 138
 361
 21
 30
 
 30
         30
        
Total Fleet 109
 2
 111
       13
 108
       13
____________________
(1)In typical configuration for our operations.
(2)Reflects the average age of helicopters that are owned by us.
Liquidity and Capital Resources
General
Our ongoing liquidity requirements arise primarily from working capital needs, meeting our capital commitments (including the purchase of helicopters and other equipment) and the repayment of debt obligations. In addition, we may use our liquidity to fund acquisitions, repurchase shares or debt securities or make other investments. Sources of liquidity are cash balances and cash flows from operations and, from time to time, we may obtain additional liquidity through the issuance of equity or debt or through borrowings under the amended and restated senior secured revolving credit facility (the “Revolving Credit Facility”). or through asset sales.
Summary of Cash Flows
 Three Months Ended 
 March 31,
 2019 2018
 (in thousands)
Cash flows provided by or (used in):   
Operating activities$2,635
 $(1,030)
Investing activities(3,874) 15,843
Financing activities43
 (15,070)
Effect of exchange rate changes on cash, cash equivalents and restricted cash55
 (23)
Net increase (decrease) in cash, cash equivalents and restricted cash$(1,141) $(280)

Operating Activities
Cash flows provided by operating activities increased by $3.7 million in the Current Quarter compared to the Prior Year Quarter. The components of cash flows provided by operating activities during the Current Quarter and Prior Year Quarter were as follows (in thousands):
 Three Months Ended 
 March 31,
 2019 2018
Operating income before depreciation, gains on asset dispositions and impairment, net$5,722
 $7,591
Changes in operating assets and liabilities before interest and income taxes(4,160) (9,181)
Interest paid, net of capitalized interest of $0 and $97 in 2019 and 2018, respectively(353) (983)
Other1,426
 1,543
Total cash flows provided by operating activities$2,635
 $(1,030)
Operating income before depreciation and gains on asset dispositions, net was $1.9 million lower in the Current Quarter compared to the Prior Year Quarter primarily due to a decrease in operating revenues, partially offset by lower general and administrative expenses and lower operating expenses.
During the Current Quarter, changes in operating assets and liabilities before interest and income taxes used cash flows of $4.2 million primarily due to a decrease in payables. During the Prior Year Quarter, changes in operating assets and liabilities before interest and income taxes used cash flows of $9.2 million primarily due to a decrease in accounts payables and an increase in prepaid expenses and other receivables.
Interest paid, net of capitalized interest, was $0.6 million lower in the Current Quarter.
Investing Activities
During the Current Quarter, net cash used in investing activities was $3.9 million primarily as follows:
Net principal payments received from equity investees and third parties were $2.4 million.
Capital expenditures were $1.3 million, which consisted primarily of spare helicopter parts and leasehold improvements.
Purchase of investments was $5.0 million.
During the Prior Year Quarter, net cash provided by investing activities was $15.8 million primarily as follows:
Proceeds from the disposition of property and equipment were $19.5 million.
Net principal payments received from equity investees and third parties were $0.1 million.
Capital expenditures were $3.8 million, which consisted primarily of helicopter acquisitions, spare helicopter parts, and capitalized interest.
Financing Activities
During the Current Quarter, net cash provided by financing activities was less than $0.1 million primarily as follows:
Proceeds from share award plans were $0.6 million.
Principal payments on long-term debt were $0.5 million.
During the Prior Year Quarter, net cash used in financing activities was $15.1 million primarily as follows:
Proceeds from share award plans were $0.5 million.
Principal payments on long-term debt, including our Revolving Credit Facility, were $14.3 million.
Long-term debt issuance costs were $1.3 million incurred in connection with the amendment of the Revolving Credit Facility.

Unfunded Capital Commitments
As of September 30, 2018,March 31, 2019, we had unfunded capital commitments of $82.3$80.1 million, consisting primarily of agreements to purchase helicopters, including three AW189 heavy helicopters and five AW169 light twin helicopters. The AW189 helicopters are scheduled to be delivered in 2019 and 2020. Delivery dates for the AW169 helicopters have yet to be determined. These commitments are payable beginning in 2019 and through 2020, and all of the commitments (inclusive of deposits paid on options not yet exercised) may be terminated without further liability to us other than aggregate liquidated damages of $2.1 million. In addition, we had outstanding options to purchase up to ten additional AW189 helicopters. If these options are exercised, the helicopters would be scheduled for delivery in 2020 and 2021.
If we do not exercise our rights to cancel these capital commitments, we expect to finance the remaining acquisition costs for these helicopters through a combination of cash on hand, cash provided by operating activities, asset sales and borrowings under our Revolving Credit Facility.

Summary of Cash Flows
 Nine Months Ended 
 September 30,
 2018 2017
 (in thousands)
Cash flows provided by or (used in):   
Operating activities$50,352
 $17,928
Investing activities23,855
 (6,899)
Financing activities(42,964) (14,961)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(445) 101
Net increase (decrease) in cash, cash equivalents and restricted cash$30,798
 $(3,831)
Operating Activities
Cash flows provided by operating activities increased by $32.4 million in the Current Nine Months compared to the Prior Nine Months. The components of cash flows provided by operating activities during the Current Nine Months and Prior Nine Months were as follows (in thousands):
 Nine Months Ended 
 September 30,
 2018 2017
Operating income before depreciation, gains on asset dispositions and impairment, net$61,441
 $19,500
Changes in operating assets and liabilities before interest and income taxes(6,593) 2,440
Interest paid, net of capitalized interest of $97 and $451 in 2018 and 2017, respectively(7,770) (7,798)
Income taxes paid(63) (427)
Other3,337
 4,213
Total cash flows provided by operating activities$50,352
 $17,928
Operating income before depreciation and gains on asset dispositions, net was $41.9 million higher in the Current Nine Months compared to the Prior Nine Months primarily due to litigation settlement proceeds of $42.0 million.
During the Current Nine Months, changes in operating assets and liabilities before interest and income taxes used cash flows of $6.6 million primarily due to a decrease in accounts payables. During the Prior Nine Months, changes in operating assets and liabilities before interest and income taxes provided cash flows of $2.4 million primarily due to an increase in accounts payable and accrued expenses partially offset by an increase in receivables.
Net non-cash expenses decreased by $0.9 million compared to the Prior Nine Months primarily due to a decrease in equity award amortization.
Investing Activities
During the Current Nine Months, net cash provided by investing activities was $23.9 million primarily as follows:
Proceeds from the disposition of property and equipment were $29.5 million.
Net principal payments received from equity investees and third parties were $1.0 million.
Dividends received from equity investees were $1.0 million.
Capital expenditures were $7.7 million, which consisted primarily of helicopter acquisitions, spare helicopter parts, and leasehold improvements.
During the Prior Nine Months, net cash used in investing activities was $6.9 million primarily as follows:
Proceeds from the disposition of property and equipment were $5.7 million.
Net principal payments received from equity investees and third parties were $0.7 million.
Capital expenditures were $13.1 million, which consisted primarily of helicopter acquisitions, deposits on future helicopter deliveries, spare helicopter parts and capitalized interest.
Investments in and advances to equity method investees were $0.1 million.

Financing Activities
During the Current Nine Months, net cash used in financing activities was $43.0 million primarily as follows:
Principal payments on long-term debt, including our Revolving Credit Facility, were $42.6 million.
Long-term debt issuance costs were $1.3 million incurred in connection with the amendment of the Revolving Credit Facility.
Proceeds from share award plans were $0.9 million.
During the Prior Nine Months, net cash used in financing activities was $15.0 million primarily as follows:
Proceeds from additional borrowings under our Revolving Credit Facility were $9.0 million.
Proceeds from share award plans were $0.8 million.
Principal payments on long-term debt, including our Revolving Credit Facility, were $24.7 million.
Revolving Credit Facility
As of September 30, 2018, our Revolving Credit Facility provided us with the ability to borrow up to $125.0 million, with a sub-limit of up to $50.0 million for letters of credit. The Revolving Credit Facility includes an “accordion” feature which, if exercised and subject to agreement by the lenders and the satisfaction of certain conditions, will increase total commitments by up to $50.0 million. Our availability under the Revolving Credit Facility may be limited by certain maintenance covenants specified under the Revolving Credit Facility. As of September 30, 2018, the Company had no outstanding borrowings under the Revolving Credit Facility, and based on our operating results through September 30, 2018, we have the ability to borrow up to $123.9 million under the Revolving Credit Facility.
Senior Notes
On December 7, 2012, we completed an offering of $200.0 million aggregate principal amount of our 7.750% Senior Notes due December 15, 2022. Interest on the notes is payable semi-annually in arrears on June 15th and December 15th of each year. From time to time, we may opportunistically repurchase our 7.750% Senior Notes in open market or privately negotiated transactions on terms we believe to be favorable. As of September 30, 2018, $144.8 million in aggregate principal amount of the 7.750% Senior Notes remains outstanding. We may also redeem the 7.750% Senior Notes at any time and from time to time at a premium as specified in the indenture governing the 7.750% Senior Notes.
Promissory Notes
In December 2010, we entered into two promissory notes to purchase a heavy and a medium helicopter. We refinanced the notes upon their maturity in December 2015. The notes bear interest at the one-month LIBOR rate plus 181 basis points and require monthly principal and interest payments of $0.2 million with final payments totaling $16.8 million due in December 2020.
Aeróleo Debt
During the nine months ended September 30, 2018, the Company did not enter into any new debt arrangements in Brazil. During the nine months ended September 30, 2017, the Company settled certain tax disputes for installment payments in Brazil totaling $0.2 million. Such amounts bear interest at a rate equal to the overnight rate as published by the Central Bank of Brazil.
For additional information about our long-term debt, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Amended and Restated Senior Secured Revolving Credit Facility”, “-7.750% Senior Notes”, “-Promissory Notes”, and “-Aeróleo Debt” contained in our Annual Report on Form 10-K for the year ended December 31, 2017.
Short and Long-Term Liquidity Requirements
We anticipate that we will generate positive cash flows from operating activities and that these cash flows will be adequate to meet our working capital requirements. During the ninethree months ended September 30, 2018,March 31, 2019, our cash provided by operating activities was $50.4$2.6 million. To support our capital expenditure program and/or other liquidity requirements, we may use any combination of operating cash flow, cash balances or proceeds from sales of assets, issue debt or equity, or borrowings under our Revolving Credit Facility.
Our availability of long-term liquidity is dependent upon our ability to generate operating profits sufficient to meet our requirements for working capital, debt service, capital expenditures and a reasonable return on investment. Management will continue to closely monitor our liquidity and the credit markets.

Off-Balance Sheet Arrangements
On occasion, we and our partners will guarantee certain obligations on behalf of our joint ventures. As of September 30, 2018,March 31, 2019, we had no such guarantees in place. As of September 30, 2018,March 31, 2019, we had standby letters of credit totaling $1.1$0.7 million.
Contingencies
Brazilian Tax Disputes
WeIn connection with our ownership of Aeróleo and its operations in Brazil, we have several ongoing legal disputes related to the local, municipal and federal taxation requirements in Brazil, including assessments associated with the import and re-export of our helicopters in Brazil. The legal disputes are disputingrelated to: (i) municipal tax assessments of approximately $9.6 millionarising under the authorities in taxes, penalties and interest levied by the municipal authorities of Rio de Janeiro (for the period between 2000 toand 2005), and Macaé (for the period between 2001 to 2006), and Cabo Frio (for the period 2012) (collectively, the “Municipal Assessments”Tax Disputes”). We believe that, based on our interpretation of tax legislation supported by clarifying guidance provided by the Supreme Court of Brazil with respect to the issue in a 2006 ruling, we are in compliance with all applicable tax legislation, have paid all applicable taxes, penalties and interest and plan to defend these claims vigorously at the administrative levels in each jurisdiction. In the event the Municipal Assessments are upheld at the last administrative level, it may be necessary for us to deposit the amounts at issue as security to pursue further appeals. At September 30, 2018, it is not possible to determine the outcome of the Municipal Assessments, but we do not expect that the outcome would have a material effect on our business, financial position or results of operations. In addition, it is not possible to reasonably estimate the likelihood or potential amount of assessments that may be issued for any subsequent periods.
We are disputing responsibility for $2.5 million of employer; (ii) social security contributions required to have been remitted bythat one of our customers relatingwas required to the periodremit from 1995 to 1998. Although we may be deemed co-responsible for such remittances under the local regulatory regime, the customer’s payments to us against presented invoices were made net of the specific remittances required to have been made by the customer and at issue in the claim. As such, we plan to defend this claim vigorously. At September 30, 2018, it is not possible to determine the outcome of this matter, but we do not expect that the outcome would have a material adverse effect on our business, financial position or results of operations.
We are disputing certain1998; (iii) penalties that are being assessed by the State of Rio de Janeiro in respect of our alleged failure to submit accurate documentation and to fully comply with filing requirements with respect to certain value-added taxes. We elected to make payments of $0.2 million in installments over time to satisfy a portion of these penalties.  Upon confirming with the asserting authority that the originally proposed penalties of $1.6 million with respect to the balance of the assessments were calculated based on amounts containing a typographical error, the aggregate penalties that remain in dispute total $0.5 million. At September 30, 2018, it is not possible to determine the outcome of this matter, but we do not expect that the outcome would have a material adverse effect on our business, financial position or results of operations.
We are disputing the imposition of $0.2 million in fines levied by the Brazilian customs authorities. These fines relatedue to our alleged failure to comply with certain deadlines underrelated to the temporary regime pursuant to whichhelicopters we import helicopters into Brazil. In orderand export in and out of Brazil; and (iv) fines sought by taxing authorities in Brazil related to dispute such fines and pursue our legal remedies withinuse of certain tax credits used to offset certain social tax liabilities (collectively, the judicial system, we deposited certain amounts“Tax Disputes”).
The aggregate amount at issue for the Tax Disputes is $14.8 million. The Municipal Tax Disputes are the largest contributor to the total amount being sought from Aeróleo, with approximately $10.4 million at issue.
In addition to the foregoing Tax Disputes (and unrelated thereto), Aeróleo is engaged in two additional civil litigation matters relating to: (i) a dispute with its former tax consultant who has alleged that $0.5 million is due and payable as a contingency fee related to execution of certain tax strategies; and (ii) a fatal accident that occurred in 1983 and was previously settled with the plaintiffs’ in the U.S. (the “Civil Disputes”). With respect to the fatal accident, the plaintiffs are seeking to collect additional amounts in Brazil despite the previous settlement agreed upon by the parties in the U.S.
We continue to evaluate and assess various legal strategies for each of the Tax Disputes and the Civil Disputes. As is customary for certain legal matters in Brazil, Aeróleo has already deposited amounts as security into an escrow account with the presiding judgeto pursue further legal appeals in the matters who controls the release of such funds pending the outcome. We believe our documentation evidences our timely compliance with the relevant deadlines. As such, we plan to defend this case vigorously. At September 30, 2018, it is not possible to determine the outcome of these matters, but we do not expect that the outcome would have a material adverse effect on our business, financial position or results of operations.
We are disputing fines of $0.3 million sought by taxing authorities in Brazil following the final adjudication to disallow certain tax credits we applied to offset certain social tax liabilities. The fine is calculated as 50%several of the incremental tax liability resulting fromTax Disputes and the disallowanceCivil Disputes. As of the tax credits and has been applied without taking into account the circumstances relating to the disallowance of such tax credits.  The constitutionality of such fines is under review by the Supreme Court in Brazil.  There are a number of cases in which taxpayers have received favorable rulings due to the lack of constitutionality of the law.  As such,March 31, 2019, we plan to defend this claim vigorously. At September 30, 2018, it is not possible to determine the outcome, but we do not expect that it would have a material adverse impact on our business, financial position or results of operations. 
We are disputing contingent fees of $0.5 million sought by our former tax consultant that have been calculated based on unrealized tax savings attributed to the consultant’s suggested tax strategies. Our contention is that fees are due only upon realized tax savings. At September 30, 2018, it is not possible to determine the outcome of these matters, but we do not expect that the outcome would have a material adverse effect on our business, financial position or results of operations.
In the normal course of business, we become involved in various employment-related litigation matters. At September 30, 2018, it is not possible to determine the outcome of several of these claims wherein an aggregate amount equal to the Company’s established accrual is being sought. We do not expect that the outcome with respect to such claims would have a material adverse effect on our business, financial position or results of operations. 
We are also disputing claims from the Brazilian tax authorities with respect to federal customs taxes levied upon the helicopters imported into Brazil under a temporary regime and subject to re-export. In order to dispute such assessments and pursue our available legal remedies within the judicial system, we deposited the amounts at issue as security into an escrow account

with the presiding judge in the matter controlling the release of such funds. We believe that, based on our interpretation of tax legislation and well established aviation industry practice, we are not required to pay such taxes and plan to defend this claim vigorously. At September 30, 2018, it is not possible to determine the outcome of this matter, but we do not expect that the outcome would have a material adverse effect on our business, financial position or results of operations.
In the normal course of our business, we become involved in various litigation matters including, among other things, claims by third parties for alleged property damages and personal injuries. In addition, from time to time, we are involved in tax and other disputes with various government agencies. Management has used estimates in determining our potential exposure to these matters and has recorded reserves in our financial statements related thereto as appropriate. It is possible that a change in our estimates related to these exposures could occur, but we do not expect such changes in estimated costs would have a material effect on our business, consolidated financial position or results of operations. As it relates to the specific cases referred to above, we currently anticipate that any administrative fine or penalty ultimately would not have a material effect on our business, financial position or results of operations. We have deposited $6.7$5.4 million into escrow accounts controlled by the court with respect to certain of the cases described aboveTax Disputes and the Civil Disputes, and we have fully reserved such amounts subject to final determination and the judicial release of such escrow deposits. These estimates are based on our assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s intentions and experience. Aeróleo plans to defend the cases vigorously. As of March 31, 2019, it is not possible to determine the outcome of the Tax Disputes or the Civil Disputes, but we do not expect that an outcome would have a material adverse effect on our business, financial position or results of operations.
Airbus Lawsuit
On November 21, 2016, we filed a lawsuit in the District Court of Dallas County, Texas against Airbus Helicopters, Inc. and Airbus Helicopters S.A.S. (collectively, “Airbus”) alleging breaches of various contracts between us, fraudulent inducement and unjust enrichment in connection with the Airbus marketing and sale of H225 model helicopters to us. On October 26, 2017, we added claims against Airbus for fraud and negligent misrepresentation, and on December 28, 2017, we amended our complaint to seek damages attributable to the impact of Airbus’ unlawful acts on the value of a H225 that we purchased from another helicopter operator.
On July 3, 2018, the Company entered into a litigation settlement agreement (the “Settlement Agreement”) with Airbus to settle all claims made by the Company against Airbus related to Airbus' marketing and sale, and the Company's purchase, of eleven H225 model helicopters. Pursuant to the Settlement Agreement, Airbus has agreed to pay the Company $42.0 million in cash and provide it with certain trade account credits that the Company may use for up to five years. The Company has agreed to release Airbus from any and all liabilities, claims, counterclaims, demands, complaints, costs, losses and expenses relating to the action and to dismiss the action with prejudice without any party admitting fault.
For additional information about our contractual obligations and commercial commitments, refer to “Liquidity and Capital Resources—Contractual Obligations and Commercial Commitments” contained in our Annual Report on Form 10-K for the year ended December 31, 2017.2018. There have been no material changes since such date.
Critical Accounting Policies
The preparation of our financial statements is in conformity with U.S. generally accepted accounting principles (“GAAP”). In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP, whereas, in other circumstances, GAAP requires us to make estimates, judgments and assumptions that we believe are reasonable based upon information available. We base our estimates and judgments on historical experience, professional advice and various other sources that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions. In addition to the policies discussed in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2017,2018, the following involves a high degree of judgment and complexity.
Revenue recognition. Leases. We have elected to exercise the right to invoicean optional practical expedient to retain our current classification of leases and adopted ASU 2016-02 using the current-period adjustment method thus recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the current period. We currently maintain operating leases for a number of fixed assets and determine if an arrangement is considered a lease at inception or during modification or renewal of an existing lease. The right-of-use (“ROU”) assets associated with these leases are reflected under long-term assets, and the payables on lease agreements recorded as liabilities, with amounts due within one year recorded in other current liabilities on our adoption of ASC 606. We recognize revenue for flight services and emergency response services with the passing of each day as we have the right to consideration from our customers in an amount that corresponds directly with the value to our customerconsolidated balance sheets. The majority of our performance completed to date. The right to invoice represents a method for recognizing revenue over time using the output measure of “value to the customer” which is an objective measure of an entity’s performance in a contract. We typically invoice our customers on a monthly basis for revenues earned during the prior month with payment terms of 30 days. Our customer arrangementsoperating leases do not contain any significant financing component for our customers.provide an implicit rate, so the incremental borrowing rate is based on the information available at commencement date to determine the present value of future payments.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For additional information about our exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, contained in our Annual Report on Form 10-K for the year ended December 31, 2017.2018. There has been no material change in our exposure to market risk during the Current Quarter, except as described below.
As of September 30, 2018,March 31, 2019, we had non-U.S. dollar denominated capital purchase commitments of €70.9€71.5 million ($82.380.1 million). An adverse change of 10% in the underlying foreign currency exchange rate would increase the U.S. dollar equivalent of the non-hedged purchase commitments by $8.2$8.0 million. As of September 30, 2018,March 31, 2019, our Brazilian subsidiary maintained a non-U.S. dollar denominated working capital balance of R$24.236.3 million ($6.09.3 million). An adverse change of 10% in the underlying foreign currency exchange rate would reduce our working capital balance by $0.5$0.8 million.
ITEM 4.CONTROLS AND PROCEDURES

With the participation of our Chief Executive Officer and Chief Financial Officer, management evaluated 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 (the “Exchange Act”)) as of September 30, 2018.March 31, 2019. Based on their evaluation, our principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective in providing reasonable assurance that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, as of September 30, 2018 solely because of the existence of the material weaknesses in internal controls over financial reporting described below.disclosure.
Material Weaknesses in Internal Control Over Financial Reporting
In connection with our evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2017, management determined that review controls over the accrual of interest relating to tax installment agreements entered into by Aeróleo, our subsidiary in Brazil, were not designed effectively to ensure the accuracy of the accrual of variable interest.
While this deficiency in controls did not result in a material misstatement of our 2017 consolidated financial statements, we determined this deficiency represents a material weakness in internal control over financial reporting as of December 31, 2017 and resulted in the correction of errors in our fourth quarter 2017 financial results prior to publication of the results. As noted below, this material weakness was remedied in the first quarter of 2018.
Management also identified a material weakness in the third and fourth quarters of 2017 related to the design and operation of controls over preparation and review of the Company’s calculation of its tax provisions (income and other).
Remediation Process
In order to remediate the material weaknesses in internal control related to our subsidiary in Brazil, management implemented additional controls. These new controls include validation of monthly interest accruals on tax installments including review of the terms of any new installment arrangements. The implementation of the additional controls were completed by the end of first quarter 2018. Accordingly, management concluded this material weakness was remediated as of March 31, 2018.
Management is in the process of remediating the material weakness related to the design and operation of controls over the preparation and review of the Company’s tax provision calculation by enhancing the precision of the review and reconciliation controls over each significant component of the income tax and other tax accrual processes. These controls were enhanced in the first quarter of 2018. However, management is continuing to enhance further controls and assess the effectiveness of these controls; therefore, our remediation efforts are ongoing.None.
Changes in Internal Controls Over Financial Reporting
Other than as noted above with respect toDuring the above remedied and existing material weaknesses, during the quarterthree months ended September 30, 2018,March 31, 2019, there were no changes in our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1A.     RISK FACTORS
For additional information about our risk factors, see “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017.2018. There have been no material changes to this Item from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2017.2018.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table presents information regarding our repurchases of shares of our Common Stock on a monthly basis during the three months ended September 30, 2018:March 31, 2019:
 Total Number of Shares Repurchased 
Average Price Paid Per
Share
 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Value of Shares that May Yet be Purchased Under the Plans or Programs
July 1, 2018 - July 31, 2018
 $
 
 $22,934,076
August 1, 2018 - August 31, 2018
 $
 
 $22,934,076
September 1, 2018 - September 30, 2018
 $
 
 $22,934,076
 Total Number of Shares Repurchased 
Average Price Paid Per
Share
 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Value of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2019 - January 31, 2019
 $
 
 $22,934,076
February 1, 2019 - February 28, 2019530 $9.62
 
 $22,928,977
March 1, 2019 - March 31, 2019
 $
 
 $22,928,977

ITEM 6.EXHIBITS
3.1
3.2
10.1 
31.1 
31.2 
32.1 
32.2 
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension Calculation Linkbase
101.DEF XBRL Taxonomy Extension Definition Linkbase
101.LAB XBRL Taxonomy Extension Label Linkbase
101.PRE XBRL Taxonomy Extension Presentation Linkbase




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.
 
    Era Group Inc. (Registrant) 
      
      
DATE:November 6, 2018May 7, 2019By: /s/ Jennifer D. Whalen 
    
Jennifer D. Whalen, Senior Vice President, Chief Financial Officer
      


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