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Maximum Aggregate | Registration | |||||
Class of Securities Registered | Offering Price (1) | Fee(2) | ||||
3.00% Convertible Senior Notes due 2038 | $115,000,000 | $4,519.50 | ||||
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Underwriting | ||||||||||||
Price to | Discounts and | Proceeds to | ||||||||||
Public(1) | Commissions | Bristow(1) | ||||||||||
Per Note | 100 | % | 2.75 | % | 97.25 | % | ||||||
Total | $ | 100,000,000 | $ | 2,750,000 | $ | 97,250,000 |
(1) | Plus accrued interest, if any, from June 17, 2008, if settlement occurs after that date. |
Credit Suisse | Goldman, Sachs & Co. | JPMorgan |
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Bristow Group Inc. | 1 | |||
Risk Factors | 2 | |||
Forward-Looking Statements | 2 | |||
Use of Proceeds | 3 | |||
Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends | 3 | |||
Description of Debt Securities | 3 | |||
Description of Guarantees of the Debt Securities | 4 | |||
Description of Capital Stock | 4 | |||
Description of Warrants | 12 | |||
Plan of Distribution | 12 | |||
Legal Matters | 14 | |||
Experts | 14 | |||
Where You Can Find More Information | 14 |
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Number of Aircraft | Percentage of | |||||||||||||||||||||||||||
Helicopters | Revenue for | |||||||||||||||||||||||||||
Small(1) | Medium | Large | Training | Fixed Wing | Total | Fiscal Year 2008 | ||||||||||||||||||||||
North America | 121 | 30 | 4 | — | 1 | 156 | 23 | % | ||||||||||||||||||||
South and Central America | 4 | 28 | 1 | — | — | 33 | 6 | % | ||||||||||||||||||||
Europe | 1 | 10 | 38 | — | — | 49 | 36 | % | ||||||||||||||||||||
West Africa | 12 | 28 | 3 | — | 7 | 50 | 17 | % | ||||||||||||||||||||
Southeast Asia | 3 | 11 | 13 | — | — | 27 | 11 | % | ||||||||||||||||||||
Other International | — | 11 | 9 | — | 2 | 22 | 5 | % | ||||||||||||||||||||
EH Centralized Operations | — | — | — | — | — | — | 1 | % | ||||||||||||||||||||
Bristow Academy | — | — | — | 68 | 1 | 69 | 1 | % | ||||||||||||||||||||
Total, consolidated affiliates(2) | 141 | 118 | 68 | 68 | 11 | 406 | 100 | % | ||||||||||||||||||||
Unconsolidated affiliates(3) | 55 | 56 | 8 | — | 23 | 142 | ||||||||||||||||||||||
Total | 196 | 174 | 76 | 68 | 34 | 548 | ||||||||||||||||||||||
Aircraft not currently in fleet:(4) | ||||||||||||||||||||||||||||
On order | — | 9 | 16 | 10 | — | 35 | ||||||||||||||||||||||
Under option | — | 33 | 17 | — | — | 50 |
(1) | We have been disposing of our smaller aircraft in the U.S. Gulf of Mexico and are currently exploring alternatives for accelerating the disposition of approximately 50 of such aircraft within the next eighteen months. Any such aircraft dispositions will be subject to obtaining terms acceptable to us and other factors which may affect the timing or completion of the disposition. | |
(2) | Includes 4 aircraft held for sale. | |
(3) | The 142 aircraft operated by our unconsolidated affiliates are in addition to those aircraft leased from us. | |
(4) | All of these aircraft are attributed to our consolidated affiliates. |
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• | We have a history of consistent revenue and Adjusted EBITDA growth. We have a history of consistent revenue growth, including 17.6% compounded annual growth rate over the past three fiscal years. Our growth has translated into increases in Adjusted EBITDA (as defined under “Summary Historical Financial Information”) of 19.3% compounded annually over the past three fiscal years. Our revenues are driven primarily by offshore, production-related operating expenses, which over the last twelve years have been relatively stable and upward trending, including during a downturn in the energy industry. Worldwide there are more than 8,800 production platforms and 660 rigs. The ongoing nature of production work makes it less volatile than exploration and development work, which is more reactive to changes or expected changes in commodity prices. Accordingly, we have experienced less volatility in demand than other sectors of the energy services industry. In addition, most of our contracts provide that the customer will reimburse us for cost increases associated with the contract, including fuel cost increases. Lastly, our pricing structure, consisting of a fixed monthly reservation fee plus additional fees for each hour flown, fixes a percentage of our revenue stream in the short-term, stabilizing the impact of short-term fluctuations in flight hours by customers. | |
• | We have a global footprint. We operate in 20 countries including the U.S. and U.K. and have the largest fleet of helicopters serving the offshore energy market in the world. We have the largest fleet in each of Nigeria, Australia and the U.S. Gulf of Mexico and also have a strong market position in the North Sea and other key markets. This global footprint allows us to provide our offshore energy customers with consistent, high-quality service, reduces our exposure to any one market and provides us with flexibility in deploying our aircraft to the most attractive markets. | |
• | We have a record of safe operations and operate a modern, well-maintained fleet. We have a record of safe operations, including fewer accidents per 100,000 flight hours over the past five years than the industry average for the U.S. Gulf of Mexico and the North Sea. We continuously maintain and improve the quality of the equipment that we operate and apply state-of-the-art safety technologies across our global organization. Our size and our strong safety record allow us access to the substantial amount and type of insurance coverage required by our customers. As of March 31, 2008, the average age of the helicopters in our consolidated fleet was approximately 13 years. The average age of our fleet has been reduced with the addition of 36 new aircraft in the fiscal year ended March 31, 2008. | |
• | We have strong, long-term relationships with our customers. We have strong, long-term relationships with our customers, which include major, independent, international and national energy companies. Our relationships with these companies involve information sharing regarding future aircraft requirements and coordination of our respective operations. Our close customer relationships have allowed us to expand our helicopter fleet capacity based on identifiable specific projects that require new aircraft. | |
• | We have a strong pilot training program. We have a strong pilot training program through Bristow Academy. We anticipate a long-term demand for skilled pilots in the rotorwing aviation services business. This view is based upon internal analysis of our existing pilots compared to anticipated future requirements to meet growing demand in the offshore energy services and other sectors. We believe that our ability to train new pilots provides us with a strategic advantage over our competitors. |
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• | We have an experienced management team. Our management team has extensive experience in the energy services industry and helicopter services sector. We train each of these managers on our corporate values, including safety, quality, integrity and profitability, and their performance is evaluated using key performance indicators which directly link to those values. Our senior management team is composed of eight executives who have an average of over 28 years of relevant experience. | |
• | We have the financial flexibility to pursue growth. As adjusted for this offering and as further adjusted for the concurrent offering discussed below, our balance-sheet debt as a percentage of total capital was 42% and 38%, respectively, at March 31, 2008. We also do not have a significant amount of off-balance sheet obligations. (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Future Cash Requirements — Contractual Obligations, Commercial Commitments and Off Balance Sheet Arrangements”). Under our syndicated secured credit facilities entered into in August 2006 (“Credit Facilities”), we have an undrawn $100 million revolving credit facility and $24.6 million available under a $25 million letter of credit facility as of the date of this prospectus supplement. We believe that this capital structure provides us with the financial flexibility to pursue opportunities to grow our business, including through the aircraft fleet investment program described above and potential strategic acquisitions. |
• | Grow our business. We plan to continue to grow our business globally and increase our revenue, profitability and fleet capacity. We have a footprint in most major oil and gas producing regions of the world, and we have the opportunity to expand and deepen our presence in many of these markets. We anticipate this growth will result primarily from the deployment of new aircraft into markets where we expect they will be most profitably employed, as well as by executing opportunistic acquisitions. Through our relationships with our existing customers, we are aware of future business opportunities in a broad range of the markets we currently serve that would require capital expenditures of roughly double our current $590 million capital expenditure budget plus the amount of proceeds from this offering and the concurrent offering described below. Our acquisition-related growth may include increasing our role and participation with existing unconsolidated affiliates and may include increasing our position in existing markets or expanding into new markets. | |
• | Strategically position our company as the preferred provider of helicopter services. We position our company as the preferred provider of helicopter services by maintaining strong relationships with our customers and providing safe and high-quality service. We focus on maintaining relationships with our customers’ field operations and corporate management. We believe that this focus helps us better anticipate customer needs and provide our customers with the right aircraft in the right place at the right time, which in turn allows us to better manage our existing fleet and capital investment program. We also leverage our close relationships with our customers to establish mutually beneficial operating practices and safety standards worldwide. By applying standard operating and safety practices across our global operations, we are able to provide our customers with consistent, high-quality service in each of their areas of operation. By better understanding our customers’ needs and by virtue of our global operations and safety standards, we have effectively competed against other helicopter service providers based on aircraft availability, customer service, safety and reliability, and not just price. | |
• | Integrate our global operations. We are an integrated global operator, and we intend to continue to identify and implement further opportunities to integrate our global organization. In the past several years, we have changed our senior management team, integrated our operations among previously independently managed businesses, created a global flight and maintenance standards group, improved our global asset allocation and made other changes in our corporate operations. We anticipate that these improvements and further integration opportunities will result in revenue growth, and may also generate cost savings. |
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Issuer | Bristow Group Inc., a Delaware corporation. | |
Securities | $100,000,000 aggregate principal amount of 3.00% Convertible Senior Notes due 2038, or the “notes.” We have also granted the underwriters a30-day option to purchase a maximum of $15,000,000 additional principal amount of the notes. | |
Maturity | The notes will mature on June 15, 2038, subject to earlier redemption, repurchase or conversion. | |
Subsidiary Guarantors | The notes will be jointly and severally guaranteed on a senior unsecured basis by those of our U.S. subsidiaries that currently provide guarantees of our other senior notes or our revolving credit facility, as well as certain future subsidiaries. | |
Ranking and Subordination | The notes will be our unsecured senior obligations. Accordingly, the notes and the related subsidiary guarantees will rank: | |
• equally in right of payment with our outstanding 61/8% Senior Notes due 2013, our 71/2% Senior Notes due 2017 and any of our and the guarantors’ future unsecured senior indebtedness; | ||
• will be effectively subordinated to all of our and the guarantors’ existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, including indebtedness under our Credit Facilities; and | ||
• will rank senior to all of our and the guarantors’ future subordinated indebtedness. | ||
In addition, the notes will be effectively subordinated to the existing and future liabilities, including trade payables, of our non-guarantor subsidiaries. As of March 31, 2008, our non-guarantor subsidiaries had approximately $358.4 million of total liabilities (including trade payables but excluding intercompany liabilities and guarantees). Revenue related to our non-guarantor subsidiaries constituted 70% of our operating revenue during fiscal year 2008 (excluding intercompany revenues), and our non-guarantor subsidiaries held approximately 57% of our consolidated assets as of March 31, 2008. | ||
Interest | 3.00% per year on the principal amount from June 17, 2008, payable semi-annually in arrears on June 15 and December 15 of each year, beginning December 15, 2008. | |
Conversion rights | Under the circumstances discussed below, you will be able to surrender your notes for conversion, in whole or in part, into cash and, if applicable, shares of our common stock at any time on or before the close of business on the business day immediately preceding the maturity date of the notes, unless the notes have been |
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previously redeemed or repurchased. Prior to January 1, 2038, you may convert your notes only in the following circumstances: | ||
• with respect to any calendar quarter commencing after June 30, 2008, if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 120% of the base conversion price on such last trading day; | ||
• during the fivebusiness-day period following any five consecutivetrading-day period in which the trading price for $1,000 principal amount of notes was less than 97% of the product of the last reported sale price of our common stock and the applicable conversion rate on such day; | ||
• if we have called the particular notes for redemption, until the close of business on the business day prior to the redemption date; or | ||
• upon the occurrence of specified corporate transactions described under “Description of the Notes — Conversion Rights — Conversion Upon Specified Corporate Transactions.” | ||
On or after January 1, 2038, notes may be converted until the close of business on the business day preceding maturity without regard to the foregoing conditions. | ||
Conversion payment | Subject to certain exceptions, we will deliver to holders in respect of each $1,000 principal amount of notes surrendered for conversion cash and shares of common stock, if applicable, in an amount equal to the sum of the daily settlement amounts for each of the 20 consecutive trading days during the applicable cash settlement averaging period. | |
The “daily settlement amount,” for each of the 20 consecutive trading days during a cash settlement averaging period, shall consist of: | ||
• cash equal to $50 or, if less, the daily conversion value; and | ||
• to the extent the daily conversion value exceeds $50, a number of shares equal to (A) the difference between the daily conversion value and $50, divided by (B) the applicable stock price of our common stock for such day. | ||
The “daily conversion value” means generally, for each of the 20 consecutive trading days during a cash settlement averaging period, the product of (1) the daily conversion rate fraction for such day and (2) the applicable stock price of our common stock on such day. | ||
The “daily conversion rate fraction” for each trading day during the relevant cash settlement averaging period will be determined as follows: | ||
• if the applicable stock price of our common stock on such trading day is less than or equal to the base conversion price, the daily conversion rate fraction for such trading day will be equal to the base conversion rate divided by 20; and |
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• if the applicable stock price of our common stock on such trading day is greater than the base conversion price, the daily conversion rate fraction for such trading day will be equal to l/20th of the following: | ||
Base Conversion Rate | + | (Applicable Stock Price of our Common Stock on such Trading Day - Base Conversion Price) Applicable Stock Price of our Common Stock on such Trading Day | × | Incremental Share Factor |
The “cash settlement averaging period” with respect to any note being converted means the 20 consecutivetrading-day period beginning on and including the second trading day after a conversion date (as defined under “Description of the Notes — Conversion Rights — Conversion Procedures”), except that with respect to any conversion date that is on or after the 24th scheduled trading day immediately preceding the maturity date or a redemption date, as applicable, the cash settlement averaging period means the 20 consecutive trading days beginning on and including the 22nd scheduled trading day prior to the maturity date or redemption date, as the case may be. | ||
The initial “base conversion rate” for the notes will be 12.9307, equivalent to an initial “base conversion price” of approximately $77.34 per share of our common stock. The base conversion rate will be subject to adjustment in certain events. The “incremental share factor”is initially 8.4049, subject to the same proportional adjustment as the base conversion rate. | ||
You will not receive any additional cash payment, including any accrued but unpaid interest, upon conversion of a note except in circumstances described in “Description of the Notes — Interest.” Instead, interest will be deemed paid by the delivery of the settlement amount to you upon conversion of a note. | ||
Increase of conversion rate upon certain fundamental changes | If a make-whole fundamental change (as defined under “Description of the Notes — Conversion Rights — Increase of Applicable Conversion Rate Upon Conversion Upon Make-Whole Fundamental Change”) occurs prior to June 15, 2015, we may be required in certain circumstances to increase the applicable conversion rate for any notes converted in connection with such fundamental change. A description of how the conversion rate will be increased and a table showing the increase in conversion rate that would apply at various stock prices and effective dates of the fundamental change are set forth under “Description of the Notes — Conversion Rights — Increase of Applicable Conversion Rate Upon Conversion Upon Make-Whole Fundamental Change.” | |
Sinking fund | None. | |
Optional redemption | We may not redeem the notes before June 15, 2015. We may redeem the notes, in whole or in part, for cash on or after June 15, 2015, on at least 30 days’ but not more than 60 days’ notice by mail to holders of notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. | |
Optional repurchase right of holders | Holders may require us to repurchase all or a portion of their notes for cash on June 15, 2015, June 15, 2020, June 15, 2025, June 15, |
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2030, and June 15, 2035, at a purchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date. | ||
Repurchase of notes upon a fundamental change | If we undergo a fundamental change (as defined under “Description of the Notes — Fundamental Change Permits Holders to Require Us to Purchase Notes”), you will have the option to require us to purchase all or any portion of your notes for cash. The fundamental change purchase price will be 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. | |
Use of proceeds | We estimate that the aggregate net proceeds from this offering will be approximately $96.6 million ($111.2 million if the underwriters exercise their overallotment option in full). We intend to use the net proceeds from this offering, together with the estimated aggregate net proceeds of $183.2 million from our concurrent common stock offering ($210.7 million if the underwriters exercise their overallotment option in full) as well as the proceeds from the Caledonia Private Placement, to purchase additional aircraft. If we do not complete the concurrent common stock offering, the funds available to purchase additional aircraft will be reduced. We plan to order additional aircraft from time to time following completion of this offering and expect to pay the purchase price for additional aircraft at various dates during fiscal years 2009 to 2013. Pending such use, we plan to invest the net proceeds of this offering in highly liquid, investment-grade or better securities. Depending on our ability to obtain such aircraft orders and the timing of such use, we may use a portion of the net proceeds for working capital and other general corporate purposes, including acquisitions. | |
Trustee and Paying Agent | U.S. Bank National Association. | |
Governing law | The indenture and the notes provide that they will be governed by, and construed in accordance with, the laws of the State of New York. | |
Book-entry form | The notes will be issued in book-entry form and will be represented by permanent global certificates deposited with, or on behalf of, The Depository Trust Company, which we refer to as “DTC,” and registered in the name of a nominee of DTC. Beneficial interests in any of the notes will be shown on, and transfers will be effected only through, records maintained by DTC or its nominee and any such interest may not be exchanged for certificated securities, except in limited circumstances. | |
Absence of a public market for the notes | The notes are new securities, and there is currently no established market for the notes. The underwriters have advised us that they currently intend to make a market in the notes. However, they are not obligated to do so, and may discontinue any market making with respect to the notes without notice. We do not intend to apply for a listing of the notes on any national securities exchange or any automated dealer quotation system. Accordingly, we cannot assure you as to the development or liquidity of any market for the notes. Our common stock is listed on the New York Stock Exchange under the symbol “BRS.” |
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Fiscal Year Ended March 31, | ||||||||||||||||||||
2004(1) | 2005(2) | 2006(3) | 2007(4) | 2008(5) | ||||||||||||||||
(In thousands, except per share amounts and number of aircraft) | ||||||||||||||||||||
Statement of Operations Data:(6) | ||||||||||||||||||||
Total gross revenue(7) | $ | 574,124 | $ | 622,637 | $ | 709,901 | $ | 843,595 | $ | 1,012,764 | ||||||||||
Direct cost(7) | $ | 437,672 | $ | 473,818 | $ | 540,310 | $ | 634,302 | $ | 726,433 | ||||||||||
Operating income | $ | 86,194 | $ | 73,695 | $ | 68,467 | $ | 111,128 | $ | 148,748 | ||||||||||
Earnings from unconsolidated affiliates, net | 11,039 | 9,600 | 6,758 | 11,423 | 12,978 | |||||||||||||||
Interest income | 1,684 | 3,144 | 4,046 | 8,716 | 12,725 | |||||||||||||||
Interest expense | (16,829 | ) | (15,665 | ) | (14,689 | ) | (10,940 | ) | (23,779 | ) | ||||||||||
Loss on extinguishment of debt | (6,205 | ) | — | — | — | — | ||||||||||||||
Other income (expense), net | (7,811 | ) | (1,136 | ) | 4,615 | (8,998 | ) | 1,585 | ||||||||||||
Provision for income taxes | (18,476 | ) | (20,407 | ) | (14,668 | ) | (38,781 | ) | (44,526 | ) | ||||||||||
Minority interest | (1,382 | ) | (210 | ) | (219 | ) | (1,200 | ) | 83 | |||||||||||
Income from continuing operations | 48,214 | 49,021 | 54,310 | 71,348 | 107,814 | |||||||||||||||
Income (loss) from discontinued operations | 1,611 | 2,539 | 3,499 | 2,824 | (3,822 | ) | ||||||||||||||
Net income | $ | 49,825 | $ | 51,560 | $ | 57,809 | $ | 74,172 | $ | 103,992 | ||||||||||
Diluted earnings per common share: | ||||||||||||||||||||
Earnings from continuing operations | $ | 2.08 | $ | 2.10 | $ | 2.30 | $ | 2.64 | $ | 3.53 | ||||||||||
Earnings (loss) from discontinued operations | 0.07 | 0.11 | 0.15 | 0.10 | (0.12 | ) | ||||||||||||||
Net earnings | $ | 2.15 | $ | 2.21 | $ | 2.45 | $ | 2.74 | $ | 3.41 | ||||||||||
Balance Sheet Data:(6) | ||||||||||||||||||||
Total cash and cash equivalents | $ | 85,679 | $ | 146,440 | $ | 122,482 | $ | 184,188 | 290,050 | |||||||||||
Working capital | 235,691 | 270,747 | 283,337 | 368,006 | 541,422 | |||||||||||||||
Total assets | 1,046,828 | 1,149,576 | 1,176,413 | 1,505,803 | 1,977,355 | |||||||||||||||
Total debt | 255,534 | 262,080 | 265,296 | 259,082 | 606,218 | |||||||||||||||
Stockholders’ investment | 429,952 | 492,993 | 537,697 | 871,657 | 967,441 | |||||||||||||||
Statement of Cash Flows Data: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 83,331 | $ | 104,473 | $ | 39,265 | $ | 104,430 | $ | 87,557 | ||||||||||
Net cash used in investing activities | (62,582 | ) | (46,539 | ) | (54,180 | ) | (264,335 | ) | (310,145 | ) | ||||||||||
Net cash provided by (used in) financing activities | 3,539 | 2,763 | (5,394 | ) | 215,682 | 328,860 | ||||||||||||||
Other Financial Data: | ||||||||||||||||||||
Adjusted EBITDA(8) | $ | 128,072 | $ | 140,009 | $ | 131,856 | $ | 170,470 | $ | 237,830 | ||||||||||
Capital expenditures | (67,855 | ) | (90,023 | ) | (139,572 | ) | (304,776 | ) | (338,003 | ) | ||||||||||
Aircraft in fleet | 332 | 320 | 331 | 345 | 406 | |||||||||||||||
Average revenue per aircraft | $ | 1,729 | $ | 1,946 | $ | 2,145 | $ | 2,445 | $ | 2,494 |
(1) | Results for fiscal year 2004 include $21.7 million ($15.7 million, net of tax) of curtailment gain relating to the pension plan, $7.9 million ($5.7 million, net of tax) of foreign currency transaction losses and a $6.2 million in loss on extinguishment of debt related to notes redeemed in that fiscal year. |
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(2) | Results for fiscal year 2005 include $2.2 million ($1.4 million, net of tax) in costs associated with the Internal Review (as defined in “Risk Factors — Risks Relating to Our Internal Review and Governmental Investigations), a $3.7 million reduction in our provision for income taxes resulting from the resolution of tax contingencies and $1.3 million ($0.9 million, net of tax) of foreign currency transaction losses. | |
(3) | Results for fiscal year 2006 include $10.5 million ($6.8 million, net of tax) in costs associated with the Internal Review, $2.6 million ($1.7 million, net of tax) in costs associated with the DOJ antitrust investigation, $1.0 million in an impairment charge to reduce the value of our investment in a Brazilian joint venture as we expected at that time that our investment would not be recoverable, a $11.4 million reduction in our provision for income taxes resulting from the resolution of tax contingencies and $5.4 million ($3.5 million, net of tax) of foreign currency transaction gains. | |
(4) | Results for fiscal year 2007 include $3.1 million ($2.0 million, net of tax) in costs associated with the Internal Review, $1.9 million ($1.3 million, net of tax) in costs associated with the DOJ antitrust investigation, $2.5 million ($1.6 million, net of tax) in a gain realized on the sale of our investment in a Brazilian joint venture for which we had recorded an impairment charge in fiscal year 2006 as we expected at that time that our investment would not be recoverable, $2.5 million of additional tax expense resulting from the sale of Turbo Engines, Inc. (“Turbo”) in November 2006 and $9.8 million ($6.3 million, net of tax) of foreign currency transaction losses. Diluted earnings per share for fiscal year 2007 was also impacted by our issuance of 5.50% mandatory convertible preferred stock (“Preferred Stock”) in September and October 2006, which resulted in a reduction of $0.30 per share. | |
(5) | Results for fiscal year 2008 include $1.0 million ($0.7 million, net of tax) in a reversal of costs accrued for the Internal Review as we settled the SEC investigation, $1.3 million ($0.8 million, net of tax) in costs associated with the DOJ investigations, $10.7 million ($7.0 million, net of tax) in net interest incurred on the 71/2% Senior Notes issued in June and November 2007 and $1.5 million ($1.0 million, net of tax) of foreign currency transaction gains. Diluted earnings per share for fiscal year 2008 was also impacted by the issuance of Preferred Stock in September and October 2006, which resulted in a reduction of $0.96 per share. Additionally, fiscal year 2008 includes the significant items as discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — Overview of Operating Results — Fiscal Year 2008 Compared to Fiscal Year 2007” included elsewhere in this Prospectus Supplement. | |
(6) | Amounts reflect our Grasso Production Management business (“Grasso”) as discontinued operations. Grasso was sold on November 2, 2007. | |
(7) | Gross revenue includes reimbursable revenue of $94.0 million, $86.2 million, $62.9 million, $53.6 million and $52.2 million for fiscal years 2008, 2007, 2006, 2005 and 2004, respectively. Direct cost includes reimbursable expense of $91.1 million, $85.9 million, $61.9 million, $52.9 million and $52.2 million for fiscal years 2008, 2007, 2006, 2005 and 2004, respectively. | |
(8) | Adjusted EBITDA means earnings before interest expense, taxes, depreciation and amortization, loss on extinguishment of debt and non-cash compensation adjusted for non-cash components of net income (minority interest in earnings and equity in earnings from unconsolidated affiliates (over) under dividends received). Adjusted EBITDA is not a measure of financial performance or liquidity under U.S. generally accepted accounting principles (“GAAP”). Accordingly, it should not be considered as a substitute for net income, operating income, net cash provided by operating activities or any other operating or liquidity measure prepared in accordance with GAAP. Additionally, our Adjusted EBITDA computation may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA provides additional information regarding our ability to meet our future debt service, capital expenditures and working capital requirements. While we believe that Adjusted EBITDA may provide additional information with respect to our ability to meet our future debt service, capital expenditures and working capital requirements, certain functional or legal requirements of our business may require us to use our available funds for other purposes. |
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Fiscal Year Ended March 31, | ||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Adjusted EBITDA | $ | 128,072 | $ | 140,009 | $ | 131,856 | $ | 170,470 | $ | 237,830 | ||||||||||
Cash items (deducted from) added to Adjusted EBITDA: | ||||||||||||||||||||
Current income tax | (7,059 | ) | (19,995 | ) | (15,191 | ) | (20,383 | ) | (36,917 | ) | ||||||||||
Interest expense | (16,829 | ) | (15,665 | ) | (14,689 | ) | (10,940 | ) | (23,784 | ) | ||||||||||
Losses (gains) on asset dispositions | (3,943 | ) | (8,039 | ) | (102 | ) | (10,618 | ) | (9,393 | ) | ||||||||||
Gain on disposal of discontinued operations | — | — | — | — | (1,019 | ) | ||||||||||||||
Loss on extinguishment of debt | (6,205 | ) | — | — | — | — | ||||||||||||||
Increase (decrease) in cash from: | ||||||||||||||||||||
Accounts receivable | 10,984 | (8,612 | ) | (34,718 | ) | (1,428 | ) | (32,600 | ) | |||||||||||
Inventories | (4,111 | ) | (5,127 | ) | (12,518 | ) | (10,225 | ) | (18,969 | ) | ||||||||||
Prepaid expenses and other | 5,232 | (724 | ) | (5,925 | ) | (6,634 | ) | (18,249 | ) | |||||||||||
Accounts payable | (5,156 | ) | 6,889 | 15,944 | (10,688 | ) | 7,019 | |||||||||||||
Accrued liabilities | (3,192 | ) | 11,090 | (35,397 | ) | 5,771 | (36,766 | ) | ||||||||||||
Other liabilities and deferred credits | 795 | (538 | ) | 9,933 | (811 | ) | 17,725 | |||||||||||||
Other non-cash items | (15,257 | ) | 5,185 | 72 | (84 | ) | 2,680 | |||||||||||||
Net cash provided by operating activities | $ | 83,331 | $ | 104,473 | $ | 39,265 | $ | 104,430 | $ | 87,557 | ||||||||||
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• | the supply of and demand for oil and gas and market expectations for such supply and demand; | |
• | actions of the Organization of Petroleum Exporting Countries and other oil producing countries to control prices or change production levels; | |
• | general economic conditions, both worldwide and in particular regions; | |
• | governmental regulation; | |
• | the price and availability of alternative fuels; | |
• | weather conditions, including the impact of hurricanes and other weather-related phenomena; | |
• | advances in exploration, development and production technology; | |
• | the policies of various governments regarding exploration and development of their oil and gas reserves; and | |
• | the worldwide political environment, including the war in Iraq, uncertainty or instability resulting from an escalation or additional outbreak of armed hostilities or other crises in the Middle East or the other geographic areas in which we operate (including, but not limited to, Nigeria), or further acts of terrorism in the U.S. or elsewhere. |
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• | local regulations restricting foreign ownership of helicopter operators; | |
• | requirements to award contracts to local operators; and | |
• | the number and location of new drilling concessions granted by foreign sovereigns. |
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• | political, social and economic instability, including risks of war, general strikes and civil disturbances; | |
• | physical and economic retribution directed at U.S. companies and personnel; | |
• | governmental actions that restrict payments or the movement of funds or result in the deprivation of contract rights; | |
• | the taking of property without fair compensation; and | |
• | the lack of well-developed legal systems in some countries which could make it difficult for us to enforce our contractual rights. |
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• | issuance of administrative, civil and criminal penalties; | |
• | denial or revocation of permits or other authorizations; | |
• | imposition of limitations on our operations; and | |
• | performance of site investigatory, remedial or other corrective actions. |
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• | making it more difficult for us to satisfy our obligations with respect to the notes; | |
• | impairing our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes or to repurchase the notes from you upon a change of control; | |
• | requiring us to dedicate a substantial portion of our cash flow to the payment of principal and interest on our indebtedness, which reduces the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes; | |
• | subjecting us to the risk of increased sensitivity to interest rate increases on our indebtedness with variable interest rates, including our borrowings under our syndicated senior secured Credit Facilities which consist of a $100 million revolving credit facility (with a subfacility of $25 million for letters of credit) and a $25 million letter of credit facility; | |
• | increasing the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and | |
• | limiting our ability to adjust to rapidly changing market conditions, reducing our ability to withstand competitive pressures and making us more vulnerable to a downturn in general economic conditions or our business than our competitors with less debt. |
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• | borrow money or issue guarantees; | |
• | pay dividends, redeem capital stock or make other restricted payments; | |
• | incur liens to secure indebtedness; | |
• | make certain investments; | |
• | sell certain assets; | |
• | enter into transactions with our affiliates; or | |
• | merge with another person or sell substantially all of our assets. |
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(1) | fair consideration or reasonably equivalent value was not received in exchange for the obligation; and | |
(2) | at the time the obligation was incurred, the obligor: |
• | was insolvent or rendered insolvent by reason of the obligation; | |
• | was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or | |
• | intended to incur, or believed that it would incur, debts beyond its ability to pay them as the debts matured. |
• | the sum of its debts, including contingent liabilities, is greater than the saleable value of all of its assets at a fair valuation; | |
• | the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and matured; or | |
• | it could not pay its debts as they become due. |
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• | the risks and uncertainties described under “Risk Factors” in this prospectus supplement; | |
• | the level of activity in the oil and natural gas industry is lower than anticipated; | |
• | production-related activities become more sensitive to variances in commodity prices; | |
• | the major oil companies do not continue to expand internationally; | |
• | market conditions are weaker than anticipated; | |
• | we are unable to acquire additional aircraft due to limited availability; | |
• | we are not able to re-deploy our aircraft to regions with the greater demand; | |
• | we do not achieve the anticipated benefit of our fleet capacity expansion program; | |
• | outcome of the DOJ investigation relating to our Internal Review, which is ongoing, has a greater than anticipated financial or business impact; and | |
• | the outcome of the DOJ antitrust investigation, which is ongoing, has a greater than anticipated financial or business impact. |
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Price | ||||||||
High | Low | |||||||
Fiscal Year Ended March 31, 2007 | ||||||||
First Quarter | $ | 38.37 | $ | 33.62 | ||||
Second Quarter | $ | 38.52 | $ | 32.21 | ||||
Third Quarter | $ | 36.84 | $ | 32.11 | ||||
Fourth Quarter | $ | 38.45 | $ | 33.51 | ||||
Fiscal Year Ended March 31, 2008 | ||||||||
First Quarter | $ | 52.21 | $ | 36.01 | ||||
Second Quarter | $ | 53.06 | $ | 41.85 | ||||
Third Quarter | $ | 58.63 | $ | 45.07 | ||||
Fourth Quarter | $ | 57.38 | $ | 49.58 | ||||
Fiscal Year Ended March 31, 2009 | ||||||||
First Quarter (through June 11, 2008) | $ | 58.03 | $ | 45.71 |
• | any applicable contractual restrictions limiting our ability to pay dividends; | |
• | our earnings and cash flows; | |
• | our capital requirements; | |
• | our financial condition; and | |
• | other factors our board of directors deems relevant. |
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As of March 31, 2008 | ||||||||||||
As Further | ||||||||||||
Adjusted for | ||||||||||||
Concurrent | ||||||||||||
As Adjusted for | Common Stock | |||||||||||
Actual | This Offering(1) | Offering(1) | ||||||||||
(In thousands) | ||||||||||||
Cash and cash equivalents | $ | 290,050 | $ | 386,695 | $ | 569,870 | ||||||
Debt, including current portion(2): | ||||||||||||
71/2% Senior Notes due 2017, including $0.6 million of unamortized premium | $ | 350,601 | $ | 350,601 | $ | 350,601 | ||||||
61/8% Senior Notes due 2013 | 230,000 | 230,000 | 230,000 | |||||||||
Senior secured credit facilities(3) | — | — | — | |||||||||
Term loans | 16,683 | 16,683 | 16,683 | |||||||||
Hemisco Helicopters International, Inc. note | 4,380 | 4,380 | 4,380 | |||||||||
Advance from customer | 1,400 | 1,400 | 1,400 | |||||||||
Sakhalin debt | 3,154 | 3,154 | 3,154 | |||||||||
Notes offered hereby(4)(5) | — | 100,000 | 100,000 | |||||||||
Total debt | 606,218 | 706,218 | 706,218 | |||||||||
Minority interest | 4,570 | 4,570 | 4,570 | |||||||||
Stockholders’ investment: | ||||||||||||
5.50% mandatory convertible preferred stock, $.01 par value, authorized and outstanding 4,600,000 shares; entitled in liquidation to $230 million; net of offering costs of $7.4 million | 222,554 | 222,554 | 222,554 | |||||||||
Common stock, $.01 par value, authorized 90,000,000 shares: outstanding 23,923,685; outstanding 28,023,685 as adjusted (in each case, exclusive of 1,281,050 treasury shares) | 239 | 239 | 280 | |||||||||
Additional paid-in capital | 186,390 | 186,390 | 369,524 | |||||||||
Retained earnings | 606,931 | 606,931 | 606,931 | |||||||||
Accumulated other comprehensive loss | (48,673 | ) | (48,673 | ) | (48,673 | ) | ||||||
Total stockholders’ investment | 967,441 | 967,441 | 1,150,616 | |||||||||
Total capitalization | $ | 1,578,229 | $ | 1,678,229 | $ | 1,861,404 | ||||||
(1) | The net proceeds of this offering and our concurrent common stock offering are included in “Cash and cash equivalents” in the table above. | |
(2) | For description of other obligations and commitments, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Future Cash |
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Requirements — Contractual Obligations, Commercial Commitments and Off Balance Sheet Arrangements.” |
(3) | As of June 11, 2008, we had no borrowings outstanding and $0.4 million in letters of credit issued under these facilities, which consist of a $100 million revolving credit facility and a $25 million letter of credit facility. | |
(4) | This amount excludes $3.4 million of offering costs for this offering and $12.3 million of combined offering costs for this and the concurrent offering. | |
(5) | In May 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. APB14-a, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”. Under this new staff position for convertible debt instruments (such as the notes) that may be settled entirely or partially in cash upon conversion, an entity must separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s economic interest cost. The effect of the staff position on the accounting for the notes is that the estimated fair value of the equity component would be reflected as an increase topaid-in-capital within stockholders investment and a decrease in debt for the estimated original issue discount. The staff position is effective for fiscal year 2010 beginning with the three month period ended June 30, 2009, with retrospective application required. Early adoption is not permitted. As a result, we will be required to record a greater amount of non-cash interest expense in current and prior periods presented as a result of the amortization of the discounted carrying value of the notes to their face amount over the term of the notes. We may report lower net income in our financial results because the staff position will require interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest. We are currently evaluating the staff position, which could adversely affect our future financial results, the trading price of our common stock and the trading price of the notes. |
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Fiscal Year Ended March 31, | ||||||||||||||||||||
2004(1) | 2005(2) | 2006(3) | 2007(4) | 2008(5) | ||||||||||||||||
(In thousands, except per share amounts and number of aircraft) | ||||||||||||||||||||
Statement of Operations Data:(6) | ||||||||||||||||||||
Total gross revenue(7) | $ | 574,124 | $ | 622,637 | $ | 709,901 | $ | 843,595 | $ | 1,012,764 | ||||||||||
Direct cost(7) | $ | 437,672 | $ | 473,818 | $ | 540,310 | $ | 634,302 | $ | 726,433 | ||||||||||
Operating income | $ | 86,194 | $ | 73,695 | $ | 68,467 | $ | 111,128 | $ | 148,748 | ||||||||||
Earnings from unconsolidated affiliates, net | 11,039 | 9,600 | 6,758 | 11,423 | 12,978 | |||||||||||||||
Interest income | 1,684 | 3,144 | 4,046 | 8,716 | 12,725 | |||||||||||||||
Interest expense | (16,829 | ) | (15,665 | ) | (14,689 | ) | (10,940 | ) | (23,779 | ) | ||||||||||
Loss on extinguishment of debt | (6,205 | ) | — | — | — | — | ||||||||||||||
Other income (expense), net | (7,811 | ) | (1,136 | ) | 4,615 | (8,998 | ) | 1,585 | ||||||||||||
Provision for income taxes | (18,476 | ) | (20,407 | ) | (14,668 | ) | (38,781 | ) | (44,526 | ) | ||||||||||
Minority interest | (1,382 | ) | (210 | ) | (219 | ) | (1,200 | ) | 83 | |||||||||||
Income from continuing operations | 48,214 | 49,021 | 54,310 | 71,348 | 107,814 | |||||||||||||||
Income (loss) from discontinued operations | 1,611 | 2,539 | 3,499 | 2,824 | (3,822 | ) | ||||||||||||||
Net income | $ | 49,825 | $ | 51,560 | $ | 57,809 | $ | 74,172 | $ | 103,992 | ||||||||||
Diluted earnings per common share: | ||||||||||||||||||||
Earnings from continuing operations | $ | 2.08 | $ | 2.10 | $ | 2.30 | $ | 2.64 | $ | 3.53 | ||||||||||
Earnings (loss) from discontinued operations | 0.07 | 0.11 | 0.15 | 0.10 | (0.12 | ) | ||||||||||||||
Net earnings | $ | 2.15 | $ | 2.21 | $ | 2.45 | $ | 2.74 | $ | 3.41 | ||||||||||
Balance Sheet Data:(6) | ||||||||||||||||||||
Total cash and cash equivalents | $ | 85,679 | $ | 146,440 | $ | 122,482 | $ | 184,188 | 290,050 | |||||||||||
Working capital | 235,691 | 270,747 | 283,337 | 368,006 | 541,422 | |||||||||||||||
Total assets | 1,046,828 | 1,149,576 | 1,176,413 | 1,505,803 | 1,977,355 | |||||||||||||||
Total debt | 255,534 | 262,080 | 265,296 | 259,082 | 606,218 | |||||||||||||||
Stockholders’ investment | 429,952 | 492,993 | 537,697 | 871,657 | 967,441 | |||||||||||||||
Statement of Cash Flows Data: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 83,331 | $ | 104,473 | $ | 39,265 | $ | 104,430 | $ | 87,557 | ||||||||||
Net cash used in investing activities | (62,582 | ) | (46,539 | ) | (54,180 | ) | (264,335 | ) | (310,145 | ) | ||||||||||
Net cash provided by (used in) financing activities | 3,539 | 2,763 | (5,394 | ) | 215,682 | 328,860 | ||||||||||||||
Other Financial Data: | ||||||||||||||||||||
Adjusted EBITDA(8) | $ | 128,072 | $ | 140,009 | $ | 131,856 | $ | 170,470 | $ | 237,830 | ||||||||||
Capital expenditures | (67,855 | ) | (90,023 | ) | (139,572 | ) | (304,776 | ) | (338,003 | ) | ||||||||||
Aircraft in fleet | 332 | 320 | 331 | 345 | 406 | |||||||||||||||
Average revenue per aircraft | $ | 1,729 | $ | 1,946 | $ | 2,145 | $ | 2,445 | $ | 2,494 |
(1) | Results for fiscal year 2004 include $21.7 million ($15.7 million, net of tax) of curtailment gain relating to the pension plan, $7.9 million ($5.7 million, net of tax) of foreign currency transaction losses and a $6.2 million in loss on extinguishment of debt related to notes redeemed in that fiscal year. |
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(2) | Results for fiscal year 2005 include $2.2 million ($1.4 million, net of tax) in costs associated with the Internal Review, a $3.7 million reduction in our provision for income taxes resulting from the resolution of tax contingencies and $1.3 million ($0.9 million, net of tax) of foreign currency transaction losses. | |
(3) | Results for fiscal year 2006 include $10.5 million ($6.8 million, net of tax) in costs associated with the Internal Review, $2.6 million ($1.7 million, net of tax) in costs associated with the DOJ antitrust investigation, $1.0 million in an impairment charge to reduce the value of our investment in a Brazilian joint venture as we expected at that time that our investment would not be recoverable, a $11.4 million reduction in our provision for income taxes resulting from the resolution of tax contingencies and $5.4 million ($3.5 million, net of tax) of foreign currency transaction gains. | |
(4) | Results for fiscal year 2007 include $3.1 million ($2.0 million, net of tax) in costs associated with the Internal Review, $1.9 million ($1.3 million, net of tax) in costs associated with the DOJ antitrust investigation, $2.5 million ($1.6 million, net of tax) in a gain realized on the sale of our investment in a Brazilian joint venture for which we had recorded an impairment charge in fiscal year 2006 as we expected at that time that our investment would not be recoverable, $2.5 million of additional tax expense resulting from the sale of Turbo in November 2006 and $9.8 million ($6.3 million, net of tax) of foreign currency transaction losses. Diluted earnings per share for fiscal year 2007 was also impacted by the impact of our issuance of Preferred Stock in September and October 2006, which resulted in a reduction of $0.30 per share. | |
(5) | Results for fiscal year 2008 include $1.0 million ($0.7 million, net of tax) in a reversal of costs accrued for the Internal Review as we settled the SEC investigation, $1.3 million ($0.8 million, net of tax) in costs associated with the DOJ investigations, $10.7 million ($7.0 million, net of tax) in net interest incurred on the 71/2% Senior Notes issued in June and November 2007 and $1.5 million ($1.0 million, net of tax) of foreign currency transaction gains. Diluted earnings per share for fiscal year 2008 was also impacted by our issuance of Preferred Stock in September and October 2006, which resulted in a reduction of $0.96 per share. Additionally, fiscal year 2008 includes the significant items as discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — Overview of Operating Results — Fiscal Year 2008 Compared to Fiscal Year 2007” included elsewhere in this prospectus supplement. | |
(6) | Amounts reflect our Grasso Production Management business as discontinued operations. Grasso was sold on November 2, 2007. | |
(7) | Gross revenue includes reimbursable revenue of $94.0 million, $86.2 million, $62.9 million, $53.6 million and $52.2 million for fiscal years 2008, 2007, 2006, 2005 and 2004, respectively. Direct cost includes reimbursable expense of $91.1 million, $85.9 million, $61.9 million, $52.9 million and $52.2 million for fiscal years 2008, 2007, 2006, 2005 and 2004, respectively. | |
(8) | Adjusted EBITDA means earnings before interest expense, taxes, depreciation and amortization, loss on extinguishment of debt and non-cash compensation adjusted for non-cash components of net income (minority interest in earnings and equity in earnings from unconsolidated affiliates (over) under dividends received). Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP. Accordingly, it should not be considered as a substitute for net income, operating income, net cash provided by operating activities or any other operating or liquidity measure prepared in accordance with GAAP. Additionally, our Adjusted EBITDA computation may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA provides additional information regarding our ability to meet our future debt service, capital expenditures and working capital requirements. While we believe that Adjusted EBITDA may provide additional information with respect to our ability to meet our future debt service, capital expenditures and working capital requirements, certain functional or legal requirements of our business may require us to use our available funds for other purposes. |
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Fiscal Year Ended March 31, | ||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Adjusted EBITDA | $ | 128,072 | $ | 140,009 | $ | 131,856 | $ | 170,470 | $ | 237,830 | ||||||||||
Cash items (deducted from) added to Adjusted EBITDA: | ||||||||||||||||||||
Current income tax | (7,059 | ) | (19,995 | ) | (15,191 | ) | (20,383 | ) | (36,917 | ) | ||||||||||
Interest expense | (16,829 | ) | (15,665 | ) | (14,689 | ) | (10,940 | ) | (23,784 | ) | ||||||||||
Losses (gains) on asset dispositions | (3,943 | ) | (8,039 | ) | (102 | ) | (10,618 | ) | (9,393 | ) | ||||||||||
Gain on disposal of discontinued operations | — | — | — | — | (1,019 | ) | ||||||||||||||
Loss on extinguishment of debt | (6,205 | ) | — | — | — | — | ||||||||||||||
Increase (decrease) in cash from: | ||||||||||||||||||||
Accounts receivable | 10,984 | (8,612 | ) | (34,718 | ) | (1,428 | ) | (32,600 | ) | |||||||||||
Inventories | (4,111 | ) | (5,127 | ) | (12,518 | ) | (10,225 | ) | (18,969 | ) | ||||||||||
Prepaid expenses and other | 5,232 | (724 | ) | (5,925 | ) | (6,634 | ) | (18,249 | ) | |||||||||||
Accounts payable | (5,156 | ) | 6,889 | 15,944 | (10,688 | ) | 7,019 | |||||||||||||
Accrued liabilities | (3,192 | ) | 11,090 | (35,397 | ) | 5,771 | (36,766 | ) | ||||||||||||
Other liabilities and deferred credits | 795 | (538 | ) | 9,933 | (811 | ) | 17,725 | |||||||||||||
Other non-cash items | (15,257 | ) | 5,185 | 72 | (84 | ) | 2,680 | |||||||||||||
Net cash provided by operating activities | $ | 83,331 | $ | 104,473 | $ | 39,265 | $ | 104,430 | $ | 87,557 | ||||||||||
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RESULTS OF OPERATIONS
• | Grow our business. We plan to continue to grow our business globally and increase our revenue, profitability and fleet capacity. We have a footprint in most major oil and gas producing regions of the world, and we have the opportunity to expand and deepen our presence in many of these markets. We anticipate this growth will result primarily from the deployment of new aircraft into markets where we expect they will be most profitably employed, as well as by executing opportunistic acquisitions. Through our relationships with our existing customers, we are aware of future business opportunities in a broad range of the markets we currently serve that would require capital expenditures of roughly double our current $590 million capital expenditure budget plus the amount of proceeds from this offering and the concurrent common stock offering. Our acquisition-related growth may include increasing our role and participation with existing unconsolidated affiliates and may include increasing our position in existing markets or expanding into new markets. | |
• | Strategically position our company as the preferred provider of helicopter services. We position our company as the preferred provider of helicopter services by maintaining strong relationships with our customers and providing safe and high-quality service. We focus on maintaining relationships with our customers’ field operations and corporate management. We believe that this focus helps us better anticipate customer needs and provide our customers with the right aircraft in the right place at the right time, which in turn allows us to better manage our existing fleet and capital investment program. We also leverage our close relationships with our customers to establish mutually beneficial operating practices and safety standards worldwide. By applying standard operating and safety practices across our global operations, we are able to provide our customers with consistent, high-quality service in each of their areas of operation. By better understanding our customers’ needs and by virtue of our global operations and safety standards, we have effectively competed against other helicopter service providers based on aircraft availability, customer service, safety and reliability, and not just price. | |
• | Integrate our global operations. We are an integrated global operator, and we intend to continue to identify and implement further opportunities to integrate our global organization. In the past several years, we have changed our senior management team, integrated our operations among previously independently managed businesses, created a global flight and maintenance standards group; improved our global asset allocation and made other changes in our corporate operations. We anticipate that these improvements and further integration opportunities will result in revenue growth, and may also generate cost savings. |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Gross revenue: | ||||||||||||
Operating revenue | $ | 646,971 | $ | 757,424 | $ | 918,735 | ||||||
Reimbursable revenue | 62,930 | 86,171 | 94,029 | |||||||||
Total gross revenue | 709,901 | 843,595 | 1,012,764 | |||||||||
Operating expense: | ||||||||||||
Direct cost | 478,421 | 548,364 | 635,327 | |||||||||
Reimbursable expense | 61,889 | 85,938 | 91,106 | |||||||||
Depreciation and amortization | 42,060 | 42,459 | 54,140 | |||||||||
General and administrative | 59,167 | 66,321 | 92,833 | |||||||||
Gain on disposal of assets | (103 | ) | (10,615 | ) | (9,390 | ) | ||||||
Total operating expense | 641,434 | 732,467 | 864,016 | |||||||||
Operating income | 68,467 | 111,128 | 148,748 | |||||||||
Earnings from unconsolidated affiliates, net of losses | 6,758 | 11,423 | 12,978 | |||||||||
Interest income (expense), net | (10,643 | ) | (2,224 | ) | (11,054 | ) | ||||||
Other income (expense), net | 4,615 | (8,998 | ) | 1,585 | ||||||||
Income from continuing operations before provision for income taxes and minority interest | 69,197 | 111,329 | 152,257 | |||||||||
Provision for income taxes | (14,668 | ) | (38,781 | ) | (44,526 | ) | ||||||
Minority interest | (219 | ) | (1,200 | ) | 83 | |||||||
Income from continuing operations | 54,310 | 71,348 | 107,814 | |||||||||
Discontinued operations: | ||||||||||||
Income from discontinued operations before provision for income taxes | 5,438 | 4,409 | 1,722 | |||||||||
Provision for income taxes on discontinued operations | (1,939 | ) | (1,585 | ) | (5,544 | ) | ||||||
Income (loss) from discontinued operations | 3,499 | 2,824 | (3,822 | ) | ||||||||
Net income | $ | 57,809 | $ | 74,172 | $ | 103,992 | ||||||
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• | Costs in our Other International business unit related to a claim by a former agent whom we terminated in connection with the Internal Review, that decreased operating income by $5.0 million, income from continuing operations by $3.3 million and diluted earnings per share by $0.11. | |
• | Retirement related expenses for two of our corporate officers that decreased operating income by $1.9 million ($1.1 million recorded in our North America business unit, $0.3 million in our South and Central America business unit and $0.5 million in our corporate results), income from continuing operations by $1.2 million and diluted earnings per share by $0.04. | |
• | Tax items that increased operating income by $8.3 million, income from continuing operations by $11.4 million and diluted earnings per share by $0.37. These tax items included: |
• | A reversal of accruals for sales tax contingency and employee taxes in West Africa of $5.4 million and $1.3 million, respectively, and a reversal of accruals for employee taxes in Europe of $1.6 million, which are included in direct cost in our consolidated statement of income. | |
• | A $6.0 million reduction in our provision for income taxes resulting from a benefit of $2.5 million associated with the reduction in the corporate income tax rate in the U.K. and a benefit of $3.5 million associated with an internal reorganization completed during fiscal year 2008. |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Flight hours (excludes unconsolidated affiliates): | ||||||||||||
North America | 150,240 | 152,803 | 147,802 | |||||||||
South and Central America | 38,469 | 38,417 | 40,439 | |||||||||
Europe | 38,648 | 42,377 | 44,343 | |||||||||
West Africa | 34,185 | 36,124 | 38,170 | |||||||||
Southeast Asia | 12,119 | 12,668 | 16,029 | |||||||||
Other International | 6,711 | 9,318 | 8,730 | |||||||||
Consolidated total | 280,372 | 291,707 | 295,513 | |||||||||
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Gross revenue: | ||||||||||||
North America | $ | 216,482 | $ | 239,978 | $ | 237,658 | ||||||
South and Central America | 42,869 | 52,820 | 63,863 | |||||||||
Europe | 245,294 | 297,934 | 361,744 | |||||||||
West Africa | 107,411 | 131,141 | 170,770 | |||||||||
Southeast Asia | 61,168 | 73,404 | 111,117 | |||||||||
Other International | 35,339 | 46,005 | 47,518 | |||||||||
EH Centralized Operations | 10,749 | 13,896 | 22,366 | |||||||||
Bristow Academy | — | — | 14,787 | |||||||||
Intrasegment eliminations | (10,104 | ) | (12,058 | ) | (17,195 | ) | ||||||
Corporate | 693 | 475 | 136 | |||||||||
Consolidated total | $ | 709,901 | $ | 843,595 | $ | 1,012,764 | ||||||
Operating expense:(1) | ||||||||||||
North America | $ | 185,765 | $ | 210,768 | $ | 205,099 | ||||||
South and Central America | 36,207 | 36,995 | 49,011 | |||||||||
Europe | 196,602 | 245,115 | 284,396 | |||||||||
West Africa | 95,430 | 112,343 | 138,829 | |||||||||
Southeast Asia | 51,317 | 60,034 | 87,363 | |||||||||
Other International | 26,277 | 36,696 | 47,801 | |||||||||
EH Centralized Operations | 35,761 | 27,476 | 35,757 | |||||||||
Bristow Academy | — | — | 15,596 | |||||||||
Intrasegment eliminations | (10,104 | ) | (12,058 | ) | (17,195 | ) | ||||||
Gain on disposal of assets | (103 | ) | (10,615 | ) | (9,390 | ) | ||||||
Corporate | 24,282 | 25,713 | 26,749 | |||||||||
Consolidated total | $ | 641,434 | $ | 732,467 | $ | 864,016 | ||||||
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands, except percentages) | ||||||||||||
Operating income: | ||||||||||||
North America | $ | 30,717 | $ | 29,210 | $ | 32,559 | ||||||
South and Central America | 6,662 | 15,825 | 14,852 | |||||||||
Europe | 48,692 | 52,819 | 77,348 | |||||||||
West Africa | 11,981 | 18,798 | 31,941 | |||||||||
Southeast Asia | 9,851 | 13,370 | 23,754 | |||||||||
Other International | 9,062 | 9,309 | (283 | ) | ||||||||
EH Centralized Operations | (25,012 | ) | (13,580 | ) | (13,391 | ) | ||||||
Bristow Academy | — | — | (809 | ) | ||||||||
Gain on disposal of assets | 103 | 10,615 | 9,390 | |||||||||
Corporate | (23,589 | ) | (25,238 | ) | (26,613 | ) | ||||||
Consolidated operating income | 68,467 | 111,128 | 148,748 | |||||||||
Earnings from unconsolidated affiliates | 6,758 | 11,423 | 12,978 | |||||||||
Interest income | 4,046 | 8,716 | 12,725 | |||||||||
Interest expense | (14,689 | ) | (10,940 | ) | (23,779 | ) | ||||||
Other income (expense), net | 4,615 | (8,998 | ) | 1,585 | ||||||||
Income from continuing operations before provision for income taxes and minority interest | 69,197 | 111,329 | 152,257 | |||||||||
Provision for income taxes | (14,668 | ) | (38,781 | ) | (44,526 | ) | ||||||
Minority interest | (219 | ) | (1,200 | ) | 83 | |||||||
Income from continuing operations | $ | 54,310 | $ | 71,348 | $ | 107,814 | ||||||
Operating margin:(2) | ||||||||||||
North America | 14.2 | % | 12.2 | % | 13.7 | % | ||||||
South and Central America | 15.5 | % | 30.0 | % | 23.3 | % | ||||||
Europe | 19.9 | % | 17.7 | % | 21.4 | % | ||||||
West Africa | 11.2 | % | 14.3 | % | 18.7 | % | ||||||
Southeast Asia | 16.1 | % | 18.2 | % | 21.4 | % | ||||||
Other International | 25.6 | % | 20.2 | % | (0.6 | )% | ||||||
Bristow Academy | — | — | (5.5 | )% | ||||||||
Consolidated total | 9.6 | % | 13.2 | % | 14.7 | % |
(1) | Operating expenses include depreciation and amortization in the following amounts for the periods presented: |
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
North America | $ | 12,436 | $ | 11,553 | $ | 12,245 | ||||||
South and Central America | 3,661 | 3,891 | 3,878 | |||||||||
Europe | 10,803 | 11,671 | 17,668 | |||||||||
West Africa | 5,741 | 6,601 | 8,090 | |||||||||
Southeast Asia | 3,681 | 3,497 | 4,090 | |||||||||
Other International | 3,031 | 3,511 | 5,161 | |||||||||
EH Centralized Operations | 2,612 | 1,510 | 753 | |||||||||
Bristow Academy | — | — | 1,840 | |||||||||
Corporate | 95 | 225 | 415 | |||||||||
Consolidated total | $ | 42,060 | $ | 42,459 | $ | 54,140 | ||||||
(2) | Operating margin is calculated as gross revenue less operating expense divided by gross revenue. |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Number of aircraft delivered: | ||||||||||||
Small | 15 | 4 | 4 | |||||||||
Medium | 9 | 17 | 14 | |||||||||
Large | 2 | 5 | 8 | |||||||||
Fixed wing | — | — | 1 | |||||||||
Training | — | — | 9 | |||||||||
Total aircraft(1) | 26 | 26 | 36 | |||||||||
Capital expenditures (in thousands): | ||||||||||||
Aircraft and related equipment(2) | $ | 141,166 | $ | 294,444 | $ | 328,479 | ||||||
Other | 13,096 | 10,332 | 9,524 | |||||||||
Total capital expenditures | $ | 154,262 | $ | 304,776 | $ | 338,003 | ||||||
(1) | Includes one aircraft in fiscal year 2007 and two aircraft in fiscal year 2008 that were not acquired through orders. | |
(2) | Includes expenditures financed with $3.2 million of short-term notes during fiscal year 2006. |
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Payments Due by Period | ||||||||||||||||||||||||
Fiscal Year Ending March 31, | ||||||||||||||||||||||||
2010- | 2012- | 2014 and | ||||||||||||||||||||||
Total | 2009 | 2011 | 2013 | Beyond | Other | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Contractual obligations: | ||||||||||||||||||||||||
Long-term debt and short-term borrowings: | ||||||||||||||||||||||||
Principal(1) | $ | 605,617 | $ | 6,484 | $ | 4,973 | $ | 4,602 | $ | 589,558 | $ | — | ||||||||||||
Interest | 332,084 | 41,644 | 82,578 | 81,961 | 125,901 | — | ||||||||||||||||||
Aircraft operating leases(2) | 60,677 | 9,972 | 14,543 | 15,226 | 20,936 | — | ||||||||||||||||||
Other operating leases(3) | 18,480 | 3,398 | 5,711 | 4,001 | 5,370 | — | ||||||||||||||||||
Pension obligations(4) | 164,667 | 14,550 | 29,099 | 22,833 | 98,185 | — | ||||||||||||||||||
Aircraft purchase obligations(5) | 349,278 | 262,200 | 87,078 | — | — | — | ||||||||||||||||||
Other purchase obligations(6) | 38,462 | 36,175 | 2,287 | — | — | — | ||||||||||||||||||
Tax reserves(7) | 3,006 | — | — | — | — | 3,006 | ||||||||||||||||||
Total contractual cash obligations | $ | 1,572,271 | $ | 374,423 | $ | 226,269 | $ | 128,623 | $ | 839,950 | $ | 3,006 | ||||||||||||
Other commercial commitments: | ||||||||||||||||||||||||
Debt guarantees(8) | $ | 29,171 | $ | 9,296 | $ | — | $ | 19,875 | $ | — | $ | — | ||||||||||||
Other guarantees(9) | 19,057 | 3,860 | 5,959 | — | 9,238 | — | ||||||||||||||||||
Letter of credit | 1,365 | 1,365 | — | — | — | — | ||||||||||||||||||
Total commercial commitments | $ | 49,593 | $ | 14,521 | $ | 5,959 | $ | 19,875 | $ | 9,238 | $ | — | ||||||||||||
(1) | Excludes unamortized premium on the 71/2% Senior Notes of $0.6 million. | |
(2) | Represents primarily separate operating leases for nine aircraft with a subsidiary of General Electric Capital Corporation with terms of ten years expiring in January 2016. Operating lease expense attributable to aircraft leases was $12.6 million in fiscal year 2008. | |
(3) | Represents minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year. | |
(4) | Represents expected funding for pension benefits in future periods. These amounts are undiscounted and are based on the expectation that the pension will be fully funded in approximately 10 years. As of March 31, 2008, we had recorded on our balance sheet a $134.2 million pension liability associated with this obligation. Also, the timing of the funding is dependent on actuarial valuations and resulting negotiations with the plan trustees. | |
(5) | For further details on our aircraft purchase obligations, see Note 6 in the “Notes to Consolidated Financial Statements” included elsewhere in this prospectus supplement. | |
(6) | Other purchase obligations primarily represent unfilled purchase orders for aircraft parts, commitments associated with upgrading facilities at our bases and amounts committed under a supply agreement (See Note 2 in the “Notes to Consolidated Financial Statements” included elsewhere in this prospectus supplement). | |
(7) | Represents gross unrecognized benefits in connection with the adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”) (see discussion under “— Critical Accounting Policies and Estimates — Taxes” included elsewhere in this prospectus supplement) that may result in cash payments being made to certain tax authorities. We are not able to reasonably estimate in which future periods this amount will ultimately be settled and paid. |
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(8) | We have guaranteed the repayment of up to £10 million ($19.9 million) of the debt of FBS and $9.3 million of the debt of RLR, both unconsolidated affiliates. Additionally, the lender has an option to put to us the remaining amount of the RLR debt of $9.7 million, which we have guaranteed in the event of default of the other RLR shareholder. This amount is not included in the table above. | |
(9) | Relates to an indemnity agreement between us and Afianzadora Sofimex, S.A. to support issuance of surety bonds on behalf of HC from time to time. As of March 31, 2008, surety bonds denominated in Mexican pesos with an aggregate value of 184.9 million Mexican pesos ($17.3 million) and a surety bond denominated in U.S. dollars with a value of $1.7 million were outstanding. |
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• | Western Hemisphere |
• | North America | |
• | South and Central America |
• | Eastern Hemisphere |
• | Europe | |
• | West Africa | |
• | Southeast Asia | |
• | Other International | |
• | EH Centralized Operations |
• | Global Training |
• | Bristow Academy |
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Number of Aircraft | ||||||||||||||||||||||||||
Consolidated Affiliates | Unconsolidated | Maximum | ||||||||||||||||||||||||
On | Under | Affiliates | Passenger | Speed | ||||||||||||||||||||||
Type | In Fleet | Order(1) | Option(2) | In Fleet | Capacity | (MPH)(3) | Engine | |||||||||||||||||||
Small Helicopters: | ||||||||||||||||||||||||||
Bell 206L Series | 74 | — | — | 7 | 6 | 115 | Turbine | |||||||||||||||||||
Bell 206B | 19 | — | — | 4 | 4 | 100 | Turbine | |||||||||||||||||||
Bell 407 | 41 | — | — | 3 | 6 | 132 | Turbine | |||||||||||||||||||
BK-117 | 2 | — | — | — | 7 | 160 | Twin Turbine | |||||||||||||||||||
BO-105 | 2 | — | — | — | 4 | 125 | Twin Turbine | |||||||||||||||||||
EC120 | 1 | — | — | — | 4 | 110 | Turbine | |||||||||||||||||||
EC135 | 2 | — | — | 2 | 6 | 143 | Twin Turbine | |||||||||||||||||||
Agusta 109 | — | — | — | 2 | 8 | 177 | Twin Turbine | |||||||||||||||||||
AS 350BB | — | — | — | 37 | 4 | 161 | Turbine | |||||||||||||||||||
141 | — | — | 55 | |||||||||||||||||||||||
Medium Helicopters: | ||||||||||||||||||||||||||
Bell 212 | 11 | — | — | 18 | 12 | 115 | Twin Turbine | |||||||||||||||||||
Bell 412 | 36 | — | — | 33 | 13 | 125 | Twin Turbine | |||||||||||||||||||
EC155 | 10 | — | — | — | 13 | 167 | Twin Turbine | |||||||||||||||||||
SikorskyS-76 | 61 | 9 | 21 | — | 12 | 145 | Twin Turbine | |||||||||||||||||||
EC AS 365N | — | — | — | 4 | 14 | 167 | Twin Turbine | |||||||||||||||||||
Agusta AW139 | — | — | — | 1 | 15 | 181 | Twin Turbine | |||||||||||||||||||
EC175 | — | — | 12 | — | 16 | 166 | Twin Turbine | |||||||||||||||||||
118 | 9 | 33 | 56 | |||||||||||||||||||||||
Large Helicopters: | ||||||||||||||||||||||||||
AS332L Super Puma | 30 | — | — | 4 | 18 | 144 | Twin Turbine | |||||||||||||||||||
Bell 214ST | 4 | — | — | — | 18 | 144 | Twin Turbine | |||||||||||||||||||
SikorskyS-61 | 11 | — | — | — | 18 | 132 | Twin Turbine | |||||||||||||||||||
SikorskyS-92 | 10 | 9 | 8 | 3 | 19 | 158 | Twin Turbine | |||||||||||||||||||
Mil Mi-8 | 7 | — | — | 1 | 20 | 138 | Twin Turbine | |||||||||||||||||||
EC225 | 6 | 7 | 9 | — | 25 | 167 | Twin Turbine | |||||||||||||||||||
68 | 16 | 17 | 8 | |||||||||||||||||||||||
Training Helicopters: | ||||||||||||||||||||||||||
Robinson R22 | 20 | — | — | — | 2 | 92 | Piston | |||||||||||||||||||
Schweizer 300CB/CBi | 46 | 10 | — | — | 2 | 92 | Piston | |||||||||||||||||||
Bell 206B | 2 | — | — | — | 4 | 100 | Turbine | |||||||||||||||||||
Fixed wing | 1 | — | — | — | ||||||||||||||||||||||
69 | 10 | — | — | |||||||||||||||||||||||
Fixed wing | 10 | — | — | 23 | ||||||||||||||||||||||
Total(4) | 406 | 35 | 50 | 142 | ||||||||||||||||||||||
(1) | Of the aircraft on order, 27 are expected to be delivered during fiscal year 2009 (10 of which are training aircraft). 18 of the non-training aircraft which are on order have been dedicated to customers for specific |
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projects, including 8 under signed contracts. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Future Cash Requirements” included elsewhere in this prospectus supplement. | ||
(2) | Represents aircraft which we have the option to acquire. If the options are exercised, we anticipate that the large aircraft would be delivered in fiscal years 2010 and 2011, while the medium aircraft would be delivered over fiscal years 2010 through 2013, principally in the later portion of that period. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Future Cash Requirements” included elsewhere in this prospectus supplement. | |
(3) | Represents the approximate normal cruise speed flying at gross weight and at sea level under standard operating conditions. | |
(4) | We own 373 of the 406 aircraft reflected in the table above, hold 25 of the remaining aircraft under operating leases and operate 8 of the aircraft for one of our customers. 4 of the owned aircraft are held for sale. Unconsolidated affiliates leased 25 of our 373 aircraft in addition to the 142 aircraft they operate. |
South & | EH | |||||||||||||||||||||||||||||||||||
North | Central | West | Southeast | Other | Cent. | Bristow | ||||||||||||||||||||||||||||||
Type | America | America | Europe | Africa | Asia | Int’l | Ops. | Academy | Total | |||||||||||||||||||||||||||
Small | 121 | 4 | 1 | 12 | 3 | — | — | — | 141 | |||||||||||||||||||||||||||
Medium | 30 | 28 | 10 | 28 | 11 | 11 | — | — | 118 | |||||||||||||||||||||||||||
Large | 4 | 1 | 38 | 3 | 13 | 9 | — | — | 68 | |||||||||||||||||||||||||||
Training | — | — | — | — | — | — | — | 68 | 68 | |||||||||||||||||||||||||||
Other (includes fixed wing) | 1 | — | — | 7 | — | 2 | — | 1 | 11 | |||||||||||||||||||||||||||
Total consolidated affiliates | 156 | 33 | 49 | 50 | 27 | 22 | — | 69 | 406 | |||||||||||||||||||||||||||
Unconsolidated affiliates | — | 17 | 25 | — | — | 41 | 59 | — | 142 | |||||||||||||||||||||||||||
Total | 156 | 50 | 74 | 50 | 27 | 63 | 59 | 69 | 548 | |||||||||||||||||||||||||||
Percentage of consolidated revenue for fiscal year 2008 | 23 | % | 6 | % | 36 | % | 17 | % | 11 | % | 5 | % | 1 | % | 1 | % | 100 | % | ||||||||||||||||||
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• | Egypt —We operate through our 25% interest in Petroleum Air Services (“PAS”), an Egyptian corporation. PAS provides helicopter and fixed wing transportation to the offshore energy industry. Additionally, spare fixed-wing capacity is chartered to tourism operators. PAS owns 40 aircraft and leases 1 aircraft from us. | |
• | India —We lease two aircraft to an Indian helicopter operator and operate from two locations. | |
• | Ireland —We lease an aircraft to another helicopter operator. | |
• | Kazakhstan —We operate four aircraft through our 49% interest in Atyrau Bristow Air Services (“ABAS”), a Kazakhstan corporation. ABAS owns one aircraft, and we lease the other three aircraft to them. ABAS provides helicopter services to an international oil company from a single location. | |
• | Mauritania —We operate two aircraft and provide services to an international oil company from a single location. | |
• | Morocco —We operate one aircraft and provide helicopter services to an international oil company from a single location. | |
• | Russia —We operate nine aircraft from three locations on Sakhalin Island and provide both helicopter and fixed wing services to international oil companies and domestic customers. | |
• | Turkmenistan —We operate two aircraft through our 51% interest in Turkmenistan Helicopters Limited (“THL”), a Turkmenistan corporation. THL provides helicopter services to an international oil company from a single location. |
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North America | 1,044 | |||
South and Central America | 177 | |||
Europe | 604 | |||
West Africa | 766 | |||
Southeast Asia | 308 | |||
Other International | 335 | |||
EH Centralized Operations | 204 | |||
Bristow Academy | 165 | |||
Corporate | 41 | |||
3,644 | ||||
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• | a covenant to maintain a leverage ratio not greater than 4.00:1.00; | |
• | a covenant to maintain an interest coverage ratio of not less than 3.00:1.00; | |
• | a covenant not to permit our consolidated net worth at any time to be less than an amount equal to the sum of (i) $485,216,000, plus (ii) as of the end of each fiscal quarter, 50% of our positive cumulative consolidated net income since March 31, 2006; plus (iii) 100% of the amount by which our total stockholders’ investment is increased as a result of any public or private offering of capital stock; | |
• | a covenant that during the time certain permitted investments exceed 5% of our consolidated net tangible assets, we will maintain a ratio of collateral asset value to senior secured debt of at least 1.20:1.00; | |
• | restrictions on conducting hedging transactions except in the ordinary course of business; | |
• | restrictions on amending our material agreements; and | |
• | restrictions on making changes to our accounting practices. |
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• | will be general unsecured senior obligations; | |
• | will be issued in denominations of $1,000 and integral multiples of $1,000; | |
• | will be represented by one or more registered notes in global form, but in certain limited circumstances may be represented by notes in certificated form as described below under “— Book-Entry, Settlement and Clearance;” | |
• | will not be subject to defeasance or any sinking fund provision; | |
• | will rank equally in right of payment to any of our existing or future unsecured senior debt; | |
• | will be unconditionally guaranteed on a senior basis by those of our subsidiaries that currently provide guarantees of our other senior notes or our revolving credit facility, as well as certain future subsidiaries; and | |
• | will effectively rank junior to any of our secured debt to the extent of the value of the assets securing such indebtedness, and will be structurally subordinated to all liabilities of our subsidiaries that are not guarantors. |
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• | if we have specified a redemption date or a fundamental change repurchase date (as defined below) that is after a record date and on or prior to the business day immediately following the interest payment date; | |
• | to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such note; or | |
• | if the notes are surrendered for conversion after 5:00 p.m., New York City time, on the regular record date immediately preceding the maturity date and before 5:00 p.m., New York City time, on the business day immediately preceding the maturity date for the notes. |
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• | our general unsecured senior obligations; | |
• | equal (“pari passu”) in ranking with all of our existing and future unsecured senior indebtedness; and | |
• | senior in right of payment to all of our future subordinated indebtedness. |
• | will be general unsecured, senior obligations of the guarantors; | |
• | will rank equally in right of payment to any other senior indebtedness of the guarantors; and | |
• | will rank senior in right of payment to any future subordinated indebtedness of the guarantors. |
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• | three such bids cannot reasonably be obtained by the bid solicitation agent, but two such bids are obtained, then the average of the two bids shall be used, and | |
• | only one such bid can reasonably be obtained by the bid solicitation agent, that one bid shall be used. |
• | distribute, to all or substantially all holders of our common stock, rights, warrants or options entitling them to subscribe for or purchase, for a period expiring not more than 45 days from the record date of the distribution, shares of our common stock at a price per share less than the average of the last reported sale price of our common stock for each of the ten trading days immediately preceding the date that such distribution was first publicly announced; or | |
• | distribute, to all or substantially all holders of our common stock, cash or other assets, debt securities or certain rights or warrants to purchase our securities (excluding distributions described in clauses (1) and (2) under “Conversion Rate Adjustments”), which distribution has a per share value exceeding 15% of the average of the last reported sale price of our common stock for the ten trading days immediately preceding the date that such distribution was first publicly announced, |
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• | cash equal to $50 or, if less, the daily conversion value; and | |
• | to the extent the daily conversion value exceeds $50, a number of shares of common stock (the “daily share amount”) equal to (A) the difference between the daily conversion value and $50, divided by (B) the applicable stock price of our common stock for such day. |
• | if the applicable stock price (as defined below) of our common stock on such trading day is less than or equal to the base conversion price (as defined below), the daily conversion rate fraction for such trading day will be equal to the base conversion rate divided by 20; and | |
• | if the applicable stock price of our common stock on such trading day is greater than the base conversion price, the daily conversion rate fraction for such trading day will be equal to 1/20th of the following: |
Base Conversion Rate | + | (Applicable Stock Price of our Common Stock on such Trading Day − Base Conversion Price) Applicable Stock Price of our Common Stock on such Trading Day | × | Incremental Share Factor |
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• | complete and manually sign the conversion notice on the back of the note, or a facsimile of the conversion notice; | |
• | deliver the conversion notice, which is irrevocable, and the note to the conversion agent; | |
• | if required, furnish appropriate endorsements and transfer documents; | |
• | if required, pay all transfer or similar taxes; and | |
• | if required, pay funds equal to interest payable on the next interest payment date. |
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CR’ | = | CR0 | × | OS’ OS0 |
CR’ | = | CR0 | × | OS0 + X OS0 + Y |
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• | dividends or distributions referred to in clause (1) or (2) above; | |
• | dividends or distributions paid exclusively in cash; and | |
• | spin-offs to which the provisions set forth below in this paragraph (3) shall apply, |
CR’ | = | CR0 | × | SP0 SP0 − FMV |
CR’ | = | CR0 | × | FMV + MP0 MP0 |
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CR’ | = | CR0 | × | SP0 SP0 − C |
CR’ | = | CR0 | × | AC + (SP’ × OS’) OS0 × SP’ |
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• | any reclassification of our common stock (other than a change only in par value, or from par value to no par value or from no par value to par value, or a change as a result of a subdivision or combination of our common stock); | |
• | a consolidation, merger or combination involving us; or | |
• | a sale or conveyance to another person of all or substantially all of our property and assets, |
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• | upon the issuance of any shares of our common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on our securities and the investment of additional optional amounts in shares of our common stock under any plan; | |
• | upon the issuance of any shares of our common stock or restricted stock units or options or rights (including shareholder appreciation rights) to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by us or any of our subsidiaries; | |
• | upon the issuance of any shares of our common stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding bullet and outstanding as of the date the notes were first issued; | |
• | upon the repurchase of any of our shares pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the nature described in “— Conversion Rights — Conversion Rate Adjustments — Adjustment Events”; | |
• | for a change in the par value of the common stock; or | |
• | for accrued and unpaid interest, if any. |
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(per $1,000 principal amount of the notes)
Stock Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date | $ | 46.87 | $ | 50.00 | $ | 55.00 | $ | 60.00 | $ | 65.00 | $ | 70.00 | $ | 75.00 | $ | 80.00 | $ | 85.00 | $ | 90.00 | $ | 95.00 | $ | 100.00 | $ | 105.00 | $ | 110.00 | $ | 115.00 | $ | 120.00 | $ | 125.00 | $ | 130.00 | $ | 135.00 | $ | 140.00 | $ | 145.00 | $ | 150.00 | $ | 155.00 | $ | 160.00 | $ | 165.00 | $ | 170.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
June 17, 2008 | 8.4049 | 7.8699 | 7.2329 | 6.7917 | 6.4884 | 6.2834 | 6.1488 | 5.7852 | 5.2603 | 4.8151 | 4.4339 | 4.1046 | 3.8176 | 3.5657 | 3.3429 | 3.1446 | 2.9670 | 2.8071 | 2.6623 | 2.5306 | 2.4102 | 2.2997 | 2.1979 | 2.1038 | 2.0165 | 1.9354 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 15, 2009 | 8.4049 | 7.5344 | 6.8338 | 6.3527 | 6.0270 | 5.8121 | 5.6767 | 5.3186 | 4.8035 | 4.3711 | 4.0043 | 3.6904 | 3.4193 | 3.1833 | 2.9762 | 2.7932 | 2.6304 | 2.4847 | 2.3534 | 2.2346 | 2.1264 | 2.0276 | 1.9368 | 1.8531 | 1.7757 | 1.7039 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 15, 2010 | 8.4049 | 7.2204 | 6.4303 | 5.8896 | 5.5272 | 5.2928 | 5.1506 | 4.7999 | 4.2941 | 3.8749 | 3.5240 | 3.2273 | 2.9743 | 2.7565 | 2.5674 | 2.4020 | 2.2562 | 2.1267 | 2.0109 | 1.9068 | 1.8126 | 1.7269 | 1.6485 | 1.5766 | 1.5102 | 1.4488 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 15, 2011 | 8.4049 | 7.1902 | 6.0126 | 5.3953 | 4.9848 | 4.7240 | 4.5714 | 4.2167 | 3.7196 | 3.3148 | 2.9819 | 2.7056 | 2.4739 | 2.2777 | 2.1101 | 1.9656 | 1.8398 | 1.7294 | 1.6317 | 1.5447 | 1.4666 | 1.3960 | 1.3318 | 1.2732 | 1.2193 | 1.1696 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 15, 2012 | 8.4049 | 7.1600 | 5.6184 | 4.8842 | 4.3952 | 4.0872 | 3.9116 | 3.5519 | 3.0626 | 2.6742 | 2.3634 | 2.1123 | 1.9074 | 1.7383 | 1.5974 | 1.4787 | 1.3774 | 1.2902 | 1.2142 | 1.1474 | 1.0881 | 1.0350 | 0.9871 | 0.9436 | 0.9037 | 0.8670 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 15, 2013 | 8.4049 | 7.1298 | 5.2726 | 4.3616 | 3.7469 | 3.3590 | 3.1415 | 2.7691 | 2.2882 | 1.9224 | 1.6429 | 1.4277 | 1.2605 | 1.1290 | 1.0242 | 0.9395 | 0.8699 | 0.8117 | 0.7623 | 0.7197 | 0.6824 | 0.6493 | 0.6197 | 0.5928 | 0.5683 | 0.5457 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 15, 2014 | 8.4049 | 7.0995 | 5.2619 | 3.8357 | 2.9993 | 2.4619 | 2.1655 | 1.7732 | 1.3153 | 0.9995 | 0.7839 | 0.6371 | 0.5364 | 0.4665 | 0.4167 | 0.3799 | 0.3518 | 0.3294 | 0.3108 | 0.2948 | 0.2808 | 0.2682 | 0.2567 | 0.2460 | 0.2362 | 0.2269 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 15, 2015 | 8.4049 | 7.0693 | 5.2511 | 3.7360 | 2.4539 | 1.3550 | 0.4027 | 0.0053 | 0.0017 | 0.0016 | 0.0015 | 0.0014 | 0.0013 | 0.0012 | 0.0012 | 0.0011 | 0.0010 | 0.0010 | 0.0009 | 0.0009 | 0.0008 | 0.0008 | 0.0008 | 0.0007 | 0.0007 | 0.0006 |
• | if the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, based on a365-day year, as applicable; | |
• | if the stock price is greater than $170.00 per share (subject to adjustment in the same manner as the stock prices set forth in the first row of the table above), no additional shares will be issued upon conversion; and | |
• | if the stock price is less than $46.87 per share (subject to adjustment in the same manner as the stock prices set forth in the first row of the table above), no additional shares will be issued upon conversion. |
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• | “board of directors” means the board of directors or other governing body charged with the ultimate management of any person; | |
• | “continuing director” means a director who either was a member of our board of directors on the date the notes are first issued or who becomes a member of our board of directors subsequent to that date and whose initial election, appointment or nomination for election by our shareholders is duly approved by a majority of the continuing directors on our board of directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by us on behalf of our entire board of directors in which such individual is named as a nominee for director; and | |
• | the term “person” includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act. |
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• | the events causing a fundamental change; | |
• | the effective date of the fundamental change; | |
• | the last date on which a holder may exercise the purchase right; | |
• | the fundamental change purchase price; | |
• | the fundamental change repurchase date; | |
• | the name and address of the paying agent and the conversion agent; | |
• | if applicable, the base conversion rate and any adjustments to the applicable conversion rate; | |
• | if applicable, that the notes with respect to which a fundamental change purchase notice has been delivered by a holder may be converted only if the holder withdraws the fundamental change purchase notice in accordance with the terms of the indenture; and | |
• | the procedures that holders must follow to require us to purchase their notes. |
• | if certificated notes have been issued, the certificate numbers of your notes to be delivered for purchase, or if not certificated, your notice must comply with appropriate DTC procedures; | |
• | the portion of the principal amount of notes to be purchased, which must be $1,000 or an integral multiple thereof; and | |
• | that the notes are to be purchased by us pursuant to the applicable provisions of the notes and the indenture. |
• | the principal amount of the withdrawn notes; | |
• | if certificated notes have been issued, the certificate numbers of the withdrawn notes, or if not certificated, your notice must comply with appropriate DTC procedures; and | |
• | the principal amount, if any, which remains subject to the purchase notice. |
• | the notes will cease to be outstanding and interest, if any, will cease to accrue (whether or not book-entry transfer of the notes is made or whether or not the note is delivered to the paying agent); and |
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• | all other rights of the holder will terminate (other than the right to receive the fundamental change purchase price upon delivery or transfer of the notes). |
• | comply with the provisions ofRule 13e-4,Rule 14e-1 and any other applicable tender offer rules under the Exchange Act; | |
• | file a Schedule TO or any successor or similar schedule, if required, under the Exchange Act; and | |
• | otherwise comply with all applicable federal and state securities laws in connection with any offer by us to purchase the notes. |
• | if certificated notes have been issued, the certificate numbers of the holders’ notes to be delivered for repurchase, or if not certificated, the notice of repurchase must comply with appropriate DTC procedures; | |
• | the portion of the principal amount of notes to be repurchased, which must be $1,000 or an integral multiple thereof; and | |
• | that the notes are to be repurchased by us pursuant to the applicable provisions of the notes and the indenture. |
• | the principal amount of notes being withdrawn; |
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• | if certificated notes have been issued, the certificate numbers of the notes being withdrawn, or if not certificated, the notice of withdrawal must comply with appropriate DTC procedures; and | |
• | the principal amount of the notes, if any, which remains subject to the repurchase notice. |
• | comply with the provisions ofRule 13e-4,Rule 14e-1 and any other applicable tender offer rules under the Exchange Act; | |
• | file a Schedule TO or any successor or similar schedule, if required, under the Exchange Act; and | |
• | otherwise comply with all applicable federal and state securities laws in connection with any offer by us to purchase the notes. |
• | we are the continuing person or the resulting, surviving or transferee person, if other than us, is organized and validly existing under the laws of the United States of America, any state thereof, or the District of Columbia and assumes our obligations on the notes and under the indenture; | |
• | immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and | |
• | other conditions described in the indenture are met. |
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• | our default in the payment of any principal amount or any redemption price, purchase price or fundamental change purchase price, in each case when due and payable, whether at the final maturity date, upon redemption, required purchase, acceleration or otherwise; | |
• | our default in the payment of any interest under the notes, which default continues for 30 days; | |
• | our default in the delivery when due of all cash and any shares of common stock or other consideration payable upon conversion with respect to the notes, which default continues for 10 days; | |
• | our failure to provide any notice of a fundamental change within the time required to provide such notice; | |
• | our failure to comply with the covenant described above under “— Consolidation, Merger and Sale of Assets” upon our receipt of notice of such default from the trustee or from holders of not less than 25% in aggregate principal amount of the notes then outstanding, and the failure to cure (or obtain a waiver of) such default within 30 days after receipt of such notice; | |
• | our failure to comply with any of our other agreements in the notes or the indenture upon our receipt of notice of such default from the trustee or from holders of not less than 25% in aggregate principal amount of the notes then outstanding, and the failure to cure (or obtain a waiver of) such default within 60 days after receipt of such notice; | |
• | a default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by us or any of our subsidiaries (or the payment of which is guaranteed by us or any of our subsidiaries), which default is caused by a failure to pay principal of or premium or interest on such indebtedness prior to the expiration of any grace period provided in such indebtedness, including any extension thereof (a “payment default”), or results in the acceleration of such indebtedness prior to its stated maturity and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates in excess of $25.0 million and provided, further, that if any such default is cured or waived or any such acceleration rescinded, or such indebtedness is repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such event of default and any consequential acceleration of the notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree; | |
• | failure by any guarantor to perform any covenant set forth in its subsidiary guarantee, or the repudiation by any guarantor of its obligations under its subsidiary guarantee or the unenforceability of any subsidiary guarantee against a guarantor for any reason; and | |
• | certain events of bankruptcy, insolvency or reorganization affecting us, any guarantor or any of our significant subsidiaries (as defined inRegulation S-X under the Securities Act). |
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• | alter the manner of calculation or rate of accrual of interest on the note or change the time of payment of any installment of interest; | |
• | make the note payable in money or securities other than that stated in the note; | |
• | change the stated maturity of the note; | |
• | reduce the principal amount, redemption price, purchase price or fundamental change purchase price with respect to the note; | |
• | make any change that adversely affects the rights of a holder to convert the note or, except as provided for in the indenture, changes the consideration to be received upon any such conversion; | |
• | make any change that adversely affects the right to require us to purchase the note; | |
• | impair the right to institute suit for the enforcement of any payment with respect to the note or with respect to conversion of the note; or | |
• | change the provisions in the indenture that relate to modifying or amending the indenture or waiving any past defaults in the payment of principal, premium, if any, or interest on the notes. |
• | to evidence a successor to us and the assumption by that successor of our obligations under the indenture and the notes; | |
• | to add to our covenants for the benefit of the holders of the notes or to surrender any right or power conferred upon us; | |
• | to secure our obligations in respect of the notes or to add a guarantor of the notes; | |
• | to evidence and provide the acceptance of the appointment of a successor trustee under the indenture; | |
• | to comply with the requirements of the SEC in order to effect or maintain qualification of the indenture under the Trust Indenture Act, as contemplated by the indenture or otherwise; | |
• | to provide for conversion rights of holders if any reclassification or change of common stock or any consolidation, merger or sale of all or substantially all of our property and assets occurs or otherwise comply with the provisions of the indenture in the event of such a transaction; | |
• | to increase the conversion rate in accordance with the terms of the notes; | |
• | to cure any ambiguity, omission, defect or inconsistency in the indenture; or |
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• | to make any change that does not adversely affect the rights of the holders of the notes in any material respect. |
• | waive compliance by us with restrictive provisions of the indenture, as detailed in the indenture; or | |
• | waive any past default or event of default under the indenture and its consequences, except a default or event of default in the payment of any amount due, or in the obligation to deliver consideration upon conversion or with respect to any note or in respect of any provision which under the indenture cannot be modified or amended without the consent of the holder of each outstanding note affected. |
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• | upon deposit of a global note with DTC’s custodian, DTC will credit portions of the principal amount of the global note to the accounts of the DTC participants designated by the underwriter; and | |
• | ownership of beneficial interests in a global note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the global note). |
• | a limited purpose trust company organized under the laws of the State of New York; | |
• | a “banking organization” within the meaning of the New York State Banking Law; | |
• | a member of the Federal Reserve System; | |
• | a “clearing corporation” within the meaning of the Uniform Commercial Code; and | |
• | “clearing agency” registered under Section 17A of the Exchange Act. |
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• | will not be entitled to have notes represented by the global note registered in their names; | |
• | will not receive or be entitled to receive physical, certificated notes; and | |
• | will not be considered the owners or holders of the notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee under the indenture. |
• | DTC notifies us at any time that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days; | |
• | DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days; or | |
• | an event of default in respect of the notes has occurred and is continuing and any holder of notes requests that the notes be issued in physical, certificated form. |
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• | a financial institution, | |
• | a tax-exempt organization, | |
• | an S corporation or other pass-through entity, | |
• | an insurance company, | |
• | a mutual fund, | |
• | a dealer in stocks and securities, or foreign currencies, | |
• | a trader in securities who elects the mark-to-market method of accounting for its securities, | |
• | a holder who is subject to the alternative minimum tax provisions of the Internal Revenue Code, | |
• | certain expatriates or former long-term residents of the United States or a United States person that has a functional currency other than the U.S. dollar, | |
• | a domestic personal holding company, | |
• | a regulated investment company, | |
• | a real estate investment trust, or | |
• | a holder who holds the notes as part of a hedge, conversion or constructive sale transaction, straddle, wash sale, or other risk reduction transaction. |
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• | an individual U.S. citizen or resident alien, | |
• | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under U.S. law (federal or state), | |
• | an estate whose worldwide income is subject to U.S. federal income tax, or | |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons (as defined in the Internal Revenue Code) have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person. |
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• | a reduction by an amount equal to that portion of the holder’s tax basis in the note that is allocable to any fractional share, | |
• | a reduction by the amount of cash the holder received in the conversion (other than cash received in lieu of a fractional share or cash attributable to accrued interest) and | |
• | an increase by the amount of gain, if any, recognized by the holder on the conversion (other than gain with respect to a fractional share). |
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• | interest paid on the note is not effectively connected with thenon-U.S. holder’s conduct of a trade or business in the United States; | |
• | thenon-U.S. holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our shares of stock entitled to vote; | |
• | thenon-U.S. holder is not a controlled foreign corporation that is related to us through stock ownership within the meaning of the Code; and | |
• | the U.S. payor does not have actual knowledge or reason to know that the holder is a U.S. person and either (1) the beneficial owner of the note certifies to the applicable payor or its agent, under penalties of perjury, that it is not a U.S. holder and provides its name and address on IRSForm W-8BEN (or a suitable substitute form), or (2) a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business (a “financial institution”) and holds the note, certifies under penalties of perjury that an IRS FormW-8BEN (or a substitute form) has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy of the form or the U.S. payor otherwise possesses documentation upon which it may rely to treat the payment as made to anon-U.S. person in accordance with U.S. Treasury Regulations. |
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• | the gain is effectively connected with thenon-U.S. holder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the holder); | |
• | thenon-U.S. holder is an individual present in the United States for 183 days or more in the year of such sale, exchange or retirement and either (1) has a “tax home” in the United States and certain other requirements are met, or (2) the gain from the disposition is attributable to an office or other fixed place of business thenon-U.S. holder maintains in the United States; or | |
• | we are or have been a “U.S. real property holding corporation,” or a USRPHC, for U.S. federal income tax purposes (i.e., a domestic corporation whose trade or business and real property assets consist primarily of “United States real property interests”). |
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Principal | ||||
Amount | ||||
Underwriter | of Notes | |||
Credit Suisse Securities (USA) LLC | $ | 50,000,000 | ||
Goldman, Sachs & Co. | 32,000,000 | |||
J.P. Morgan Securities Inc. | 18,000,000 | |||
Total | $ | 100,000,000 | ||
Per Note | Total | |||||||||||||||
Without | With | Without | With | |||||||||||||
Over-Allotment | Over-Allotment | Over-Allotment | Over-Allotment | |||||||||||||
Underwriting discounts and commissions payable by us | 2.75 | % | 2.75 | % | $ | 2,750,000 | $ | 3,162,500 | ||||||||
Expenses payable by us | 0.61 | % | 0.53 | % | $ | 605,000 | $ | 605,000 |
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• | Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. | |
• | Over-allotment involves sales by the underwriters of notes in excess of the principal amount of notes the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the principal amount of the notes over-allotted by the underwriters is not greater than the principal amount of notes that they may purchase in the over-allotment option. In a naked short position, the principal amount of notes involved is greater than the principal amount of the notes in the over-allotment option. The underwriters may close out any short position by either exercising their over-allotment optionand/or purchasing notes in the open market. | |
• | Syndicate covering transactions involve purchases of the notes in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of notes to close out the short position, the underwriters will consider, among other things, the price of notes available for purchase in the open market as compared to the price at which they may purchase notes through the over-allotment option. If the underwriters sell more notes than could be covered by the over-allotment option, a naked short position, that position can only be closed out by buying notes in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the notes in the open market after pricing that could adversely affect investors who purchase in the offering. | |
• | Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the notes originally sold by the syndicate member are purchased in a stabilizing transaction or a syndicate covering transaction to cover syndicate short positions. |
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• | In passive market making, market makers in the notes who are underwriters or prospective underwriters may, subject to limitations, make bids for or purchases of the notes until the time, if any, at which a stabilizing bid is made. |
• | to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; | |
• | to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; | |
• | to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the underwriter for any such offer; or | |
• | in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of notes shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive. |
• | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act (“FSMA”)) received by it in connection with the issue or sale of the notes in circumstances in which Section 21(1) of the FSMA does not apply to us; and | |
• | it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom. |
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• | the purchaser is entitled under applicable provincial securities laws to purchase the notes without the benefit of a prospectus qualified under those securities laws, | |
• | where required by law, that the purchaser is purchasing as principal and not as agent, | |
• | the purchaser has reviewed the text above under Resale Restrictions, and | |
• | the purchaser acknowledges and consents to the provision of specified information concerning its purchase of the notes to the regulatory authority that by law is entitled to collect the information. |
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• | our Annual Report onForm 10-K for the fiscal year ended March 31, 2008, which was filed with the SEC on May 21, 2008; | |
• | our Current Report on Form 8-K filed with the SEC on June 6, 2008; and |
• | the description of our common stock contained in our Registration Statement onForm 8-A/A, filed on March 7, 2003, and any subsequent amendment thereto filed for the purpose of updating such description. |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Gross revenue: | ||||||||||||
Operating revenue from non-affiliates | $ | 595,139 | $ | 709,254 | $ | 868,929 | ||||||
Operating revenue from affiliates | 51,832 | 48,170 | 49,806 | |||||||||
Reimbursable revenue from non-affiliates | 58,570 | 80,244 | 87,325 | |||||||||
Reimbursable revenue from affiliates | 4,360 | 5,927 | 6,704 | |||||||||
709,901 | 843,595 | 1,012,764 | ||||||||||
Operating expense: | ||||||||||||
Direct cost | 478,421 | 548,364 | 635,327 | |||||||||
Reimbursable expense | 61,889 | 85,938 | 91,106 | |||||||||
Depreciation and amortization | 42,060 | 42,459 | 54,140 | |||||||||
General and administrative | 59,167 | 66,321 | 92,833 | |||||||||
Gain on disposal of assets | (103 | ) | (10,615 | ) | (9,390 | ) | ||||||
641,434 | 732,467 | 864,016 | ||||||||||
Operating income | 68,467 | 111,128 | 148,748 | |||||||||
Earnings from unconsolidated affiliates, net of losses | 6,758 | 11,423 | 12,978 | |||||||||
Interest income | 4,046 | 8,716 | 12,725 | |||||||||
Interest expense | (14,689 | ) | (10,940 | ) | (23,779 | ) | ||||||
Other income (expense), net | 4,615 | (8,998 | ) | 1,585 | ||||||||
Income from continuing operations before provision for income taxes and minority interest | 69,197 | 111,329 | 152,257 | |||||||||
Provision for income taxes | (14,668 | ) | (38,781 | ) | (44,526 | ) | ||||||
Minority interest | (219 | ) | (1,200 | ) | 83 | |||||||
Income from continuing operations | 54,310 | 71,348 | 107,814 | |||||||||
Discontinued operations: | ||||||||||||
Income from discontinued operations before provision for income taxes | 5,438 | 4,409 | 1,722 | |||||||||
Provision for income taxes on discontinued operations | (1,939 | ) | (1,585 | ) | (5,544 | ) | ||||||
Income (loss) from discontinued operations | 3,499 | 2,824 | (3,822 | ) | ||||||||
Net income | 57,809 | 74,172 | 103,992 | |||||||||
Preferred stock dividends | — | (6,633 | ) | (12,650 | ) | |||||||
Net income available to common stockholders | $ | 57,809 | $ | 67,539 | $ | 91,342 | ||||||
Basic earnings per common share: | ||||||||||||
Earnings from continuing operations | $ | 2.33 | $ | 2.75 | $ | 4.00 | ||||||
Earnings (loss) from discontinued operations | 0.15 | 0.12 | (0.16 | ) | ||||||||
Net earnings | $ | 2.48 | $ | 2.87 | $ | 3.84 | ||||||
Diluted earnings per common share: | ||||||||||||
Earnings from continuing operations | $ | 2.30 | $ | 2.64 | $ | 3.53 | ||||||
Earnings (loss) from discontinued operations | 0.15 | 0.10 | (0.12 | ) | ||||||||
Net earnings | $ | 2.45 | $ | 2.74 | $ | 3.41 | ||||||
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March 31, | ||||||||
2007 | 2008 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 184,188 | $ | 290,050 | ||||
Accounts receivable from non-affiliates, net of allowance for doubtful accounts of $1.8 million and $1.8 million, respectively | 147,608 | 204,599 | ||||||
Accounts receivable from affiliates, net of allowance for doubtful accounts of $3.2 million and $4.0 million, respectively | 17,199 | 11,316 | ||||||
Inventories | 157,563 | 176,239 | ||||||
Prepaid expenses and other | 17,387 | 24,177 | ||||||
Current assets from discontinued operations | 12,029 | — | ||||||
Total current assets | 535,974 | 706,381 | ||||||
Investment in unconsolidated affiliates | 46,828 | 52,467 | ||||||
Property and equipment — at cost: | ||||||||
Land and buildings | 51,785 | 60,056 | ||||||
Aircraft and equipment | 1,139,781 | 1,428,996 | ||||||
1,191,566 | 1,489,052 | |||||||
Less — Accumulated depreciation and amortization | (300,045 | ) | (316,514 | ) | ||||
891,521 | 1,172,538 | |||||||
Goodwill | 6,630 | 15,676 | ||||||
Other assets | 10,725 | 30,293 | ||||||
Long-term assets from discontinued operations | 14,125 | — | ||||||
$ | 1,505,803 | $ | 1,977,355 | |||||
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 40,459 | $ | 49,650 | ||||
Accrued wages, benefits and related taxes | 36,390 | 35,523 | ||||||
Income taxes payable | 3,412 | 5,862 | ||||||
Other accrued taxes | 9,042 | 1,589 | ||||||
Deferred revenues | 16,283 | 15,415 | ||||||
Accrued maintenance and repairs | 12,309 | 13,250 | ||||||
Accrued interest | 4,511 | 5,656 | ||||||
Other accrued liabilities | 17,151 | 22,235 | ||||||
Deferred taxes | 17,611 | 9,238 | ||||||
Short-term borrowings and current maturities of long-term debt | 4,852 | 6,541 | ||||||
Current liabilities from discontinued operations | 5,948 | — | ||||||
Total current liabilities | 167,968 | 164,959 | ||||||
Long-term debt, less current maturities | 254,230 | 599,677 | ||||||
Accrued pension liabilities | 113,069 | 134,156 | ||||||
Other liabilities and deferred credits | 17,345 | 14,805 | ||||||
Deferred taxes | 76,089 | 91,747 | ||||||
Minority interest | 5,445 | 4,570 | ||||||
Commitments and contingencies (Note 6) | ||||||||
Stockholders’ investment: | ||||||||
5.50% mandatory convertible preferred stock, $.01 par value, authorized and outstanding 4,600,000 shares; entitled in liquidation to $230 million; net of offering costs of $7.4 million | 222,554 | 222,554 | ||||||
Common stock, $.01 par value, authorized 35,000,000 shares as of March 31, 2007 and 90,000,000 shares as of March 31, 2008; outstanding 23,585,370 as of March 31, 2007 and 23,923,685 as of March 31, 2008 (exclusive of 1,281,050 treasury shares) | 236 | 239 | ||||||
Additional paid-in capital | 169,353 | 186,390 | ||||||
Retained earnings | 515,589 | 606,931 | ||||||
Accumulated other comprehensive loss | (36,075 | ) | (48,673 | ) | ||||
871,657 | 967,441 | |||||||
$ | 1,505,803 | $ | 1,977,355 | |||||
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 57,809 | $ | 74,172 | $ | 103,992 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 42,256 | 42,643 | 54,241 | |||||||||
Deferred income taxes | 1,488 | 21,031 | 17,571 | |||||||||
Gain on disposal of discontinued operations | — | — | (1,019 | ) | ||||||||
Gain on asset dispositions | (102 | ) | (10,618 | ) | (9,393 | ) | ||||||
Stock-based compensation expense | 613 | 4,903 | 9,546 | |||||||||
Equity in earnings from unconsolidated affiliates in excess of dividends received | (337 | ) | (3,754 | ) | (3,720 | ) | ||||||
Minority interest in earnings | 219 | 1,200 | (83 | ) | ||||||||
Tax benefit related to stock-based compensation | — | (1,132 | ) | (1,738 | ) | |||||||
Increase (decrease) in cash resulting from changes in: | ||||||||||||
Accounts receivable | (34,718 | ) | (1,428 | ) | (32,600 | ) | ||||||
Inventories | (12,518 | ) | (10,225 | ) | (18,969 | ) | ||||||
Prepaid expenses and other | (5,925 | ) | (6,634 | ) | (18,249 | ) | ||||||
Accounts payable | 15,944 | (10,688 | ) | 7,019 | ||||||||
Accrued liabilities | (35,397 | ) | 5,771 | (36,766 | ) | |||||||
Other liabilities and deferred credits | 9,933 | (811 | ) | 17,725 | ||||||||
Net cash provided by operating activities | 39,265 | 104,430 | 87,557 | |||||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (139,572 | ) | (304,776 | ) | (338,003 | ) | ||||||
Proceeds from asset dispositions | 85,392 | 40,441 | 26,623 | |||||||||
Acquisitions, net of cash received | — | — | (14,622 | ) | ||||||||
Net proceeds from sale of discontinued operations | — | — | 21,958 | |||||||||
Note issued to unconsolidated affiliate | — | — | (4,141 | ) | ||||||||
Investment in unconsolidated affiliate | — | — | (1,960 | ) | ||||||||
Net cash used in investing activities | (54,180 | ) | (264,335 | ) | (310,145 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from borrowings | — | — | 350,622 | |||||||||
Debt issuance costs | (2,564 | ) | — | (5,882 | ) | |||||||
Issuance of Preferred Stock | — | 223,550 | — | |||||||||
Preferred Stock issuance costs | — | (996 | ) | — | ||||||||
Repayment of debt and debt redemption premiums | (4,070 | ) | (5,716 | ) | (10,054 | ) | ||||||
Partial prepayment of put/call obligation | (129 | ) | (130 | ) | (163 | ) | ||||||
Acquisition of minority interest | — | — | (507 | ) | ||||||||
Preferred Stock dividends paid | — | (6,107 | ) | (12,650 | ) | |||||||
Issuance of common stock | 1,369 | 3,949 | 5,756 | |||||||||
Tax benefit related to stock-based compensation | — | 1,132 | 1,738 | |||||||||
Net cash (used in) provided by financing activities | (5,394 | ) | 215,682 | 328,860 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (3,649 | ) | 5,929 | (410 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | (23,958 | ) | 61,706 | 105,862 | ||||||||
Cash and cash equivalents at beginning of period | 146,440 | 122,482 | 184,188 | |||||||||
Cash and cash equivalents at end of period | $ | 122,482 | $ | 184,188 | $ | 290,050 | ||||||
Supplemental disclosure of non-cash investing activities: | ||||||||||||
Non-monetary exchange of assets | $ | 11,511 | $ | — | $ | — | ||||||
Capital expenditures funded by short-term notes | $ | 3,179 | $ | — | $ | — | ||||||
Recapitalization of Hemisco funded by note payable | $ | 4,380 | $ | — | $ | — | ||||||
Accrued proceeds on insurance claim | $ | — | $ | — | $ | 15,582 |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands, except share amounts) | ||||||||||||
5.50% mandatory convertible Preferred Stock (shares): | ||||||||||||
Balance — beginning of fiscal year | — | — | 4,600,000 | |||||||||
Preferred Stock issued | — | 4,600,000 | — | |||||||||
Balance — end of fiscal year | — | 4,600,000 | 4,600,000 | |||||||||
5.50% mandatory convertible Preferred Stock ($.01 Par): | ||||||||||||
Balance — beginning of fiscal year | $ | — | $ | — | $ | 222,554 | ||||||
Preferred Stock issued, net of offering costs of $7.4 million | — | 222,554 | — | |||||||||
Balance — end of fiscal year | $ | — | $ | 222,554 | $ | 222,554 | ||||||
Common Stock (shares, exclusive of treasury shares): | ||||||||||||
Balance — beginning of fiscal year | 23,314,708 | 23,385,473 | 23,585,037 | |||||||||
Stock options exercised | 70,765 | 196,672 | 230,570 | |||||||||
Issuance of Common Stock | — | 2,892 | 108,078 | |||||||||
Balance — end of fiscal year | 23,385,473 | 23,585,037 | 23,923,685 | |||||||||
Common Stock ($.01 Par): | ||||||||||||
Balance — beginning of fiscal year | $ | 233 | $ | 234 | $ | 236 | ||||||
Stock options exercised | 1 | 2 | 3 | |||||||||
Balance — end of fiscal year | $ | 234 | $ | 236 | $ | 239 | ||||||
Additional paid in capital: | ||||||||||||
Balance — beginning of fiscal year | $ | 157,100 | $ | 158,762 | $ | 169,353 | ||||||
Stock options exercised | 1,368 | 3,946 | 5,753 | |||||||||
Tax benefit related to the exercise of employee stock options | 294 | 1,131 | 1,738 | |||||||||
Stock-based compensation expense | — | 4,903 | 9,546 | |||||||||
Reclassified prior year stock-based compensation liability | — | 611 | — | |||||||||
Balance — end of fiscal year | $ | 158,762 | $ | 169,353 | $ | 186,390 | ||||||
Retained earnings: | ||||||||||||
Balance — beginning of fiscal year | $ | 389,715 | $ | 447,524 | $ | 515,589 | ||||||
Net income | 57,809 | 74,172 | 103,992 | |||||||||
Preferred Stock dividends declared | — | (6,107 | ) | (12,650 | ) | |||||||
Balance — end of fiscal year | $ | 447,524 | $ | 515,589 | $ | 606,931 | ||||||
Accumulated other comprehensive loss: | ||||||||||||
Balance — beginning of fiscal year | $ | (54,055 | ) | $ | (68,823 | ) | $ | (36,075 | ) | |||
Other comprehensive income (loss): | ||||||||||||
Translation adjustments | (20,729 | ) | 27,084 | 4,087 | ||||||||
Pension liability adjustment(1) | 5,961 | 5,664 | (20,030 | ) | ||||||||
Equity method investment other comprehensive loss | — | — | (360 | ) | ||||||||
Unrealized gain on cash flow hedges(2) | — | — | 3,705 | |||||||||
Total other comprehensive income (loss) | (14,768 | ) | 32,748 | (12,598 | ) | |||||||
Balance — end of fiscal year | $ | (68,823 | ) | $ | (36,075 | ) | $ | (48,673 | ) | |||
Comprehensive income: | ||||||||||||
Net income | $ | 57,809 | $ | 74,172 | $ | 103,992 | ||||||
Other comprehensive income (loss) | (14,768 | ) | 32,748 | (12,598 | ) | |||||||
Total comprehensive income | $ | 43,041 | $ | 106,920 | $ | 91,394 | ||||||
(1) | Net of tax provision of $3.0 million, $2.6 million, and $9.6 million for the fiscal years ended March 31, 2006, 2007 and 2008, respectively. | |
(2) | Net of tax provision of $2.0 million for the fiscal year ended March 31, 2008. |
F-6
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• | Taxes; | |
• | Property and equipment; | |
• | Revenue recognition; | |
• | Pension benefits; | |
• | Allowance for doubtful accounts; | |
• | Inventory reserve; | |
• | Insurance; | |
• | Contingent liabilities; | |
• | Goodwill impairment; and | |
• | Stock — based compensation. |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Balance — beginning of fiscal year | $ | 8,961 | $ | 8,923 | $ | 5,009 | ||||||
Expense | 3,263 | 7,842 | 12,370 | |||||||||
Write-offs and collections | (2,884 | ) | (12,121 | ) | (11,662 | ) | ||||||
Foreign currency effects | (417 | ) | 365 | 100 | ||||||||
Balance — end of fiscal year | $ | 8,923 | $ | 5,009 | $ | 5,817 | ||||||
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Balance — beginning of fiscal year | $ | 10,325 | $ | 13,147 | $ | 10,993 | ||||||
Expense | 3,769 | 5,485 | 3,269 | |||||||||
Inventory disposed and scrapped | (429 | ) | (8,611 | ) | (2,529 | ) | ||||||
Foreign currency effects | (518 | ) | 972 | 94 | ||||||||
Balance — end of fiscal year | $ | 13,147 | $ | 10,993 | $ | 11,827 | ||||||
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F-9
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F-10
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• | Cash and cash equivalents held in U.S. dollar-denominated accounts. Beginning in July 2006, we reduced a portion of Bristow Aviation’s U.S. dollar-denominated cash balances. | |
• | U.S. dollar-denominated intercompany loans and U.S. dollar-denominated receivables. On August 14, 2006, we entered into a derivative contract to mitigate our exposure to exchange rate fluctuations on our U.S. dollar-denominated intercompany loans. This derivative contract provided us with a call option on £12.9 million and a put option on $24.5 million, with a strike price of 1.895 U.S. dollars per British pound sterling, and was exercised by us prior to the scheduled expiration on November 14, 2006, resulting in a net loss of $0.3 million. On November 14, 2006, we entered into another derivative contract for the same amount and strike price that expired on May 14, 2007, resulting in a cumulative gain of $0.6 million, of which $0.1 million related to fiscal year 2008 and is included in other income (expense) net in our consolidated statement of income. On April 1, 2007, primarily as a result of changes in the manner in which certain of our consolidated subsidiaries create and manage intercompany balances, we changed the functional currency of two of our consolidated subsidiaries, Bristow Helicopters (International) Ltd. and Caledonia Helicopters Ltd., from the British pound sterling to the U.S. dollar, which reduced our exposure to U.S. dollar-denominated intercompany loans and advances. The changes we made to the manner in which we manage intercompany balances for these two entities |
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has simplified our business as it allows for a clearer view of sales and purchases required to run these businesses and assists in resource management. |
• | Euro- and Nigerian Naira-denominated intercompany loans. The economic effect of the foreign currency transaction losses during fiscal year 2007 was offset by a corresponding benefit during those periods reflected as a cumulative translation adjustment in stockholders’ investment on our consolidated balance sheet. Additionally, in April 2007 we significantly reduced our euro-denominated intercompany loans, thereby reducing our exposure to fluctuations in exchange rates for this foreign currency. |
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
High | $ | 1.92 | $ | 1.99 | $ | 2.11 | ||||||
Average | 1.79 | 1.89 | 2.01 | |||||||||
Low | 1.71 | 1.74 | 1.94 |
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F-13
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Note 2 — | ACQUISITIONS AND DISPOSITIONS |
Sale price | $ | 22,500 | ||
Adjustment for working capital | 7,801 | |||
Gross proceeds | 30,301 | |||
Net assets sold | (29,282 | ) | ||
1,019 | ||||
Transaction expenses | (1,542 | ) | ||
Pre-tax loss on sale | (523 | ) | ||
Provision for income taxes(1) | (4,784 | ) | ||
After-tax loss on sale of discontinued operations | $ | (5,307 | ) | |
(1) | Includes $4.9 million of tax expense related to taxes on non-deductible goodwill. |
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April 2, 2007 | ||||
(In thousands) | ||||
Current assets | $ | 2,916 | ||
Property and equipment | 8,743 | |||
Other assets | 12,440 | |||
Total assets acquired | 24,099 | |||
Current liabilities, including debt | 9,068 | |||
Total liabilities assumed | 9,068 | |||
Net assets acquired | $ | 15,031 | ||
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Note 3 — | INVESTMENTS IN SIGNIFICANT AFFILIATES |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Balance — beginning of fiscal year | $ | 2,130 | $ | 1,804 | $ | 2,042 | ||||||
Payments to minority interest shareholders | (156 | ) | (157 | ) | (189 | ) | ||||||
Minority interest expense | 155 | 163 | 192 | |||||||||
Currency translation | (325 | ) | 232 | 27 | ||||||||
Balance — end of fiscal year | $ | 1,804 | $ | 2,042 | $ | 2,072 | ||||||
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F-19
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Percentage | March 31, | |||||||||||
Ownership | 2007 | 2008 | ||||||||||
Cost Method: | ||||||||||||
HC | 49 | % | $ | 7,017 | $ | 7,017 | ||||||
PAS | 25 | % | 6,286 | 6,286 | ||||||||
Other | 1,046 | 933 | ||||||||||
Equity Method: | ||||||||||||
FB Entities | 50 | % | 20,011 | 24,296 | ||||||||
Norsk | 49 | % | 10,323 | 9,912 | ||||||||
RLR | 49 | % | 1,724 | 3,541 | ||||||||
Other | 421 | 482 | ||||||||||
Total | $ | 46,828 | $ | 52,467 | ||||||||
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Dividends from entities accounted for on the cost method: | ||||||||||||
PAS | $ | 2,500 | $ | 2,500 | $ | 2,750 | ||||||
Other | 180 | 137 | 179 | |||||||||
2,680 | 2,637 | 2,929 | ||||||||||
Earnings (losses) from entities accounted for on the equity method: | ||||||||||||
FB Entities | 3,694 | 7,154 | 10,573 | |||||||||
Norsk | 2,675 | 1,635 | (467 | ) | ||||||||
RLR | (2,744 | ) | (187 | ) | (142 | ) | ||||||
Other | 453 | 184 | 85 | |||||||||
4,078 | 8,786 | 10,049 | ||||||||||
Total | $ | 6,758 | $ | 11,423 | $ | 12,978 | ||||||
March 31, | ||||||||
2007 | 2008 | |||||||
(Unaudited) | (Unaudited) | |||||||
Current assets | $ | 129,428 | $ | 143,506 | ||||
Non-current assets | 304,940 | 311,215 | ||||||
Total assets | $ | 434,368 | $ | 454,721 | ||||
Current liabilities | $ | 80,191 | $ | 119,298 | ||||
Non-current liabilities | 292,049 | 268,968 | ||||||
Equity | 62,128 | 66,455 | ||||||
Total liabilities and equity | $ | 434,368 | $ | 454,721 | ||||
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
Revenue | $ | 248,576 | $ | 318,589 | $ | 342,458 | ||||||
Gross profit | $ | 31,590 | $ | 45,906 | $ | 48,375 | ||||||
Net income | $ | 8,282 | $ | 18,357 | $ | 23,048 |
Note 4 — | PROPERTY AND EQUIPMENT |
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Note 5 — | DEBT |
March 31, | ||||||||
2007 | 2008 | |||||||
71/2% Senior Notes due 2017, including $0.6 million of unamortized premium | $ | — | $ | 350,601 | ||||
61/8% Senior Notes due 2013 | 230,000 | 230,000 | ||||||
Term loans | 18,848 | 16,683 | ||||||
Hemisco Helicopters International, Inc. note | 4,380 | 4,380 | ||||||
Advance from customer | 1,400 | 1,400 | ||||||
Sakhalin debt | 4,454 | 3,154 | ||||||
Total debt | 259,082 | 606,218 | ||||||
Less short-term borrowings and current maturities of long-term debt | (4,852 | ) | (6,541 | ) | ||||
Total long-term debt | $ | 254,230 | $ | 599,677 | ||||
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Fiscal Year ending March 31 | ||||
2009 | $ | 6,484 | ||
2010 | 2,631 | |||
2011 | 2,342 | |||
2012 | 2,301 | |||
2013 | 2,301 | |||
Thereafter | 589,558 | |||
$ | 605,617 | |||
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Note 6 — | COMMITMENTS AND CONTINGENCIES |
Fiscal Year Ending March 31, | ||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | Total | |||||||||||||||||||
Commitments as of March 31, 2008: | ||||||||||||||||||||||||
Number of aircraft: | ||||||||||||||||||||||||
Medium | 6 | 3 | — | — | — | 9 | ||||||||||||||||||
Large | 11 | 5 | — | — | — | 16 | ||||||||||||||||||
Training | 10 | — | — | — | — | 10 | ||||||||||||||||||
27 | (1) | 8 | (2) | — | — | — | 35 | |||||||||||||||||
Related expenditures (in thousands)(3) | $ | 262,200 | $ | 87,078 | $ | — | $ | — | $ | — | $ | 349,278 | ||||||||||||
Options as of March 31, 2008: | ||||||||||||||||||||||||
Number of aircraft: | ||||||||||||||||||||||||
Medium | — | 3 | 6 | 11 | 13 | 33 | ||||||||||||||||||
Large | — | 6 | 10 | 1 | — | 17 | ||||||||||||||||||
— | 9 | 16 | 12 | 13 | 50 | |||||||||||||||||||
Related expenditures (in thousands)(3) | $ | 63,628 | $ | 229,972 | $ | 226,283 | $ | 155,407 | $ | 127,086 | $ | 802,376 | ||||||||||||
(1) | Signed customer contracts are currently in place for 8 of these 17 non-training aircraft. | |
(2) | No signed customer contracts are currently in place for these 8 aircraft. | |
(3) | Includes progress payments on aircraft scheduled to be delivered in future periods. |
Fiscal Year Ending | ||||||||||||||||||||||||
March 31, 2006 | March 31, 2007 | March 31, 2008 | ||||||||||||||||||||||
Orders | Options | Orders | Options | Orders | Options | |||||||||||||||||||
Beginning of fiscal year | 14 | — | 51 | 24 | 31 | 52 | ||||||||||||||||||
Aircraft delivered(1) | (12 | ) | — | (25 | ) | — | (34 | ) | — | |||||||||||||||
Aircraft ordered | 49 | — | 17 | (9 | ) | 20 | (19 | ) | ||||||||||||||||
New options | — | 24 | — | 31 | — | 17 | ||||||||||||||||||
Training aircraft | — | — | — | — | 18 | — | ||||||||||||||||||
Orders converted to options | — | — | (12 | ) | 12 | — | — | |||||||||||||||||
Expired options | — | — | — | (6 | ) | — | — | |||||||||||||||||
End of fiscal year | 51 | 24 | 31 | 52 | 35 | 50 | ||||||||||||||||||
(1) | Includes nine training aircraft delivered during fiscal year 2008. |
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Fiscal year ending March 31, | ||||
2009 | $ | 13,370 | ||
2010 | 10,578 | |||
2011 | 9,676 | |||
2012 | 9,856 | |||
2013 | 9,371 | |||
Thereafter | 26,306 | |||
$ | 79,157 | |||
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F-29
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Amount of Commitment Expiration per Period | ||||||||||||||||||
Fiscal Year | ||||||||||||||||||
Fiscal Year | Fiscal Years | Fiscal Years | 2014 and | |||||||||||||||
Total | 2009 | 2010-2011 | 2012-2013 | Thereafter | ||||||||||||||
(In thousands) | ||||||||||||||||||
$ | 49,220 | $ | 14,150 | $ | 5,959 | $ | 19,875 | $ | 9,238 |
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Note 7 — | TAXES |
March 31, | ||||||||
2007 | 2008 | |||||||
(In thousands) | ||||||||
Deferred tax assets: | ||||||||
Foreign tax credits | $ | 35,910 | $ | 15,502 | ||||
Accrued pension liability | 61,658 | 70,518 | ||||||
Maintenance and repair | 9,898 | 13,852 | ||||||
Accrued equity compensation | — | 4,662 | ||||||
Deferred revenues | 3,028 | 2,992 | ||||||
Other | 7,048 | 6,787 | ||||||
Valuation allowance | (9,417 | ) | (7,865 | ) | ||||
Total deferred tax assets | 108,125 | 106,448 | ||||||
Deferred tax liabilities: | ||||||||
Property and equipment | (169,957 | ) | (173,249 | ) | ||||
Inventories | (13,172 | ) | (12,700 | ) | ||||
Investments in unconsolidated affiliates | (14,889 | ) | (17,298 | ) | ||||
Other | (3,807 | ) | (4,186 | ) | ||||
Total deferred tax liabilities | (201,825 | ) | (207,433 | ) | ||||
Net deferred tax liabilities | $ | (93,700 | ) | $ | (100,985 | ) | ||
Fiscal Year Generated | Amount of Carryover | Expiration Date | ||||
(In thousands) | ||||||
2004 | $ | 3,392 | March 31, 2014 | |||
Total carryover to fiscal year 2009 | $ | 3,392 | ||||
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Domestic | $ | 3,986 | $ | 27,376 | $ | 29,455 | ||||||
Foreign | 65,211 | 83,953 | 122,802 | |||||||||
Total | $ | 69,197 | $ | 111,329 | $ | 152,257 | ||||||
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Current: | ||||||||||||
Domestic | $ | 816 | $ | (2,764 | ) | $ | 4,321 | |||||
Foreign | 12,225 | 21,824 | 27,478 | |||||||||
13,041 | 19,060 | 31,799 | ||||||||||
Deferred: | ||||||||||||
Domestic | (1,117 | ) | 18,352 | 16,312 | ||||||||
Foreign | 3,616 | 5,332 | (2,033 | ) | ||||||||
2,499 | 23,684 | 14,279 | ||||||||||
Increase (decrease) in valuation allowance | (872 | ) | (3,963 | ) | (1,552 | ) | ||||||
Total | $ | 14,668 | $ | 38,781 | $ | 44,526 | ||||||
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
Foreign earnings taxed at rates other than the U.S. rate | 5.6 | % | 11.1 | % | 7.2 | % | ||||||
Foreign earnings indefinitely reinvested abroad | (24.5 | )% | (8.7 | )% | (11.2 | )% | ||||||
Foreign earnings repatriated at reduced U.S. rate | 5.8 | % | — | % | — | % | ||||||
Change in valuation allowance | (1.2 | )% | (3.5 | )% | (1.0 | )% | ||||||
State taxes provided | 1.8 | % | 0.2 | % | (0.3 | )% | ||||||
Taxes related to goodwill recognized upon the disposition of Turbo (Note 2) | — | % | 2.2 | % | — | % | ||||||
Effect of reduction in U.K. corporate income tax rate | — | % | — | % | (1.7 | )% | ||||||
Release of deferred tax on entity restructuring | — | % | — | % | (2.3 | )% | ||||||
Other, net | (1.3 | )% | (1.5 | )% | 3.5 | % | ||||||
Effective tax rate | 21.2 | % | 34.8 | % | 29.2 | % | ||||||
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Jurisdiction | Years Open | |
U.S. | 2004 to present | |
U.K. | 1998 to present | |
Nigeria | 2000 to present |
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Unrecognized tax benefits at April 1, 2007 | $ | 6,310 | ||
Increases for tax positions taken in prior years | 1,487 | |||
Decreases for tax positions taken in prior years | (4,380 | ) | ||
Decreases related to settlements with tax authorities | (411 | ) | ||
Unrecognized tax benefits at March 31, 2008 | $ | 3,006 | ||
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Note 8 — | EMPLOYEE BENEFIT PLANS |
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Fiscal Year Ended | ||||||||
March 31, | ||||||||
2007 | 2008 | |||||||
(In thousands) | ||||||||
Change in benefit obligation: | ||||||||
Projected benefit obligation (PBO) at beginning of period | $ | 429,085 | $ | 499,387 | ||||
Service cost | 261 | 285 | ||||||
Interest cost | 22,703 | 26,521 | ||||||
Actuarial gain (loss) | 9,162 | (2,776 | ) | |||||
Benefit payments and expenses | (17,547 | ) | (17,603 | ) | ||||
Effect of exchange rate changes | 55,723 | 6,166 | ||||||
Projected benefit obligation (PBO) at end of period | $ | 499,387 | $ | 511,980 | ||||
Change in plan assets: | ||||||||
Market value of assets at beginning of period | $ | 329,771 | $ | 386,318 | ||||
Actual return on assets | 20,347 | (10,556 | ) | |||||
Employer contributions | 10,832 | 14,703 | ||||||
Benefit payments and expenses | (17,547 | ) | (17,603 | ) | ||||
Effect of exchange rate changes | 42,915 | 4,962 | ||||||
Market value of assets at end of period | $ | 386,318 | $ | 377,824 | ||||
Reconciliation of funded status: | ||||||||
Accumulated benefit obligation (ABO) | $ | 499,387 | $ | 511,980 | ||||
Projected benefit obligation (PBO) | $ | 499,387 | $ | 511,980 | ||||
Fair value of assets | (386,318 | ) | (377,824 | ) | ||||
Net recognized pension liability | $ | 113,069 | $ | 134,156 | ||||
Amounts recognized in accumulated other comprehensive loss | $ | 163,096 | $ | 195,902 | ||||
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Components of net periodic pension cost: | ||||||||||||
Service cost for benefits earned during the period | $ | 280 | $ | 261 | $ | 285 | ||||||
Interest cost on PBO | 21,326 | 22,703 | 26,521 | |||||||||
Expected return on assets | (19,401 | ) | (23,490 | ) | (27,454 | ) | ||||||
Amortization of unrecognized losses | 3,649 | 3,641 | 4,141 | |||||||||
Net periodic pension cost | $ | 5,854 | $ | 3,115 | $ | 3,493 | ||||||
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Discount rate | 4.95 | % | 5.30 | % | 6.20 | % | ||||||
Expected long-term rate of return on assets | 6.90 | % | 6.60 | % | 7.10 | % | ||||||
Rate of compensation increase | 2.70 | % | 3.00 | % | 3.50 | % |
Target Allocation | Actual Allocation | |||||||||||||||
As of March 31, | as of March 31, | |||||||||||||||
Asset Category | 2007 | 2008 | 2007 | 2008 | ||||||||||||
Equity securities | 66.0 | % | 68.0 | % | 67.8 | % | 64.8 | % | ||||||||
Debt securities | 34.0 | % | 31.7 | % | 31.7 | % | 34.3 | % | ||||||||
Other assets | 0.0 | % | 0.3 | % | 0.5 | % | 0.9 | % | ||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
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Projected Benefit Payments by the Plan for Fiscal Years Ending March 31, | Payments | |||
(In thousands) | ||||
2009 | $ | 20,074 | ||
2010 | 21,465 | |||
2011 | 23,453 | |||
2012 | 25,440 | |||
2013 | 27,030 | |||
Aggregate 2014 — 2018 | 162,975 |
• | The 1994 Long-Term Management Incentive Plan, as amended (“1994 Plan”), which provided for awards to officers and key employees in the form of stock options, stock appreciation rights, restricted stock, deferred stock, other stock-based awards or any combination thereof. Options become exercisable at such time or times as determined at the date of grant and expire no more than ten years after the date of grant. This plan expired in 2005. | |
• | The 2004 Stock Incentive Plan (“2004 Plan”), which provided for awards to officers and key employees in the form of stock options, stock appreciation rights, restricted stock, other stock-based awards or any combination thereof. Options become exercisable at such time or times as determined at the date of grant and expire no more than ten years after the date of grant. This plan expired in 2007. |
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• | The 1991 Non-qualified Stock Option Plan for Non-employee Directors, as amended, (“1991 Director Plan”), which provided that as of the date of each annual meeting, each non-employee director who meets certain attendance criteria was automatically granted an option to purchase 2,000 shares of our Common Stock. The exercise price of the options granted is equal to the fair market value of the Common Stock on the date of grant, and the options are exercisable not earlier than six months after the date of grant and have an indefinite term. This plan expired in 2003. |
Fiscal Year Ended | ||||
March 31, 2007 | ||||
(In thousands) | ||||
Reduction in income before provision for income taxes and minority interest | $ | 2,527 | ||
Reduction in net income | 1,643 |
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Fiscal Year Ended | ||||
March 31, 2007 | ||||
Decrease in earnings per share: | ||||
Basic | $ | (0.07 | ) | |
Diluted | (0.06 | ) |
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Exercise | Number | Contractual | Intrinsic | |||||||||||||
Prices | of Shares | Life | Value | |||||||||||||
(In years) | (In thousands) | |||||||||||||||
Outstanding at March 31, 2007 | $ | 28.42 | 763,301 | |||||||||||||
Granted | 46.84 | 246,960 | ||||||||||||||
Exercised | 25.11 | (230,570 | ) | |||||||||||||
Expired or forfeited | 35.37 | (17,826 | ) | |||||||||||||
Outstanding at March 31, 2008 | 35.40 | 761,865 | 8.30 | $ | 13,783 | |||||||||||
Exercisable at March 31, 2008 | 31.19 | 437,451 | 7.97 | $ | 10,041 | |||||||||||
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Fiscal Years Ended | ||||
March 31, | ||||
2007 | 2008 | |||
Risk free interest rate | 5.0% - 5.2% | 3.0% - 4.7% | ||
Expected life (years) | 4 | 4 | ||
Volatility | 30% - 34% | 34% - 45% | ||
Dividend yield | — | — | ||
Weighted average grant-date fair value of options granted | $12.01 | $18.94 |
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Weighted | ||||||||
Average | ||||||||
Grant | ||||||||
Date Fair | ||||||||
Value | ||||||||
Units | per Unit | |||||||
Non-vested as of March 31, 2007 | 371,940 | $ | 32.20 | |||||
Granted | 214,610 | 45.17 | ||||||
Forfeited | (34,030 | ) | 35.63 | |||||
Vested | (57,350 | ) | 33.02 | |||||
Non-vested as of March 31, 2008 | 495,170 | 37.47 | ||||||
Fiscal Year Ended | ||||
March 31, 2006 | ||||
(In thousands, | ||||
except per share amounts) | ||||
Net income, as reported | $ | 57,809 | ||
Stock-based employee compensation expense included in reported net income, net of tax | 476 | |||
Stock-based employee compensation expense, net of tax | (1,758 | ) | ||
Pro forma net income | $ | 56,527 | ||
Basic earnings per common share: | ||||
Earnings per common share, as reported | $ | 2.48 | ||
Stock-based employee compensation expense, net of tax | (0.06 | ) | ||
Pro forma basic earnings per common share | $ | 2.42 | ||
Diluted earnings per common share: | ||||
Earnings per common share, as reported | $ | 2.45 | ||
Stock-based employee compensation expense, net of tax | (0.06 | ) | ||
Pro forma diluted earnings per common share | $ | 2.39 | ||
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Note 9 — | STOCKHOLDERS’ INVESTMENT AND EARNINGS PER SHARE |
Number of Shares of | Total Number of Shares of | |||
Market Value of | Common Stock Issued | Common Stock Issued | ||
Common Stock on | for Each Share of | for 4,600,000 Shares of | ||
September 15, 2009 | Preferred Stock | Preferred Stock | ||
$35.26 or less | 1.4180 | 6,522,800 | ||
Between $35.26 and $43.19 | 1.4180 to 1.1577 | 6,522,799 to 5,324,961 | ||
$43.19 or greater | 1.1576 | 5,324,960 |
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Earnings (in thousands): | ||||||||||||
Continuing operations: | ||||||||||||
Income available to common stockholders — basic | $ | 54,310 | $ | 64,715 | $ | 95,164 | ||||||
Preferred Stock dividends | — | 6,633 | 12,650 | |||||||||
Income available to common stockholders — diluted | $ | 54,310 | $ | 71,348 | $ | 107,814 | ||||||
Discontinued operations: | ||||||||||||
Income (loss) available to common stockholders — basic and diluted | $ | 3,499 | $ | 2,824 | $ | (3,822 | ) | |||||
Net earnings: | ||||||||||||
Income available to common stockholders — basic | $ | 57,809 | $ | 67,539 | $ | 91,342 | ||||||
Preferred Stock dividends | — | 6,633 | 12,650 | |||||||||
Income available to common stockholders — diluted | $ | 57,809 | $ | 74,172 | $ | 103,992 | ||||||
Shares: | ||||||||||||
Weighted average number of common shares outstanding — basic | 23,341,315 | 23,496,253 | 23,772,425 | |||||||||
Assumed conversion of Preferred Stock outstanding during the period | — | 3,420,621 | 6,522,800 | |||||||||
Net effect of dilutive stock options and restricted stock units based on the treasury stock method | 262,877 | 137,880 | 218,677 | |||||||||
Weighted average number of common shares outstanding — diluted | 23,604,192 | 27,054,754 | 30,513,902 | |||||||||
Basic earnings per common share: | ||||||||||||
Earnings from continuing operations | $ | 2.33 | $ | 2.75 | $ | 4.00 | ||||||
Earnings (loss) from discontinued operations | 0.15 | 0.12 | (0.16 | ) | ||||||||
Net earnings | $ | 2.48 | $ | 2.87 | $ | 3.84 | ||||||
Diluted earnings per common share: | ||||||||||||
Earnings from continuing operations | $ | 2.30 | $ | 2.64 | $ | 3.53 | ||||||
Earnings (loss) from discontinued operations | 0.15 | 0.10 | (0.12 | ) | ||||||||
Net earnings | $ | 2.45 | $ | 2.74 | $ | 3.41 | ||||||
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Note 10 — | SEGMENT INFORMATION |
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Segment gross revenue from external customers: | ||||||||||||
North America | $ | 211,469 | $ | 235,178 | $ | 234,717 | ||||||
South and Central America | 42,869 | 52,820 | 63,863 | |||||||||
Europe | 241,750 | 292,705 | 359,706 | |||||||||
West Africa | 107,411 | 131,141 | 170,770 | |||||||||
Southeast Asia | 61,168 | 73,404 | 111,117 | |||||||||
Other International | 33,934 | 45,876 | 46,737 | |||||||||
EH Centralized Operations | 10,607 | 11,996 | 10,931 | |||||||||
Bristow Academy | — | — | 14,787 | |||||||||
Corporate | 693 | 475 | 136 | |||||||||
Total segment gross revenue | $ | 709,901 | $ | 843,595 | $ | 1,012,764 | ||||||
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Intrasegment gross revenue: | ||||||||||||
North America | $ | 5,013 | $ | 4,800 | $ | 2,941 | ||||||
South and Central America | — | — | — | |||||||||
Europe | 3,544 | 5,229 | 2,038 | |||||||||
West Africa | — | — | — | |||||||||
Southeast Asia | — | — | — | |||||||||
Other International | 1,405 | 129 | 781 | |||||||||
EH Centralized Operations | 142 | 1,900 | 11,435 | |||||||||
Bristow Academy | — | — | — | |||||||||
Total intrasegment gross revenue | $ | 10,104 | $ | 12,058 | $ | 17,195 | ||||||
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Consolidated gross revenue reconciliation: | ||||||||||||
North America | $ | 216,482 | $ | 239,978 | $ | 237,658 | ||||||
South and Central America | 42,869 | 52,820 | 63,863 | |||||||||
Europe | 245,294 | 297,934 | 361,744 | |||||||||
West Africa | 107,411 | 131,141 | 170,770 | |||||||||
Southeast Asia | 61,168 | 73,404 | 111,117 | |||||||||
Other International | 35,339 | 46,005 | 47,518 | |||||||||
EH Centralized Operations | 10,749 | 13,896 | 22,366 | |||||||||
Bristow Academy | — | — | 14,787 | |||||||||
Intrasegment eliminations | (10,104 | ) | (12,058 | ) | (17,195 | ) | ||||||
Corporate | 693 | 475 | 136 | |||||||||
Total consolidated gross revenue | $ | 709,901 | $ | 843,595 | $ | 1,012,764 | ||||||
Consolidated operating income (loss) reconciliation: | ||||||||||||
North America | $ | 30,717 | $ | 29,210 | $ | 32,559 | ||||||
South and Central America | 6,662 | 15,825 | 14,852 | |||||||||
Europe | 48,692 | 52,819 | 77,348 | |||||||||
West Africa | 11,981 | 18,798 | 31,941 | |||||||||
Southeast Asia | 9,851 | 13,370 | 23,754 | |||||||||
Other International | 9,062 | 9,309 | (283 | ) | ||||||||
EH Centralized Operations | (25,012 | ) | (13,580 | ) | (13,391 | ) | ||||||
Bristow Academy | — | — | (809 | ) | ||||||||
Gain on disposal of assets | 103 | 10,615 | 9,390 | |||||||||
Corporate | (23,589 | ) | (25,238 | ) | (26,613 | ) | ||||||
Total consolidated operating income | $ | 68,467 | $ | 111,128 | $ | 148,748 | ||||||
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Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Capital expenditures: | ||||||||||||
North America | $ | 16,541 | $ | 29,064 | $ | 34,518 | ||||||
South and Central America | 537 | 30,025 | 9,007 | |||||||||
Europe | 39,521 | 88,400 | 107,212 | |||||||||
West Africa | 28,716 | 1,892 | 15,823 | |||||||||
Southeast Asia | 1,349 | 221 | 4,355 | |||||||||
Other International | 1,007 | 1,861 | 8,974 | |||||||||
EH Centralized Operations | 4 | 63 | 297 | |||||||||
Bristow Academy | — | — | 7,073 | |||||||||
Corporate(1) | 66,480 | 153,080 | 150,608 | |||||||||
Total capital expenditures(2) | $ | 154,155 | $ | 304,606 | $ | 337,867 | ||||||
Depreciation and amortization: | ||||||||||||
North America | $ | 12,436 | $ | 11,553 | $ | 12,245 | ||||||
South and Central America | 3,661 | 3,891 | 3,878 | |||||||||
Europe | 10,803 | 11,671 | 17,668 | |||||||||
West Africa | 5,741 | 6,601 | 8,090 | |||||||||
Southeast Asia | 3,681 | 3,497 | 4,090 | |||||||||
Other International | 3,031 | 3,511 | 5,161 | |||||||||
EH Centralized Operations | 2,612 | 1,510 | 753 | |||||||||
Bristow Academy | — | — | 1,840 | |||||||||
Corporate | 95 | 225 | 415 | |||||||||
Total depreciation and amortization | $ | 42,060 | $ | 42,459 | $ | 54,140 | ||||||
March 31, | ||||||||
2007 | 2008 | |||||||
(In thousands) | ||||||||
Identifiable assets: | ||||||||
North America | $ | 249,084 | $ | 301,494 | ||||
South and Central America | 109,279 | 132,038 | ||||||
Europe | 416,447 | 509,413 | ||||||
West Africa | 167,826 | 252,458 | ||||||
Southeast Asia | 92,173 | 165,431 | ||||||
Other International | 79,385 | 99,185 | ||||||
EH Centralized Operations | 47,049 | 51,291 | ||||||
Bristow Academy | — | 33,966 | ||||||
Corporate(3) | 318,406 | 432,079 | ||||||
Total identifiable assets(4) | $ | 1,479,649 | $ | 1,977,355 | ||||
(1) | Includes $66.1 million, $152.9 million and $150.4 million of construction in progress payments that were not allocated to business units in fiscal years 2006, 2007 and 2008, respectively. |
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(2) | Excludes $0.1 million, $0.2 million and $0.1 million of capital expenditures for discontinued operations for fiscal years 2006, 2007 and 2008, respectively. | |
(3) | Includes $167.8 million and $182.9 million in progress payments on aircraft scheduled to be delivered in future periods for fiscal years 2007 and 2008, respectively, which is included in construction in progress within property and equipment on our consolidated balance sheets as of March 31, 2007 and 2008. | |
(4) | Excludes $26.2 million in identifiable assets from discontinued operations as of March 31, 2007. |
Fiscal Year Ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Gross revenue: | ||||||||||||
United Kingdom | $ | 250,304 | $ | 304,669 | $ | 357,706 | ||||||
United States | 158,135 | 186,187 | 249,641 | |||||||||
Nigeria | 107,411 | 131,141 | 170,770 | |||||||||
Australia | 52,382 | 66,679 | 102,774 | |||||||||
Trinidad | 24,659 | 30,355 | 37,441 | |||||||||
Mexico | 10,849 | 14,021 | 17,014 | |||||||||
Other countries | 106,161 | 110,543 | 77,418 | |||||||||
$ | 709,901 | $ | 843,595 | $ | 1,012,764 | |||||||
March 31, | ||||||||
2007 | 2008 | |||||||
(In thousands) | ||||||||
Long-lived assets | ||||||||
United States(1) | $ | 141,963 | $ | 194,482 | ||||
United Kingdom | 234,710 | 333,686 | ||||||
Nigeria | 114,916 | 132,935 | ||||||
Norway | 59,004 | 95,651 | ||||||
Australia | 59,027 | 74,533 | ||||||
Trinidad | 40,813 | 46,179 | ||||||
Other countries | 73,298 | 112,190 | ||||||
Construction in progress attributable to aircraft(2) | 167,790 | 182,882 | ||||||
$ | 891,521 | $ | 1,172,538 | |||||
(1) | Excludes $0.4 million in long-lived assets from discontinued operations as of March 31, 2007. | |
(2) | These costs have been disclosed separately as the physical location where the aircraft will ultimately be operated is subject to change. |
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Note 11 — | QUARTERLY FINANCIAL INFORMATION (Unaudited) |
Fiscal Quarter Ended | ||||||||||||||||
June 30 | September 30(1) | December 31(2) | March 31(3)(4) | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Fiscal Year 2007 | ||||||||||||||||
Gross revenue | $ | 206,280 | $ | 209,629 | $ | 211,009 | $ | 216,677 | ||||||||
Operating income(5)(6) | 29,641 | 29,470 | 20,241 | 31,776 | ||||||||||||
Income from continuing operations(5)(6)(7) | 16,289 | 18,145 | 9,934 | 26,980 | ||||||||||||
Income from discontinued operations(8) | 940 | 930 | 517 | 437 | ||||||||||||
Basic earnings per common share: | ||||||||||||||||
Earnings from continuing operations | $ | 0.70 | $ | 0.76 | $ | 0.29 | $ | 1.01 | ||||||||
Earnings from discontinued operations | 0.04 | 0.04 | 0.02 | 0.02 | ||||||||||||
Net earnings | $ | 0.74 | $ | 0.80 | $ | 0.31 | $ | 1.03 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Earnings from continuing operations | $ | 0.69 | $ | 0.75 | $ | 0.29 | $ | 0.89 | ||||||||
Earnings from discontinued operations | 0.04 | 0.04 | 0.02 | 0.02 | ||||||||||||
Net earnings | $ | 0.73 | $ | 0.79 | $ | 0.31 | $ | 0.91 | ||||||||
Fiscal Year 2008 | ||||||||||||||||
Gross revenue | $ | 231,151 | $ | 259,808 | $ | 261,520 | $ | 260,285 | ||||||||
Operating income(5)(6) | 28,786 | 49,718 | 36,748 | 33,496 | ||||||||||||
Income from continuing operations(5)(6)(7)(9) | 21,910 | 33,335 | 26,234 | 26,335 | ||||||||||||
Income (loss) from discontinued operations(8) | 762 | 615 | (6,086 | ) | 887 | |||||||||||
Basic earnings per common share: | ||||||||||||||||
Earnings from continuing operations | $ | 0.80 | $ | 1.27 | $ | 0.97 | $ | 0.97 | ||||||||
Earnings (loss) from discontinued operations | 0.03 | 0.03 | (0.26 | ) | 0.04 | |||||||||||
Net earnings | $ | 0.83 | $ | 1.30 | $ | 0.71 | $ | 1.01 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Earnings from continuing operations | $ | 0.73 | $ | 1.10 | $ | 0.86 | $ | 0.86 | ||||||||
Earnings (loss) from discontinued operations | 0.02 | 0.02 | (0.20 | ) | 0.03 | |||||||||||
Net earnings | $ | 0.75 | $ | 1.12 | $ | 0.66 | $ | 0.89 | ||||||||
(1) | Operating income and income from continuing operations for the fiscal quarter ended September 30, 2007 included $5.4 million in reversal of accrual for sales tax contingency ($2.8 million of which was originally accrued in the fiscal quarter ended December 31, 2006) in West Africa which is included in direct costs in our consolidated statements of income. | |
(2) | Income from continuing operations for the fiscal quarter ended December 31, 2006 included expense of $1.2 million, net of taxes, for acquisition costs previously deferred in connection with an acquisition we were |
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evaluating as we determined that the acquisition was no longer probable. This quarter also included additional tax expense of $2.5 million related to the sale of certain assets of Turbo completed in November 2006. See discussion of the Turbo asset sale in Note 2. | ||
(3) | Income from continuing operations for the fiscal quarter ended March 31, 2007 included an after-tax gain on the sale of our investment in Aeroleo of $1.6 million on March 30, 2007, which is included in other income (expense), net in our consolidated statements of income. See discussion in Note 3. | |
(4) | Income from continuing operations for the fiscal quarters ended March 31, 2007 and 2008 included dividend income received from an unconsolidated affiliate, net of taxes, of $1.7 million and $1.8 million, respectively. Operating income and income from continuing operations for the fiscal quarter ended March 31, 2008 included expense of $2.9 million, net of taxes, related to a claim by a former agent who we terminated in connection with the Internal Review. These costs are included in general and administrative expenses in our consolidated statements of income. Also for the fiscal quarter ended March 31, 2008, operating income and income from continuing operations included reversals of accruals for tax items of $1.0 million and $0.8 million, net of taxes, in Europe and West Africa, respectively, and $6.0 million in tax benefit which directly reduced our provision of income taxes associated with reduced U.K. corporate tax rates and an internal reorganization (see Note 7). The reversals of accruals in Europe and West Africa are included in direct costs in our consolidated statements of income. Operating income and income from continuing operations for the fiscal quarter ended March 31, 2008 included $1.2 million, net of taxes, of retirement related expenses for retirement agreements executed between the Company and two of our corporate officers, which were recorded in general and administrative expenses in our consolidated statements of income. | |
(5) | Operating income and income from continuing operations included legal and professional costs in connection with the Internal Review and DOJ investigation totaling $0.7 million and $0.5 million, respectively, for the fiscal quarter ended June 30, 2006; $0.3 million and $0.2 million, respectively, for the fiscal quarter ended September 30, 2006; $3.7 million and $2.4 million, respectively, for the fiscal quarter ended December 31, 2006; and $0.4 million and $0.3 million, respectively, for the fiscal quarter ended March 31, 2007. Operating income and income from continuing operations included legal and professional costs in connection with the Internal Review and DOJ investigation totaling; $0.5 million and $0.3 million, respectively, for the fiscal quarter ended September 30, 2007; $0.3 million and $0.2 million, respectively, for the fiscal quarter ended December 31, 2007; and $0.5 million and $0.3 million, respectively, for the fiscal quarter ended March 31, 2008. Income from continuing operations amounts are presented on an after-tax basis. In December 2006, we recorded a pre-tax charge of $3.0 million for costs and fees we expected to incur in connection with the resolution of the SEC investigation regarding findings resulting from the Internal Review, a substantial portion of which related to legal fees in connection with the investigation. We reversed $1.0 million ($0.7 million, net of taxes) of this charge in September 2007 upon settlement of the investigation with the SEC. | |
(6) | Operating income and income from continuing operations for the fiscal quarters ended June 30, September 30 and December 31, 2006 and March 31, 2007 included $0.7 million, $2.4 million, $0.7 million and $3.2 million, respectively, in gains on disposal of assets, net of taxes. Operating income and income from continuing operations for the fiscal quarters ended June 30, September 30 and December 31, 2007 and March 31, 2008 included $0.4 million, $(0.5) million, $2.7 million and $3.5 million, respectively, in gains (losses) on disposal of assets, net of taxes. | |
(7) | Income from continuing operations for the fiscal quarters ended June 30, September 30 and December 31, 2006 and March 31, 2007 included $3.1 million, $0.9 million, $2.2 million and $0.1 million, respectively, of foreign currency transaction losses, net of taxes. Income from continuing operations for fiscal quarters ended June 30, September 30 and December 31, 2007 and March 31, 2008 included $0.4 million, $0.2 million, $0.6 million, and $(0.2) million, respectively, of foreign currency transaction gains (losses), net of taxes. | |
(8) | On November 2, 2007, we sold our Grasso business, which comprised our entire Production Management Services segment. The financial results for our Production Management Services segment through |
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November 2, 2007 are classified as discontinued operations. Income from discontinued operations for the fiscal quarter ended December 31, 2007 included an after-tax loss of $5.3 million related to the sale. | ||
(9) | Income from continuing operations for the fiscal quarters ended June, September and December 2007 and March 31, 2008 included $0.2 million, $1.5 million, $2.0 million and $2.8 million, respectively, of interest expense, net of interest income from invested proceeds, from issuance of the 71/2% Senior Notes in June and November 2007, net of taxes. See a discussion of the 71/2% Senior Notes in Note 5. |
Note 12 — | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
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Fiscal Year Ended March 31, 2006
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Gross revenue | $ | 692 | $ | 236,543 | $ | 472,666 | $ | — | $ | 709,901 | ||||||||||
Intercompany revenue | — | 8,263 | 8,831 | (17,094 | ) | — | ||||||||||||||
692 | 244,806 | 481,497 | (17,094 | ) | 709,901 | |||||||||||||||
Operating expense: | ||||||||||||||||||||
Direct cost | 16 | 172,047 | 368,247 | — | 540,310 | |||||||||||||||
Intercompany expenses | — | 8,831 | 7,823 | (16,654 | ) | — | ||||||||||||||
Depreciation and amortization | 95 | 17,559 | 24,406 | — | 42,060 | |||||||||||||||
General and administrative | 24,168 | 12,246 | 23,193 | (440 | ) | 59,167 | ||||||||||||||
Gain on disposal of assets | 4 | (589 | ) | 482 | — | (103 | ) | |||||||||||||
24,283 | 210,094 | 424,151 | (17,094 | ) | 641,434 | |||||||||||||||
Operating income (loss) | (23,591 | ) | 34,712 | 57,346 | — | 68,467 | ||||||||||||||
Earnings (losses) from unconsolidated affiliates, net | 35,737 | (2,534 | ) | 9,500 | (35,945 | ) | 6,758 | |||||||||||||
Interest income | 54,920 | 90 | 4,244 | (55,208 | ) | 4,046 | ||||||||||||||
Interest expense | (14,597 | ) | (11 | ) | (55,289 | ) | 55,208 | (14,689 | ) | |||||||||||
Other income net | (515 | ) | 10 | 5,120 | — | 4,615 | ||||||||||||||
Income from continuing operations before provision for income taxes and minority interest | 51,954 | 32,267 | 20,921 | (35,945 | ) | 69,197 | ||||||||||||||
Allocation of consolidated income taxes | 6,010 | (458 | ) | (20,220 | ) | — | (14,668 | ) | ||||||||||||
Minority interest | (155 | ) | — | (64 | ) | — | (219 | ) | ||||||||||||
Income from continuing operations | 57,809 | 31,809 | 637 | (35,945 | ) | 54,310 | ||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Income from discontinued operations before provision for income taxes | — | 5,438 | — | — | 5,438 | |||||||||||||||
Provision for income taxes on discontinued operations | — | (1,939 | ) | — | — | (1,939 | ) | |||||||||||||
Income from discontinued operations | — | 3,499 | — | — | 3,499 | |||||||||||||||
Net income | $ | 57,809 | $ | 35,308 | $ | 637 | $ | (35,945 | ) | $ | 57,809 | |||||||||
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Fiscal Year Ended March 31, 2006
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net cash provided by operating activities | $ | 42,235 | $ | 48,593 | $ | 16,797 | $ | (68,360 | ) | $ | 39,265 | |||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Capital expenditures | (520 | ) | (109,618 | ) | (29,434 | ) | — | (139,572 | ) | |||||||||||
Proceeds from asset dispositions | 73 | 61,581 | 23,738 | — | 85,392 | |||||||||||||||
Investments | — | 2,000 | (2,000 | ) | — | — | ||||||||||||||
Net cash used in investing activities | (447 | ) | (46,037 | ) | (7,696 | ) | — | (54,180 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from borrowings | 20,691 | — | — | (20,691 | ) | — | ||||||||||||||
Debt issuance costs | (2,564 | ) | — | — | — | (2,564 | ) | |||||||||||||
Repayment of debt and debt redemption premiums | — | — | (4,070 | ) | — | (4,070 | ) | |||||||||||||
Increases (decreases) in cash related to intercompany advances and debt | (10,501 | ) | (4,600 | ) | (6,804 | ) | 21,905 | — | ||||||||||||
Partial prepayment of put/call obligation | (129 | ) | — | — | — | (129 | ) | |||||||||||||
Dividends paid | — | (4,500 | ) | (62,646 | ) | 67,146 | — | |||||||||||||
Issuance of common stock | 1,369 | — | — | — | 1,369 | |||||||||||||||
Net cash provided (used in) by financing activities | 8,866 | (9,100 | ) | (73,520 | ) | 68,360 | (5,394 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (3,649 | ) | — | (3,649 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | 50,654 | (6,544 | ) | (68,068 | ) | — | (23,958 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 23,947 | 7,907 | 114,586 | — | 146,440 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 74,601 | $ | 1,363 | $ | 46,518 | $ | — | $ | 122,482 | ||||||||||
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Fiscal Year Ended March 31, 2007
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Gross revenue | $ | 475 | $ | 275,606 | $ | 567,514 | $ | — | $ | 843,595 | ||||||||||
Intercompany revenue | — | 15,705 | 12,173 | (27,878 | ) | — | ||||||||||||||
475 | 291,311 | 579,687 | (27,878 | ) | 843,595 | |||||||||||||||
Operating expense: | ||||||||||||||||||||
Direct cost | 9 | 196,920 | 437,373 | — | 634,302 | |||||||||||||||
Intercompany expenses | — | 12,161 | 15,667 | (27,828 | ) | — | ||||||||||||||
Depreciation and amortization | 225 | 18,435 | 23,799 | — | 42,459 | |||||||||||||||
General and administrative | 25,480 | 13,464 | 27,427 | (50 | ) | 66,321 | ||||||||||||||
Gain on disposal of assets | — | (1,110 | ) | (9,505 | ) | — | (10,615 | ) | ||||||||||||
25,714 | 239,870 | 494,761 | (27,878 | ) | 732,467 | |||||||||||||||
Operating income (loss) | (25,239 | ) | 51,441 | 84,926 | — | 111,128 | ||||||||||||||
Earnings from unconsolidated affiliates, net | 37,626 | 25 | 11,613 | (37,841 | ) | 11,423 | ||||||||||||||
Interest income | 70,711 | 115 | 3,957 | (66,067 | ) | 8,716 | ||||||||||||||
Interest expense | (11,652 | ) | — | (65,355 | ) | 66,067 | (10,940 | ) | ||||||||||||
Other income net | (1,927 | ) | (111 | ) | (6,960 | ) | — | (8,998 | ) | |||||||||||
Income from continuing operations before provision for income taxes and minority interest | 69,519 | 51,470 | 28,181 | (37,841 | ) | 111,329 | ||||||||||||||
Allocation of consolidated income taxes | 4,816 | (5,239 | ) | (38,358 | ) | — | (38,781 | ) | ||||||||||||
Minority interest | (163 | ) | — | (1,037 | ) | — | (1,200 | ) | ||||||||||||
Income from continuing operations | 74,172 | 46,231 | (11,214 | ) | (37,841 | ) | 71,348 | |||||||||||||
Discontinued operations: | ||||||||||||||||||||
Income from discontinued operations before provision for income taxes | — | 4,409 | — | — | 4,409 | |||||||||||||||
Provision for income taxes on discontinued operations | — | (1,585 | ) | — | — | (1,585 | ) | |||||||||||||
Income from discontinued operations | — | 2,824 | — | — | 2,824 | |||||||||||||||
Net income | $ | 74,172 | $ | 49,055 | $ | (11,214 | ) | $ | (37,841 | ) | $ | 74,172 | ||||||||
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Table of Contents
As of March 31, 2007
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 133,010 | $ | 3,434 | $ | 47,744 | $ | — | $ | 184,188 | ||||||||||
Accounts receivable | 32,103 | 51,331 | 123,453 | (42,080 | ) | 164,807 | ||||||||||||||
Inventories | — | 72,527 | 85,036 | — | 157,563 | |||||||||||||||
Prepaid expenses and other | 830 | 9,391 | 7,166 | — | 17,387 | |||||||||||||||
Current assets from discontinued operations | — | 12,029 | — | — | 12,029 | |||||||||||||||
Total current assets | 165,943 | 148,712 | 263,399 | (42,080 | ) | 535,974 | ||||||||||||||
Intercompany investment | 297,113 | 1,046 | — | (298,159 | ) | — | ||||||||||||||
Investment in unconsolidated affiliates | 4,643 | 1,611 | 40,574 | — | 46,828 | |||||||||||||||
Intercompany notes receivable | 825,203 | — | 11,980 | (837,183 | ) | — | ||||||||||||||
Property and equipment — at cost: | ||||||||||||||||||||
Land and buildings | 263 | 36,624 | 14,898 | — | 51,785 | |||||||||||||||
Aircraft and equipment | 2,259 | 548,814 | 588,708 | — | 1,139,781 | |||||||||||||||
2,522 | 585,438 | 603,606 | — | 1,191,566 | ||||||||||||||||
Less: Accumulated depreciation and amortization | (1,471 | ) | (121,892 | ) | (176,682 | ) | — | (300,045 | ) | |||||||||||
1,051 | 463,546 | 426,924 | — | 891,521 | ||||||||||||||||
Goodwill | — | 4,745 | 1,774 | 111 | 6,630 | |||||||||||||||
Other assets | 9,348 | 224 | 1,153 | — | 10,725 | |||||||||||||||
Long-term assets from discontinued operations | — | 14,125 | — | — | 14,125 | |||||||||||||||
$ | 1,303,301 | $ | 634,009 | $ | 745,804 | $ | (1,177,311 | ) | $ | 1,505,803 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 1,043 | $ | 14,744 | $ | 36,028 | $ | (11,356 | ) | $ | 40,459 | |||||||||
Accrued liabilities | 10,736 | 15,945 | 103,141 | (30,724 | ) | 99,098 | ||||||||||||||
Deferred taxes | 217 | — | 17,394 | — | 17,611 | |||||||||||||||
Short-term borrowings and current maturities of long-term debt | — | — | 4,852 | — | 4,852 | |||||||||||||||
Current liabilities from discontinued operations | — | 5,948 | — | — | 5,948 | |||||||||||||||
Total current liabilities | 11,996 | 36,637 | 161,415 | (42,080 | ) | 167,968 | ||||||||||||||
Long-term debt, less current maturities | 234,379 | — | 19,851 | — | 254,230 | |||||||||||||||
Intercompany notes payable | 14,569 | 230,773 | 591,841 | (837,183 | ) | — | ||||||||||||||
Accrued pension liabilities | — | — | 113,069 | — | 113,069 | |||||||||||||||
Other liabilities and deferred credits | 4,529 | 9,644 | 3,172 | — | 17,345 | |||||||||||||||
Deferred taxes | 42,655 | 2,295 | 31,139 | — | 76,089 | |||||||||||||||
Minority interest | 2,042 | — | 3,403 | — | 5,445 | |||||||||||||||
Stockholders’ investment: | ||||||||||||||||||||
Preferred stock | 222,554 | — | — | — | 222,554 | |||||||||||||||
Common stock | 236 | 4,062 | 35,426 | (39,488 | ) | 236 | ||||||||||||||
Additionalpaid-in-capital | 169,353 | 51,170 | 8,015 | (59,185 | ) | 169,353 | ||||||||||||||
Retained earnings | 515,589 | 299,428 | (82,414 | ) | (217,014 | ) | 515,589 | |||||||||||||
Accumulated other comprehensive income (loss) | 85,399 | — | (139,113 | ) | 17,639 | (36,075 | ) | |||||||||||||
993,131 | 354,660 | (178,086 | ) | (298,048 | ) | 871,657 | ||||||||||||||
$ | 1,303,301 | $ | 634,009 | $ | 745,804 | $ | (1,177,311 | ) | $ | 1,505,803 | ||||||||||
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Fiscal Year Ended March 31, 2007
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (15,795 | ) | $ | 52,987 | $ | 76,739 | $ | (9,501 | ) | $ | 104,430 | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Capital expenditures | (643 | ) | (215,728 | ) | (88,405 | ) | — | (304,776 | ) | |||||||||||
Proceeds from asset dispositions | 14,241 | 3,872 | 22,328 | — | 40,441 | |||||||||||||||
Net cash provided by (used in) investing activities | 13,598 | (211,856 | ) | (66,077 | ) | — | (264,335 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Issuance of Preferred Stock | 223,550 | — | — | — | 223,550 | |||||||||||||||
Preferred Stock issuance costs | (996 | ) | — | — | — | (996 | ) | |||||||||||||
Repayment of debt and debt redemption premiums | — | — | (5,716 | ) | — | (5,716 | ) | |||||||||||||
Increases (decreases) in cash related to intercompany advances and debt | (160,940 | ) | 160,940 | (2,760 | ) | 2,760 | — | |||||||||||||
Partial prepayment of put/call obligation | (130 | ) | — | — | — | (130 | ) | |||||||||||||
Preferred Stock dividends paid | (6,107 | ) | — | — | — | (6,107 | ) | |||||||||||||
Dividends paid | — | — | (6,741 | ) | 6,741 | — | ||||||||||||||
Issuance of common stock | 3,949 | — | — | — | 3,949 | |||||||||||||||
Tax benefit related to exercise of stock options | 1,132 | — | — | — | 1,132 | |||||||||||||||
Net cash provided by (used in) financing activities | 60,458 | 160,940 | (15,217 | ) | 9,501 | 215,682 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 148 | — | 5,781 | — | 5,929 | |||||||||||||||
Net increase in cash and cash equivalents | 58,409 | 2,071 | 1,226 | — | 61,706 | |||||||||||||||
Cash and cash equivalents at beginning of period | 74,601 | 1,363 | 46,518 | — | 122,482 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 133,010 | $ | 3,434 | $ | 47,744 | $ | — | $ | 184,188 | ||||||||||
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Fiscal Year Ended March 31, 2008
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Gross revenue | $ | 271 | $ | 302,510 | $ | 709,983 | $ | — | $ | 1,012,764 | ||||||||||
Intercompany revenue | — | 23,220 | 25,694 | (48,914 | ) | — | ||||||||||||||
271 | 325,730 | 735,677 | (48,914 | ) | 1,012,764 | |||||||||||||||
Operating expense: | ||||||||||||||||||||
Direct cost | 144 | 203,962 | 522,327 | — | 726,433 | |||||||||||||||
Intercompany expenses | — | 25,845 | 23,069 | (48,914 | ) | — | ||||||||||||||
Depreciation and amortization | 291 | 21,357 | 32,492 | — | 54,140 | |||||||||||||||
General and administrative | 27,651 | 12,832 | 52,350 | — | 92,833 | |||||||||||||||
Gain on disposal of assets | 2 | (3,967 | ) | (5,425 | ) | — | (9,390 | ) | ||||||||||||
28,088 | 260,029 | 624,813 | (48,914 | ) | 864,016 | |||||||||||||||
Operating income (loss) | (27,817 | ) | 65,701 | 110,864 | — | 148,748 | ||||||||||||||
Earnings (losses) from unconsolidated affiliates, net | 85,395 | 68 | 12,910 | (85,395 | ) | 12,978 | ||||||||||||||
Interest income | 87,441 | 224 | 2,268 | (77,208 | ) | 12,725 | ||||||||||||||
Interest expense | (26,643 | ) | — | (74,344 | ) | 77,208 | (23,779 | ) | ||||||||||||
Other income (expense), net | 1,080 | (997 | ) | 1,502 | — | 1,585 | ||||||||||||||
Income from continuing operations before provision for income taxes and minority interest | 119,456 | 64,996 | 53,200 | (85,395 | ) | 152,257 | ||||||||||||||
Allocation of consolidated income taxes | (15,272 | ) | 1,893 | (31,147 | ) | — | (44,526 | ) | ||||||||||||
Minority interest | (192 | ) | — | 275 | — | 83 | ||||||||||||||
Income from continuing operations | 103,992 | 66,889 | 22,328 | (85,395 | ) | 107,814 | ||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Income from discontinued operations before provision for income taxes | — | 1,722 | — | — | 1,722 | |||||||||||||||
Provision for income taxes on discontinued operations | — | (5,544 | ) | — | — | (5,544 | ) | |||||||||||||
Loss from discontinued operations | — | (3,822 | ) | — | — | (3,822 | ) | |||||||||||||
Net income | $ | 103,992 | $ | 63,067 | $ | 22,328 | $ | (85,395 | ) | $ | 103,992 | |||||||||
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Fiscal Year Ended March 31, 2008
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 226,494 | $ | 361 | $ | 63,195 | $ | — | $ | 290,050 | ||||||||||
Accounts receivable | 34,679 | 73,023 | 155,232 | (47,019 | ) | 215,915 | ||||||||||||||
Inventories | — | 76,706 | 99,533 | — | 176,239 | |||||||||||||||
Prepaid expenses and other | 1,145 | 2,856 | 20,176 | — | 24,177 | |||||||||||||||
Total current assets | 262,318 | 152,946 | 338,136 | (47,019 | ) | 706,381 | ||||||||||||||
Intercompany investment | 602,282 | 1,047 | 16,990 | (620,319 | ) | — | ||||||||||||||
Investment in unconsolidated affiliates | 4,433 | 3,639 | 44,395 | — | 52,467 | |||||||||||||||
Intercompany notes receivable | 875,856 | — | (15,145 | ) | (860,711 | ) | — | |||||||||||||
Property and equipment — at cost: | ||||||||||||||||||||
Land and buildings | 212 | 44,230 | 15,614 | — | 60,056 | |||||||||||||||
Aircraft and equipment | 2,957 | 552,429 | 873,610 | — | 1,428,996 | |||||||||||||||
3,169 | 596,659 | 889,224 | — | 1,489,052 | ||||||||||||||||
Less: Accumulated depreciation and amortization | (1,146 | ) | (139,100 | ) | (176,268 | ) | — | (316,514 | ) | |||||||||||
2,023 | 457,559 | 712,956 | — | 1,172,538 | ||||||||||||||||
Goodwill | — | 4,755 | 10,921 | — | 15,676 | |||||||||||||||
Other assets | 14,183 | 4,457 | 11,653 | — | 30,293 | |||||||||||||||
$ | 1,761,095 | $ | 624,403 | $ | 1,119,906 | $ | (1,528,049 | ) | $ | 1,977,355 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 686 | $ | 14,486 | $ | 47,986 | $ | (13,508 | ) | $ | 49,650 | |||||||||
Accrued liabilities | 10,893 | 15,780 | 106,368 | (33,511 | ) | 99,530 | ||||||||||||||
Deferred taxes | (1,909 | ) | — | 11,147 | — | 9,238 | ||||||||||||||
Short-term borrowings and current maturities of long-term debt | — | — | 6,541 | — | 6,541 | |||||||||||||||
Total current liabilities | 9,670 | 30,266 | 172,042 | (47,019 | ) | 164,959 | ||||||||||||||
Long-term debt, less current maturities | 584,981 | — | 14,696 | — | 599,677 | |||||||||||||||
Intercompany notes payable | — | 190,498 | 670,213 | (860,711 | ) | — | ||||||||||||||
Accrued pension liabilities | — | — | 134,156 | — | 134,156 | |||||||||||||||
Other liabilities and deferred credits | 3,834 | 9,379 | 1,592 | — | 14,805 | |||||||||||||||
Deferred taxes | 52,190 | 3,669 | 35,888 | — | 91,747 | |||||||||||||||
Minority interest | 2,072 | — | 2,498 | — | 4,570 | |||||||||||||||
Stockholders’ investment: | ||||||||||||||||||||
Preferred stock | 222,554 | — | — | — | 222,554 | |||||||||||||||
Common stock | 239 | 4,996 | 68,986 | (73,982 | ) | 239 | ||||||||||||||
Additionalpaid-in-capital | 186,390 | 23,100 | 242,983 | (266,083 | ) | 186,390 | ||||||||||||||
Retained earnings | 606,931 | 362,495 | (60,086 | ) | (302,409 | ) | 606,931 | |||||||||||||
Accumulated other comprehensive income (loss) | 92,234 | — | (163,062 | ) | 22,155 | (48,673 | ) | |||||||||||||
1,108,348 | 390,591 | 88,821 | (620,319 | ) | 967,441 | |||||||||||||||
$ | 1,761,095 | $ | 624,403 | $ | 1,119,906 | $ | (1,528,049 | ) | $ | 1,977,355 | ||||||||||
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Fiscal Year Ended March 31, 2008
Parent | Non- | |||||||||||||||||||
Company | Guarantor | Guarantor | ||||||||||||||||||
Only | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (418 | ) | $ | 83,358 | $ | 7,803 | $ | (3,186 | ) | $ | 87,557 | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Capital expenditures | (164 | ) | (270,819 | ) | (67,020 | ) | — | (338,003 | ) | |||||||||||
Proceeds from asset dispositions | — | 19,376 | 7,247 | — | 26,623 | |||||||||||||||
Acquisitions, net of cash received | (16,990 | ) | — | 2,368 | — | (14,622 | ) | |||||||||||||
Net proceeds from sale of discontinued operations | 21,958 | — | — | — | 21,958 | |||||||||||||||
Notes issued to unconsolidated affiliate | — | (4,141 | ) | — | — | (4,141 | ) | |||||||||||||
Investment in unconsolidated affiliate | — | (1,960 | ) | — | — | (1,960 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 4,804 | (257,544 | ) | (57,405 | ) | — | (310,145 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from borrowings | 350,622 | — | — | — | 350,622 | |||||||||||||||
Debt issuance costs | (5,882 | ) | — | — | — | (5,882 | ) | |||||||||||||
Repayment of debt and debt redemption premiums | — | — | (10,054 | ) | — | (10,054 | ) | |||||||||||||
Increases (decreases) in cash related to intercompany advances and debt | (250,586 | ) | 171,113 | 76,287 | 3,186 | — | ||||||||||||||
Partial prepayment of put/call obligation | (163 | ) | — | — | — | (163 | ) | |||||||||||||
Acquisition of minority interest | — | — | (507 | ) | — | (507 | ) | |||||||||||||
Preferred Stock dividends paid | �� | (12,650 | ) | — | — | — | (12,650 | ) | ||||||||||||
Issuance of common stock | 5,756 | — | — | — | 5,756 | |||||||||||||||
Tax benefit related to exercise of stock options | 1,738 | — | — | — | 1,738 | |||||||||||||||
Net cash provided by financing activities | 88,835 | 171,113 | 65,726 | 3,186 | 328,860 | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 263 | — | (673 | ) | — | (410 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | 93,484 | (3,073 | ) | 15,451 | — | 105,862 | ||||||||||||||
Cash and cash equivalents at beginning of period | 133,010 | 3,434 | 47,744 | — | 184,188 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 226,494 | $ | 361 | $ | 63,195 | $ | — | $ | 290,050 | ||||||||||
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Subordinated Debt Securities
Common Stock
Preferred Stock
Warrants
Guarantees of Debt Securities
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Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends | 3 | |||
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• | the risks and uncertainties described under “Risk Factors” in this prospectus, in any prospectus supplement and in the “Risk Factors” and other sections of the documents that we incorporated by reference into this prospectus, including our Annual Reports onForm 10-K and Quarterly Reports onForm 10-Q and in our other reports filed with the SEC; | |
• | the level of activity in the oil and natural gas industry is lower than anticipated; | |
• | production-related activities become more sensitive to variances in commodity prices; | |
• | the major oil companies do not continue to expand internationally; | |
• | market conditions are weaker than anticipated; | |
• | we are unable to acquire additional aircraft due to limited availability; | |
• | we are not able to re-deploy our aircraft to regions with the greater demand; | |
• | we do not achieve the anticipated benefit of our fleet capacity expansion program; | |
• | the outcome of the United States Department of Justice (“DOJ”) investigation relating to our internal review of Foreign Corrupt Practices Act and other matters, which is ongoing, has a greater than anticipated financial or business impact; and | |
• | the outcome of the DOJ antitrust investigation, which is ongoing, has a greater than anticipated financial or business impact. |
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• | helicopter purchases, | |
• | acquisitions, | |
• | working capital, | |
• | capital expenditures, | |
• | repayment or refinancing of debt, and | |
• | repurchases and redemptions of securities. |
Preferred Stock Dividends
Fiscal Year Ended March 31, | ||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||
Ratio of Earnings to Fixed Charges | 4.1 | x | 5.0 | x | 4.3 | x | 5.4 | x | 4.5 | x | ||||||||||
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends | 4.1 | x | 5.0 | x | 4.3 | x | 3.7 | x | 3.2 | x |
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• | the number of shares that shall constitute any such series and whether the number of shares may be increased or decreased by action of our board of directors; | |
• | whether the shares of any such series shall be convertible into or exchangeable for shares of stock of any other class or classes or shares of any other series of the same class; | |
• | the price or prices, or the rate or rates, of conversion if our board of directors determines that the shares of any such series shall be convertible; | |
• | any limitations or restrictions to be effective while any shares of any such series are outstanding upon the payment of dividends or the making of other distributions or upon the acquisition in any manner by the company or any of our subsidiaries of any of the shares of the company’s common, preferred, or other class or classes of stock; | |
• | any conditions or any restrictions upon the creation of indebtedness of the company or any of our subsidiaries or upon the issuance of any additional stock of any kind while the shares of any series are outstanding; | |
• | the annual rate of dividends, if any, payable on the shares of any such series and the conditions upon which such dividends shall be payable; | |
• | whether dividends, if authorized, shall be cumulative and, if so, the date from which such dividends shall be cumulative; | |
• | voting rights, if any; | |
• | when and at what price or prices (whether in cash or in debentures of the company) the shares of any such series shall be redeemable or, at the option of the company, exchangeable or both; | |
• | whether the shares of any such series shall be subject to the operation of any purchase, retirement or sinking fund or funds and, if so, the terms and provisions relative to the operation of any such fund or funds; and | |
• | the amount payable on the shares of any such series in the event of voluntary liquidation, dissolution or winding up of the affairs of the company; and any other powers, preferences and relative, participating, option and other special rights, and any qualifications, limitations and restrictions thereof. |
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Market Value of | Number of Shares of | Total Number of Shares of | ||
Common Stock on | Common Stock Issued | Common Stock Issued | ||
September 15, | for Each Share of | for 4,600,000 Shares of | ||
2009 | Preferred Stock | Preferred Stock | ||
$35.26 or less | 1.4180 | 6,522,800 | ||
Between $35.26 and $43.19 | 1.4180 to 1.1577 | 6,522,799 to 5,324,961 | ||
$43.19 or greater | 1.1576 | 5,324,960 |
• | upon a “Voting Rights Triggering Event,” which is generally defined as our failure to pay dividends on the 5.50% Mandatory Convertible Preferred Stock with respect to six or more dividend periods, the |
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5.50% Mandatory Convertible Preferred Stock, voting as a single class with any other securities on parity with similar voting rights (the “Voting Rights Class”), will be entitled to elect two additional directors of our company; |
• | we shall not, without the affirmative vote or consent of the holders of at least 662/3% of the voting power of the outstanding 5.50% Mandatory Convertible Preferred Stock and the Voting Rights Class, create, authorize or issue any class of series of securities senior thereto; and | |
• | we shall not, without the affirmative vote or consent of the holders of at least 662/3% of the voting power of the outstanding 5.50% Mandatory Convertible Preferred Stock, amend, alter or repeal any of the provisions of our certificate of incorporation or any certificate of designation that would adversely affect the rights, preferences or voting powers of the 5.50% Mandatory Convertible Preferred Stock. |
• | make nominations in the election of directors; | |
• | propose that a director be removed; | |
• | propose any repeal or change in our bylaws; or | |
• | propose any other business to be brought before an annual or special meeting of stockholders. |
• | a description of the business or nomination to be brought before the meeting and the reasons for conducting such business at the meeting; | |
• | any material interest of the stockholder in the proposal and the beneficial owner, if any, on whose behalf the proposal is made; | |
• | the name, address and number of shares owned beneficially and of record by the stockholder or the beneficial owner on whose behalf the nomination or proposal is being made, if any; and | |
• | with respect to each person nominated for election to our board of directors, all information relating to such person that is required to be disclosed in proxy statements with respect to the election of directors by Section 14A of the Exchange Act and the related rules of the SEC. |
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• | in connection with an annual meeting of stockholders, not earlier than the close of business on the 90th day prior to and not later than the close of business on the 60th day prior to the first anniversary of the preceding year’s annual meeting. However, if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice is required not earlier than the 90th day prior to such annual meeting and not later than the later of the 60th day prior to the annual meeting or the 10th day following the day on which we first publicly announce the date of such meeting; or | |
• | in connection with the election of a director at a special meeting of stockholders, not earlier than the close of business on the 90th day prior to and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which we first publicly announce the date of such meeting. |
• | any breach of the director’s duty of loyalty to our company or our stockholders; | |
• | any act or omission not in good faith or which involved intentional misconduct or a knowing violation of law; | |
• | unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; and | |
• | any transaction from which the director derived an improper personal benefit. |
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• | the board of directors of the corporation had previously approved either the business combination or the transaction that resulted in the stockholder’s becoming an interested stockholder; | |
• | upon completion of the transaction that resulted in the stockholder’s becoming an interested stockholder, that person owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than statutorily excluded shares; or | |
• | following the transaction in which that person became an interested stockholder, the business combination is approved by the board of directors of the corporation and holders of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
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• | the title of the warrants; | |
• | the aggregate number of warrants offered; | |
• | the designation, number and terms of the debt securities, common stock, preferred stock, rights or other securities purchasable upon exercise of the warrants, and procedures that will result in the adjustment of those numbers; | |
• | the exercise price of the warrants; | |
• | the dates or periods during which the warrants are exercisable; | |
• | the designation and terms of any securities with which the warrants are issued; | |
• | if the warrants are issued as a unit with another security, the date, if any, on and after which the warrants and the other security will be separately transferable; | |
• | if the exercise price is not payable in U.S. dollars, the foreign currency, currency unit or composite currency in which the exercise price is denominated; | |
• | any minimum or maximum amount of warrants that may be exercised at any one time; | |
• | any terms, procedures and limitations relating to the transferability, exchange or exercise of the warrants; and | |
• | any other terms of the warrants. |
• | the terms of the offering; | |
• | the names of any underwriters or agents; | |
• | the purchase price of the securities from us and, if the purchase price is not payable in U.S. dollars, the currency or composite currency in which the purchase price is payable; | |
• | the net proceeds to us from the sale of the securities; | |
• | any delayed delivery arrangements; | |
• | any underwriting discounts, commissions and other items constituting underwriters’ compensation; | |
• | any initial public offering price; | |
• | any discounts or concessions allowed or reallowed or paid to dealers; and | |
• | any commissions paid to agents. |
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• | our Annual Report onForm 10-K for the fiscal year ended March 31, 2008, which was filed with the SEC on May 21, 2008; and | |
• | the description of our common stock contained in our Registration Statement onForm 8-A/A, filed on March 7, 2003, and any subsequent amendment thereto filed for the purpose of updating such description. |
2000 W. Sam Houston Pkwy S., Suite 1700
Houston, Texas 77042
Attention: Corporate Secretary
Telephone number is(713) 267-7600
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