![]() Bristow Group Inc. Presentation to Investors January 2011 11 Exhibit 99.1 |
![]() 2 Forward-looking Statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our future business, operations, capital expenditures, fleet composition, capabilities and results; financial projections; plans, strategies and objectives of our management, including our plans and strategies to grow earnings and our business, our general strategy going forward and our business model; expected actions by us and by third parties, including our customers, competitors and regulators; the valuation of our company and its valuation relative to relevant financial indices; assumptions underlying or relating to any of the foregoing, including assumptions regarding factors impacting our business, financial results and industry; and other matters. Our forward-looking statements reflect our views and assumptions on the date of this presentation regarding future events and operating performance. They involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended March 31, 2010 and Form 10-Q for the quarter ended September 30, 2010. We do not undertake any obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. |
![]() Company Overview |
![]() 4 Bristow is the leading provider of helicopter transportation services to the global offshore industry • Ticker: BRS • Stock price 1 : $38.78 • Market cap 1 : ~$1.42 billion • Enterprise value 1 : ~$2.0 billion • ~20 countries • 578 aircraft • ~3,400 employees $275 $67 • Bristow flies crews and light cargo to production platforms, vessels and rigs 1) As of 10/29/2010. Based on 36.7 million fully diluted weighted average shares outstanding for the quarter ended 09/30/2010. |
![]() 5 Key Investment Considerations Leading Market Position: #1 or #2 in each market Experienced Management Team: 180 years of Senior Management business experience Industry Leading Safety Record: 0.17 vs. 2.27 OGI accident rate per 100k of flight hours As of September 30, 2010 Stable Revenue and Cash Flow Drive Strong Financial Performance: ’07 -’10 CAGR EBITDA growth: 16.3% As of September 30, 2010 Well Positioned to Capitalize on Improving Industry Fundamentals: ~$258m EBITDA LTM 9/30/10 ~3.0x Debt / EBITDA 9/30/10 Geographic and Fleet Diversification: ~20 countries with 578 aircraft As of September 30, 2010 Note: OGI is Oil & Gas Industry |
![]() 6 Bristow Core Values • Safety – Safety first, with a “Target Zero” goal of no accidents • Quality and Excellence – Set and achieve high standards in everything we do • Integrity – Do the right thing in conjunction with our Code of Business Conduct • Fulfillment – Develop our talents and enjoy our work • Teamwork – Communicate openly and respect each other • Profitability – Make prudent decisions and grow the business |
![]() 7 Industry leading safety record creates marketing and cost advantage • Safety is the primary core value • ‘Target Zero’ safety vision changes culture and behavior to achieve: • Zero accidents • Zero harm to people • Zero harm to the environment • Bristow safety performance protects customer personnel and reputation • Safety Performance accounts for 25% of management incentive compensation • Bristow accident rate is approximately one tenth the average rates for the oil and gas industry and all civil helicopters • Bristow Academy provides industry-specific training to improve pilot quality * Averages for most recently available three-year period: Helicopter Association International 2007-2009, International Oil & Gas Producers 2005-2007, Bristow Group 2008-2010, excluding Bristow Academy commercial training 3-year average air accident rates * per 100K flight hours Bristow Oil & Gas industry All civil helicopters 2.79 2.27 0.17 |
![]() 8 • Bristow has long-term relationships with the oil and gas operators that account for 80% of global offshore E&P spending • Industry-leading safety performance - the key customer requirement • #1 or #2 market position in the major oil and gas provinces: North Sea, USGoM, Australia, West Africa and Brazil • New-technology fleet of medium and large sized helicopters meets the needs of premium and fast growing deepwater segment • Stable revenue and cash flows drive strong financial performance; strong balance sheet ensures continued financial flexibility • Experienced management team Key Competitive Advantages |
![]() 9 Bristow services are utilized in every phase of offshore oil and gas activity, especially production • Largest share of revenues (>60%) relates to oil and gas production, ensuring stability and growth • There are ~ 8,000 offshore production installations worldwide - compared with >600 drilling rigs • Bristow revenues driven by both Opex and Capex PRODUCTION DEVELOPMENT ABANDONMENT EXPLORATION SEISMIC H e l i c o p t e r t r a n s p o r t a t i o n s e r v i c e s Typical revenues by segment Exploration 20% Development 10% Production 60% Other 10% |
![]() 10 Low risk contract structure results in more predictable revenue and cash flow Two-tiered contract structure includes both: • Fixed or monthly fee to reserve capacity • Variable fees based on hours flown • In most markets, Bristow earns 65% of revenue without flying Revenue Sources Variable hourly 35% Fixed monthly 65% Operating Income Variable hourly 30% Fixed monthly 70% Bristow’s steady performance through the recent financial crisis and recession highlights the more stable nature of our business |
![]() 11 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% HOS BRS AIRM PHII RIG NE ESV TDW GLF CKH PDE HERO RDC DO TRMA Coefficient of Variation of EBITDAR Margin, 1999 to 2009 Note: Coefficient of Variation is calculated as (standard deviation of (EBITDAR as a % of revenues)) / (mean of (EBITDAR as a % of revenues)) using quarterly data from 4Q1999 to 4Q2009, inclusive Stability of Bristow cash flows through full cycle Bristow’s low margin volatility relative to oil service peers highlights its close tie to offshore production |
![]() 12 Our customers are market leaders |
![]() 13 9/30/2010 Small 31% Medium 43% Large 26% Repositioning fleet toward premium segments 4 • Shift of global offshore industry toward deepwater exploration and production creates need for larger and more technologically advanced helicopters • Bristow has responded by upgrading fleet, personnel and training 9/30/2007 Small 52% Medium 31% Large 17% |
![]() 14 Senior Management Team William Chiles President & CEO July 2004 Richard Burman Senior Vice President Operations October 2004 Mark Duncan Senior Vice President Commercial January 2005 Hilary Ware Senior Vice President Administration August 2007 Randall Stafford Senior Vice President General Counsel & Corporate Secretary May 2006 Jonathan Baliff Senior Vice President & Chief Financial Officer October 2010 • Senior management team has a combined 180 years of business experience • A proven track record of delivering results • Focused on increasing ROCE/WACC spread and cash flow to drive financial performance Note: ROCE is Return on Capital Employed |
![]() 15 Key Accomplishments of the Bristow team • Strengthened relationships with global customers at the executive and operating levels • Implemented return targets by business unit • Improved profitability and cash flow • Established global fleet management • Integrated global operations; established global flight and maintenance standards • Divested non-core businesses (53 small helicopters in GOM) • Enhanced the safety culture • Implemented cost reductions in early 2009 • Instilled regulatory compliance culture • Invested about $1.4 billion in new technology aircraft (Fleet age reduced from 19 years to 12 years) • Acquired 42.5% of Líder Aviation in Brazil, a high growth market |
![]() Market Overview |
![]() ![]() ![]() 17 Oil and gas industry expanding to new offshore regions • Fastest growth in Africa, Brazil and Asia • Europe becoming a mature production province – but intense activity will continue to mitigate decline and leverage infrastructure Offshore oil and gas production by region 1995 25 mmboe/d 14% 14% 30% 7% 16% 2% 17% 2010 42 mmboe/d 10% 15% 16% 12% 21% 6% 20% 2020E 46 mmboe/d 6% 17% 10% 13% 25% 8% 21% Source: PFC Energy, March 2010 NAmerica LatAmerica Europe SSAfrica MidEast/NAfrica FormerSU AsiaPac |
![]() 18 Offshore spending—particularly Opex—projected to grow over next decade • All segments will show significant spending increases • As production matures in the deepwater, spending will switch from Capex to Opex Source: PFC Energy, March 2010 Global offshore E&P spending forecast $ billion CAPEX OPEX 0 100 200 300 400 500 600 700 2000 est 2010 proj 2020 proj CAPEX OPEX |
![]() 19 • >6% forecast annual real growth in deepwater installations • Typical client facility is 100 – 200 miles offshore with a crew of 150, compared with 20 miles offshore and a crew of 20 in shallow water • Brazil, West Africa and USGoM have 77% of global deepwater installations with helidecks Source: PFC Energy, September 2010 Deepwater production installations are fastest growing segment… 0 50 100 150 200 250 300 350 400 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Active Deepwater Platforms |
![]() 20 …driving demand for medium and large helicopters • Expanding markets for medium and large sized twins • Larger and newer aircraft can support locations further offshore and comply with new regulatory and safety requirements • Revenue and income from 3 new large twins approximately equates to 50 small aircraft Large twin Medium twin Offshore helicopter demand forecast 2010 to 2014 Source: PFC Energy, October 2010 0 200 400 600 800 1000 1200 2010 2011 2012 2013 2014 |
![]() 21 Operating Income Q2 FY11* North America 14% Europe 33% West Africa 26% Australia 10% Other International 17% Bristow is organized to respond to most attractive global growth opportunities • Geographically focused on strongest growth markets • Global presence creates flexibility to redeploy aircraft in response to changing market conditions * Excludes centralized operations, corporate, gain on sale of assets and Bristow Academy |
![]() 22 52 124 102 328 294 141 445 0 50 100 150 200 250 300 350 400 450 500 FY06 FY07 FY08 FY09 FY10 YTD11 Bristow has responded to evolving market by upgrading helicopter size and technology • Right-sizing the fleet to meet migration to deepwater – Small 48% 30% – Medium 29% 42% – Large 20% 26% • Invested $1.4 billion in new technology aircraft – Exceed the most stringent safety requirements – Increased range with heavier payloads • Reduced average age of fleet from 19 years to under 12 years Historical fleet profile* Helicopter capital expenditures 320 125 136 309 Small Medium Large * Fleet profile excludes Bristow Academy and unconsolidated affiliates 226 0 50 100 150 200 250 300 350 400 450 500 FY05 Delivered Removed YTD 2011 |
![]() 23 56 145 4 3 7 4 7 17 9 15 1 4 7 8 20 7 11 12 North America Brazil, Colombia Mexico, Trinidad Nigeria, Ghana Equatorial Guinea Europe Caspian, Mid-East Libya, East Africa Malaysia, Thailand Indonesia Australia Small Medium Large 19 88 59 Total Opportunities * 30 Selected opportunities for 166 additional helicopters Chart shows specific customer opportunities identified by Bristow as of April 2010 |
![]() 24 Plan to capture 33% of identified opportunities while maximizing optionality 12 on order large medium small orders 7 5 0 options 10 25 0 As of September 30, 2010 |
![]() Financial Update |
![]() 26 Our financial strategy • Improve capital discipline with a specific capital allocation framework • Prudent balance sheet management is a core principle • Liquidity maintained at $200-$250 million • Best risk/return opportunities attract growth capital • Balance shareholder return between capital appreciation and regular return of capital • Communicate the capital allocation framework • Focus on providing enhanced value for shareholders by making better investment decisions with improved metrics – use of ROCE AND WACC • Lower Cost of Debt through opportunistic financing that increases flexibility • Lower Cost of Equity by providing more predictable expectations for our security holders |
![]() 27 $60 $125 $104 $74 $58 $58 $56 $0 $20 $40 $60 $80 $100 $120 $140 2006 2007 2008 2009 2010 2011 $136 $134 $124 $277 $230 $126 $165 $- $50 $100 $150 $200 $250 $300 2006 2007 2008 2009 2010 2011 $1.58 $1.63 $1.52 $3.56 $3.41 $2.74 $2.45 $- $1 $1 $2 $2 $3 $3 $4 $4 2006 2007 2008 2009 2010 2011 $605 $582 $586 $1,134 $1,013 $844 $710 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 2006 2007 2008 2009 2010 2011 Proven business model and prudent balance sheet management has delivered even during recent downturn 1) Revenue from continuing operations 2) FY09 EBITDA, Net Income, and Diluted EPS include $36.2 mm, $23.4 mm and $0.68, respectively, from sale of GoM assets CAGR 5.9% Revenue ¹ – Fiscal Year End 3/31 ( in millions) Diluted EPS² – Fiscal Year End 3/31 Net Income² – Fiscal Year End 3/31 ( in millions) EBITDA² – Fiscal Year End 3/31 (in millions) CAGR 11.3% CAGR 16.3% CAGR 15.7% 1 Six months ended September 30 Six months ended September 30 1 $1,168 $260 $3.10 $114 |
![]() 28 What is Our Capital Allocation Framework? Three Principles Invest in Growth Opportunities Return Capital to Shareholders Reduce Leverage “One-time” Payout “One-time” Payout Organic Growth Growth through Acquisitions Tender Offer Tender Offer Special Dividend Special Dividend “Continuous” Payout “Continuous” Payout Regular Dividend Regular Dividend Repurchase Program Repurchase Program Create/Build Liquidity Yes No Principle: Highest Return Principle: Prudent Balance Sheet Management Principle: Balanced Shareholder Return Yes Yes Are country hurdle rates met? Organic Acquisition Liquidity Adequate? Yes Capital Structure Targets Achieved? No |
![]() 29 Prudent balance sheet management is board mandated • Remain conservatively capitalized • Debt to total capitalization below approximately 45% • Debt / EBITDA in the range of 3.0x to 3.5x • Board policy to maintain at least $100 million of liquidity through cash and revolving credit availability at all times • Liquidity in the range of $200 to $250 million • Maintain Senior Unsecured BB (stable outlook) credit rating • Create more flexibility in capital structure for debt buyback and part of capital allocation |
![]() 30 Our new $375 million secured bank credit facility aligns well with our financial strategy • $175 million 5-year revolver and $200 million 5-year term loan • $100 million accordion feature • Term loan proceeds was used to repay $230 million 6 1/8% senior notes due 2013 on December 23, 2010; revolver for general corporate purposes • Initial borrowing margin will be LIBOR + 2.50% • Reverse flexing to 2.375% after June 30, 2011 financials are provided to lenders • Leverage ratio pricing grid not ratings driven • Additional indebtedness subject to financial ratios • Enhanced restricted payments capability for dividends and stock repurchases |
![]() 31 Total capitalization $2.1 billion (September 30, 2010) $1.4 billion Equity Today’s Strong balance sheet and liquidity position • Cash on hand at September 30, 2010: $108.5 million • YTD FY11 EBITDAR 1 of $137.4 million • Significant revolver borrowing capacity (~$135 million undrawn after redeeming the 6 1/8% notes) $721 million Debt Liquidity 1) Earnings before interest, tax, depreciation, amortization and aircraft rental expense 2) Reconciliation in Appendix. Adjusted debt includes balance sheet debt, unfunded pension liability and NPV of helicopter leases Capital Structure • $175 million, five-year revolver (Libor + 2.50%) • $200 million, five-year Term Loan • $350 million 7.5% senior notes due 2017 • $115 million 3.0% convertible senior notes; first put in 2015 • 37 million shares of common stock Leverage • Adjusted Debt to Total Capital 38.0% 2 as of September 30, 2010 • Adjusted Debt to EBITDAR 2.13:1 2 |
![]() 32 Helicopter aftermarket provides cash and value for Bristow • Global aftermarket for excess helicopters helps balance supply and demand in the oil and gas sector • Historically, Bristow has been successful in selling its non-core aircraft for prices in excess of book value • From FY07 through FY10, Bristow sold 135 aircraft for ~$211 million in proceeds • Bristow sold aircraft to ~ 30 different buyers, representing a number of different sectors, including: • Air Medical • Police and Firefighting • Seismic Support • Logging • General Commercial • Training / Personal Use • The size and global nature of the helicopter market, the diversity of end users and the high level of maintenance required by safety regulations helps maintain helicopter values and an active aftermarket With the oil and gas sector comprising only 4% of the global helicopter market, there has been liquidity for sale of our assets |
![]() 33 Projected operating cash covers capex; over $500 million available for growth and/or distribution to shareholders 78 100 1400 84 762 800 300 230 217 125 552 Projections based on five-year plan; actual financing choices will depend on evaluation of available options: subject to numerous conditions, uncertainties and risks, including operating performance, industry conditions, management decisions regarding financing and use of funds and board approval |
![]() 34 Our strategy…gaining altitude • Deliver on the Brand promise though the safest and most valuable services • Create Discipline around capital allocation • Adhere to a prudent balance sheet management philosophy- always • Employ a robust return on capital employed and beyond model for growth capital |
![]() Appendix A Aircraft Information |
![]() 36 Aircraft Fleet – Medium and Large - As of September 30, 2010 Next Generation Aircraft Mature Aircraft Models Medium capacity 12-16 passengers Large capacity 18-25 passengers Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Medium Helicopters AW139 12 Twin Turbine 5 4 9 2 Bell 212 12 Twin Turbine 3 23 26 - Bell 412 13 Twin Turbine 40 44 84 - EC155 13 Twin Turbine 10 - 10 - Sikorsky S-76 A/A++ 12 Twin Turbine 21 10 31 - Sikorsky S-76 C/C++ 12 Twin Turbine 51 25 76 3 130 106 236 5 Large Helicopters AS332L Super Puma 18 Twin Turbine 30 - 30 - Bell 214ST 18 Twin Turbine 3 - 3 - EC225 25 Twin Turbine 14 - 14 3 Mil MI 8 20 Twin Turbine 7 - 7 - Sikorsky S-61 18 Twin Turbine 2 - 2 - Sikorsky S-92 19 Twin Turbine 22 1 23 4 78 1 79 7 |
![]() 37 Aircraft Fleet – Small, Training and Fixed As of September 30, 2010 (continued) Next Generation Aircraft Mature Aircraft Models Small capacity 4-7 passengers Training capacity 2-6 passengers Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Small Helicopters Bell 206B 4 Turbine 2 2 4 - Bell 206 L-3 6 Turbine 5 6 11 - Bell 206 L-4 6 Turbine 31 2 33 - Bell 407 6 Turbine 44 1 45 - BK 117 7 Twin Turbine 2 - 2 - BO-105 4 Twin Turbine 2 - 2 - EC135 7 Twin Turbine 6 3 9 - AS350 4 Turbine - 36 36 - Agusta 109 8 Twin Turbine - 3 3 - 92 53 145 - Training Helicopters AS355 4 Twin Turbine 3 - 3 - Bell 206B 6 Single Engine 9 - 9 - Robinson R22 2 Piston 10 - 10 - Robinson R44 2 Piston 2 - 2 - Sikorsky 300CB/Cbi 2 Piston 51 - 51 - Fixed Wing 1 - 1 - 76 - 76 - - Fixed Wing 3 39 42 - Total 379 199 578 12 (1) (1) Signed customer contracts are in place for seven of these twelve aircraft as of September 30, 2010 |
![]() Appendix B Other Company Information |
![]() 39 #2 #1 #1 #2 #1 #1 #2 #1* #1* #1* #1 * Unconsolidated affiliate #2 #1* Leading market position |
![]() ![]() ![]() 40 West Africa (WASBU) Nigeria • Represents 19%* of revenue • 26% of operating income in Q2 FY11 • Operating margin 29.5% in Q2 FY11 • Continues to be a high margin business unit • Recent changes in the competitive landscape of the region make operating results unpredictable Lagos Escravos Port Harcourt Warri Eket Calabar * For the three months ended September 30, 2010 |
![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() 41 Europe (EBU) UK Netherlands Norway Norwich Aberdeen Scasta Stavanger Den Helder Bergen Hammerfest • Represents 38%* of revenue • 33% of operating income in Q2 FY11 • Operating Margin 18.4% in Q2 FY11 • Slight increase in operating margin for the Sept quarter is a result of operating expense decrease • Centralized operations show first results of improved cost efficiency * For the three months ended September 30, 2010 |
![]() ![]() ![]() ![]() 42 Karratha Exmouth Learmonth Varanus Is Barrow Is Australia (AUSBU) Australia Perth Dongara Essendon Tooradin Broome Truscott Darwin BDI provide support to the Republic of Singapore Air Force Oakey • Represents 12%* of revenue • 9% of operating income in Q2 FY11 • Operating margin 16.3% in Q2 FY11 • Negotiations completed with the pilot’s union • Minor decline in operating margin is due to increase in salaries and benefits • Introduction of new aircraft results in change in revenue mix * For the three months ended September 30, 2010 |
![]() 43 North America (NABU) • Represents 18%* of revenue • 14% of operating income in Q2 FY11 • Operating margin 16.1% in Q2 FY11 • Additional work from BP in support of the spill control resulted in 6% operating margin increase • Drilling Moratorium was lifted on October 13, 2010 * For the three months ended September 30, 2010 |
![]() 44 Other International (OIBU) • OIBU represents 12%* of revenue for the quarter • 17% of operating income in Q2 FY11 • Operating margin 30.6% in Q2 FY11 • Brazil – Lider: expecting start up of new contracts • Recent contract awards coming on full force • Focused on improving business performance in Trinidad Consolidated in OIBU Unconsolidated Affiliate * For the three months ended September 30, 2010 |
![]() 45 EBITDA and EBITDAR Reconciliations ($ in millions) 2000 2001 2002 2003 2004 Income from continuing operations $8.8 $27.9 $42.5 $40.3 $49.6 Income tax expense 3.8 13.3 19.1 17.5 18.5 Interest expense 18.5 18.4 15.8 14.9 16.8 Depreciation and amortization 32.0 33.1 33.9 37.5 39.4 EBITDA Subtotal 63.1 92.7 111.4 110.2 124.3 Aircraft rental expense – – – – – EBITDAR $63.1 $92.7 $111.4 $110.2 $124.3 ($ in millions) 2005 2006 2007 2008 2009 2010 Income from continuing operations $49.2 $54.5 $72.5 $107.7 $125.5 $113.5 Income tax expense $20.4 $14.7 $38.8 $44.5 $50.5 $29.0 Interest expense $15.7 $14.7 $10.9 $23.8 $35.1 $42.4 Depreciation and amortization 40.5 42.1 42.5 54.1 65.5 74.7 EBITDA Subtotal 125.8 125.9 164.7 230.1 276.7 259.6 Aircraft rental expense – 2.1 6.3 6.3 8.2 8.5 EBITDAR $125.8 $128.0 $171.0 $236.4 $284.9 $268.1 March 31, March 31, ($ in millions) YTD FY10 YTD FY11 Income from continuing operations $57.7 $59.8 Income tax expense 20.7 11.9 Interest expense 20.7 22.4 Depreciation and amortization 36.7 40.3 EBITDA Subtotal 135.8 134.4 Aircraft rental expense 4.9 3.0 EBITDAR $140.7 $137.4 September 30, |
![]() 46 Leverage Reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) As of September, 2010 720.6 $ 1,432.6 $ 2,153.2 $ 33.5% Adjust for: Unfunded Pension Liability 112.6 112.6 NPV of GE and Norsk Lease Obligations 43.5 43.5 Adjusted 876.7 $ (d) 1,432.6 $ 2,309.3 $ 38.0% Calculation of debt to EBITDAR multiple EBITDAR: FY 2011 274.8 $ (e) Annualized 366.4 $ = (d) / (e) 2.13 : 1 |