Third Quarter FY 2011 Earnings Presentation Bristow Group Inc. February 3, 2011 Exhibit 99.1 |
Third quarter earnings call agenda • Introduction (Linda McNeill, Investor Relations Manager) • CEO Remarks (Bill Chiles, President and CEO) • Financial highlights (Jonathan Baliff, SVP and CFO) • Operational highlights (Bill Chiles, President and CEO) • Questions and answers 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; modeling information, expected operating margins and other 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; our use of excess cash; 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 Quarterly Report on Form 10-Q for the quarter ended December 31, 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. 3 |
Chief Executive comments Bill Chiles, President and CEO |
5 Operational safety review Air Accident Rate* per 100,000 Flight Hours (Fiscal Year) 1.17 0.78 0.78 0.00 0.53 0.00 0.00 1.00 2.00 2006 2007 2008 2009 2010 2011 YTD FY11 Total Reportable Injury Rate per 200,000 manhours (cumulative) 0.32 0.16 0.52 0.40 0.32 0.39 0.33 0.34 0.34 0.00 0.50 1.00 A M J J A S O N D J F M FY11 Lost Work Case Rate per 200,000 manhours (cumulative) 0.00 0.00 0.21 0.16 0.13 0.16 0.14 0.13 0.15 0.00 0.50 A M J J A S O N D J F M * Includes commercial operations only |
3Q FY2011 highlights 6 • YTD Earnings per share of $2.77 • 19.4% increase from 9 months ended 3QFY10 • YTD Operating income of $139.9M • 1.3% increase from 9 months ended 3QFY10 • YTD EBITDA of $200M • Relatively flat from 9 months ended 3QFY10 • Improving margins for most of our business units with strength in Europe, West Africa and Other International. • Tax benefit in 3Q FY2011 primarily due to reversal of deferred tax balances recorded in prior fiscal years ($0.45 and $0.47 EPS benefit in 3Q and YTD). • No aircraft sales. • 3Q Earnings per share of $1.13 • 6.6% increase from 2QFY11 • 52.7% increase from 3QFY10 • 3Q Operating income of $46.6M • 12.9% decrease from 2QFY11 • 17.4% increase 3QFY10 • 3Q EBITDA of $65.6M • 12% decrease from 2QFY11 • 1.8% increase from 3QFY10 |
• Oil price strength continues for multiple reasons • Overall international Exploration & Production (E&P) capital expenditure and operating expenditure growth • Recovered in calendar 2010, modest in 2011, and expanding in 2012 • Balanced across non-U.S. geographies although U.S. is challenged • International deepwater exhibiting particularly robust activity • This E&P confidence is reflected in improved helicopter tender activity, principally for FY 2012/2013 work • Although activity and prospects are improving, there is softness in aftermarket for helicopters Current market environment 7 |
Operational performance highlights • Europe Revenue is higher year over year due to better contracting with better operational margins due to efficiency gains and higher equity earnings • West Africa Revenue down, but margins are intact through lower costs even though the lost contract is not fully offset yet. • Australia Revenue increased year over year; however, the competition refocused in recognition of the increase in medium/long term opportunities. Higher compensation costs drove lower EBITDA. • Other International Lider performing well with cash dividend paid; however, near term still materializing at a slower pace. Offset by brisk improvement in other countries. Reduction in Mexico exposure with HC restructuring. • North America Year over year improvement in a challenging environment with sequential weakness intra year. 8 |
9 Consolidated Fleet Changes as of December 31, 2010 (1) Includes aircraft sales, net lease returns/commencements and operated returns Q1 FY2011 Q2 FY2011 Q3 FY2011 Total Fleet Count Beginning Period 390 384 379 390 Delivered Agusta AW 139 1 1 2 4 Sikorsky S-92 1 1 Added 1 1 3 5 Removed (1) (7) (6) (4) (17) Total 384 379 378 378 |
Financial highlights Jonathan Baliff, SVP and CFO |
Financial highlights – Earnings per share summary 3Q FY10 to 3Q FY11 bridge 9 months Q3 FY10 to 9 months Q3 FY11 bridge 11 $0.74 $1.00 $1.21 $1.13 $1.13 $0.74 $0.26 $0.46 $0.25 $0.08 Q3FY2010 Operations Taxes Corporate and Other FX Changes Q3FY2011 $2.32 $2.63 $2.82 $2.77 $2.77 $2.32 $0.31 $0.68 $0.49 $0.05 9 Mos FY2010 Operations Taxes Corporate and Other FX Changes 9 Mos FY2011 |
Financial highlights – EBITDA summary 3Q FY10 to 3Q FY11 bridge 12 9 months Q3 FY10 to 9 months Q3 FY11 bridge $64.4 $69.6 $65.6 $65.6 $64.4 $12.4 $7.2 $4.0 Q3FY2010 Operations Corporate and Other FX Changes Q3FY2011 $220.7 $204.6 $200.0 $200.0 $200.2 $20.5 $16.1 $4.6 9 Mos FY2010 Operations Corporate and Other FX Changes 9 Mos FY2011 |
($101) ($122) ($61) ($43) ($51) $9 ($45) ($24) ($4) $9 ($13) Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Historical cash flow from operations less all capex 13 Historical cash flow from operations less capex ($ millions) • Historically, Bristow has employed cash flow from operations with growth capital expenditures • Driven by fleet modernization catch-up with transitioning to new technology medium and large aircraft. • Non-discretionary (aircraft maintenance and facilities) capital expenditures have been far lower as a percentage of growth capital expenditures • In the future, we do not see the same level of capital spending in as short a period of time |
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 with a $100 million accordion feature • Term loan proceeds and revolver borrowings were used to repay $230 million 6 1/8% senior notes due 2013 on December 23, 2010; revolver also used for general corporate purposes • Initial borrowing margin is LIBOR + 2.50%, but reverse flexing to 2.375% after June 30, 2011 financials are provided to lenders • Leverage ratio pricing grid • Additional indebtedness subject to financial covenants • Enhanced capability for dividends and stock repurchases • Incurred one time charge of 11 cents due to early retirement • ~$7 million pre-tax expected annual cash interest savings at current LIBOR levels 14 |
Total capitalization $2.2 billion (December 31, 2010) $1.5 billion Equity Prudent balance sheet management 15 • Cash on hand at December 31, 2010: $100.9 million • YTD FY11 EBITDAR 1 of $204.4 million • Undrawn borrowing capacity ($132 million revolving credit facility) • Total liquidity 3 : $232.9 million $726 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 3) Total liquidity calculated as undrawn borrowing capacity plus cash on hand Capital Structure • $175 million Revolver November 2015 • $8 million in short-term borrowings and current portion of debt • $717.5 million in long-term debt • 36 million shares of common stock Leverage ratios • Adjusted Debt to Total Capital 37.4% 2 • Adjusted Debt to EBITDAR 3.23:12 |
Other financial information and guidance revisions • Capital allocation framework • Prudent balance sheet management is a core principle • Total liquidity maintained at $200-$250 million • Best risk/return opportunities attract Bristow capital • Balance shareholder return between capital appreciation and regular return of capital • Modeling information • Tax 17% – 21% (assuming revenue earned in the same regions and same mix) • SG & A Expense ~ $125-130 million • Depreciation and amortization expense ~ $85 million • Interest expense ~ $30-35 million 16 |
Operational highlights Bill Chiles, President and CEO |
Quarterly changes Quarter on quarter changes: • 3% increase in the operating income in Europe is due to higher equity earnings from our military training unconsolidated affiliate, price escalations and renegotiated rates. We added three new clients since the prior year quarter • 4% decrease in the operating income in West Africa reflects the loss of a major client in this market. However, lower operating expense combined with the addition of new contracts lessened the impact • 8% decrease in the operating income in Australia is an impact of higher compensation and increased depreciation expense • 9% increase in the operating income (from $5.2M to $11.6M Q over Q) for Other International Business Unit as a result of increased revenue in Brazil, the Baltic Sea, Suriname, Ghana and Russia. • No change in the operating income quarter over quarter in North America 18 Operating Income* Q3 FY2011 North America 3% Europe 41% West Africa 26% Australia 11% Other International 19% Operating Income* Q3 FY2010 North America 3% Europe 38% West Africa 30% Australia 19% Other International 10% Operating income for Q3 2011 is $46.6M Operating income for Q3 2010 is $39.7M * Excludes centralized operations, corporate, gain on sale of assets, and Bristow Academy |
Europe (EBU) UK Netherlands Norway Norwich Aberdeen Scasta Stavanger Den Helder Bergen Hammerfest • Europe represents 42% of total revenue in Q3 FY11 and 41% of operating income • Operating margin 19.6% vs. 16.1% in prior year quarter • Increase in activity with three new client contracts commencing • Operational disruption due to severe weather in December • FBH, unconsolidated JV, military training - higher equity earnings • Outlook: • Several major tender outstanding in UK, Norway and Denmark for FY13 • SAR-H award delayed Operating margins expected for FY11 to be ~ high teens 19 |
West Africa (WASBU) Nigeria Lagos Escravos Port Harcourt Warri Eket Calabar 20 • Nigeria represents 17% of total revenue in Q3 FY11 and 26% of operating income • Operating margin 29.8% in Q3 FY11 vs. 25.5% Q3 prior year • Revenue of $53.7M decreased from $58.7M • Operating income of $16M increased from $14.9M • Lower operating expense • Increased competition and new entrants Outlook: • Awaiting results of recent tenders Operating margins expected in FY11 to be ~ mid twenties |
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 • Australia represented 13% of total revenue in Q3 FY11 and 11% of operating income • Operating margin 17.2% vs. 24.5% for the prior year quarter • Revenue of $41.4M increased from $38.2M • Operating income declined from $9.4M to $7.1M • Higher compensation costs • Older under utilized aircraft to be sold or redeployed • Outlook: Increased competition in market place; loss of Woodside as of May 31, 2011 Operating margins expected for FY11 to be ~ mid teens 21 |
Other International (OIBU) Consolidated in OIBU Unconsolidated Affiliate • OIBU represented 13% of total revenue and 19% of operating income for Q3FY11 • Operating margin was 27.7% vs. 15.5% for the prior year quarter • Revenue increased to $41.9 from $33.3M • Operating income to $11.6M from $5.2M • Increased revenue from Brazil, the Baltic Sea, Suriname, Ghana and Russia • Brazil - Lider: paid previously mentioned dividend for 2009 of $1.4M, $0.8M net (7/12’s of the year) • Lider EBITDA was R$26M reias, which is in line with previously stated run rate of R$8-10M reias/month • Reducing exposure in Mexico Outlook: • Tender activity in Ghana, Equatorial Guinea and Libya • PAS dividend of $2.5 million expected in March 2011 Expect operating margins in FY11 to be ~high teens to lower twenties 22 |
North America (NABU) • Represented 15% of total revenue and 3% of operating income in Q3 FY11 • Operating margin of 4.2% for Q3 FY11 up from 3.3% for the prior year quarter • Revenue of $45.6M flat from $45.7M • Operating income of $1.9M vs. $1.5M • Gulf of Mexico • Continues to be in a state of flux and challenging market • Continues to redeploy aircraft to other regions of the world • 1 aircraft currently working for BP, down from 3 at December 31 and 5 as of September 30 Expect operating margins for FY11 to be single digit for the rest of the year 23 |
Summary 24 Open for Q and A Bristow continues to deliver on our FY2011 promises with third quarter earnings performance improving both year over year and sequentially. Our medium to long term outlook remains strong given better market dynamics |
Appendix 25 |
Organizational Chart - as of December 31, 2010 Bristow NABU 15 %* U . S . GoM – 89 / 7 Trinidad – 8 / 1 Alaska – 15 / 3 Mexico – 21 / 5 Brazil – 6 / 9 Lider - 76 HC - 12 UK – 38 / 3 Netherlands – 6 / 1 Norway – 12 / 3 FBH - 63 Nigeria – 46 / 10 Australia – 35 / 8 Other – 10 / 1 Russia – 7 / 3 Egypt – – / – India – 2 / 2 Turkmenistan – 2 / 1 PAS - 45 AUSBU 13 % EBU 39 % Florida – 56 / 1 Louisiana – 12 / 1 California – 6 / 1 U . K . – 3 / 1 Malaysia – 4 / 2 WASBU 17 % OIBU 14 % BRS Academy 2 % Business Unit (* % of FY10 Revenues) Corporate Region - # of Aircraft / # of Bases Joint Venture (No. of aircraft) Key Operated Aircraft Bristow owns and/or operates 378 aircraft as of December 31, 2010 Affiliated Aircraft Bristow affiliates and joint ventures operate 196 aircraft as of December 31, 2010 26 |
Aircraft Fleet – Medium and Large As of December 31, 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 27 Medium Helicopters AW139 12 Twin Turbine 7 4 11 - Bell 212 12 Twin Turbine 3 22 25 - Bell 412 13 Twin Turbine 40 46 86 - EC155 13 Twin Turbine 4 - 4 - Sikorsky S-76 A/A++ 12 Twin Turbine 21 8 29 - Sikorsky S-76 C/C++ 12 Twin Turbine 51 25 76 3 126 105 231 3 Large Helicopters AS332L Super Puma 18 Twin Turbine 30 - 30 - Bell 214ST 18 Twin Turbine 3 - 3 - EC225 25 Twin Turbine 15 - 15 3 Mil MI 8 20 Twin Turbine 7 - 7 - Sikorsky S-61 18 Twin Turbine 2 - 2 - Sikorsky S-92 19 Twin Turbine 23 1 24 3 80 1 81 6 |
Aircraft Fleet – Small, Training and Fixed As of December 31, 2010 (continued) Next Generation Aircraft Mature Aircraft Models Small capacity 4-7 passengers Training capacity 2-6 passengers 28 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 11 - 11 - Robinson R44 2 Piston 2 - 2 - Sikorsky 300CB/Cbi 2 Piston 51 - 51 - Fixed Wing 1 - 1 - 77 - 77 - - Fixed Wing 3 37 40 - Total 378 196 574 9 |
EBITDA and EBITDAR Reconciliations 29 ($ 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 9.1 EBITDAR $125.8 $128.0 $171.0 $236.4 $284.9 $268.7 March 31, March 31, ($ in millions) YTD FY10 YTD FY11 Income from continuing operations $84.8 $102.1 Income tax expense 26.4 0.0 Interest expense 31.6 36.3 Depreciation and amortization 57.3 61.6 EBITDA Subtotal 200.2 200.0 Aircraft rental expense 7.0 4.4 EBITDAR $207.2 $204.4 December 31, |
ROCE Reconciliation 30 |
ROCE Reconciliation 31 |
ROCE Reconciliation 32 |
Leverage Reconciliation 33 Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) As of December 31, 2010 725.5 $ 1,476.1 $ 2,201.6 $ 33.0% Adjust for: Unfunded Pension Liability 112.2 112.2 NPV of GE and Norsk Lease Obligations 42.6 42.6 Adjusted 880.3 $ (d) 1,476.1 $ 2,356.4 $ 37.4% Calculation of debt to EBITDAR multiple EBITDAR: FY 2011 272.5 $ (e) Annualized 363.4 $ = (d) / (e) 3.23:1 |
Bristow Group Inc. (NYSE: BRS) 2000 West Sam Houston Parkway South Suite 1700, Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com/investorrelations Contact Us 34 |