8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________________________

FORM 8-K

_________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 6, 2014

_________________________________________________

Bristow Group Inc.

(Exact name of registrant as specified in its charter)

_________________________________________________

Delaware  (State or other jurisdiction  of incorporation) 001-31617  (Commission
File Number) 72-0679819  (IRS Employer  Identification No.)

2103 City West Blvd.,  4^th Floor  Houston, Texas  (Address of principal executive offices) 77042  (Zip Code) 

Registrant's telephone number, including area code: (713) 267-7600

Former Name or Former Address, if Changed Since Last Report: NONE

_________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 Results of Operations and Financial Condition.

On February 6, 2014, Bristow Group Inc. (the “Company”) issued a press release that summarized its financial results for the three and nine-month periods ended December 31, 2013 (the “Financial Results”). This press release was issued in anticipation of a conference call and Q&A session starting at 10:00 a.m. ET (9:00 a.m. CT) on Friday, February 7, 2014, to review the Financial Results. A copy of the press release is furnished with this report as Exhibit 99.1, and is incorporated herein by reference.

The press release includes certain “non-GAAP financial measures” under Regulation G of the Securities Exchange Act of 1934 (the “Exchange Act”), including adjusted operating income, adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share (collectively, the “Non-GAAP Measures”). Adjusted EBITDAR is calculated by taking our net income and adjusting for interest expense, depreciation and amortization, rent expense, benefit (provision) for income taxes, gain (loss) on disposal of assets and special items, if any. Additionally, our operating income, net income and diluted earnings per share in this release have been presented in certain instances excluding gain (loss) on disposal of assets and special items detailed in the press release; these items are presented as adjusted operating income, adjusted net income and adjusted diluted earnings per share. Management believes that the Non-GAAP measures provide relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and business unit performance. Adjusted operating income provides us with an understanding of the results from the primary operations of our business by excluding asset disposition effects and special items that do not reflect the ordinary earnings of our helicopter services operations. We believe that this measure is a useful supplemental measure because operating income includes asset disposition effects and special items, and inclusion of these items does not reflect the normal earnings of our business. Adjusted EBITDAR provides us with an understanding of one aspect of earnings before the impact of investing and financing transactions and income taxes. Additionally, we believe that adjusted EBITDAR provides us with a useful supplemental measure of our operational performance by excluding the financing decisions we make regarding aircraft purchasing or leasing decisions. Adjusted EBITDAR should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. Adjusted net income and adjusted diluted earnings per share present our consolidated results excluding asset dispositions and special items that do not reflect the ordinary earnings of our helicopter services operations. We believe that these measures are useful supplemental measures because net income and diluted earnings per share include asset disposition effects and special items, and inclusion of these items does not reflect the predictive ongoing operational earnings of our business. The Non-GAAP measures are not calculated or presented in accordance with GAAP and other companies in our industry may calculate these measures differently than we do. As a result, these financial measures have limitations as analytical and comparative tools and you should not consider these items in isolation, or as a substitute for analysis of our results as reported under GAAP. In calculating these financial measures, we make certain adjustments that are based on assumptions and estimates that may prove to be inaccurate. In addition, in evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of the Non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or special items. Such non-GAAP measures should not be viewed as an alternative to our GAAP financial statements, but should be read as a supplement to, and in conjunction with, our GAAP financial statements.

ITEM 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description of Exhibit
99.1	Press Release summarizing financial results dated February 6, 2014.

Limitation on Incorporation by Reference.

Information on Bristow’s website is not incorporated by reference in this Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Form 8-K and the attached exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933 or the Exchange Act unless Bristow expressly states that such information is to be considered “filed” under the Exchange Act or incorporates it by specific reference in such a filing. The information set forth in Item 2.02 and the related exhibit furnished in Item 9.01 of this report shall not be deemed an admission as to the materiality of any information in this report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BRISTOW GROUP INC.
Date: February 6, 2014	By:	/s/ Brian J. Allman
		Brian J. Allman
		Vice President, Chief Accounting Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

News Release

Linda McNeill

Investor Relations

(713) 267-7622

BRISTOW GROUP REPORTS FINANCIAL RESULTS

FOR ITS 2014 FISCAL THIRD QUARTER AND NINE MONTHS ENDEDDECEMBER 31, 2013

• THIRD QUARTER AND NINE MONTH GAAP NET INCOME OF $18.9 MILLION ($0.51 PER DILUTED SHARE) AND $156.4 MILLION ($4.28 PER DILUTED SHARE)

• THIRD QUARTER AND NINE MONTH ADJUSTED NET INCOME OF $31.3 MILLION ($0.85 PER DILUTED SHARE) AND $113.9 MILLION ($3.11 PER DILUTED SHARE), WHICH EXCLUDES THE IMPACT OF SPECIAL ITEMS AND ASSET DISPOSITIONS

• COMPANY ANNOUNCES ACQUISITION OF 60% INTEREST IN EASTERN AIRLINES IN THE UK, IMMEDIATELY ACCRETIVE TO BVA AND EARNINGS PER SHARE

• COMPANY REAFFIRMS GUIDANCE FOR FULL FISCAL YEAR 2014 ADJUSTED EPS OF $4.25 - $4.55

HOUSTON, February 6, 2014 – Bristow Group Inc. (NYSE: BRS) today reported net income for the December2013 quarter of $18.9 million, or $0.51 per diluted share, compared to net income of $36.4 million, or $1.00 per diluted share, in the same period a year ago.

Adjusted net income, which excludes special items and asset disposition effects, decreased 27% to $31.3 million, or $0.85 per diluted share, for the December2013 quarter, compared to $42.6 million, or $1.17 per diluted share, in the December2012 quarter.

Adjusted earnings before interest, taxes, depreciation, amortization and rent (“adjusted EBITDAR”), which also excludes special items and asset disposition effects, was $100.7 million for the December2013 quarter compared to $109.2 million in the same period a year ago, a decrease of 8%. Net cash provided by operating activities totaled $137.3 million for the nine months ended December 31, 2013, compared to $202.7 million for the same period a year ago.

The decrease in adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share for the December2013 quarter compared to the December2012 quarter was primarily driven by certain contract revenue being delayed from the December 2013 quarter to the March 2014 quarter, leading to LACE rate declines while overall costs increased slightly on a sequential basis versus the September 2013 quarter; specifics include:

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• A decrease in operating revenue of $6.9 million in our Australia business unit primarily resulting from the ending of short-term contracts, while overall maintenance expense remained flat and labor costs increased in anticipation of new contracts that start during the fourth quarter of fiscal year 2014 and early fiscal year 2015, and

• An increase in operating expense of $3.4 million in our Other International business unit due to start up of operations in a new market with revenue to follow in the fourth quarter;

We also saw additional expenses in the December 2013 quarter including:

• Maintenance expense of $9.5 million and labor costs of $9.0 million in our Europe business unit, which primarily resulted from the return to service of Eurocopter EC225 aircraft in this market, and costs associated with our Sikorsky S-92 fleet in Norway,

• An increase in labor costs in our West Africa business unit of $2.6 million, and

• An increase in general and administrative expense at the corporate level of $3.3 million primarily due to higher incentive compensation levels driven by a year-over-year increase in BVA and improved stock price.

“Our fiscal third quarter saw margin declines as we experienced delays in some contract work that shifted into the next quarter, incurred costs as we commenced operations with new aircraft in new locations like Tanzania and incurred costs with the return to service of our EC225 fleet. However, we continue to see growth for our premier service offerings into the future,” said William E. Chiles, President and Chief Executive Officer of Bristow Group. “Our expectations for a strong fourth quarter allow us to reaffirm our adjusted EPS guidance for fiscal year 2014 at $4.25 - $4.55.”

THIRD QUARTER FY2014 RESULTS

• Operating revenue increased 8% to $373.6 million compared to $346.7 million in the same period a year ago.

• Operating income decreased 60% to $29.5 million compared to $74.1 million in the December2012 quarter.

• GAAP net income decreased by 48% to $18.9 million, or $0.51 per diluted share, compared to $36.4 million, or $1.00 per diluted share, in the December2012 quarter.

• GAAP results for the December2013 quarter were affected by the following items that are excluded from our adjusted non-GAAP financial measures for the quarter:

◦ Lower earnings from Líder of $19.3 million related to a payment made by Líder under a tax amnesty program in November 2013 and related tax expense recorded by Líder. This special item decreased net income by $12.6 million and earnings per share by $0.34,

◦ A gain on disposal of assets of $4.0 million compared to a gain of $7.4 million in the December2012 quarter,

◦ A charge of $2.1 million in direct costs related to the restructuring of our North America business unit and the planned closure of our Alaska operations which related primarily to employee severance and retention costs. We expect to incur approximately $2.1 million in additional costs related mostly to severance and retention through August 2014 to provide services for the remaining Alaska contracts and to close our operations, and

◦ A charge of $2.1 million in direct costs related to severance costs in the Southern North Sea.

• Adjusted net income, which also excludes special items and asset disposition effects, decreased 27% to $31.3 million, or $0.85 per diluted share, compared to $42.6 million, or $1.17 per diluted share, in the December2012 quarter.

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• Adjusted EBITDAR, which excludes special items and asset disposition effects, decreased 8% to $100.7 million compared to $109.2 million in the same period a year ago.

• Cash as of December 31, 2013 totaled $323.2 million compared to $215.6 million as of March 31, 2013. Our total liquidity, including cash on hand and availability on our revolving credit facility, was $617.2 million as of December 31, 2013 compared to $415.0 million as of March 31, 2013, a 49% increase.

THIRD QUARTER FY2014 BUSINESS UNIT RESULTS

Europe Business Unit

The net addition of eight large aircraft, along with an overall increase in activity with existing clients and new contracts primarily in the U.K. Northern North Sea, resulted in increased revenue of $22.3 million and were the primary contributors to revenue growth in our Europe Business Unit. We increased our fleet in this region by executing operating leases for new large oil and gas aircraft beginning in late fiscal year 2012 and continuing through the December 2013 quarter, with the addition of the four search and rescue (“SAR”) aircraft. Adjusted EBITDAR increased almost 14% year-over-year; however, adjusted EBITDAR margin decreased to 35.3% in the December2013 quarter compared to 39.5% in the December2012 quarter primarily due to maintenance and salary increases year over year. Sequential quarterly adjusted EBITDAR margins remained flat at 35.3% in both the December and September 2013 quarters.

West Africa Business Unit

Pricing improvements drove revenue increases in our West Africa Business Unit, leading to a 3.8% increase in operating revenue for the December2013 quarter compared to the December2012 quarter. However, an increase in salaries and benefits resulted in a 0.8% decrease in adjusted EBITDAR compared with the December2012 quarter as well as a decrease in adjusted EBITDAR margin to 33.5% for the December2013 quarter compared to 35.0% for the December2012 quarter. Sequentially, quarterly adjusted EBITDAR margin increased to 33.5% for the December2013 quarter compared to 30.4% for the September 2013 quarter primarily due to lower training, travel and maintenance expense.

North America Business Unit

The decrease in small aircraft on contract in the U.S. Gulf of Mexico, partially offset by an increase in medium and large aircraft in this business unit, drove the reduction in our revenue in North America. However, North America’s adjusted EBITDAR and adjusted EBITDAR margin improved to $18.2 million and 33.1%, respectively, in the December2013 quarter compared to $17.3 million and 29.1%, respectively, in the December2012 quarter, driven primarily by a lower level of bad debt expense in the December 2013 quarter, an increase in earnings from unconsolidated affiliates, net of losses, related to our Cougar investment and an increase in the number of large and medium aircraft on contract in the U.S. Gulf of Mexico. Sequentially, adjusted EBITDAR margin improved to 33.1% in the December 2013 quarter compared to 31.0% in the September 2013 quarter primarily due to higher equity earnings from our investment in Cougar.

We recognize that the current operating environment in the North America business unit is challenging for our fleet mix and we are proactively restructuring our business by exiting the Alaska market and selling smaller aircraft with a long-term strategy of operating larger aircraft to service deepwater client contracts in the U.S. Gulf of Mexico.

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Australia Business Unit

Operating revenue for our Australia Business Unit decreased 16.7% to $34.6 million in the December2013 quarter from $41.6 million in the December2012 quarter due to the end of short-term contracts and the impact of foreign currency exchange rate changes. Further, as a result of costs incurred in the December2013 quarter in anticipation of client contracts that start in the fourth quarter of this current fiscal year and fiscal year 2015, adjusted EBITDAR and adjusted EBITDAR margin decreased in the December 2013 quarter to $5.2 million and 15.0%, respectively, from $11.4 million and 27.3%, respectively, in the December2012 quarter. We continue to incur salaries and benefits, depreciation, insurance, training and lease costs in anticipation of the new contracts that start during the fourth quarter of fiscal year 2014 and fiscal year 2015.

Other International Business Unit

Operating revenue for our Other International Business Unit decreased slightly due to a decline in aircraft on contract in Malaysia partially offset by increased activity in Trinidad and Brazil. Adjusted EBITDAR and adjusted EBITDAR margin for the December 2013 quarter decreased to $10.2 million and 33.2%, respectively, compared to $17.8 million and 55.7%, respectively, in the December 2012 quarter, primarily due to a decline in activity in Malaysia and an increase in mobilization costs in Tanzania for a new contract that began in January 2014, partially offset by increased activity in Trinidad and Brazil.

CEO SUCCESSION

On February 3, 2014, the Company announced that William E. Chiles will resign as President and Chief Executive Officer of the Company effective upon the conclusion of the 2014 annual meeting of the stockholders of the Company, and he has elected not to run for re-election and will not continue to serve as a director after that meeting. Following his resignation as an officer, Mr. Chiles will remain an employee of the Company and will provide consulting services to the Company.

Jonathan E. Baliff has been appointed President and Chief Executive Officer to succeed Mr. Chiles effective immediately following the annual meeting.  The Company also expects to nominate Mr. Baliff as a member of the Board of Directors of the Company effective for the term beginning upon the conclusion of the 2014 annual meeting.

“After ten years at Bristow, I am excited about the time ahead for the Company and our industry as the organization transitions to new leadership. I know I will be leaving this organization in the capable hands of Jonathan Baliff, a world class senior management team and dedicated employees across the globe,” said William E. Chiles.

GUIDANCE

We are reaffirming our adjusted diluted earnings per share guidance for the full fiscal year 2014 of $4.25 to $4.55, reflecting our expectation of strong operating performance in our fiscal fourth quarter.

“Despite the impact of the timing of contract start-up and other costs during the third quarter of fiscal 2014, we expect our results for the full year to be within the guidance range provided in November 2013. This highlights our focus on long-term value as we manage our business with a focus on annual and not quarterly results. Our continued improvement in operating and commercial performance has delivered strong nine-month year-to-date financial results, as seen in the over 11% growth in adjusted EBITDAR and over 12% growth in adjusted EPS for the nine months ended December 31, 2013 compared to the same period a year ago,” said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group.

“We continue to focus on safety, client service and top line growth, which we’ve seen across many of our business units, mostly in Europe in the third quarter. This growth, combined with increased overall liquidity of $202 million, has us well positioned for further growth in the oil and gas sector and for civilian SAR, while also providing funds for acquisitions and opportunistic share buybacks, both of which we executed on this quarter.”

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As a reminder, our adjusted diluted earnings per share guidance excludes the effect of special items and asset dispositions because their timing and amounts are more variable and less predictable. Further, this guidance is based on current foreign currency exchange rates. In providing this guidance, we have not included the impact of any changes in accounting standards or significant acquisitions and divestitures. Events or other circumstances that we do not currently anticipate or cannot predict, including any issues involved with the return to full revenue service of the EC225 aircraft and changes in the market and industry, could result in earnings per share for fiscal year 2014 that are significantly above or below this guidance. Factors that could cause such changes are described below under the Forward-Looking Statements Disclosure and the Risk Factors in our quarterly report on Form 10-Q for the quarter ended September 30, 2013 and annual report on Form 10-K for the fiscal year ended March 31, 2013.

DIVIDEND AND SHARE REPURCHASE

On February 5, 2014, our Board of Directors approved our twelfth consecutive quarterly dividend. This dividend of $0.25 per share will be paid on March 14, 2014 to shareholders of record on February 28, 2014 and is 67% higher than the first dividend paid in June 2011. Based on shares outstanding as of December 31, 2013, the total quarterly dividend payment will be approximately $9.1 million. Additionally, during the December 2013 quarter, we spent $16.5 million to repurchase 215,310 shares of our Common Stock. Subsequently, in January 2014, we spent an additional $16.9 million to repurchase another 230,490 shares of our Common Stock. On February 5, 2014, our Board of Directors approved an increase of the remaining repurchase amount of our Common Stock to up to $100 million through November 5, 2014.

EASTERN AIRWAYS TRANSACTION

On February 6, 2014, Bristow Helicopters Limited (“Bristow Helicopters”) acquired a 60% interest in the privately owned Eastern Airways International Limited (“Eastern Airways”) for cash of £27 million ($45 million) with possible earn out consideration of up to £6 million ($10 million) to be paid over a three year period based on the achievement of specified financial performance thresholds. In addition, Bristow Helicopters entered into agreements with the other stockholders of Eastern Airways that grant Bristow Helicopters the right to buy all of their Eastern Airways shares (and grant them the right after seven years to require Bristow Helicopters to buy all of their shares) and include transfer restrictions and other customary provisions. Eastern Airways is a regional fixed wing operator based at Humberside Airport located in North Lincolnshire, England with both charter and scheduled services targeting U.K. oil and gas industry transport. We believe this investment will strengthen Bristow Helicopters’ ability to provide a complete suite of point to point transportation services for existing European based passengers, expand helicopter services in certain areas like the Shetland Islands and create a more integrated logistics solution for global clients.

The acquisition of Eastern Airways will be accounted for under the purchase method and the results will be consolidated from the date of acquisition in the Europe business unit. The purchase price will be allocated based on the fair value of assets acquired and liabilities assumed as of the acquisition date.

We expect this acquisition will contribute approximately $160 million in operating revenue and $25 million of adjusted EBITDAR on an annual basis.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Friday, February 7, 2014 to review financial results for the fiscal year 2014 third quarter ended December 31, 2013. This release and the most recent investor slide presentation are available in the investor relations area of our web page at www.bristowgroup.com. The conference call can be accessed as follows:

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Via Webcast:

• Visit Bristow Group’s investor relations Web page at www.bristowgroup.com

• Live: Click on the link for “Bristow Group Fiscal 2014 Third Quarter Earnings Conference Call”

• Replay: A replay via webcast will be available approximately one hour after the call’s completion and will be accessible for approximately 90 days

Via Telephone within the U.S.:

• Live: Dial toll free 1-877-941-9205

• Replay: A telephone replay will be available through February 21, 2014 and may be accessed by calling toll free 1-800-406-7325, passcode: 4662021#

Via Telephone outside the U.S.:

• Live: Dial 1-480-629-9726

• Replay: A telephone replay will be available through February 21, 2014 and may be accessed by calling 1-303-590-3030, passcode: 4662021#

ABOUT BRISTOW GROUP INC.

Bristow Group Inc. is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated and one of two helicopter service providers to the offshore energy industry with global operations. The Company has major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, and in most of the other major offshore oil and gas producing regions of the world, including Australia, Brazil, Canada, Russia and Trinidad.  For more information, visit the Company’s website at www.bristowgroup.com.

FORWARD-LOOKING STATEMENTS DISCLOSURE

Statements contained in this news release that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. These forward-looking statements include statements regarding earnings guidance, EC225 return to service, capital allocation strategy, operational and capital performance, shareholder return, liquidity and market and industry conditions. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Risks and uncertainties include without limitation: fluctuations in the demand for our services; fluctuations in worldwide prices of and demand for natural gas and oil; fluctuations in levels of natural gas and oil exploration and development activities; the impact of competition; actions by customers; the risk of reductions in spending on helicopter services by governmental agencies; changes in tax and other laws and regulations; changes in foreign exchange rates and controls; risks associated with international operations; operating risks inherent in our business, including the possibility of declining safety performance; general economic conditions including the capital and credit markets; our ability to obtain financing; the risk of grounding of segments of our fleet for extended periods of time or indefinitely; our ability to re-deploy our aircraft to regions with greater demand; our ability to acquire additional aircraft and dispose of older aircraft through sales into the aftermarket; the possibility that we do not achieve the anticipated benefit of our fleet investment program; availability of employees; and political instability, war or acts of terrorism in any of the countries where we operate. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including but not limited to the Company’s quarterly report on Form 10-Q for the quarter ended December 31, 2013 and annual report on Form 10-K for the fiscal year ended March 31, 2013. Bristow Group Inc. disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.

(financial tables follow)

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BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

(Unaudited)

	Three Months Ended   December 31,						Nine Months Ended   December 31,
	2013			2012			2013			2012
Gross revenue:
Operating revenue from non-affiliates	$	351,193		$	326,481		$	1,041,290		$	960,993
Operating revenue from affiliates	22,371			20,199			70,451			32,292
Reimbursable revenue from non-affiliates	38,760			41,657			116,840			123,330
Reimbursable revenue from affiliates	11			132			76			216
	412,335			388,469			1,228,657			1,116,831
Operating expense:
Direct cost	261,590			224,739			773,612			672,002
Reimbursable expense	36,677			39,434			109,734			118,240
Depreciation and amortization	23,655			24,867			70,332			69,560
General and administrative	48,948			41,623			135,735			114,308
	370,870			330,663			1,089,413			974,110
Gain (loss) on disposal of assets	3,982			7,396			(803		)	819
Earnings from unconsolidated affiliates, net of losses	(15,945		)	8,918			1,115			17,901
Operating income	29,502			74,120			139,556			161,441
Interest income	407			134			1,288			485
Interest expense	(7,253		)	(14,742		)	(36,701		)	(32,113		)
Extinguishment of debt	—			(14,932		)	—			(14,932		)
Gain on sale of unconsolidated affiliate	—			—			103,924			—
Other income (expense), net	(696		)	(106		)	(575		)	(1,255		)
Income before provision for income taxes	21,960			44,474			207,492			113,626
Provision for income taxes	(2,946		)	(7,788		)	(51,682		)	(22,310		)
Net income	19,014			36,686			155,810			91,316
Net (income) loss attributable to noncontrolling interests	(87		)	(294		)	609			(1,594		)
Net income attributable to Bristow Group	$	18,927		$	36,392		$	156,419		$	89,722
Earnings per common share:
Basic	$	0.52		$	1.01		$	4.32		$	2.50
Diluted	$	0.51		$	1.00		$	4.28		$	2.45
Non-GAAAP measures:
Adjusted operating income	$	49,056		$	66,724		$	165,293		$	160,000
Adjusted operating margin	13.1		%	19.2		%	14.9		%	16.1		%
Adjusted EBITDAR	$	100,677		$	109,223		$	310,968		$	277,950
Adjusted EBITDAR margin	27.0		%	31.5		%	28.0		%	28.0		%
Adjusted net income	$	31,331		$	42,632		$	113,891		$	101,304
Adjusted diluted earnings per share	$	0.85		$	1.17		$	3.11		$	2.77

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BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	December 31,   2013			March 31,    2013
ASSETS
Current assets:
Cash and cash equivalents	$	323,230		$	215,623
Accounts receivable from non-affiliates	247,859			254,520
Accounts receivable from affiliates	7,453			8,261
Inventories	161,065			153,969
Assets held for sale	22,195			8,290
Prepaid expenses and other current assets	40,414			35,095
Total current assets	802,216			675,758
Investment in unconsolidated affiliates	255,267			272,123
Property and equipment – at cost:
Land and buildings	118,719			108,593
Aircraft and equipment	2,541,382			2,306,054
	2,660,101			2,414,647
Less – Accumulated depreciation and amortization	(530,148		)	(493,575		)
	2,129,953			1,921,072
Goodwill	30,096			28,897
Other assets	59,202			52,842
Total assets	$	3,276,734		$	2,950,692
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Accounts payable	$	60,048		$	69,821
Accrued wages, benefits and related taxes	66,528			56,084
Income taxes payable	20,304			11,659
Other accrued taxes	7,578			7,938
Deferred revenue	22,899			21,646
Accrued maintenance and repairs	16,815			15,391
Accrued interest	8,186			14,249
Other accrued liabilities	26,499			20,714
Deferred taxes	2,251			—
Short-term borrowings and current maturities of long-term debt	8,310			22,323
Deferred sale leaseback advance	81,372			—
Total current liabilities	320,790			239,825
Long-term debt, less current maturities	833,285			764,946
Accrued pension liabilities	124,974			126,647
Other liabilities and deferred credits	88,768			57,196
Deferred taxes	145,984			151,121
Stockholders’ investment:
Common stock	373			367
Additional paid-in capital	757,213			731,883
Retained earnings	1,223,904			1,094,803
Accumulated other comprehensive loss	(184,042		)	(199,683		)
Treasury shares	(42,848		)	(26,304		)
Total Bristow Group stockholders’ investment	1,754,600			1,601,066
Noncontrolling interests	8,333			9,891
Total stockholders’ investment	1,762,933			1,610,957
Total liabilities and stockholders’ investment	$	3,276,734		$	2,950,692

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BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended   December 31,
	2013			2012
Cash flows from operating activities:
Net income	$	155,810		$	91,316
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	70,332			69,560
Deferred income taxes	(3,132		)	(5,170		)
Write-off of deferred financing fees	12,733			2,889
Discount amortization on long-term debt	2,719			2,663
(Gain) loss on disposal of assets	803			(819		)
Gain on sale of unconsolidated affiliate	(103,924		)	—
Extinguishment of debt	—			14,932
Stock-based compensation	10,694			9,008
Equity in earnings from unconsolidated affiliates (in excess of) less than dividends received	7,926			(4,343		)
Tax benefit related to stock-based compensation	(5,328		)	(361		)
Increase (decrease) in cash resulting from changes in:
Accounts receivable	31,786			6,732
Inventories	1,258			(10,039		)
Prepaid expenses and other assets	(4,002		)	(8,038		)
Accounts payable	(31,727		)	2,554
Accrued liabilities	4,868			28,029
Other liabilities and deferred credits	(13,517		)	3,810
Net cash provided by operating activities	137,299			202,723
Cash flows from investing activities:
Capital expenditures	(526,048		)	(427,370		)
Proceeds from asset dispositions	244,867			130,922
Proceeds from sale of unconsolidated affiliate	112,210			—
Investment in unconsolidated affiliate	—			(51,179		)
Net cash used in investing activities	(168,971		)	(347,627		)
Cash flows from financing activities:
Proceeds from borrowings	283,977			675,000
Debt issuance costs	(15,152		)	(10,345		)
Repayment of debt	(232,063		)	(549,234		)
Partial prepayment of put/call obligation	(42		)	(48		)
Acquisition of non-controlling interest	(2,078		)	—
Proceeds from assignment of aircraft purchase agreements	106,113			—
Repurchase of common stock	(16,544		)	(1,218		)
Common stock dividends paid	(27,318		)	(21,509		)
Issuance of common stock	14,368			11,515
Tax benefit related to stock-based compensation	5,328			361
Net cash provided by financing activities	116,589			104,522
Effect of exchange rate changes on cash and cash equivalents	22,690			10,730
Net increase (decrease) in cash and cash equivalents	107,607			(29,652		)
Cash and cash equivalents at beginning of period	215,623			261,550
Cash and cash equivalents at end of period	$	323,230		$	231,898

9

BRISTOW GROUP INC. AND SUBSIDIARIES

SELECTED OPERATING DATA

(In thousands, except flight hours and percentages)

(Unaudited)

	Three Months Ended   December 31,						Nine Months Ended   December 31,
	2013			2012			2013			2012
Flight hours (excluding Bristow Academy and unconsolidated affiliates):
Europe	16,428			14,399			49,593			47,535
West Africa	11,485			11,060			34,597			32,449
North America	12,345			17,159			44,686			57,889
Australia	2,406			3,247			7,463			9,000
Other International	3,584			3,868			10,582			13,026
Consolidated	46,248			49,733			146,921			159,899
Operating revenue:
Europe	$	158,458		$	124,418		$	451,969		$	372,646
West Africa	79,421			76,541			231,075			208,169
North America	54,916			59,327			173,504			168,934
Australia	34,606			41,554			108,145			118,173
Other International	30,778			31,983			95,821			97,295
Corporate and other	16,321			13,786			54,229			30,023
Intra-business unit eliminations	(936		)	(929		)	(3,002		)	(1,955		)
Consolidated	$	373,564		$	346,680		$	1,111,741		$	993,285
Operating income (loss):
Europe	$	29,729		$	31,235		$	82,708		$	80,119
West Africa	21,777			22,883			59,261			52,444
North America	6,666			8,560			23,953			21,165
Australia	(1,027		)	6,237			4,761			19,575
Other International	(12,808		)	13,754			14,288			31,495
Corporate and other	(18,817		)	(15,945		)	(44,612		)	(44,176		)
Gain (loss) on disposal of assets	3,982			7,396			(803		)	819
Consolidated	$	29,502		$	74,120		$	139,556		$	161,441
Operating margin:
Europe	18.8		%	25.1		%	18.3		%	21.5		%
West Africa	27.4		%	29.9		%	25.6		%	25.2		%
North America	12.1		%	14.4		%	13.8		%	12.5		%
Australia	(3.0		)%	15.0		%	4.4		%	16.6		%
Other International	(41.6		)%	43.0		%	14.9		%	32.4		%
Consolidated	7.9		%	21.4		%	12.6		%	16.3		%
Adjusted EBITDAR:
Europe	$	55,995		$	49,095		$	152,677		$	132,004
West Africa	26,601			26,826			73,396			65,286
North America	18,150			17,279			53,865			41,246
Australia	5,187			11,351			19,374			32,442
Other International	10,214			17,814			43,532			43,529
Corporate and other	(15,470		)	(13,142		)	(31,876		)	(36,557		)
Consolidated	$	100,677		$	109,223		$	310,968		$	277,950
Adjusted EBITDAR margin:
Europe	35.3		%	39.5		%	33.8		%	35.4		%
West Africa	33.5		%	35.0		%	31.8		%	31.4		%
North America	33.1		%	29.1		%	31.0		%	24.4		%
Australia	15.0		%	27.3		%	17.9		%	27.5		%
Other International	33.2		%	55.7		%	45.4		%	44.7		%
Consolidated	27.0		%	31.5		%	28.0		%	28.0		%

10

BRISTOW GROUP INC. AND SUBSIDIARIES

AIRCRAFT COUNT

As of December 31, 2013

(Unaudited)

			Aircraft in Consolidated Fleet
	Percentage of Current Period Operating Revenue		Helicopters
			Small	Medium	Large	Training	Fixed Wing		Unconsolidated Affiliates (3)
								Total (1)(2)		Total
Europe	41	%	—	9	56	—	—	65	—	65
West Africa	21	%	9	27	7	—	3	46	—	46
North America	16	%	50	25	12	—	—	87	—	87
Australia	10	%	2	7	16	—	—	25	—	25
Other International	8	%	2	32	13	—	—	47	126	173
Corporate and other	4	%	—	—	—	75	—	75	—	75
Total	100	%	63	100	104	75	3	345	126	471
Aircraft not currently in fleet: (4)
On order			—	12	35	—	—	47
Under option			—	22	35	—	—	57

_________

⁽¹⁾  Includes 21 aircraft held for sale and 81 leased aircraft as follows:

	Held for Sale Aircraft in Consolidated Fleet
	Helicopters
	Small	Medium	Large	Training	Fixed Wing	Total
Europe	—	—	2	—	—	2
West Africa	—	2	—	—	—	2
North America	11	—	—	—	—	11
Australia	—	—	—	—	—	—
Other International	1	3	—	—	—	4
Corporate and other	—	—	—	2	—	2
Total	12	5	2	2	—	21
	Leased Aircraft in Consolidated Fleet
	Helicopters
	Small	Medium	Large	Training	Fixed Wing	Total
Europe	—	1	21	—	—	22
West Africa	—	1	1	—	—	2
North America	4	13	3	—	—	20
Australia	2	2	4	—	—	8
Other International	—	—	—	—	—	—
Corporate and other	—	—	—	29	—	29
Total	6	17	29	29	—	81

⁽²⁾  The average age of our fleet, excluding training aircraft, was 11 years as of December 31, 2013.

⁽³⁾  The 126 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us. Includes 56 helicopters (primarily medium) and 27 fixed wing aircraft owned and managed by Líder, our unconsolidated affiliate in Brazil, which is included in our Other International business unit. On July 14, 2013, we sold our interest in an unconsolidated affiliate operating 64 aircraft in Europe.

⁽⁴⁾  This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option.

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BRISTOW GROUP INC. AND SUBSIDIARIES

GAAP RECONCILIATIONS

These financial measures have not been prepared in accordance with generally accepted accounting principles (“GAAP”) and have not been audited or reviewed by our independent auditor. These financial measures are therefore considered non-GAAP financial measures. A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:

	Three Months Ended   December 31,						Nine Months Ended   December 31,
	2013			2012			2013			2012
	(In thousands, except  per share amounts)
Adjusted operating income	$	49,056		$	66,724		$	165,293		$	160,000
Gain (loss) on disposal of assets	3,982			7,396			(803		)	819
Special items	(23,536		)	—			(24,934		)	622
Operating income	$	29,502		$	74,120		$	139,556		$	161,441
Adjusted EBITDAR	$	100,677		$	109,223		$	310,968		$	277,950
Gain (loss) on disposal of assets	3,982			7,396			(803		)	819
Special items	(23,536		)	(14,932		)	78,990			(14,310		)
Depreciation and amortization	(23,655		)	(24,867		)	(70,332		)	(69,560		)
Rent expense	(28,255		)	(17,604		)	(74,630		)	(49,160		)
Interest expense	(7,253		)	(14,742		)	(36,701		)	(32,113		)
Provision for income taxes	(2,946		)	(7,788		)	(51,682		)	(22,310		)
Net income	$	19,014		$	36,686		$	155,810		$	91,316
Adjusted net income	$	31,331		$	42,632		$	113,891		$	101,304
Gain (loss) on disposal of assets	3,146			6,101			(634		)	658
Special items	(15,550		)	(12,341		)	43,162			(12,240		)
Net income attributable to Bristow Group	$	18,927		$	36,392		$	156,419		$	89,722
Adjusted diluted earnings per share	$	0.85		$	1.17		$	3.11		$	2.77
Gain (loss) on disposal of assets	0.09			0.17			(0.02		)	0.02
Special items	(0.42		)	(0.34		)	1.18			(0.33		)
Diluted earnings per share	0.51			1.00			4.28			2.45

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	Three Months Ended   December 31, 2013
	Adjusted Operating Income			Adjusted EBITDAR			Adjusted Net Income			Adjusted Diluted Earnings Per Share
	(In thousands, except per share amounts)
North America restructuring (1)	$	(2,101	)	$	(2,101	)	$	(1,366	)	$	(0.04	)
Líder taxes (2)	(19,335		)	(19,335		)	(12,567		)	(0.34		)
Severance costs in the Southern North Sea (3)	(2,100		)	(2,100		)	(1,617		)	(0.04		)
Total special items	$	(23,536	)	$	(23,536	)	$	(15,550	)	(0.42		)
	Three Months Ended   December 31, 2012
	Adjusted Operating Income			Adjusted EBITDAR			Adjusted Net Income			Adjusted Diluted Earnings Per Share
	(In thousands, except per share amounts)
7 ½% Senior Notes retirement (4)	$	—		$	(14,932	)	$	(11,377	)	$	(0.31	)
364-Day Term Loan financing fees (5)	—			—			(964		)	(0.03		)
Total special items	$	—		$	(14,932	)	$	(12,341	)	(0.34		)
	Nine Months Ended   December 31, 2013
	Adjusted Operating Income			Adjusted EBITDAR			Adjusted Net Income			Adjusted Diluted Earnings Per Share
	(In thousands, except per share amounts)
Gain on sale of unconsolidated affiliate (6)	$	—		$	103,924		$	67,897		$	1.86
Cancellation of potential financing (7)	—			—			(8,276		)	(0.23		)
Inventory allowances (8)	(2,364		)	(2,364		)	(1,536		)	(0.04		)
North America restructuring (1)	(2,650		)	(2,650		)	(1,723		)	(0.05		)
Líder taxes (2)	(17,820		)	(17,820		)	(11,583		)	(0.32		)
Severance costs in the Southern North Sea (3)	(2,100		)	(2,100		)	(1,617		)	(0.04		)
Total special items	$	(24,934	)	$	78,990		$	43,162		1.18
	Nine Months Ended   December 31, 2012
	Adjusted Operating Income			Adjusted EBITDAR			Adjusted Net Income			Adjusted Diluted Earnings Per Share
	(In thousands, except per share amounts)
Líder correction (9)	$	2,784		$	2,784		$	1,809		$	0.05
Severance costs in the Southern North Sea (10)	(2,162		)	(2,162		)	(1,708		)	(0.05		)
7 ½% Senior Notes retirement (4)	—			(14,932		)	(11,377		)	(0.31		)
364-Day Term Loan financing fees (5)	—			—			(964		)	(0.03		)
Total special items	$	622		$	(14,310	)	$	(12,240	)	(0.33		)

_________

⁽¹⁾  Relates to a charges associated with the restructuring of our North America business unit and planned closure of our Alaska operations which related primarily to employee severance and retention costs.

⁽²⁾  Relates to a payment Líder made to the government of Brazil for tax amnesty resulting in a $19.3 million impact for the December 2013 quarter and $17.8 million impact for the nine months ended December 31, 2013.

⁽³⁾  Relates to $2.1 million of severance costs in the Southern North Sea in the December 2013 quarter.

⁽⁴⁾  Relates to $14.9 million in redemption premium and fess as a result of the early redemption of our 7 ½ Senior Notes.

⁽⁵⁾  Relates to a charge to interest expense of $1.5 million for the write-off of deferred financing fees for our 364-Day Credit Agreement.

⁽⁶⁾  Relates to a gain resulting from the sale of our 50% interest in the FB Entities for £74 million, or approximately $112.2 million.

13

⁽⁷⁾  Relates to a charge to interest expense of $12.7 million, resulting from the write-off of unamortized deferred financing fees related to a potential financing in connection with our bid to provide SAR services in the U.K. During the June 2013 quarter, we increased our borrowing capacity on our revolving credit facility from $200 million to $350 million and cancelled this potential financing.

⁽⁸⁾  During the nine months ended December 31, 2013, we increased our inventory allowance by $2.4 million as a result of our review of excess inventory on aircraft model types we ceased ownership of or classified all or a significant portion of as held for sale. A majority of this allowance relates to small aircraft types operating primarily in our North America business unit as we continue to move toward operating a fleet of mostly large and medium aircraft in this market.

⁽⁹⁾  Relates to a calculation error related to Líder that affected our earnings from unconsolidated affiliate by $2.8 million.

⁽¹⁰⁾  Relates to $2.2 million of severance costs related to the termination of a contract in the Southern North Sea in the September 2012 quarter.

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