COMMITMENTS AND CONTINGENCIES

Aircraft Purchase Contracts — As shown in the table below, we expect to make additional capital expenditures over the next five fiscal years to purchase additional aircraft. As of March 31, 2016, we had 36 aircraft on order and options to acquire an additional 14 aircraft. Although a similar number of our existing aircraft may be sold during the same period, the additional aircraft on order will provide incremental fleet capacity in terms of revenue and operating income.



	Fiscal Year Ending March 31,
	2017		2018		2019		2020 and beyond		Total
Commitments as of March 31, 2016: ⁽¹⁾
Number of aircraft:
Medium	10		—		—		—		10
Large	—		5		4		9		18
U.K. SAR	4		4		—		—		8
	14		9		4		9		36
Related expenditures (in thousands)⁽²⁾
Medium and large	$	49,746	$	66,044	$	60,455	$	109,341	$	285,586
U.K. SAR	55,503		58,208		—		—		113,711
	$	105,249	$	124,252	$	60,455	$	109,341	$	399,297
Options as of March 31, 2016:
Number of aircraft:
Medium	—		6		—		—		6
Large	—		6		2		—		8
	—		12		2		—		14

Related expenditures (in thousands) ⁽²⁾	$	61,629	$	179,471	$	30,410	$	—	$	271,510

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⁽¹⁾	Signed client contracts are currently in place that will utilize eight of these aircraft.


⁽²⁾	Includes progress payments on aircraft scheduled to be delivered in future periods.

The following chart presents an analysis of our aircraft orders and options during fiscal years 2016, 2015 and 2014:



	Fiscal Year Ended March 31,
	2016				2015				2014
	Orders		Options		Orders		Options		Orders		Options
Beginning of fiscal year	45		30		43		55		45		70
Aircraft delivered	(8	)	—		(18	)	—		(21	)	—
Aircraft ordered	—		—		8		—		18		—
New options	—		4		—		—		—		—
Exercised options	(1	)	—		12		(12	)	8		(8	)
Expired options	—		(20	)	—		(13	)	—		(7	)
Orders assigned subject to leaseback ⁽¹⁾	—		—		—		—		(7	)	—
End of fiscal year	36		14		45		30		43		55

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⁽¹⁾	During fiscal year 2014, we transferred our interest in seven aircraft previously ordered in return for $106.1 million in progress payments previously paid on these aircraft.

We periodically purchase aircraft for which we have no orders. During fiscal year 2016, we purchased one aircraft for which we did not have orders. During fiscal year 2015, we purchased three aircraft for which we did not have orders.

Operating Leases — We have non-cancelable operating leases in connection with the lease of certain equipment, land and facilities, including leases for aircraft. Rental expense incurred under all operating leases was $211.8 million, $164.8 million and $105.8 million in fiscal years 2016, 2015 and 2014, respectively. Rental expense incurred under operating leases for aircraft was $184.0 million, $138.3 million and $83.5 million in fiscal years 2016, 2015 and 2014, respectively. As of March 31, 2016, aggregate future payments under all non-cancelable operating leases that have initial or remaining terms in excess of one year, including leases for 87 aircraft, are as follows (in thousands):



	Aircraft		Other		Total
Fiscal year ending March 31,
2017	$	174,349	$	10,385	$	184,734
2018	154,156		10,595		164,751
2019	126,003		9,874		135,877
2020	86,449		8,189		94,638
2021	19,614		7,384		26,998
Thereafter	12,663		46,307		58,970
	$	573,234	$	92,734	$	665,968

In fiscal years 2016 and 2015, we sold three and 14 aircraft for $29.2 million and $380.7 million, respectively, and entered into separate agreements to lease these aircraft back. Additionally, in fiscal year 2014, we received payment of approximately $106.1 million for progress payments we had previously made on seven aircraft under construction and we assigned any future payments due on these construction agreements to the purchaser. We leased the aircraft back from the purchaser upon completion. See Note 1 for further details.

The aircraft leases range from base terms of up to 180 months with renewal options of up to 240 months in some cases, include purchase options upon expiration and some include early purchase options. The leases contain terms customary in transactions of this type, including provisions that allow the lessor to repossess the aircraft and require us to pay a stipulated amount if we default on our obligations under the agreements. These leases are included in the amounts disclosed above. The following is a summary of the terms related to aircraft leased under operating leases with original or remaining terms in excess of one year as of March 31, 2016:



End of Lease Term	Number of Aircraft
Fiscal year 2017 to fiscal year 2018	20
Fiscal year 2019 to fiscal year 2021	44
Fiscal year 2022 to fiscal year 2024	23
	87

Employee Agreements — Approximately 50% of our employees are represented by collective bargaining agreements and/or unions with 84.9% of these employees being represented by collective bargaining agreements and/or unions that have expired or will expire in one year. These agreements generally include annual escalations of up to 6%. Periodically, certain groups of our employees who are not covered by a collective bargaining agreement consider entering into such an agreement. We also have employment agreements with members of senior management. For discussion on separation programs between the Company and its employees, see Note 9.

Nigerian Litigation — In November 2005, two of our consolidated foreign affiliates were named in a lawsuit filed with the High Court of Lagos State, Nigeria by Mr. Benneth Osita Onwubalili and his affiliated company, Kensit Nigeria Limited, which allegedly acted as agents of our affiliates in Nigeria. The claimants allege that an agreement between the parties was terminated without justification and seek damages of $16.3 million. We responded to this claim in early 2006. There has been minimal activity on this claim since then.

Environmental Contingencies — The U.S. Environmental Protection Agency, also referred to as the EPA, has in the past notified us that we are a potential responsible party, or PRP, at three former waste disposal facilities that are on the National Priorities List of contaminated sites. Under the federal Comprehensive Environmental Response, Compensation and Liability Act, also known as the Superfund law, persons who are identified as PRPs may be subject to strict, joint and several liability for the costs of cleaning up environmental contamination resulting from releases of hazardous substances at National Priorities List sites. Although we have not yet obtained a formal release of liability from the EPA with respect to any of the sites, we believe that our potential liability in connection with the sites is not likely to have a material adverse effect on our business, financial condition and results of operations.

Other Purchase Obligations — As of March 31, 2016, we had $327.3 million of other purchase obligations representing unfilled purchase orders for aircraft parts, commitments associated with upgrading facilities at our bases and non-cancelable power-by-the-hour maintenance commitments. For further details on the non-cancelable power-by-the-hour maintenance commitments, see Note 1.

Other Matters — Although infrequent, aircraft accidents have occurred in the past, and the related losses and liability claims have been covered by insurance subject to deductible, self-insured retention and loss sensitive factors.

On August 12, 2015, a Sikorsky S-76C+ operated by us was involved in an accident in which two of our crew members and four passengers were fatally injured. There were six other passengers on board who suffered injuries in the accident. The Nigerian Accident Investigation Bureau issued its preliminary report related to the accident on September 21, 2015. The cause(s) of the accident remain unknown at this time. We continue to work with authorities in their investigation.

On February 3, 2016, a Sikorsky S-76C++ operated by us was involved in a controlled water landing with minor injuries reported for the nine passengers and two crew onboard the aircraft. The cause(s) of the incident remain unknown at this time. We are fully cooperating with local authorities in their investigation to determine the cause. Following standard practice and out of an abundance of caution, the Nigerian Civil Aviation Authority (the “NCAA”) advised us to temporarily suspend operation of the 16 Sikorsky S-76C model aircraft we operate in Nigeria until they completed their review of our operations and meetings with our management. We cooperated fully with the NCAA during the audit and resumed service of the Sikorsky S-76 aircraft in early March 2016 following the audit’s completion.

On April 29, 2016, an accident occurred with an Airbus Helicopters EC225LP (also known as a H225) model helicopter operated by another helicopter company, which resulted in a crash near Turøy outside of Bergen, Norway. The aircraft was carrying eleven passengers and two crew members at the time of the accident. Thirteen fatalities were reported. The cause of the accident is not yet known and is under investigation by authorities in Norway.

We operate a total of 27 H225 model aircraft worldwide (including 16 owned and 11 leased) as follows:

•Five H225 model aircraft registered in Norway;

•Thirteen H225 model aircraft registered in the United Kingdom; and

•Nine H225 model aircraft registered in Australia.

The Norwegian Civil Aviation Authority issued a safety directive on April 29, 2016, requiring operators to suspend public transport flights and commercial air transport operations of all Airbus Helicopters EC225LP model aircraft registered in, or flying in or offshore of, Norway. The safety directive permits continued search and rescue flights of the affected aircraft in Norway for the purpose of saving life. As a result, we will continue to operate four H225 model aircraft in Norway solely for search and rescue missions, but we will not be operating a fifth H225 model aircraft in Norway until further notice.

The UK Civil Aviation Authority also issued a safety directive on April 29, 2016, requiring operators to suspend public transport flights and commercial air transport operations of all Airbus Helicopters EC225LP model aircraft registered in, or flying in or offshore of the United Kingdom. The safety directive permits continued search and rescue flights of the affected aircraft in Norway for the purpose of saving life however, Bristow has no EC225 aircraft operating in SAR in the UK. As a result, we will not be operating the 13 H225 model aircraft in the UK until further notice.

We have also suspended operations of six of our nine H225 model aircraft in Australia. We will continue to operate up to three H225 model aircraft solely for search and rescue missions for the purpose of saving life.

Our other aircraft fleets, including search and rescue, continue to operate globally. We expect to increase utilization of other in-region aircraft and implement contingency plans designed to identify other available aircraft that can be safely and quickly mobilized to minimize or eliminate the impact on our client’s critical operations. It is too early to determine whether the accident will have a material impact on us.

We operate in jurisdictions internationally where we are subject to risks that include government action to obtain additional tax revenue. In a number of these jurisdictions, political unrest, the lack of well-developed legal systems and legislation that is not clear enough in its wording to determine the ultimate application, can make it difficult to determine whether legislation may impact our earnings until such time as a clear court or other ruling exists. We operate in jurisdictions currently where amounts may be due to governmental bodies that we are not currently recording liabilities for as it is unclear how broad or narrow legislation may ultimately be interpreted. We believe that payment of amounts in these instances is not probable at this time, but is reasonably possible.

A loss contingency is reasonably possible if the contingency has a more than remote but less than probable chance of occurring. Although management believes that there is no clear requirement to pay amounts at this time and that positions exist suggesting that no further amounts are currently due, it is reasonably possible that a loss could occur for which we have estimated a maximum loss at March 31, 2016 to be approximately $7 million to $10 million.

We are a defendant in certain claims and litigation arising out of operations in the normal course of business. In the opinion of management, uninsured losses, if any, will not be material to our financial position, results of operations or cash flows.