BASIS OF PRESENTATION, CONSOLIDATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements include the accounts of Bristow Group Inc. and its consolidated entities (“Bristow Group”, the “Company”, “we”, “us”, or “our”) after elimination of all significant intercompany accounts and transactions. Our fiscal year ends March 31, and we refer to fiscal years based on the end of such period. Therefore, the fiscal year ending March 31, 2017 is referred to as “fiscal year 2017”. Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, the information contained in the following notes to condensed consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and related notes thereto contained in our fiscal year 2016 Annual Report (the “fiscal year 2016 Financial Statements”). Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the entire fiscal year.

The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair presentation of the consolidated balance sheet of the Company as of December 31, 2016, the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended December 31, 2016 and 2015, and the consolidated cash flows for the nine months ended December 31, 2016 and 2015.

Certain reclassifications of prior period information have been made to conform to the presentations of the current period information as a result of an adoption of a required accounting standard. In the prior period financial statements, we had included unamortized debt issuance costs in other assets. Current period presentation has reclassified certain of these unamortized debt issuance costs as direct deductions of our debt balances on our condensed consolidated balance sheet. These reclassifications had no effect on net income or cash flows provided by operating activities as previously reported.

Foreign Currency

During the three and nine months ended December 31, 2016 and 2015, our primary foreign currency exposure was to the British pound sterling, the euro, the Australian dollar, the Norwegian kroner and the Nigerian naira. The value of these currencies has fluctuated relative to the U.S. dollar as indicated in the following table:



	Three Months Ended December 31,		Nine Months Ended December 31,
	2016	2015	2016	2015
One British pound sterling into U.S. dollars
High	1.30	1.55	1.48	1.59
Average	1.24	1.52	1.33	1.53
Low	1.21	1.47	1.21	1.46
At period-end	1.24	1.47	1.24	1.47
One euro into U.S. dollars
High	1.12	1.14	1.15	1.16
Average	1.08	1.10	1.11	1.10
Low	1.04	1.06	1.04	1.06
At period-end	1.05	1.09	1.05	1.09
One Australian dollar into U.S. dollars
High	0.77	0.74	0.78	0.81
Average	0.75	0.72	0.75	0.74
Low	0.72	0.70	0.72	0.69
At period-end	0.72	0.73	0.72	0.73
One Norwegian kroner into U.S. dollars
High	0.1253	0.1240	0.1253	0.1367
Average	0.1193	0.1174	0.1202	0.1227
Low	0.1145	0.1130	0.1145	0.1130
At period-end	0.1162	0.1130	0.1162	0.1130
One Nigerian naira into U.S. dollars
High	0.0032	0.0050	0.0050	0.0050
Average	0.0032	0.0050	0.0037	0.0050
Low	0.0031	0.0050	0.0029	0.0050
At period-end	0.0032	0.0050	0.0032	0.0050

_____________

Source: Bank of England, FactSet and Oanda.com

Other income (expense), net, in our condensed consolidated statements of operations includes foreign currency transaction gains of $1.6 million and $0.6 million for the three months ended December 31, 2016 and 2015, respectively, and foreign currency transaction losses of $1.8 million and $7.0 million for the nine months ended December 31, 2016 and 2015, respectively. Transaction gains and losses represent the revaluation of monetary assets and liabilities from the currency that will ultimately be settled into the functional currency of the legal entity holding the asset or liability. The gains recorded for the three months ended December 31, 2016 and 2015 were primarily driven by amounts owed in British pound sterling on U.S. dollar legal entities while the pound sterling depreciated against the dollar, which was in excess of U.S. dollar liabilities revalued on pound sterling legal entities, partially offset by losses driven by U.S. dollar net liabilities on Nigerian naira legal entities while the naira devalued against the U.S. dollar. The losses for the nine months ended December 31, 2016 and 2015 were primarily driven by a combination of currencies depreciating against the U.S. dollar as presented in the table above while various foreign currency denominated legal entities held U.S. dollar liability positions.

Our earnings from unconsolidated affiliates, net of losses, are also affected by the impact of changes in foreign currency exchange rates on the reported results of our unconsolidated affiliates. During the three months ended December 31, 2016 and 2015, earnings from unconsolidated affiliates, net of losses, decreased by $1.2 million and increased by $1.0 million, respectively, and during the nine months ended December 31, 2016 and 2015, earnings from unconsolidated affiliates, net of losses, decreased by $2.5 million and $17.2 million, respectively, as a result of the impact of changes in foreign currency exchange rates on the earnings of our unconsolidated affiliates, primarily the impact of changes in the Brazilian real to U.S. dollar exchange rate on earnings for our affiliate in Brazil. The value of the Brazilian real has fluctuated relative to the U.S. dollar as indicated in the following table:



	Three Months Ended December 31,		Nine Months Ended December 31,
	2016	2015	2016	2015
One Brazilian real into U.S. dollars
High	0.3207	0.2694	0.3207	0.3437
Average	0.3032	0.2602	0.2988	0.2899
Low	0.2866	0.2479	0.2702	0.2378
At period-end	0.3073	0.2528	0.3073	0.2528

_____________

Source: FactSet and Oanda.com

We estimate that the fluctuation of currencies versus the same period in the prior fiscal year had the following effect on our financial condition and results of operations (in thousands):



	Three Months Ended December 31, 2016			Nine Months Ended December 31, 2016
Revenue	$	(25,785	)	$	(63,817	)
Operating expense	22,564			59,035
Earnings from unconsolidated affiliates, net of losses	(2,197		)	14,655
Non-operating expense	1,022			5,191
Income (loss) before benefit (provision) for income taxes	(4,396		)	15,064
Benefit (provision) for income taxes	557			(5,470		)
Net income (loss)	(3,839		)	9,594
Cumulative translation adjustment	(19,583		)	(37,122		)
Total stockholders’ investment	$	(23,422	)	$	(27,528	)

Revenue Recognition

In general, we recognize revenue when it is both realized or realizable and earned. We consider revenue to be realized or realizable and earned when the following conditions exist: there is persuasive evidence of an arrangement (generally a client contract exists); the services or products have been performed or delivered to the client; the sales price is fixed or determinable; and collection has occurred or is probable.

Revenue from helicopter services, including search and rescue (“SAR”) services, is recognized based on contractual rates as the related services are performed. The charges under these contracts are generally based on a two-tier rate structure consisting of a daily or monthly fixed fee plus additional fees for each hour flown. These contracts are for varying periods and generally permit the client to cancel the contract before the end of the term. We also provide services to clients on an “ad hoc” basis, which usually entails a shorter contract notice period and duration. The charges for ad hoc services are based on an hourly rate or a daily or monthly fixed fee plus additional fees for each hour flown. In order to offset potential increases in operating costs, our long-term contracts may provide for periodic increases in the contractual rates charged for our services. We recognize the impact of these rate increases when the criteria outlined above have been met. This generally includes written recognition from the clients that they are in agreement with the amount of the rate escalation. Cost reimbursements from clients are recorded as reimbursable revenue with the related reimbursed costs recorded as reimbursable expense on our condensed consolidated statements of operations.

Bristow Academy, our helicopter training unit, primarily earns revenue from military training, flight training provided to individual students and ground school courses. We recognize revenue from these sources using the same revenue recognition principles described above as services are provided. We consider revenue to be realized or realizable and earned when the following conditions exist: there is persuasive evidence of an arrangement (generally a contract exists); the services have been performed or delivered to the client or student; the sales price is fixed and determinable; and collection has occurred or is probable.

Eastern Airways International Limited (“Eastern Airways”) and Capiteq Limited, operating under the name Airnorth, primarily earn revenue through charter and scheduled airline services and provision of airport services (Eastern Airways only). Both chartered and scheduled airline service revenue is recognized net of passenger taxes and discounts. Revenue is recognized at the earlier of the period in which the service is provided or the period in which the right to travel expires, which is determined by the terms and conditions of the ticket. Ticket sales are recorded within deferred revenue in accordance with the above policy. Airport services revenue is recognized when earned.

Interest Expense, Net

During the three and nine months ended December 31, 2016 and 2015, interest expense, net consisted of the following (in thousands):



	Three Months Ended December 31,						Nine Months Ended December 31,
	2016			2015			2016			2015
Interest income	$	168		$	181		$	637		$	619
Interest expense	(12,347		)	(9,717		)	(35,170		)	(25,003		)
Interest expense, net	$	(12,179	)	$	(9,536	)	$	(34,533	)	$	(24,384	)

Accretion of Redeemable Noncontrolling Interests

Accretion of redeemable noncontrolling interests of $1.5 million for the nine months ended December 31, 2015 related to put arrangements whereby the noncontrolling interest holders may require us to redeem the remaining shares of Airnorth (prior to repurchasing the remaining 15% of the outstanding shares in November 2015) and Eastern Airways at a formula-based amount that is not considered fair value (the “redemption amount”). No accretion of redeemable noncontrolling interests was recorded during the three and nine months ended December 31, 2016 and three months ended December 31, 2015. Redeemable noncontrolling interest is adjusted each period for comprehensive income, dividends attributable to the noncontrolling interest and changes in ownership interest, if any, such that the noncontrolling interest represents the proportionate share of Airnorth’s and Eastern Airways’ equity (the “carrying value”). Additionally, at each period end we are required to compare the redemption amount to the carrying value of the redeemable noncontrolling interest and record the redeemable noncontrolling interest at the higher of the two amounts, with a corresponding charge or credit directly to retained earnings. While this charge or credit does not impact net income (loss), it does result in a reduction or increase of income (loss) available to common shareholders in the calculation of diluted earnings (loss) per share (see Note 8).

Accounts Receivable

As of December 31 and March 31, 2016, the allowance for doubtful accounts for non-affiliates was $4.5 million and $5.6 million, respectively. There were no allowances for doubtful accounts related to accounts receivable due from affiliates as of December 31 and March 31, 2016. The allowance for doubtful accounts for non-affiliates as of December 31 and March 31, 2016 primarily related to amounts due from two clients in Nigeria and one client in Australia for which we no longer believed collection was probable.

Inventories

As of December 31 and March 31, 2016, inventories were net of allowances of $25.5 million and $27.8 million, respectively. As of September 30, 2016, a decision was made to cease operation of certain older model aircraft within our fleet in fiscal year 2018. This decision resulted in a change in estimate of consumption of inventory utilized for the maintenance and repair of these aircraft leading to excess inventory on hand. In addition to recognizing this excess inventory, we also noted a continued decline in the recovery value for the disposal of this inventory into the aftermarket. This change in estimate of consumption and the continued decline in the secondary market for this inventory resulted in an impairment charge of $7.6 million recorded in the nine months ended December 31, 2016. No impairment was recorded in the three months ended December 31, 2016.

Prepaid Expenses and Other Current Assets

As of December 31 and March 31, 2016, prepaid expenses and other current assets included the short-term portion of contract acquisition and pre-operating costs totaling $15.5 million and $12.1 million, respectively, related to the SAR contracts in the U.K. and Australia and a client contract in Norway, which are recoverable under the contracts and will be expensed over the terms of the contracts. For the three and nine months ended December 31, 2016, we have expensed $2.5 million and $8.2 million, respectively, due to the start-up of some of these contracts.

Loss on Impairment

Loss on impairment included goodwill impairment charges of $8.7 million for the three and nine months ended December 31, 2016 and $22.3 million for the nine months ended December 31, 2015, and impairment charges for inventory of $7.6 million for the nine months ended December 31, 2016 and $5.4 million for the nine months ended December 31, 2015. The goodwill impairment charges resulted from an overall reduction in expected operating results due to the downturn in the oil and gas market driven by reduced crude oil prices (see discussion under “Goodwill” below). The inventory impairment for the nine months ended December 31, 2015 resulted from of our review of excess inventory on aircraft model types we planned to exit by the end of fiscal year 2016 (see discussion under “Inventories” above).

Goodwill

Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill has an indefinite useful life and is not amortized, but is assessed annually or when events or changes in circumstances indicate that a potential impairment exists. Goodwill as of December 31 and March 31, 2016 related to our reporting units was as follows (in thousands):



	Europe Caspian			Asia Pacific			Total
March 31, 2016	$	10,026		$	19,964		$	29,990
Impairments	(8,706		)	—			(8,706		)
Foreign currency translation	(1,320		)	(1,171		)	(2,491		)
December 31, 2016	$	—		$	18,793		$	18,793

Accumulated goodwill impairment of $50.9 million and $42.2 million as of December 31 and March 31, 2016 related to our reporting units were as follows (in thousands):



	Europe Caspian			Africa			Corporate and other			Americas			Total
March 31, 2016	$	(25,177	)	$	(6,179	)	$	(10,223	)	$	(576	)	$	(42,155	)
Impairments	(8,706		)	—			—			—			(8,706		)
December 31, 2016	$	(33,883	)	$	(6,179	)	$	(10,223	)	$	(576	)	$	(50,861	)

We test goodwill for impairment on an annual basis or when events or changes in circumstances indicate that a potential impairment exists. For the purposes of performing an analysis of goodwill, we evaluate whether there are reporting units below the reporting segment we disclose for segment reporting purposes by assessing whether our regional management typically reviews results and whether discrete financial information exists at a lower level. Based on this review, we performed our analysis of goodwill for reporting units as of March 31, 2016 during which we impaired a portion of the goodwill for Eastern Airways of $13.1 million reflected in our loss on impairment in our statement of operations for fiscal year 2016.

As of December 31, 2016, prior to any impairments being recorded, we had $27.5 million of goodwill, including $8.7 million of goodwill related to Eastern Airways, within our Europe Caspian region, and $18.8 million of goodwill related to Airnorth, within our Asia Pacific region. During the three months ended December 31, 2016, we noted an overall reduction in expected operating results for Eastern Airways from the downturn in the oil and gas market driven by reduced crude oil prices and performed an interim impairment test of goodwill for Eastern Airways. Based on this factor, we concluded that the fair value of our goodwill for Eastern Airways could have fallen below its carrying value and that an interim period analysis of goodwill was required. We performed the interim impairment test of goodwill for Eastern Airways as of December 31, 2016, noting that the estimated fair value of Eastern Airways was below its carrying value, resulting in an impairment of all of the remaining goodwill related to Eastern Airways and a loss of $8.7 million reflected in our results for the three and nine months ended December 31, 2016. We did not have any triggering events to test Airnorth for impairment as of December 31, 2016.

We estimated the implied fair value of Eastern Airways using a variety of valuation methods, including the income and market approaches. The determination of estimated fair value required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of the reporting units, such as projected demand for our services and rates.

The income approach was based on a discounted cash flow model, which utilized present values of cash flows to estimate fair value. The future cash flows were projected based on our estimates of future rates for our services, utilization, operating costs, capital requirements, growth rates and terminal values. Forecasted rates and utilization take into account current market conditions and our anticipated business outlook, both of which have been impacted by the adverse changes in the offshore energy business environment from the current downturn. Operating costs were forecasted using a combination of our historical average operating costs and expected future costs, including ongoing cost reduction initiatives. Capital requirements in the discounted cash flow model were based on management’s estimates of future capital costs driven by expected market demand in future periods. The estimated capital requirements included cash outflows for new aircraft, infrastructure and improvements. A terminal period was used to reflect our estimate of stable, perpetual growth. The future cash flows were discounted using a market-participant risk-adjusted weighted average cost of capital for each of the reporting units individually and in the aggregate. These assumptions were derived from unobservable inputs and reflect management’s judgments and assumptions.

The market approach was based upon the application of price-to-earnings multiples to management’s estimates of future earnings adjusted for a control premium. Management’s earnings estimates were derived from unobservable inputs that require significant estimates, judgments and assumptions as described in the income approach.

For purposes of the goodwill impairment test, we calculated Eastern Airways’ estimated fair value as the average of the values calculated under the income approach and the market approach.

Other Intangible Assets

Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values. Intangible assets by type were as follows (in thousands):



	Client contracts			Client relationships			Trade name and trademarks			Internally developed software			Licenses			Total

	Gross Carrying Amount
March 31, 2016	$	8,170		$	12,779		$	5,008		$	1,149		$	752		$	27,858
Foreign currency translation	(6		)	(122		)	(584		)	(94		)	(6		)	(812		)
December 31, 2016	$	8,164		$	12,657		$	4,424		$	1,055		$	746		$	27,046

	Accumulated Amortization
March 31, 2016	$	(8,062	)	$	(10,600	)	$	(636	)	$	(480	)	$	(601	)	$	(20,379	)
Amortization expense	(82		)	(353		)	(202		)	(152		)	(42		)	(831		)
December 31, 2016	$	(8,144	)	$	(10,953	)	$	(838	)	$	(632	)	$	(643	)	$	(21,210	)

Weighted average remaining contractual life, in years	0.1			3.4			8.9			1.4			1.2			4.1

Future amortization expense of intangible assets for each of the years ending March 31 are as follows (in thousands):



2017	$	209
2018	825
2019	704
2020	433
2021	433
Thereafter	3,232
	$	5,836

The Bristow Norway and Eastern Airways acquisitions, completed in October 2008 and February 2014, respectively, included in our Europe Caspian region, resulted in intangible assets for client contracts, client relationships, trade names and trademarks, internally developed software and licenses. The Airnorth acquisition completed in January 2015, included in our Asia Pacific region, resulted in intangible assets for client contracts, client relationships and trade name and trademarks. As of December 31, 2016, we tested the remaining intangible assets for Eastern Airways for trade name and trademarks and internally developed software. We determined that the fair value was above carrying value and no impairment was required as of December 31, 2016.

Other Assets

As of December 31 and March 31, 2016, other assets included the long-term portion of contract acquisition and pre-operating costs totaling $49.8 million and $55.1 million, respectively, related to the SAR contracts in the U.K. and a client contract in Norway, which are recoverable under the contract and will be expensed over the terms of the contracts.

Property and Equipment and Assets Held for Sale

During the three and nine months ended December 31, 2016 and 2015, we made capital expenditures as follows:



	Three Months Ended December 31,				Nine Months Ended December 31,
	2016		2015		2016		2015
Number of aircraft delivered:
Medium	—		—		5		1
Large	—		2		—		2
SAR aircraft	1		6		2		8
Total aircraft	1		8		7		11
Capital expenditures (in thousands):
Aircraft and related equipment ⁽¹⁾	$	17,196	$	165,394	$	112,770	$	276,547
Other	664		30,982		6,956		66,818
Total capital expenditures	$	17,860	$	196,376	$	119,726	$	343,365

_____________


⁽¹⁾	During the three months ended December 31, 2015, we spent $136.8 million and during the nine months ended December 31, 2016 and 2015, we spent $66.8 million and $201.1 million, respectively, on progress payments for aircraft to be delivered in future periods. We did not make any progress payments for aircraft to be delivered in future periods for the three months ended December 31, 2016.

The following table presents details on the aircraft sold or disposed of and impairments on assets held for sale during the three and nine months ended December 31, 2016 and 2015:



	Three Months Ended December 31,				Nine Months Ended December 31,
	2016		2015		2016		2015

	(In thousands, except for number of aircraft)

Number of aircraft sold or disposed of	3		3		9		16
Proceeds from sale or disposal of assets	$	2,525	$	3,045	$	14,344	$	19,152
Loss from sale or disposal of assets ⁽¹⁾	$	674	$	2,154	$	1,717	$	1,825

Number of aircraft impaired	1		—		13		11
Impairment charges on aircraft held for sale ⁽¹⁾	$	200	$	—	$	11,360	$	22,031

_____________


⁽¹⁾	Included in gain (loss) on disposal of assets on our condensed consolidated statements of operations.

During the three months ended December 31, 2016 and 2015, we recorded accelerated depreciation of $1.1 million and $5.0 million on five and 21 aircraft, respectively, and during the nine months ended December 31, 2016 and 2015, we recorded accelerated depreciation of $9.3 million and $22.4 million on 11 and 21 aircraft, respectively, as our management decided to exit these model types earlier than originally anticipated. We expect to record an additional $1.1 million in depreciation expense over the remainder of fiscal year 2017 relating to this change in fleet exit timing. As discussed in “— Loss on Impairment” above, during the three and nine months ended December 31, 2015, we noted an overall reduction in expected operating results due to the downturn in the oil and gas market driven by reduced crude oil prices. The impact on our results was reflected in an increase in the number of idle aircraft and reduction in forecasted results across our global oil and gas helicopter operations, and was reflected in reduced operating revenue for our business for the nine months ended December 31, 2015, when excluding growth from the U.K. SAR contract and the addition of Airnorth. The reduction in demand for aircraft in the offshore energy market led to further impairment of older model aircraft classified in held for sale as of December 31, 2015.

Changes in our forecasted cash flows during the three months ended December 31, 2016 triggered a review of our oil and gas related property and equipment and Eastern Airways property and equipment for potential impairment. In accordance with Accounting Standard Codification 360-10-35, we estimate future undiscounted cash flows to test the recoverability of our property and equipment, which largely consists of our held for use aircraft. The determination of estimated future undiscounted cash flows required us to use significant unobservable inputs including assumptions related to projected demand for services and rates. We determined that the estimated future undiscounted cash flows were above the carrying value for our oil and gas related property and equipment and Eastern Airways property and equipment as of December 31, 2016 and no impairment was recorded on these assets. Future declines in operating performance or anticipated business outlook may reduce our estimated future undiscounted cash flows and result in impairment of our oil and gas related property and equipment or Eastern Airways property and equipment.

Recent Accounting Pronouncements

We consider the applicability and impact of all accounting standard updates (“ASUs”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued accounting guidance on revenue recognition for revenue from contracts with customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance when it becomes effective. This new standard was effective for annual reporting periods beginning after December 15, 2016. However, in July 2015, the FASB approved the deferral of the effective date of the revenue recognition standard permitting public entities to apply the new revenue standard to annual reporting periods beginning after December 15, 2017. Early application is permitted, but not before the original effective date of December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating our customer contracts to determine the effect this standard will have on our financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

In August 2014, the FASB issued accounting guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within a year of the date the financial statements are issued. The standard applies to all entities and is effective for annual and interim periods beginning after December 15, 2016 with early adoption permitted. We are evaluating the effect this standard will have on our financial statements and related disclosures.

In February 2015, the FASB issued accounting guidance which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance amends the criteria for determining which entities are considered Variable Interest Entities (“VIEs”) and amends the criteria for determining if a service provider possesses a variable interest in a VIE. This pronouncement is effective for annual and interim periods in fiscal years beginning after December 15, 2015. A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application. We have adopted this accounting guidance effective April 1, 2016 and there is no material effect on our financial statements and related disclosures.

In April 2015, the FASB issued accounting guidance relating to the presentation of debt issuance costs. The intent is to simplify the presentation of debt issuance costs by requiring entities to record debt issuance costs on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to debt discounts or premiums. In August 2015, the FASB issued additional guidance to allow issuers to continue to recognize debt issuance costs related to line-of-credit arrangements as an asset and amortize that asset over the term of the credit agreement regardless of whether a balance is outstanding. These pronouncements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. We have adopted this accounting guidance effective April 1, 2016. As a result of the adoption, we presented the $8.9 million of unamortized debt issuance costs that was previously included in other assets in our condensed consolidated balance sheet as of March 31, 2016 as direct deductions from the carrying amount of the related debt.

In November 2015, the FASB issued a new standard which changes how deferred taxes are classified on an entity’s balance sheet. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The new guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and early adoption is permitted. The guidance may be applied either prospectively, for all deferred tax assets and liabilities, or retrospectively. If applied prospectively, entities are required to include a statement that prior periods were not retrospectively adjusted. If applied retrospectively, entities are also required to include quantitative information about the effects of the change on prior periods. We have not yet adopted this accounting guidance or determined the method of adoption but we believe the adoption of this guidance would reduce current assets and current liabilities and increase long-term assets and long-term liabilities by such amounts.

In February 2016, the FASB issued accounting guidance which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. Additionally, this pronouncement requires a modified retrospective transition approach for all leases existing at, or entered into after the date of initial application, with an option to use certain transition relief. We have not yet adopted this standard nor have we determined the effect of the standard on our ongoing financial reporting.

In March 2016, the FASB issued accounting guidance related to accounting for employee share-based payments. The amendments are intended to simplify several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and early adoption is permitted. We have not yet adopted this standard and are currently evaluating the effect this standard will have on our financial statements and related disclosures.

In August 2016, the FASB issued accounting guidance related to the statement of cash flows to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We have not yet adopted this standard and are currently evaluating the effect this standard will have on our financial statements.

In October 2016, the FASB issued accounting guidance related to current and deferred income taxes for intra-entity transfer of assets other than inventory. This pronouncement requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs and eliminates the exception for an intra-entity transfer of an asset other than inventory. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We have not yet adopted this standard and are currently evaluating the effect this standard will have on our financial statements.

In October 2016, the FASB issued accounting guidance related to interest held through related parties that are under common control. The pronouncement affects reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the pronouncement changes the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The pronouncement is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and early adoption is permitted. We have not yet adopted this standard and are currently evaluating the effect this standard will have on our financial statements.