FAIR VALUE DISCLOSURES

Assets and liabilities subject to fair value measurement are categorized into one of three different levels depending on the observability of the inputs employed in the measurement, as follows:


•	Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.


•	Level 2 – inputs that reflect quoted prices for identical assets or liabilities in markets which are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.


•	Level 3 – unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

Non-recurring Fair Value Measurements

The majority of our non-financial assets, which include inventories, property and equipment, assets held for sale, goodwill and other intangible assets, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial asset is required to be evaluated for impairment and deemed to be impaired, the impaired non-financial asset is recorded at its fair value.

The following table summarizes the assets as of December 31, 2017, valued at fair value on a non-recurring basis (in thousands):



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2017		Total Loss for the Three Months Ended December 31, 2017			Total Loss for the Nine Months Ended December 31, 2017
Inventories	$	—	$	—	$	—	$	—	$	—		$	(1,192	)
Assets held for sale	—		—		31,038		31,038		(1,560		)	(11,307		)
Total assets	$	—	$	—	$	31,038	$	31,038	$	(1,560	)	$	(12,499	)

The following table summarizes the assets as of December 31, 2016, valued at fair value on a non-recurring basis (in thousands):



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2016		Total Loss for the Three Months Ended December 31, 2016			Total Loss for the Nine Months Ended December 31, 2016
Inventories	$	—	$	46,654	$	—	$	46,654	$	—		$	(7,572	)
Assets held for sale	—		37,635		—		37,635		(200		)	(11,360		)
Goodwill	—		—		18,793		18,793		(8,706		)	(8,706		)
Total assets	$	—	$	84,289	$	18,793	$	103,082	$	(8,906	)	$	(27,638	)

The fair value of inventories using Level 2 inputs is determined by evaluating the current economic conditions for sale and disposal of spare parts, which includes estimates as to the recoverability of the carrying value of the parts based on historical experience with sales and disposal of similar spare parts, the expected time frame of sales or disposals, the location of the spare parts to be sold and the condition of the spare parts to be sold or otherwise disposed of.

The fair value of assets held for sale using Level 2 inputs is determined through evaluation of expected sales proceeds for aircraft. This analysis includes estimates based on historical experience with sales, recent transactions involving similar assets, quoted market prices for similar assets and condition and location of aircraft to be sold or otherwise disposed of. The loss for the three and nine months ended December 31, 2017 related to one and five aircraft held for sale, respectively, and the loss for the three and nine months ended December 31, 2016 related to one and 13 aircraft held for sale, respectively. Additionally, the loss for the nine months ended December 31, 2017 includes $6.5 million of impairment relating to the Bristow Academy disposal group. For further details on Bristow Academy disposal group, see Note 1.

The fair value of goodwill is estimated using a variety of valuation methods, including the income and market approaches. These estimates of fair value include unobservable inputs, representative of Level 3 fair value measurement, including assumptions related to future performance, such as projected demand for our services and rates. For further details on our goodwill, see Note 1.

Recurring Fair Value Measurements

The following table summarizes the financial instruments we had as of December 31, 2017, valued at fair value on a recurring basis (in thousands):



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2017		Balance Sheet Classification
Rabbi Trust investments	$	2,847	$	—	$	—	$	2,847	Other assets
Total assets	$	2,847	$	—	$	—	$	2,847

The following table summarizes the financial instruments we had as of March 31, 2017, valued at fair value on a recurring basis (in thousands):



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of March 31, 2017		Balance Sheet Classification
Rabbi Trust investments	$	3,075	$	—	$	—	$	3,075	Other assets
Total assets	$	3,075	$	—	$	—	$	3,075

The rabbi trust investments consist of cash and mutual funds whose fair value are based on quoted prices in active markets for identical assets, and are designated as Level 1 within the valuation hierarchy. The rabbi trust holds investments related to our non-qualified deferred compensation plan for our senior executives.

Fair Value of Debt

The fair value of our debt has been estimated in accordance with the accounting standard regarding fair value. The fair value of our fixed rate long-term debt is estimated based on quoted market prices. The carrying and fair value of our long-term debt, including the current portion and excluding unamortized debt issuance costs, are as follows (in thousands):



	December 31, 2017				March 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
6¼% Senior Notes	$	401,535	$	328,777	$	401,535	$	323,236
4½% Convertible Senior Notes ⁽¹⁾	106,124		158,571		—		—
Term Loan	52,546		52,546		261,907		261,907
Term Loan Credit Facility	—		—		45,900		45,900
Revolving Credit Facility	—		—		139,100		139,100
Lombard Debt	206,831		206,831		196,832		196,832
Macquarie Debt	188,528		188,528		200,000		200,000
PK Air Debt	230,000		230,000		—		—
Airnorth Debt	14,507		14,507		16,471		16,471
Eastern Airways Debt	12,772		12,772		15,326		15,326
Other Debt	2,423		2,423		16,293		16,293
	$	1,215,266	$	1,194,955	$	1,293,364	$	1,215,065

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⁽¹⁾	Carrying value of the 4½% Convertible Senior Notes includes unamortized discount of $37.6 million as of December 31, 2017.

Other

The fair values of our cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to the short-term nature of these items.