EMPLOYEE BENEFIT PLANS

Pension Plans

The components of net periodic pension cost other than the service cost component are included in other income (expense), net on our condensed consolidated statement of operations. As discussed in Note 1, on April 1, 2018, we adopted new accounting guidance related to the presentation of net periodic pension cost. The following table provides a detail of the components of net periodic pension cost (in thousands):



	Three Months Ended December 31,						Nine Months Ended December 31,
	2018			2017			2018			2017
Service cost for benefits earned during the period	$	207		$	214		$	636		$	632
Interest cost on pension benefit obligation	3,179			3,230			9,764			9,530
Expected return on assets	(4,191		)	(5,299		)	(12,872		)	(15,633		)
Amortization of unrecognized losses	1,945			2,040			5,972			6,016
Net periodic pension cost	$	1,140		$	185		$	3,500		$	545

The current estimates of our cash contributions to our defined benefit pension plans to be paid in fiscal year 2019 are $16.3 million, of which $12.7 million was paid during the nine months ended December 31, 2018. The weighted-average expected long-term rate of return on assets for our U.K. pension plans as of March 31, 2018 was 3.6%.

In October 2018, the U.K. High Court ruled that the U.K. defined pension schemes will be required to equalize for the effect of unequal guaranteed minimum pensions (“GMPs”) accrued between 1990 and 1997 by adjusting other non-GMP benefits. We recorded additional pension liability of $2.9 million as of December 31, 2018 related to this ruling that will be recorded as additional service cost over the future service period of approximately 20 years.

Incentive Compensation

Stock-based awards are currently made under the Bristow Group Inc. 2007 Long-Term Incentive Plan, as amended and restated on August 3, 2016 (the “2007 Plan”). A maximum of 10,646,729 shares of common stock are reserved. Awards granted under the 2007 Plan may be in the form of stock options, stock appreciation rights, shares of restricted stock, other stock-based awards (payable in cash or common stock) or performance awards, or any combination thereof, and may be made to outside directors, employees or consultants. As of December 31, 2018, 1,811,843 shares remained available for grant under the 2007 Plan.

We have a number of other incentive and stock option plans which are described in Note 9 to our fiscal year 2018 Financial Statements.

Total stock-based compensation expense, which includes stock options and restricted stock, totaled $1.9 million and $2.2 million during the three months ended December 31, 2018 and 2017, respectively, and $5.7 million and $8.8 million for the nine months ended December 31, 2018 and 2017, respectively. Stock-based compensation expense has been allocated to our various regions.

During the nine months ended December 31, 2018, we awarded 400,788 shares of restricted stock at an average grant date fair value of $12.53 per share. Also during the nine months ended December 31, 2018, 593,129 stock options were granted. The following table shows the assumptions used to compute the stock-based compensation expense for stock options granted during the nine months ended December 31, 2018:



Risk free interest rate	2.76	%
Expected life (years)	5
Volatility	62.8	%
Dividend yield	—	%
Weighted average exercise price of options granted	$12.19 per option
Weighted average grant-date fair value of options granted	$6.71 per option

During June 2018 and 2017, we awarded certain members of management phantom restricted stock which will be paid out in cash after three years. We account for these awards as liability awards. As of December 31, 2018 and March 31, 2018, we had $0.4 million and $1.0 million, respectively, included in other liabilities and deferred credits on our condensed consolidated balance sheet accrued for these awards. Additionally, changes in the fair values of these liability awards reduced compensation expense by $1.1 million and $0.4 million during the three and nine months ended December 31, 2018, respectively, and increased compensation expense by $0.5 million and $0.9 million during the three and nine months ended December 31, 2017, respectively.

Performance cash awards granted in June 2017 and 2018 have two components. One half of each performance cash award will vest and pay out in cash three years after the date of grant at varying levels depending on our performance in Total Shareholder Return against a peer group of companies. The other half of each performance cash award will be earned based on absolute performance in respect of improved average adjusted earnings per share for the Company over the three-year performance period beginning on April 1, 2017 and 2018, as applicable. Performance cash awards granted in June 2016 vest and pay out in cash three years after the date of grant at varying levels depending on our performance in Total Shareholder Return against a peer group of companies. These awards were designed to tie a significant portion of total compensation to performance. One of the effects of this type of compensation is that it requires liability accounting which can result in volatility in earnings. The liability recorded for these awards as of December 31 and March 31, 2018 was $3.9 million and $7.7 million, respectively, and represents an accrual based on the fair value of the awards on those dates. The decrease in the liability during the nine months ended December 31, 2018 resulted from the payout in June 2018 of the awards granted in June 2015, partially offset by the value of the new awards granted in June 2018. Any changes in fair value of the awards in future quarters will increase or decrease the liability and impact results in those periods. The effect, either positive or negative, on future period earnings can vary based on factors including changes in our stock price or the stock prices of the peer group companies, as well as changes in other market and company-specific assumptions that are factored into the calculation of fair value of the performance cash awards.

Changes in the fair values of performance cash awards reduced compensation expense by $1.3 million and $0.8 million during the three months ended December 31, 2018 and 2017, respectively, and reduced compensation expense by $0.2 million and increased compensation expense by $0.6 million during the nine months ended December 31, 2018 and 2017, respectively.