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): May 10, 2011
Bristow Group Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-31617 | 72-0679819 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
2000 W. Sam Houston Pkwy S., Suite 1700 Houston, Texas |
77042 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants 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 May 10, 2011, Bristow Group Inc. (the Company) issued a press release which summarized its financial results for the three-month period and fiscal year ended March 31, 2011 (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 CT) on Wednesday, May 11, 2011, 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 Earnings before Interest, Income Tax and Depreciation and Amortization (EBITDA). Additionally, our operating income, EBITDA, net income and diluted earnings per share for the three months ended March 31, 2011 and 2010 and the fiscal years ended March 31, 2011 and 2010 in this release have been presented in certain instances excluding special items detailed in the press release. Management believes that such non-GAAP financial measures are important metrics for evaluating our operating performance, and they provide investors with additional information that is not directly available in a GAAP presentation. Such non-GAAP financial measures are useful to investors as they eliminate items that are not a function of our current operating performance and affect our GAAP results regardless of performance. In addition, certain of these items may vary significantly from period to period and may have a disproportionate effect in a given period, which may affect the comparability of the results. 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. |
(c) Exhibits
Exhibit |
Description of Exhibit | |
99.1 | Press Release summarizing financial results dated May 10, 2011. |
Limitation on Incorporation by Reference.
Information on Bristows 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 exhibits shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (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: May 10, 2011 | By: | /s/ Randall A. Stafford | ||
Randall A. Stafford | ||||
Senior Vice President and General Counsel, Corporate Secretary |
Exhibit 99.1
FOR IMMEDIATE RELEASE
News Release | ||
Linda McNeill | ||
Investor Relations | ||
(713) 267-7622 |
BRISTOW GROUP REPORTS STRONG FINANCIAL
PERFORMANCE FOR ITS 2011 FOURTH QUARTER AND
FISCAL YEAR ENDED MARCH 31, 2011
| FOURTH QUARTER EPS OF $1.00 AND FISCAL YEAR EPS OF $3.30, BOTH EXCLUDING SPECIAL ITEMS |
| FOURTH QUARTER GAAP EPS OF $0.84 AND FISCAL YEAR GAAP EPS OF $3.60 |
| FOURTH QUARTER OPERATING INCOME OF $49.8 MILLION, A 16% INCREASE OVER THE PRIOR YEAR QUARTER DUE TO OPERATIONAL IMPROVEMENT IN THE EUROPE AND OTHER INTERNATIONAL BUSINESS UNITS |
| COMPANY INITIATES DIVIDEND OF $0.15 PER SHARE FOR THE FIRST QUARTER OF FISCAL YEAR 2012 |
| COMPANY INITIATES FISCAL YEAR 2012 DILUTED EPS GUIDANCE |
HOUSTON, May 10, 2011 Bristow Group Inc. (NYSE: BRS) today reported adjusted net income, excluding special items, for the fourth quarter ended March 31, 2011 of $37.0 million, or $1.00 per diluted share, compared to $26.6 million, or $0.73 per diluted share in the same period a year ago. GAAP net income for the fourth quarter was $30.9 million, or $0.84 per diluted share. The quarter benefited from operating improvement in the Europe and Other International Business Units as well as increased earnings from unconsolidated affiliates and higher aircraft sales. The special items referred to herein are detailed on page nine of this news release.
Revenue for the fourth quarter increased 9.8% to $310.1 million from $282.4 million in the same period a year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 30.4% to $77.5 million from $59.4 million in the March 2010 quarter. Revenue was positively impacted by improvement in the underlying operations in the Europe, Australia and Other International Business Units.
As previously anticipated, the financial results for the second half of the year exceeded the first half. We were able to deliver sequential improvement in operating income, EBITDA and earnings per share in the fourth quarter, said William E. Chiles, President and Chief Executive Officer of Bristow Group. The performance of several of our business units during the quarter was strong and our operating margin improved to 16.1%, driven by continued excellent results in our Europe and Other International Business Units.
1
On May 4, 2011, the Board of Directors of Bristow declared a first quarter cash dividend of $0.15 per share on the issued and outstanding shares of common stock.
We are proud to announce our Boards decision to initiate a quarterly cash dividend on our common stock, said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group. Our confidence in Bristows ability to generate cash flow, while growing the business across the globe and maintaining a prudent financial profile, allows us to create an exceptional investment opportunity.
Adjusted net income, excluding special items, for the fiscal year ended March 31, 2011 totaled $121.3 million, or $3.30 per diluted share, compared to $109.1 million, or $3.02 per diluted share in the same period a year ago. GAAP net income for the fiscal year ended March 31, 2011 was $132.3 million, or $3.60 per diluted share, and revenue totaled $1.233 billion. Revenue increased across all primary business units, with significant improvements in Australia, Europe and Other International compared to the same period a year ago, driven by the addition of new contracts and increases in rates on existing contracts, which offset the impact of reduced activity for certain clients in North America. The special items referred to herein are detailed on pages nine and ten of this news release.
Fiscal 2011 turned out to be a strong year, distinguished by record revenue, operating income and net income, said Bill Chiles. I am proud of the entire Bristow team, who produced top safety performance while also delivering on our commitment to improving financial performance, lowering cost of capital, and commencing a balanced capital allocation plan. We look forward to carrying this quarters momentum into fiscal 2012, where the combination of our financial strength and growth opportunities should lead to significant value creation for Bristows shareholders. In light of these factors and our more stable and predictable business profile, we have decided to provide annual earnings per share guidance starting with fiscal 2012.
FOURTH QUARTER FY2011 RESULTS
| Revenue increased 9.8% to $310.1 million compared to $282.4 million in the same period a year ago. |
| Operating income increased 16.5% to $49.8 million compared to $42.8 million in the same period a year ago. Operating margin increased to 16.1% from 15.2% in the fourth quarter of fiscal 2010. |
| EBITDA increased 30.4% to $77.5 million compared to $59.4 million in the March 2010 quarter. |
| GAAP net income increased 8.5% to $30.9 million, or $0.84 per diluted share, compared to $28.4 million, or $0.78 per diluted share, in the March 2010 quarter. |
Our Europe Business Unit saw an increase in flying activity over the prior year quarter, which resulted in increased operating margin in this market.
Our West Africa Business Unit was affected by a high level of maintenance and freight costs in the March 2011 quarter. We have been able to re-contract aircraft after the loss of a major contract in this market. We expect to benefit from new contract awards and our continuing effort to reduce aircraft maintenance delays in this market in future periods.
Our North America Business Unit continues to be a challenging market due to the impact of the severe reduction in the issuance of drilling and completion permits in the aftermath of the Macondo accident. In addition, difficult weather conditions in February coupled with the ending of our support work for BP negatively affected this business unit. We are reducing our cost structure in order to align the business with the current level of demand. A few drilling permits were issued during the fourth quarter in the U.S. Gulf of Mexico, and activity has started to pick up very recently.
2
Our Australia Business Unit saw a significant increase in revenue over the prior year resulting from new contracts and a favorable impact of change in foreign currency exchange rates. However, an increase in compensation and other costs has contributed to a decrease in operating margin versus the same quarter last year. We do not expect some of the costs incurred in the quarter to recur at the same levels in future periods, which when coupled with a continued high level of activity in this market is expected to result in improved operating margin in future quarters.
Our Other International Business Units operating margin was significantly higher primarily due to strong performance of our unconsolidated affiliate in Brazil, which generated $6.2 million of equity earnings for the three months ended March 31, 2011. We made progress in our exit strategy in Mexico by entering into an agreement to sell our 24% interest in an unconsolidated affiliate to our joint venture partner and reduced our financial exposure to the Mexican market.
During the March 2011 quarter we generated $5.4 million in after-tax gains on the sale of seven aircraft, which included two older generation large aircraft and related inventory.
FISCAL YEAR ENDED MARCH 31, 2011
| Revenue totaled $1.233 billion compared to $1.168 billion for the same period a year ago. |
| Operating income was $189.7 million compared to $180.9 million for the fiscal year ended March 31, 2010. |
| EBITDA totaled $277.5 million compared to $259.6 million for the fiscal year ended March 31, 2010. |
| GAAP net income totaled $132.3 million, or $3.60 per diluted share, compared to $112.0 million, or $3.10 per diluted share for the fiscal year ended March 31, 2010. |
Our fiscal year ended March 31, 2011 results benefited from revenue increases across all of our primary business units, with significant improvements in Australia, Europe and Other International compared to the same period a year ago, which was driven by the addition of new contracts and increases in rates on existing contracts, which offset the impact of reduced activity for certain clients.
Operating income, EBITDA, net income and earnings per share increased from the prior year due to higher earnings from unconsolidated affiliates, primarily our investment in Brazil, and improved performance in the Europe, North America and Other International Business Units. Additionally, our effective tax rate was 5.1% versus 20.4% in the prior fiscal year. This reduction was driven by a global restructuring of our operations as part of the continuing implementation of our global business strategy, in addition to a shift of our expected earnings for the current fiscal year to lower tax jurisdictions. This benefit was partially offset by a lower level of aircraft sales, increased interest expense and a reduction in other income (expense), net.
DIVIDEND
On May 4, 2011, the Board of Directors of Bristow declared a first quarter cash dividend of $0.15 per share of our common stock. The dividend will be paid on June 10, 2011 to shareholders of record on May 20, 2011. Based on shares outstanding at March 31, 2011, total dividend payments to be made during the three months ended June 30, 2011 will be approximately $5.4 million.
We expect to continue generating substantial cash flow after having increased our operating leverage through significant investment in our aircraft fleet. We believe it is now time to return some of the cash flow in the form of a dividend to our shareholders while making our stock more attractive to international and income-oriented investors, said Jonathan Baliff.
The continued execution of our ongoing capital allocation strategy of investing in our fleet, pursuing other growth opportunities and returning cash to shareholders, while maintaining prudent balance sheet management, should provide additional certainty about our financial strength that has allowed us to initiate this dividend.
3
GUIDANCE
Bristow issued today diluted earnings per share guidance for fiscal year 2012 of $3.55 to $3.90.
Our 2012 guidance demonstrates our confidence in our business model anchored by our contract structure and our clients focus on production, said Jonathan Baliff. This makes our operating performance more stable and predictable. This GAAP earnings per share guidance does not include unrealized gains and losses on disposals of assets as well as special items because their timing and amounts are more variable and less predictable. Our objectives in providing earnings guidance include aligning shareholders and other market participants with managements expectation of our operational performance and how management directs and operates our business.
This guidance is based on current foreign currency exchange rates. In providing this guidance, the Company has not included the impact of any changes in accounting standards and any impact from significant acquisitions or divestitures. Changes in events or other circumstances that the Company cannot currently anticipate or predict could result in earnings per share for fiscal year 2012 that are significantly above or below this guidance. Factors that could cause such changes are described below under Forward-Looking Statements Disclosure.
CONFERENCE CALL
Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Wednesday, May 11, to review financial results for the fiscal year 2011 fourth quarter and year-ended March 31, 2011. 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:
Via Webcast:
| Visit Bristow Groups investor relations Web page at www.bristowgroup.com |
| Live: Click on the link for Bristow Group Fiscal 2011 Fourth Quarter Earnings Conference Call |
| Replay: A replay via webcast will be available approximately one hour after the calls completion and will be accessible for approximately 90 days |
Via Telephone within the U.S.:
| Live: Dial toll free 1-877-941-8609 |
| Replay: A telephone replay will be available through May 25, 2011 and may be accessed by calling toll free 1-800-406-7325, passcode: 4435513# |
Via Telephone outside the U.S.:
| Live: Dial 480-629-9818 |
| Replay: A telephone replay will be available through May 25, 2011 and may be accessed by calling 303-590-3030, passcode: 4435513# |
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 Alaska, Australia, Brazil, Mexico, Russia and Trinidad. For more information, visit the Companys website at www.bristowgroup.com.
4
FORWARD-LOOKING STATEMENTS DISCLOSURE
Statements contained in this news release that state the Companys or managements intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. These forward-looking statements include statements regarding earnings guidance, capital allocation strategy, future dividends, the impact of activity levels, business performance, and other market and industry conditions. It is important to note that the Companys actual results could differ materially from those projected in such forward-looking statements. 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 Companys SEC filings, including but not limited to the Companys quarterly report on Form 10-Q for the quarter ended December 31, 2010 and the annual report on Form 10-K for the fiscal year ended March 31, 2010. 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)
5
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31, |
Fiscal Year Ended March 31, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Gross revenue: |
||||||||||||||||
Operating revenue from non-affiliates |
$ | 263,118 | $ | 241,809 | $ | 1,051,829 | $ | 999,249 | ||||||||
Operating revenue from affiliates |
10,625 | 15,199 | 63,067 | 61,842 | ||||||||||||
Reimbursable revenue from non-affiliates |
36,452 | 24,805 | 117,366 | 103,019 | ||||||||||||
Reimbursable revenue from affiliates |
(53 | ) | 570 | 546 | 3,646 | |||||||||||
310,142 | 282,383 | 1,232,808 | 1,167,756 | |||||||||||||
Operating expense: |
||||||||||||||||
Direct cost |
188,842 | 173,653 | 748,053 | 717,178 | ||||||||||||
Reimbursable expense |
34,542 | 24,673 | 114,288 | 105,853 | ||||||||||||
Depreciation and amortization |
29,240 | 17,365 | 90,877 | 74,684 | ||||||||||||
General and administrative |
25,013 | 30,455 | 120,145 | 119,701 | ||||||||||||
277,637 | 246,146 | 1,073,363 | 1,017,416 | |||||||||||||
Gain on disposal of other assets |
6,596 | 5,328 | 10,178 | 18,665 | ||||||||||||
Earnings from unconsolidated affiliates, net of losses |
10,746 | 1,227 | 20,101 | 11,852 | ||||||||||||
Operating Income |
49,847 | 42,792 | 189,724 | 180,857 | ||||||||||||
Interest income |
215 | 215 | 1,092 | 1,012 | ||||||||||||
Interest expense |
(9,924 | ) | (10,781 | ) | (46,187 | ) | (42,412 | ) | ||||||||
Other income (expense), net |
(1,842 | ) | (987 | ) | (4,230 | ) | 3,036 | |||||||||
Income from continuing operations before provision for income taxes |
38,296 | 31,239 | 140,399 | 142,493 | ||||||||||||
Provision for income taxes |
(7,071 | ) | (2,571 | ) | (7,104 | ) | (28,998 | ) | ||||||||
Net income from continuing operations |
31,225 | 28,668 | 133,295 | 113,495 | ||||||||||||
Net income attributable to noncontrolling interests |
(357 | ) | (225 | ) | (980 | ) | (1,481 | ) | ||||||||
Net income attributable to Bristow Group |
30,868 | 28,443 | 132,315 | 112,014 | ||||||||||||
Preferred stock dividends |
| | | (6,325 | ) | |||||||||||
Net income available to common stockholders |
$ | 30,868 | $ | 28,443 | $ | 132,315 | $ | 105,689 | ||||||||
Earnings per common share: |
||||||||||||||||
Basic |
$ | 0.85 | $ | 0.79 | $ | 3.67 | $ | 3.23 | ||||||||
Diluted |
$ | 0.84 | $ | 0.78 | $ | 3.60 | $ | 3.10 | ||||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic |
36,312 | 35,942 | 36,010 | 32,729 | ||||||||||||
Diluted |
36,966 | 36,335 | 36,731 | 36,119 | ||||||||||||
EBITDA |
$ | 77,460 | $ | 59,385 | $ | 277,463 | $ | 259,589 |
6
BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
Three Months Ended March 31, |
Fiscal Year Ended March 31, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Flight hours (excludes Bristow Academy and unconsolidated affiliates): |
||||||||||||||||
Europe |
13,388 | 11,843 | 54,463 | 54,537 | ||||||||||||
West Africa |
9,173 | 8,547 | 38,390 | 35,142 | ||||||||||||
North America |
16,741 | 18,301 | 81,503 | 79,345 | ||||||||||||
Australia |
3,825 | 3,324 | 13,618 | 12,302 | ||||||||||||
Other International |
10,423 | 10,704 | 45,894 | 44,373 | ||||||||||||
Consolidated total |
53,550 | 52,719 | 233,868 | 225,699 | ||||||||||||
Gross revenue: |
||||||||||||||||
Europe |
$ | 127,341 | $ | 104,730 | $ | 476,455 | $ | 452,998 | ||||||||
West Africa |
55,244 | 54,207 | 226,175 | 219,212 | ||||||||||||
North America |
40,124 | 45,453 | 193,845 | 189,730 | ||||||||||||
Australia |
45,025 | 34,014 | 159,120 | 130,698 | ||||||||||||
Other International |
37,260 | 32,080 | 148,239 | 135,426 | ||||||||||||
Corporate and other |
7,561 | 12,173 | 33,217 | 43,815 | ||||||||||||
Intrasegment eliminations |
(2,413 | ) | (274 | ) | (4,243 | ) | (4,123 | ) | ||||||||
Consolidated total |
$ | 310,142 | $ | 282,383 | $ | 1,232,808 | $ | 1,167,756 | ||||||||
Operating income (loss): |
||||||||||||||||
Europe |
$ | 23,939 | $ | 18,973 | $ | 89,320 | $ | 77,053 | ||||||||
West Africa |
13,262 | 18,770 | 62,051 | 62,410 | ||||||||||||
North America |
(1,602 | ) | 1,002 | 14,527 | 11,655 | |||||||||||
Australia |
7,812 | 8,349 | 28,997 | 30,374 | ||||||||||||
Other International |
17,076 | 601 | 42,038 | 25,972 | ||||||||||||
Gain on disposal of other assets |
6,596 | 5,328 | 10,178 | 18,665 | ||||||||||||
Corporate and other |
(17,236 | ) | (10,231 | ) | (57,387 | ) | (45,272 | ) | ||||||||
Consolidated total |
$ | 49,847 | $ | 42,792 | $ | 189,724 | $ | 180,857 | ||||||||
Operating margin: |
||||||||||||||||
Europe |
18.8 | % | 18.1 | % | 18.7 | % | 17.0 | % | ||||||||
West Africa |
24.0 | % | 34.6 | % | 27.4 | % | 28.5 | % | ||||||||
North America |
(4.0 | ) % | 2.2 | % | 7.5 | % | 6.1 | % | ||||||||
Australia |
17.4 | % | 24.5 | % | 18.2 | % | 23.2 | % | ||||||||
Other International |
45.8 | % | 1.9 | % | 28.4 | % | 19.2 | % | ||||||||
Consolidated total |
16.1 | % | 15.2 | % | 15.4 | % | 15.5 | % |
7
BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
AS OF MARCH 31, 2011
Aircraft in Consolidated Fleet | ||||||||||||||||||||||||||||||||
Helicopters | ||||||||||||||||||||||||||||||||
Small | Medium | Large | Training | Fixed Wing |
Total (1) | Unconsolidated Affiliates (2) |
Total | |||||||||||||||||||||||||
Europe |
| 17 | 39 | | | 56 | 63 | 119 | ||||||||||||||||||||||||
West Africa |
12 | 27 | 6 | | 3 | 48 | | 48 | ||||||||||||||||||||||||
North America |
70 | 25 | 2 | | | 97 | | 97 | ||||||||||||||||||||||||
Australia |
2 | 14 | 16 | | | 32 | | 32 | ||||||||||||||||||||||||
Other International |
5 | 44 | 15 | | | 64 | 133 | 197 | ||||||||||||||||||||||||
Corporate and other |
| | | 76 | | 76 | | 76 | ||||||||||||||||||||||||
Total |
89 | 127 | 78 | 76 | 3 | 373 | 196 | 569 | ||||||||||||||||||||||||
Aircraft not currently in fleet: (3) |
||||||||||||||||||||||||||||||||
On order |
| | 6 | | | 6 | ||||||||||||||||||||||||||
Under option |
| 22 | 9 | | | 31 |
(1) | Includes 16 aircraft held for sale. |
(2) | The 196 aircraft operated or managed by our unconsolidated affiliates are in addition to those aircraft leased from us. |
(3) | This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option. |
8
GAAP RECONCILIATIONS
EBITDA is a measure that has not been prepared in accordance with GAAP and has not been audited or reviewed by our independent auditors. EBITDA is therefore considered a non-GAAP financial measure. A description of adjustments and a reconciliation to net income from continuing operations, the most comparable GAAP financial measure to EBITDA, is as follows (in thousands):
Three Months Ended March 31, |
Fiscal Year Ended March 31, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Unaudited) | ||||||||||||||||
Net income from continuing operations |
$ | 31,225 | $ | 28,668 | $ | 133,295 | $ | 113,495 | ||||||||
Provision for income taxes |
7,071 | 2,571 | 7,104 | 28,998 | ||||||||||||
Interest expense |
9,924 | 10,781 | 46,187 | 42,412 | ||||||||||||
Depreciation and amortization |
29,240 | 17,365 | 90,877 | 74,684 | ||||||||||||
EBITDA |
$ | 77,460 | $ | 59,385 | $ | 277,463 | $ | 259,589 | ||||||||
A reconciliation of our operating income, EBITDA, net income and diluted earnings per share as adjusted for the special items described below to each of these items as reported under GAAP is as follows:
March 2011 Quarter | ||||||||||||||||
Operating Income |
EBITDA | Net Income |
Diluted Earnings Per Share |
|||||||||||||
(Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
Adjusted for special items |
$ | 56,653 | $ | 79,905 | $ | 37,001 | $ | 1.00 | ||||||||
Impairment of IT system (1) |
(5,306 | ) | | (3,449 | ) | (0.09 | ) | |||||||||
Held for sale aircraft impairment (2) |
(1,500 | ) | | (1,095 | ) | (0.03 | ) | |||||||||
Impairment of investment in affiliate (3) |
| (2,445 | ) | (1,589 | ) | (0.04 | ) | |||||||||
As reported |
$ | 49,847 | $ | 77,460 | $ | 30,868 | 0.84 | |||||||||
March 2010 Quarter | ||||||||||||||||
Operating |
EBITDA | Net Income |
Diluted Earnings Per Share |
|||||||||||||
(Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
Adjusted for special items |
$ | 39,920 | $ | 60,385 | $ | 26,630 | $ | 0.73 | ||||||||
Allowance for receivables (4) |
(2,200 | ) | (2,200 | ) | (1,430 | ) | (0.04 | ) | ||||||||
Depreciation correction (5) |
3,872 | | 2,463 | 0.07 | ||||||||||||
Australia local tax (6) |
1,200 | 1,200 | 780 | 0.02 | ||||||||||||
As reported |
$ | 42,792 | $ | 59,385 | $ | 28,443 | 0.78 | |||||||||
Fiscal Year Ended March 31, 2011 |
||||||||||||||||
Operating Income |
EBITDA | Net Income |
Diluted Earnings Per Share |
|||||||||||||
(Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
Adjusted for special items |
$ | 193,030 | $ | 278,708 | $ | 121,285 | $ | 3.30 | ||||||||
Impairment of IT system (1) |
(5,306 | ) | | (3,449 | ) | (0.09 | ) | |||||||||
Held for sale aircraft impairment (2) |
(1,500 | ) | | (1,095 | ) | (0.03 | ) | |||||||||
Impairment of investment in affiliate (3) |
| (2,445 | ) | (1,589 | ) | (0.04 | ) | |||||||||
Power-by-the-hour credit (7) |
3,500 | 3,500 | 2,520 | 0.07 | ||||||||||||
Retirement of 6 1/8% Senior Notes (8) |
| (2,300 | ) | (3,055 | ) | (0.08 | ) | |||||||||
Income tax items (9) |
| | 17,698 | 0.48 | ||||||||||||
As reported |
$ | 189,724 | $ | 277,463 | $ | 132,315 | 3.60 | |||||||||
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Fiscal Year Ended March 31, 2010 |
||||||||||||||||
Operating Income |
EBITDA | Net Income |
Diluted Earnings Per Share |
|||||||||||||
(Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
Adjusted for special items |
$ | 181,540 | $ | 259,586 | $ | 109,114 | $ | 3.02 | ||||||||
Allowance for receivables (10) |
(1,100 | ) | (1,100 | ) | (715 | ) | (0.02 | ) | ||||||||
Depreciation correction (5) |
3,250 | | 2,898 | 0.08 | ||||||||||||
Australia local tax (6) |
2,041 | 2,041 | 1,327 | 0.04 | ||||||||||||
Departure of officers (11) |
(4,874 | ) | (4,874 | ) | (3,168 | ) | (0.09 | ) | ||||||||
Hedging gains (12) |
| 3,936 | 2,558 | 0.07 | ||||||||||||
As reported |
$ | 180,857 | $ | 259,589 | $ | 112,014 | 3.10 | |||||||||
(1) | Represents additional depreciation expense recorded as a result of the impairment of previously capitalized internal software costs as the related project was abandoned in the March 2011 quarter. |
(2) | Represents additional depreciation expense recorded as a result of the impairment of three held for sale aircraft in the March 2011 quarter. |
(3) | Represents a charge recorded as a reduction in other income (expense), net related to the impairment of our 24% investment in Heliservicio, an unconsolidated affiliate in Mexico, resulting from a pending sale of the investment. |
(4) | Represents a $3.6 million bad debt allowance recorded for accounts receivable due from our unconsolidated affiliate in Mexico, which we determined were not probable of collection, which was partially offset by a $1.4 million reduction in a bad debt allowance for accounts receivable due from a client in Nigeria; these items are included in direct cost. |
(5) | Represents a reduction in depreciation expense recorded in the March 2010 quarter for errors in the calculation of depreciation on certain aircraft in prior periods. |
(6) | Represents a net expense reduction in Australia upon resolution of local tax matters in the March 2010 quarter that reduced direct costs and in fiscal year ended March 31, 2010 that reduced direct cost by $1.1 million and general and administrative expense by $0.9 million. |
(7) | Represents a reduction in maintenance expense (included in direct cost) associated with a credit resulting from the renegotiation of a power-by-the-hour contract for aircraft maintenance with a third party provider. |
(8) | Represents to impact from the early retirement of the 6 1/8% Senior Notes, which resulted in a $2.3 million early redemption premium (included in other income (expense), net) and the non-cash write-off of $2.4 million of unamortized debt issuance costs (included in interest expense). |
(9) | Represents the impact of a reduction in the provision for income taxes related to adjustments to deferred tax liabilities that were no longer required as a result of a restructuring during the fiscal year ended March 31, 2011. |
(10) | Represents a $3.6 million bad debt allowance recorded for accounts receivable due from our unconsolidated affiliate in Mexico, which we determined were not probable of collection, which was partially offset by a $2.5 million reduction in a bad debt allowance for accounts receivable due from a client in Kazakhstan; these items are included in direct cost. |
(11) | Represents compensation costs associated with the departure of three of the Companys officers during the fiscal year ended March 31, 2010; these costs are included in general and administrative costs. |
(12) | Represents the impact of pre-tax hedging gains of $3.9 million realized during the fiscal year ended March 31, 2010 due to termination of forward contracts on euro-denominated aircraft purchase commitments; these gains are included in other income (expense), net. |
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