Note 1 ¾ 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, 2013 is referred to as “fiscal year 2013.” Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), 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 2012 Annual Report (the “fiscal year 2012 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 financial position of the Company as of June 30, 2012, the consolidated results of operations for the three months ended June 30, 2012 and 2011, and the consolidated cash flows for the three months ended June 30, 2012 and 2011.

See “Foreign Currency” in Note 1 to the fiscal year 2012 Financial Statements for a discussion of the related accounting policies. During the three months ended June 30, 2012 and 2011, our primary foreign currency exposure was to the British pound sterling, the euro, the Australian dollar 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
		June 30,
		2012	2011
One British pound sterling into U.S. dollars
	High	1.62	1.66
	Average	1.58	1.63
	Low	1.53	1.60
	At period-end	1.57	1.61
One euro into U.S. dollars
	High	1.33	1.49
	Average	1.28	1.44
	Low	1.24	1.40
	At period-end	1.27	1.45
One Australian dollar into U.S. dollars
	High	1.04	1.09
	Average	1.01	1.06
	Low	0.97	1.03
	At period-end	1.03	1.07
One Nigerian naira into U.S. dollars
	High	0.0065	0.0066
	Average	0.0063	0.0065
	Low	0.0061	0.0064
	At period-end	0.0062	0.0065

Other income (expense), net, in our condensed consolidated statements of income includes foreign currency transaction losses of $0.9 million and foreign currency transaction gains of $0.2 million for the three months ended June 30, 2012 and 2011, respectively.

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 June 30, 2012 and 2011, earnings from unconsolidated affiliates, net of losses, were decreased by $3.1 million and increased by $0.6 million, respectively, as a result of the impact of changes in foreign currency exchange rates on the results of our unconsolidated affiliates, primarily the impact of changes in the Brazilian real and U.S. dollar exchange rate on results 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
		June 30,
		2012	2011
One Brazilian real into U.S. dollars
	High	0.5488	0.6405
	Average	0.5125	0.6274
	Low	0.4811	0.6106
	At period-end	0.4816	0.6380

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 discussed below (in thousands):

	Three Months Ended
	June 30, 2012
Revenue	$	(8,778)
Operating expense		9,699
Earnings from unconsolidated affiliates, net of losses		(3,690)
Non-operating expense		(1,192)
Income before benefit for income taxes		(3,961)
Benefit for income taxes		806
Net income		(3,155)
Cumulative translation adjustment		305
Total stockholders' investment	$	(2,850)

As of June 30 and March 31, 2012, the allowance for doubtful accounts for non-affiliates was $0.2 million and $0.1 million, respectively. As of June 30 and March 31, 2012, there were no allowances for doubtful accounts related to accounts receivable due from affiliates. See “Summary of Significant Accounting Policies” in Note 1 to the fiscal year 2012 Financial Statements for further information.

During the three months ended June 30, 2012, we recorded impairment charges of $1.9 million to reduce the carrying value of seven aircraft held for sale. These impairment charges are included as a reduction in gain (loss) on disposal of assets on the condensed consolidated statement of income. Additionally, we sold four aircraft and other equipment during the three months ended June 30, 2012 for proceeds of $20.2 million resulting in a loss of $3.4 million.

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement that provided new guidance on the presentation of comprehensive income in financial statements. This pronouncement requires entities to present total comprehensive income either in a single, continuous statement of comprehensive income or in two, separate, but consecutive, statements. Under the single-statement approach, entities must include the components of net income, a total for net income, the components of other comprehensive income and a total for comprehensive income. Under the two-statement approach, entities must report a statement of income and, immediately following, a statement of comprehensive income. Under either method, entities must display adjustments for items reclassified from other comprehensive income to net income in both net income and comprehensive income. In December 2011, the FASB deferred the effective date of the presentation of reclassifications of items out of other comprehensive income. The remaining provisions for this pronouncement were effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We adopted this pronouncement for our fiscal year beginning April 1, 2012 using the two-statement approach.