Company Quick10K Filing
Bristow Group
Price1.11 EPS-14
Shares36 P/E-0
MCap40 P/FCF-1
Net Debt830 EBIT-454
TEV870 TEV/EBIT-2
TTM 2019-09-30, in MM, except price, ratios
10-Q 2019-09-30 Filed 2019-12-27
10-Q 2019-06-30 Filed 2019-12-27
10-K 2019-03-31 Filed 2019-10-28
10-Q 2018-12-31 Filed 2019-06-19
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-02
10-K 2018-03-31 Filed 2018-05-23
10-Q 2017-12-31 Filed 2018-02-08
10-Q 2017-09-30 Filed 2017-11-08
10-Q 2017-06-30 Filed 2017-08-03
10-K 2017-03-31 Filed 2017-05-23
10-Q 2016-12-31 Filed 2017-02-02
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-04
10-K 2016-03-31 Filed 2016-05-27
10-Q 2015-12-31 Filed 2016-02-08
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-06
10-K 2015-03-31 Filed 2015-05-20
10-Q 2014-12-31 Filed 2015-02-05
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-04
10-K 2014-03-31 Filed 2014-05-21
10-Q 2013-12-31 Filed 2014-02-06
10-Q 2013-09-30 Filed 2013-11-07
10-Q 2013-06-30 Filed 2013-08-05
10-K 2013-03-31 Filed 2013-05-23
10-Q 2012-12-31 Filed 2013-02-04
10-Q 2012-09-30 Filed 2012-11-07
10-Q 2012-06-30 Filed 2012-08-06
10-K 2012-03-31 Filed 2012-05-23
10-Q 2011-12-31 Filed 2012-02-02
10-Q 2011-09-30 Filed 2011-11-07
10-Q 2011-06-30 Filed 2011-08-08
10-K 2011-03-31 Filed 2011-05-20
10-Q 2010-12-31 Filed 2011-02-02
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-04
10-K 2010-03-31 Filed 2010-05-21
10-Q 2009-12-31 Filed 2010-02-03
8-K 2019-11-28
8-K 2019-10-31
8-K 2019-10-03
8-K 2019-09-30
8-K 2019-09-16
8-K 2019-09-10
8-K 2019-08-26
8-K 2019-08-20
8-K 2019-08-12
8-K 2019-08-01
8-K 2019-07-30
8-K 2019-07-24
8-K 2019-06-27
8-K 2019-05-13
8-K 2019-05-10
8-K 2019-05-01
8-K 2019-04-15
8-K 2019-04-10
8-K 2019-03-14
8-K 2019-02-28
8-K 2019-02-20
8-K 2019-02-18
8-K 2019-02-11
8-K 2019-02-11
8-K 2018-12-19
8-K 2018-12-17
8-K 2018-12-10
8-K 2018-11-27
8-K 2018-11-21
8-K 2018-11-09
8-K 2018-11-09
8-K 2018-11-09
8-K 2018-11-09
8-K 2018-11-08
8-K 2018-09-12
8-K 2018-08-03
8-K 2018-08-02
8-K 2018-07-31
8-K 2018-06-05
8-K 2018-05-24
8-K 2018-05-23
8-K 2018-04-17
8-K 2018-03-06
8-K 2018-02-09
8-K 2018-02-08

BRS 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Note 1 - Basis of Presentation, Consolidation and Summary of Significant Accounting Policies
Note 2 - Bankruptcy and Related Matters
Note 3 - Revenue Recognition
Note 4 - Variable Interest Entities
Note 5 - Debt
Note 6 - Fair Value Disclosures
Note 7 - Derivative Financial Instruments and Hedging Activities
Note 8 - Commitments and Contingencies
Note 9 - Leases
Note 10 - Taxes
Note 11 - Employee Benefit Plans
Note 12 - Earnings per Share and Accumulated Other Comprehensive Income
Note 13 - Segment Information
Note 14 - Supplemental Condensed Consolidating Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 fy2020q210-q09302019ex311.htm
EX-31.2 fy2020q210-q09302019ex312.htm
EX-32.1 fy2020q210-q09302019ex321.htm
EX-32.2 fy2020q210-q09302019ex322.htm

Bristow Group Earnings 2019-09-30

Balance SheetIncome StatementCash Flow
3.62.92.21.40.70.02012201420172020
Assets, Equity
0.60.40.30.1-0.0-0.22012201420172020
Rev, G Profit, Net Income
0.30.20.1-0.1-0.2-0.32012201420172020
Ops, Inv, Fin

10-Q 1 fy2020q210-q09302019.htm 10-Q Document


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form 10-Q
 
 
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2019
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to      
 
Commission File Number 001-31617
 
 
Bristow Group Inc.
 
 
(Exact name of registrant as specified in its charter)
 
Delaware
 
72-0679819
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification Number)
 
 
3151 Briarpark Drive,
Suite 700
Houston, Texas
 
77042
(Zip Code)
(Address of principal executive offices)
 
 
Registrant’s telephone number, including area code:
(713) 267-7600
 
 
 
None 
 
 
 
 
 
 
 
 
 
 
 
 
(Former name, former address and former fiscal year, if changed since last report)
 
 
 
 
 
 
 
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
 
 
None
None
None
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ   No  ¨ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o
Smaller reporting company o
Emerging growth company o
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o  Yes    þ  No
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
þ  Yes    o  No
Pursuant to an Amended Joint Plan of Reorganization (as modified, the “Plan”), Bristow Group Inc.’s existing common stock, par value $0.01 (the “Existing Common Stock”) was cancelled as of October 31, 2019. On October 31, 2019, Bristow Group Inc. issued common stock, par value $0.0001 (the “New Common Stock”), and preferred stock, par value $0.0001 (the “New Preferred Stock”), under the Plan pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended, under Section 1145 of Chapter 11 of Title 11 of the United States Code and Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder. As of November 30, 2019, there were 11,235,535 shares of New Common Stock outstanding and 6,824,582 shares of New Preferred Stock outstanding.
 




BRISTOW GROUP INC.
INDEX — FORM 10-Q
 



PART I — FINANCIAL INFORMATION
 
Item 1.     Financial Statements.
BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
  
 
Three Months Ended
 September 30,
 
Six Months Ended
 September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
(In thousands, except per share amounts)
Revenue:
 
 
 
 
 
 
 
 
Operating revenue from non-affiliates
 
$
291,348

 
$
321,580

 
$
595,478

 
$
660,046

Operating revenue from affiliates
 
13,336

 
11,817

 
25,782

 
23,112

Reimbursable revenue from non-affiliates
 
13,536

 
15,946

 
30,136

 
32,853

 
 
318,220

 
349,343

 
651,396

 
716,011

Operating expense:
 
 
 
 
 
 
 
 
Direct cost
 
236,655

 
277,217

 
494,414

 
557,268

Reimbursable expense
 
12,840

 
15,194

 
28,974

 
31,098

Prepetition restructuring charges
 

 

 
13,476

 

Depreciation and amortization
 
31,303

 
30,489

 
62,642

 
61,430

General and administrative
 
37,820

 
38,839

 
72,590

 
78,940

 
 
318,618

 
361,739

 
672,096

 
728,736

 
 
 
 
 
 
 
 
 
Loss on impairment
 
(62,101
)
 
(117,220
)
 
(62,101
)
 
(117,220
)
Loss on disposal of assets
 
(230
)
 
(1,293
)
 
(4,017
)
 
(2,971
)
Earnings from unconsolidated affiliates, net of losses
 
633

 
1,461

 
2,980

 
(86
)
Operating loss
 
(62,096
)
 
(129,448
)
 
(83,838
)
 
(133,002
)
 
 
 
 
 
 
 
 
 
Interest expense, net
 
(22,445
)
 
(26,433
)
 
(48,766
)
 
(53,577
)
Reorganization items, net
 
(93,943
)
 

 
(170,299
)
 

Gain (loss) on sale of subsidiaries
 
420

 

 
(55,883
)
 

Other expense, net
 
(6,637
)
 
(3,204
)
 
(10,510
)
 
(7,154
)
Loss before benefit for income taxes
 
(184,701
)
 
(159,085
)
 
(369,296
)
 
(193,733
)
Benefit for income taxes
 
21,782

 
15,655

 
37,289

 
18,506

Net loss
 
(162,919
)
 
(143,430
)
 
(332,007
)
 
(175,227
)
Net income attributable to noncontrolling interests
 
(55
)
 
(517
)
 
(213
)
 
(584
)
Net loss attributable to Bristow Group
 
$
(162,974
)
 
$
(143,947
)
 
$
(332,220
)
 
$
(175,811
)
 
 
 
 
 
 
 
 
 
Loss per common share:
 
 
 
 
 
 
 
 
Basic
 
$
(4.54
)
 
$
(4.02
)
 
$
(9.25
)
 
$
(4.93
)
Diluted
 
$
(4.54
)
 
$
(4.02
)
 
$
(9.25
)
 
$
(4.93
)
The accompanying notes are an integral part of these condensed consolidated financial statements.

1


BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
  
 
Three Months Ended
 September 30,
 
Six Months Ended
 September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
(In thousands)
Net loss
 
$
(162,919
)
 
$
(143,430
)
 
$
(332,007
)
 
$
(175,227
)
Other comprehensive loss:
 
 
 
 
 
 
 
 
Currency translation adjustments
 
(12,334
)
 
(7,967
)
 
4,565

 
(37,000
)
Unrealized gain (loss) on cash flow hedges, net of tax benefit of zero, $(0.1) million, zero and $0.2 million, respectively
 
1,124

 
(98
)
 
1,598

 
1,250

Total comprehensive loss
 
(174,129
)
 
(151,495
)
 
(325,844
)
 
(210,977
)
 
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
 
(55
)
 
(517
)
 
(213
)
 
(584
)
Currency translation adjustments attributable to noncontrolling interests
 
35

 
(32
)
 
24

 
(171
)
Total comprehensive income attributable to noncontrolling interests
 
(20
)
 
(549
)
 
(189
)
 
(755
)
Total comprehensive loss attributable to Bristow Group
 
$
(174,149
)
 
$
(152,044
)
 
$
(326,033
)
 
$
(211,732
)
The accompanying notes are an integral part of these condensed consolidated financial statements.

2


BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 
 
September 30,
 2019
 
March 31,
 2019
 
 
(Unaudited)
 
 
(In thousands)
ASSETS
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
153,885

 
$
178,055

Restricted cash
 
38,910

 

Accounts receivable from non-affiliates
 
211,058

 
203,631

Accounts receivable from affiliates
 
17,735

 
13,160

Inventories
 
113,514

 
121,308

Assets held for sale
 

 
5,350

Prepaid expenses and other current assets
 
42,545

 
44,009

Total current assets
 
577,647

 
565,513

Investment in unconsolidated affiliates
 
109,986

 
118,203

Property and equipment – at cost:
 
 
 
 
Land and buildings
 
238,208

 
244,273

Aircraft and equipment
 
2,403,726

 
2,497,622

 
 
2,641,934

 
2,741,895

Less – Accumulated depreciation and amortization
 
(963,634
)
 
(907,715
)
 
 
1,678,300

 
1,834,180

Right-of-use assets
 
331,743

 

Goodwill
 

 
18,436

Other assets
 
94,899

 
116,267

Total assets
 
$
2,792,575

 
$
2,652,599

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
 
 
 
 
Accounts payable
 
$
93,433

 
$
99,573

Accrued wages, benefits and related taxes
 
45,774

 
48,151

Income taxes payable
 
3,234

 
3,646

Other accrued taxes
 
7,775

 
6,729

Deferred revenue
 
6,161

 
11,932

Accrued maintenance and repairs
 
24,932

 
24,337

Accrued interest
 
2,649

 
17,174

Current portion of operating lease liabilities
 
83,630

 

Other accrued liabilities
 
58,434

 
38,679

Short-term borrowings and current maturities of long-term debt
 
947,041

 
1,418,630

Total current liabilities
 
1,273,063

 
1,668,851

Long-term debt, less current maturities
 
75,611

 
8,223

Accrued pension liabilities
 
18,706

 
25,726

Other liabilities and deferred credits
 
7,905

 
26,229

Deferred taxes
 
59,862

 
111,203

Long-term operating lease liabilities
 
251,399

 

Total liabilities not subject to compromise
 
1,686,546

 
1,840,232

Liabilities subject to compromise
 
624,867

 

Total liabilities
 
2,311,413

 
1,840,232

Commitments and contingencies (Note 8)
 


 

Stockholders’ investment:
 
 
 
 
Common stock, $.01 par value, authorized 90,000,000; outstanding: 35,918,916 as of September 30 and March 31 (exclusive of 1,291,441 treasury shares)
 
386

 
386

Additional paid-in capital
 
863,546

 
862,020

Retained earnings
 
123,378

 
455,598

Accumulated other comprehensive loss
 
(321,802
)
 
(327,989
)
Treasury shares, at cost (2,756,419 shares)
 
(184,796
)
 
(184,796
)
Total Bristow Group stockholders’ investment
 
480,712

 
805,219

Noncontrolling interests
 
450

 
7,148

Total stockholders’ investment
 
481,162

 
812,367

Total liabilities and stockholders’ investment
 
$
2,792,575

 
$
2,652,599

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
  
 
Six Months Ended
 September 30,
 
 
2019
 
2018
 
 
 
 
 
 
 
(Unaudited)
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net loss
 
$
(332,007
)
 
$
(175,227
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
 
62,642

 
61,430

Deferred income taxes
 
(45,252
)
 
(27,651
)
Write-off of deferred financing fees
 
4,038

 

Discount amortization on long-term debt
 
1,520

 
3,101

Reorganization items, net
 
119,333

 

Loss on disposal of assets
 
4,017

 
2,971

Loss on impairment
 
62,101

 
117,220

Loss on sale of subsidiaries
 
55,883



Deferral of lease payments
 
285

 
2,841

Stock-based compensation
 
1,526

 
3,714

Equity in earnings from unconsolidated affiliates less than dividends received
 
636

 
2,812

Increase (decrease) in cash resulting from changes in:
 
 
 
 
Accounts receivable
 
(20,805
)
 
6,792

Inventories
 
(201
)
 
(3,785
)
Prepaid expenses and other assets
 
(2,675
)
 
2,980

Accounts payable
 
12,745

 
7,651

Accrued liabilities
 
32,890

 
(26,703
)
Other liabilities and deferred credits
 
(13,841
)
 
(5,048
)
Net cash used in operating activities
 
(57,165
)
 
(26,902
)
Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(25,950
)
 
(17,302
)
Proceeds from asset dispositions
 
5,003

 
8,462

Cash transferred in sale of subsidiaries, net of cash received
 
(22,458
)
 

Net cash used in investing activities
 
(43,405
)
 
(8,840
)
Cash flows from financing activities:
 
 
 
 
Proceeds from borrowings
 
225,585

 
387

Debt issuance costs
 
(14,130
)
 
(2,554
)
Repayment of debt
 
(99,228
)
 
(29,970
)
Partial prepayment of put/call obligation
 
(1,323
)
 
(27
)
Dividends paid to noncontrolling interest
 

 
(580
)
Issuance of common stock
 

 
2,830

Repurchases for tax withholdings on vesting of equity awards
 

 
(1,504
)
Net cash provided by (used in) financing activities
 
110,904

 
(31,418
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
 
4,406

 
(5,272
)
Net increase (decrease) in cash, cash equivalents and restricted cash
 
14,740

 
(72,432
)
Cash and cash equivalents at beginning of period
 
178,055

 
380,223

Cash, cash equivalents and restricted cash at end of period
 
$
192,795

 
$
307,791

Cash paid during the period for:
 
 
 
 
Interest
 
$
37,165

 
$
48,555

Income taxes
 
$
8,631

 
$
9,919

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Investment
(Unaudited)
(In thousands, except share amounts)
 
Total Bristow Group Stockholders’ Investment
 
 
 
 
 
Common
Stock
 
Common
Stock
(Shares)
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury
Stock
 
Noncontrolling
Interests
 
Total
Stockholders’
Investment
March 31, 2019
$
386

 
35,918,916

 
$
862,020

 
$
455,598

 
$
(327,989
)
 
$
(184,796
)
 
$
7,148

 
$
812,367

Issuance of common stock

 

 
824

 

 

 

 

 
824

Sale of subsidiaries

 

 

 

 

 

 
(5,612
)
 
(5,612
)
Currency translation adjustments

 

 

 

 

 

 
(11
)
 
(11
)
Net income (loss)

 

 

 
(169,246
)
 

 

 
158

 
(169,088
)
Other comprehensive income

 

 

 

 
17,362

 

 

 
17,362

June 30, 2019
$
386

 
35,918,916

 
$
862,844

 
$
286,352

 
$
(310,627
)
 
$
(184,796
)
 
$
1,683

 
$
655,842

Issuance of common stock

 

 
702

 

 

 

 

 
702

Distributions paid to noncontrolling interests

 

 

 

 

 

 
(1,323
)
 
(1,323
)
Currency translation adjustments

 

 

 

 

 

 
35

 
35

Net income (loss)

 

 

 
(162,974
)
 

 

 
55

 
(162,919
)
Other comprehensive income

 

 

 

 
(11,175
)
 

 

 
(11,175
)
September 30, 2019
$
386

 
35,918,916

 
$
863,546

 
$
123,378

 
$
(321,802
)
 
$
(184,796
)
 
$
450

 
$
481,162

The accompanying notes are an integral part of these condensed consolidated financial statements.


5


BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Investment
(Unaudited)
(In thousands, except share amounts)
 
Total Bristow Group Stockholders’ Investment
 
 
 
 
 
Common
Stock
 
Common
Stock
(Shares)
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury
Stock
 
Noncontrolling
Interests
 
Total
Stockholders’
Investment
March 31, 2018
$
382

 
35,526,625

 
$
852,565

 
$
794,191

 
$
(286,094
)
 
$
(184,796
)
 
$
7,253

 
$
1,183,501

Adoption of new accounting guidance (1)

 

 

 
(1,746
)
 

 

 

 
(1,746
)
Issuance of common stock
3

 
238,650

 
4,261

 

 

 

 

 
4,264

Distributions paid to noncontrolling interests

 

 

 

 

 

 
(14
)
 
(14
)
Currency translation adjustments

 

 

 

 

 

 
(139
)
 
(139
)
Net income (loss)

 

 

 
(31,864
)
 

 

 
67

 
(31,797
)
Other comprehensive loss

 

 

 

 
(27,824
)
 

 

 
(27,824
)
June 30, 2018
385

 
35,765,275

 
856,826

 
760,581

 
(313,918
)
 
(184,796
)
 
7,167

 
1,126,245

Issuance of common stock

 
32,910

 
1,983

 

 

 

 

 
1,983

Distributions paid to noncontrolling interests

 

 

 

 

 

 
(13
)
 
(13
)
Dividends paid to noncontrolling interest

 

 

 

 

 

 
(580
)
 
(580
)
Currency translation adjustments

 

 

 

 

 

 
(32
)
 
(32
)
Net income (loss)

 

 

 
(143,947
)
 

 

 
517

 
(143,430
)
Other comprehensive loss

 

 

 

 
(8,097
)
 

 

 
(8,097
)
September 30, 2018
$
385

 
35,798,185

 
$
858,809

 
$
616,634

 
$
(322,015
)
 
$
(184,796
)
 
$
7,059

 
$
976,076

_____________ 
(1) 
Cumulative-effect adjustment upon the adoption of new accounting guidance related to current and deferred income taxes for intra-entity transfer of assets other than inventory. For further details, see Note 1.
The accompanying notes are an integral part of these condensed consolidated financial statements.

6

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 1 — 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, 2020 is referred to as “fiscal year 2020”. Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “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 the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019 (the “fiscal year 2019 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 September 30, 2019, the consolidated statements of operations and comprehensive loss for the three and six months ended September 30, 2019 and 2018, the consolidated cash flows for the six months ended September 30, 2019 and 2018, and the consolidated statements of changes in stockholders’ investment for the three and six months ended September 30, 2019 and 2018.
Bankruptcy and Restructuring Support Agreement
On May 11, 2019 (the “Petition Date”), Bristow Group Inc. and certain of its subsidiaries: BHNA Holdings Inc., Bristow Alaska Inc., Bristow Helicopters Inc., Bristow U.S. Leasing LLC, Bristow U.S. LLC, BriLog Leasing Ltd. and Bristow Equipment Leasing Ltd. (together, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Debtors’ Chapter 11 Cases were jointly administered under the caption In re: Bristow Group Inc., et al., Main Case No. 19-32713. During the pendency of the Chapter 11 Cases, the Debtors continued to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
On May 10, 2019, we entered into a restructuring support agreement (the “Initial RSA”) with (i) certain holders of the Company’s 8.75% Senior Secured Notes due 2023 (the “8.75% Senior Secured Notes”) and (ii) the guarantors of the 8.75% Senior Secured Notes (the “Secured Guarantors”), to support a restructuring of the Company (the “Restructuring”). On June 27, 2019, we entered into an amendment and restatement of the Initial RSA and on July 24, 2019, we entered into a second amendment and restatement thereof (as so amended and restated, the “Second Amended RSA”), with a group of holders representing approximately 99.3% of the 8.75% Senior Secured Notes (the “Supporting Secured Noteholders”), the Secured Guarantors and a group of holders representing approximately 73.6% (together with the Supporting Secured Noteholders, the “Supporting Noteholders”) of the 6¼% Senior Notes due 2022 (the “6¼% Senior Notes”) and the 4½% Convertible Senior Notes due 2023 (the “4½% Convertible Senior Notes”) combined (together, the “Unsecured Notes”). The Second Amended RSA contemplated implementation of the Restructuring on the amended terms set forth in the term sheet contained in an exhibit to the Second Amended RSA (the “Restructuring Term Sheet”) pursuant to a Chapter 11 plan of reorganization and the various related transactions set forth in or contemplated by the Restructuring Term Sheet, the term sheet for the DIP Credit Agreement (as defined herein) and the other restructuring documents attached to the Second Amended RSA.
On August 1, 2019, the Debtors filed with the Bankruptcy Court the Joint Chapter 11 Plan of Reorganization of Bristow Group Inc. and its Debtor Affiliates and the Disclosure Statement related thereto. On August 20, 2019, the Debtors filed with the Bankruptcy Court the Amended Joint Chapter 11 Plan of Reorganization of Bristow Group Inc. and its Debtor Affiliates (as further modified on August 22, 2019, the “Amended Plan”) and the Disclosure Statement related thereto (as further modified on August 22, 2019, the “Amended Disclosure Statement”). On October 4, 2019, the Bankruptcy Court approved the Amended Disclosure Statement and indicated that it would confirm the Amended Plan. On October 8, 2019, the Bankruptcy Court entered an order approving the Amended Disclosure Statement and confirming the Amended Plan.
The effective date of the Amended Plan (the “Effective Date”) occurred on October 31, 2019.

7

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Bankruptcy Accounting
The condensed consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business and reflect the application of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the filing of the Chapter 11 Cases, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in reorganization items, net on our condensed consolidated statements of operations. In addition, prepetition unsecured and under-secured obligations that may be impacted by the bankruptcy reorganization process have been classified as liabilities subject to compromise on our condensed consolidated balance sheet as of September 30, 2019. As of September 30, 2019, these liabilities were reported at the amounts expected to be allowed as claims by the Bankruptcy Court, although some were subsequently settled for less. Where there was uncertainty about whether a secured claim would be paid or impaired pursuant to the Chapter 11 Cases, we classified the entire amount of the claim as an outstanding liability subject to compromise as of September 30, 2019. For specific discussion on balances of liabilities subject to compromise and reorganization items, net, see Note 2.
The accompanying condensed consolidated financial statements do not purport to reflect or provide for the consequences of the Chapter 11 Cases. In particular, the condensed consolidated financial statements do not purport to show: (i) the realizable value of assets on a liquidation basis or their availability to satisfy liabilities; (ii) the full amount of prepetition liabilities that may be allowed for claims or contingencies, or the status and priority thereof; (iii) the effect on stockholders’ investment accounts of any changes that may be made to our capitalization; or (iv) the effect on operations of any changes that may be made to our business.
Going Concern
The significant risks and uncertainties related to the Chapter 11 Cases raise substantial doubt about the Company’s ability to continue as a going concern. In addition, each of the commencement of the Chapter 11 Cases and the delivery of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, as amended by the amendment thereto (the “Amended 10-K”), with a going concern qualification or explanation constituted an event of default under certain of our secured equipment financings, giving those secured equipment lenders the right to accelerate repayment of the applicable debt, subject to Chapter 11 protections, and triggering cross-default and/or cross-acceleration provisions in substantially all of our other debt instruments should that right to accelerate repayment be exercised. The condensed consolidated financial statements included herein have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of the going concern uncertainty.
Loss on Impairment
Loss on impairment for the three and six months ended September 30, 2019 and 2018 includes the following (in thousands):
 
Three and six months ended September 30, 2019
 
Three and six months ended September 30, 2018
Impairment of property and equipment (1)
$
42,022

 
$
104,939

Impairment of goodwill
17,504

 

Impairment of inventories

 
9,276

Impairment of investment in unconsolidated affiliates
2,575

 

Impairment of intangible assets

 
3,005

 
$
62,101

 
$
117,220

___________ 
(1) 
Includes impairment of $42.0 million for H225 aircraft for the three and six months ended September 30, 2019. Includes impairment of $87.5 million for H225 aircraft and $17.5 million for Eastern Airways International Limited (“Eastern Airways”) aircraft and equipment for the three and six months ended September 30, 2018.
We recorded impairment of goodwill of $17.5 million during the three months ended September 30, 2019 attributable to Capiteq Limited, operating under the name Airnorth (see discussion under “Goodwill” below).

8

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


We perform regular reviews of each investee’s financial condition, the business outlook for its products and services, and its present and projected results and cash flows. When an investee has experienced consistent declines in financial performance or difficulties raising capital to continue operations, and when we expect the decline to be other-than-temporary, the investment is written down to fair value. Actual results may vary from estimates due to the uncertainty regarding the projected financial performance of investees, the severity and expected duration of declines in value, and the available liquidity in the capital markets to support the continuing operations of the investees in which we have investments.
We own a 17.2% investment in Sky Future Partners Limited (“Sky Future Partners”), a provider of drone-based inspection services to the global industrial markets. Given the negative evolution of Sky Future Partners’ liquidity forecast during the three months ended September 30, 2019 and the impact this would have on continued operations and future opportunities, we determined the investment to be other-than-temporarily impaired as of September 30, 2019. During the three months ended September 30, 2019, we recorded a $2.6 million impairment to our investment in Sky Future Partners in our Corporate and other region.
The fair value of investment in unconsolidated affiliates is estimated using the income approach. The estimate of fair value includes unobservable inputs, representative of Level 3 fair value measurement, including assumptions related to future performance, such as projected demand for services.
Prior to the three months ended September 30, 2018, we had been actively marketing our H225 aircraft with the expectation of a substantial return of the aircraft to oil and gas service. However, market conditions and more significantly, the development of alternative opportunities outside of our traditional oil and gas service for our H225 aircraft and our decision to pursue those opportunities during the three months ended September 30, 2018, indicated a substantial return to oil and gas service within our operations was not likely. Therefore, during the three months ended September 30, 2018, we concluded that cash flows associated with our H225 helicopters are largely independent from the cash flows associated with the remainder of our oil and gas related property and equipment (the “oil and gas asset group”) and should be tested for impairment as a stand-alone asset group. In accordance with ASC 360-10, we performed an impairment analysis for our stand-alone H225 asset group (“H225 asset group”) and determined that the forecasted cash flows over the remaining useful life of the asset group were insufficient to recover the carrying value of the asset group. We determined the fair value of the H225 asset group to be $116.4 million and recorded an impairment charge of $87.5 million. In addition, we performed a review of our H225 aircraft-related inventory and recorded an impairment charge of $8.9 million to record the inventory at the lower of cost or net realizable value. These impairments are included in our Corporate and other region in Note 13. The inputs used in our fair value estimates were from Level 3 of the fair value hierarchy discussed in Note 6.
In September 2019, we identified a potential decline in the fair value of the H225 asset group based on market transactions for the aircraft and as a result, in accordance with ASC 360-10, we performed an impairment analysis for our H225 asset group. We determined that the forecasted cash flows over the remaining useful life of the H225 asset group were insufficient to recover the carrying value of the H225 asset group. We determined the fair value of the H225 asset group to be $61.2 million and recorded an impairment charge of $42.0 million in the three months ended September 30, 2019. The inputs used in our fair value estimates were from Level 2 of the fair value hierarchy discussed in Note 6.
 Changes in our forecasted cash flows during the three months ended September 30, 2018 indicated the need for the performance of a recoverability analysis for the airline related assets of Eastern Airways. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of the airline related assets of Eastern Airways for potential impairment. 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 below the carrying value for our airline related assets of Eastern Airways as of September 30, 2018.  We determined the fair value of the asset group to be $20.5 million and recorded an impairment charge of $17.5 million.  As part of our impairment review of the airline assets of Eastern Airways, we also recorded impairments of $3.0 million related to the remaining intangible assets and $0.3 million related to inventory. These impairments are included in our Europe and Caspian region in Note 13. The inputs used in our fair value estimates were from Level 3 of the fair value hierarchy discussed in Note 6.

9

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Foreign Currency
During the three and six months ended September 30, 2019 and 2018, 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
 September 30,
 
Six Months Ended
 September 30,
 
 
2019
 
2018
 
2019
 
2018
One British pound sterling into U.S. dollars
 
 
 
 
 
 
 
 
High
 
1.27

 
1.33

 
1.32

 
1.43

Average
 
1.23

 
1.30

 
1.26

 
1.33

Low
 
1.21

 
1.27

 
1.21

 
1.27

At period-end
 
1.23

 
1.30

 
1.23

 
1.30

One euro into U.S. dollars
 
 
 
 
 
 
 
 
High
 
1.13

 
1.18

 
1.14

 
1.24

Average
 
1.11

 
1.16

 
1.12

 
1.18

Low
 
1.09

 
1.13

 
1.09

 
1.13

At period-end
 
1.09

 
1.16

 
1.09

 
1.16

One Australian dollar into U.S. dollars
 
 
 
 
 
 
 
 
High
 
0.70

 
0.75

 
0.72

 
0.78

Average
 
0.69

 
0.73

 
0.69

 
0.74

Low
 
0.67

 
0.71

 
0.67

 
0.71

At period-end
 
0.67

 
0.72

 
0.67

 
0.72

One Norwegian kroner into U.S. dollars
 
 
 
 
 
 
 
 
High
 
0.1172

 
0.1249

 
0.1179

 
0.1290

Average
 
0.1129

 
0.1214

 
0.1143

 
0.1230

Low
 
0.1097

 
0.1179

 
0.1097

 
0.1179

At period-end
 
0.1101

 
0.1228

 
0.1101

 
0.1228

One Nigerian naira into U.S. dollars
 
 
 
 
 
 
 
 
High
 
0.0028

 
0.0028

 
0.0028

 
0.0028

Average
 
0.0028

 
0.0028

 
0.0028

 
0.0028

Low
 
0.0028

 
0.0027

 
0.0028

 
0.0027

At period-end
 
0.0028

 
0.0027

 
0.0028

 
0.0027

_____________ 
Source: FactSet
Other income (expense), net, in our condensed consolidated statements of operations includes foreign currency transaction losses of $5.8 million and $2.3 million for the three months ended September 30, 2019 and 2018, respectively, and $8.7 million and $5.3 million for the six months ended September 30, 2019 and 2018, 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 most significant items revalued are denominated in U.S. dollars on entities with British pound sterling and Nigerian naira functional currencies and denominated in British pound sterling on entities with U.S. dollar functional currencies, with transaction gains or losses primarily resulting from the strengthening or weakening of the U.S. dollar versus those other currencies.

10

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


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 September 30, 2019 and 2018, earnings (losses) from unconsolidated affiliates, net decreased by $1.6 million and $1.0 million, respectively, and during the six months ended September 30, 2019 and 2018, earnings from unconsolidated affiliates, net of losses, decreased by $1.7 million and $3.6 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
 September 30,
 
Six Months Ended
 September 30,
 
 
2019
 
2018
 
2019
 
2018
One Brazilian real into U.S. dollars
 
 
 
 
 
 
 
 
High
 
0.2675

 
0.2699

 
0.2675

 
0.3020

Average
 
0.2524

 
0.2537

 
0.2538

 
0.2657

Low
 
0.2393

 
0.2390

 
0.2393

 
0.2390

At period-end
 
0.2401

 
0.2504

 
0.2401

 
0.2504

_____________ 
Source: FactSet
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
 September 30, 2019
 
Six Months Ended
 September 30, 2019
Revenue
 
$
(11,361
)
 
$
(23,964
)
Operating expense
 
11,025

 
21,855

Earnings from unconsolidated affiliates, net of losses
 
(576
)
 
1,888

Other income (expense), net
 
(3,509
)
 
(3,411
)
Income before provision for income taxes
 
(4,421
)
 
(3,632
)
Provision for income taxes
 
1,041

 
415

Net income
 
(3,380
)
 
(3,217
)
Cumulative translation adjustment
 
(12,299
)
 
4,589

Total stockholders’ investment
 
$
(15,679
)
 
$
1,372

Interest Expense, Net
During the three and six months ended September 30, 2019 and 2018, interest expense, net consisted of the following (in thousands):
 
Three Months Ended
 September 30,
 
Six Months Ended
 September 30,
 
2019
 
2018
 
2019
 
2018
Interest income
$
270

 
$
1,229

 
$
657

 
$
1,408

Interest expense
(22,715
)
 
(27,662
)
 
(49,423
)
 
(54,985
)
Interest expense, net
$
(22,445
)
 
$
(26,433
)
 
$
(48,766
)
 
$
(53,577
)

11

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Restricted Cash
As of September 30, 2019, restricted cash consisted of $37.0 million deposited in a financial institution trust held in escrow to be used in accordance with the DIP Credit Agreement and $1.9 million related to Norway withholding taxes. See Note 5 for further details on the DIP Credit Agreement.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.
 
 
September 30,
 2019
 
March 31,
 2019
 
 
 
 
 
 
 
(In thousands)
Reconciliation of cash, cash equivalents and restricted cash as shown in the statements of cash flows:
 
 
Cash and cash equivalents
 
$
153,885

 
$
178,055

Restricted cash
 
38,910

 

Total cash, cash equivalents and restricted cash
 
$
192,795

 
$
178,055

Accounts Receivable
As of September 30 and March 31, 2019, the allowance for doubtful accounts for non-affiliates was $0.8 million and $1.6 million, respectively. There were no allowances for doubtful accounts related to accounts receivable due from affiliates as of September 30 and March 31, 2019. The allowance for doubtful accounts for non-affiliates as of September 30, 2019 and March 31, 2019 primarily relates to amounts due from a customer in Australia.
Inventories
As of September 30 and March 31, 2019, inventories were net of allowances of $18.7 million and $19.4 million, respectively. As discussed under “ Loss on Impairment”, we performed a review of our H225 aircraft related inventory and Eastern Airways inventory and recorded impairment charges of $8.9 million and $0.3 million, respectively, to record the inventories at the lower of cost or net realizable value during the three months ended September 30, 2018.
Prepaid Expenses and Other Current Assets
As of September 30 and March 31, 2019, prepaid expenses and other current assets included the short-term portion of contract acquisition and pre-operating costs totaling $9.2 million and $9.8 million, respectively, related to the search and rescue (“SAR”) contracts in the U.K. and two customer contracts in Norway, which are recoverable under the contracts and will be expensed over the terms of the contracts. For the three months ended September 30, 2019 and 2018, we expensed $2.6 million and $2.5 million, respectively, and for the six months ended September 30, 2019 and 2018, we expensed $4.7 million and $5.2 million, respectively, related to these contracts.
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 for impairment annually or when events or changes in circumstances indicate that a potential impairment exists.
Goodwill related to our Asia Pacific reporting unit was as follows (in thousands):
March 31, 2019
$
18,436

Foreign currency translation
(932
)
Impairments
(17,504
)
September 30, 2019
$


12

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Accumulated goodwill impairment of $68.4 million and $50.9 million as as of September 30 and March 31, 2019, respectively, related to our reporting units as follows (in thousands):
 
Europe Caspian
 
Africa
 
Americas
 
Asia Pacific
 
Corporate and other
 
Total
March 31, 2019
$
(33,883
)
 
$
(6,179
)
 
$
(576
)
 
$

 
$
(10,223
)
 
$
(50,861
)
Impairments

 

 

 
(17,504
)
 

 
(17,504
)
September 30, 2019
$
(33,883
)
 
$
(6,179
)
 
$
(576
)
 
$
(17,504
)
 
$
(10,223
)
 
$
(68,365
)
We test goodwill for impairment on an annual basis as of March 31 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.
During the three months ended September 30, 2019, we noted an overall reduction in expected operating results for Airnorth from continued cost pressure combined with less than expected passenger and route fulfillment. We concluded the fair value of our goodwill for Airnorth 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 Airnorth as of September 30, 2019, concluding the estimated fair value of Airnorth was below its carrying value. We recorded an impairment charge of $17.5 million reflected in loss on impairment on our statements of operations for the three and six months ended September 30, 2019.
We estimated the implied fair value of Airnorth using 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 and mining business environment from the downturn. Operating costs were forecasted using a combination of our historical average operating costs and expected future costs. 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, if necessary. 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 the reporting unit. 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 Airnorth’s estimated fair value as a combination of the values calculated under the income approach and the market approach.


13

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Other Assets
The long-term portion of intangible assets and intangible assets with indefinite lives are included within other assets. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values. The Airnorth acquisition included in our Asia Pacific region, resulted in intangible assets for customer relationships and trade name and trademarks. Intangible assets by type not fully amortized were as follows (in thousands):
 
Customer
relationships
 
Trade name and trademarks
 
Total
 
 
 
 
 
 
 
Gross Carrying Amount
March 31, 2019
$
2,143

 
$
331

 
$
2,474

Foreign currency translation
(54
)
 
(16
)
 
(70
)
September 30, 2019
$
2,089

 
$
315

 
$
2,404

 
 
 
 
 
 
 
Accumulated Amortization
March 31, 2019
$
(1,070
)
 
$

 
$
(1,070
)
Amortization expense
(75
)
 

 
(75
)
September 30, 2019
$
(1,145
)
 
$

 
$
(1,145
)
 
 
 
 
 
 
Weighted average remaining contractual life, in years
6.3

 
*

 
6.3

_____________ 
*
Trade name and trademarks relating to Airnorth were determined to have indefinite useful lives and therefore were not amortized, but instead are tested for impairment on an annual basis.
Future amortization expense of intangible assets for each of the years ending March 31 is as follows (in thousands):
                 
2020
$
75

2021
150

2022
150

2023
150

2024
150

Thereafter
584

 
$
1,259

In addition to the other intangible assets described above, other assets included the long-term portion of contract acquisition and pre-operating costs totaling $30.5 million and $37.1 million, respectively, as of September 30 and March 31, 2019, related to the SAR contracts in the U.K. and two customer contracts in Norway, which are recoverable under the contracts and will be expensed over the terms of the contracts.
Property and Equipment
During the three and six months ended September 30, 2019 and 2018, we made capital expenditures as follows:
 
Three Months Ended
 September 30,
 
Six Months Ended
 September 30,
 
2019

2018
 
2019

2018
 
 
Capital expenditures (in thousands):
 
 
 
 
 
 
 
Aircraft and equipment
$
16,074

 
$
4,394

 
$
22,762

 
$
12,731

Land and buildings
2,437

 
4,013

 
3,188

 
4,571

Total capital expenditures
$
18,511

 
$
8,407

 
$
25,950

 
$
17,302

As of December 31, 2018, we revised the salvage values of certain aircraft to reflect our expectation of future sales values given our disposal plans for those aircraft. We recorded additional depreciation expense of $1.4 million and $2.8 million during the three and six months ended September 30, 2019, respectively.

14

BRISTOW GROUP INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


We evaluate our asset groups for impairment whenever facts or circumstances indicate the carrying value of an asset group may not be recoverable.
The removal of the H225 aircraft from our oil and gas asset group and changes in our forecasted cash flows for that asset group during the three months ended September 30, 2018 indicated the need for the performance of a recoverability analysis of our oil and gas asset group. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of our oil and gas asset group, which largely consists of our oil and gas-related 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, rates and anticipated aircraft disposal values. We determined that the estimated future undiscounted cash flows exceeded the carrying value for our oil and gas asset group as of September 30, 2018, and no impairment was recorded on these assets.
Changes in our forecasted cash flows as a result of actions taken during the Chapter 11 Cases during the three months ended September 30, 2019 triggered a review of our oil and gas asset group for potential impairment. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of our oil and gas asset group, which largely consists of our oil and gas-related 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, rates and anticipated aircraft disposal values. We determined that the estimated future undiscounted cash flows exceeded the carrying value for our oil and gas asset group as of September 30, 2019, and no impairment was recorded on these assets. Future declines in operating performance, anticipated business outlook and asset disposal values may reduce our estimated future undiscounted cash flows and result in impairment of our oil and gas asset group.
Changes in our forecasted cash flows during the three months ended September 30, 2019 indicated the need for the performance of a recoverability analysis for the airline related assets of Airnorth. In accordance with ASC 360-10, we estimate future undiscounted cash flows to test the recoverability of the airline related assets of Airnorth for potential impairment. 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 exceeded the carrying value for our Airnorth asset group as of September 30, 2019 and no impairment was recorded on these assets. Future declines in operating performance, anticipated business outlook and asset disposal values may reduce our estimated future undiscounted cash flows and result in impairment of our Airnorth asset group.
The following table presents details on the property and equipment sold or disposed of and impairments on property and equipment during the three and six months ended September 30, 2019 and 2018:
 
Three Months Ended
 September 30,
 
Six Months Ended
 September 30,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
(In thousands, except for number of aircraft)
Number of aircraft sold or disposed of
1

 

 
3

 
3
Proceeds from sale or disposal of assets (1)
$
1,799

 
$
688

 
$
5,003

 
$
8,462

Loss from sale or disposal of assets (2)
$
(230
)
 
$
(1,293
)
 
$
(4,017
)
 
$
(2,971
)
 
 
 
 
 
 
 
 
Impairment charges on property and equipment (3)
$
42,022

 
$
104,939

 
$
42,022

 
$
104,939

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