Bristow Group, Inc. · NYSE:VTOL
Bristow — Q3 FY2015 Earnings Presentation
52 slides from Bristow's earnings presentation, Feb 6, 2015
Slide 1: Third quarter FY15 earnings presentation
Exhibit 99.1 Third quarter FY15 earnings presentation Bristow Group Inc. February 6, 2015
Slide 2: Third quarter FY15 earnings call agenda
Third quarter FY15 earnings call agenda Introduction Linda McNeill, Director Investor Relations CEO remarks and safety review Jonathan Baliff, President and CEO Operational highlights Jeremy Akel, SVP and COO Current and future financial performance John Briscoe, SVP and CFO Closing remarks Jonathan
Slide 3: Forward-looking statements
Forward-looking statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our future business, operations, capital expenditures, fleet composition, capabilities
Slide 4: CEO remarks and safety review
CEO remarks and safety review Jonathan Baliff, President and CEO
Slide 5: Operational safety review
Operational safety review Commercial Air Accident Rate1 (AAR) per 100,000 Total Recordable Injury Rate 2 (TRIR) per flight hours (fiscal year) 200,000 man hours (cumulative) 1) AAR includes consolidated commercial operations only 2) TRIR includes consolidated commercial operations, corporate and Bri
Slide 6: HeliOffshore: Safety through collaboration
HeliOffshore: Safety through collaboration • Interest is very strong. Since its launch in October 2014, enrollment has grown to more than 20 members, with an additional 50 in process • Global engagement is underway. Membership interest from all regions of the world • HeliOffshore is producing real r
Slide 7: Q3 FY15 highlights
Q3 FY15 highlights • Q3 operating revenue of $430.3M (15.2% increase from Q3 FY14, 2.3% decrease from Q2 FY15) • Q3 GAAP EPS loss of $0.03 (105.9% decrease from Q3 FY14, 104.1% decrease from Q2 FY15) • Q3 adjusted EPS* of $0.70 (17.6% decrease from Q3 FY14, 19.5% decrease from Q2 FY15) • Q3 adjusted
Slide 8: Bristow market perspectives
Bristow market perspectives • Clients are only at the start of a three phase response in this downturn: retrenching, recalibration, and (eventually) renewal • The strength of the U.S. dollar has impacted Bristow’s current financial Overall oil results more than the oil price decline price • Bristow
Slide 9: Operational highlights
Operational highlights Jeremy Akel, SVP and COO 9
Slide 10: Europe (EBU)
Europe (EBU) • Europe contributed 46% of Bristow operating revenue and 47% of adjusted EBITDAR* in Q3 FY15 • Operating revenue increased 22.3% to $193.8M in Q3 FY15 from $158.5M in Q3 FY14 with the net addition of eleven LACE, the addition of Eastern Airways and an overall increase in activity over
Slide 11: UK SAR update
UK SAR update • From the start of the GAP SAR contract on June 1, 2013 through December 31, 2014, we have conducted 519 missions and rescued and/or assisted 520 people • Sumburgh and Stornoway bases generated $11.9M of operating revenue in Q3 FY15 and $76.1M since the beginning of the contract • Com
Slide 12: West Africa (WASBU)
West Africa (WASBU) • West Africa (Nigeria) contributed 19% of Bristow operating revenue and 20% of adjusted EBITDAR* in Q3 FY15 • Operating revenue increased to $80.5M in Q3 FY15 from $79.4M in Q3 FY14 due to increased activity levels and improved contract terms • Adjusted EBITDAR increased to $27.
Slide 13: North America (NABU)
North America (NABU) • North America contributed 15% of Bristow operating revenue and 18% of adjusted EBITDAR* in Q3 FY15 • Operating revenue increased to $62.4M in Q3 FY15 from $54.9M in Q3 FY14 primarily due to an increase in the number of medium and large aircraft on contract • Adjusted EBITDAR i
Slide 14: Australia (AUSBU)
Australia (AUSBU) • Australia contributed 12% of Bristow operating revenue and 10% of adjusted EBITDAR* in Q3 FY15 • Operating revenue increased by 51.5% to $52.4M in Q3 FY15 from $34.6M in Q3 FY14 • Adjusted EBITDAR increased 157.1% to $13.3M in Q3 FY15 from $5.2M in Q3 FY14 and adjusted EBITDAR ma
Slide 15: Bristow has acquired Airnorth, Northern Australia's largest regional airline
Bristow has acquired Airnorth, Northern Australia’s largest regional airline • Bristow acquired an 85% interest in the privately owned Airnorth • Airnorth is an Australian regional fixed-wing operator with a balanced portfolio of charter and scheduled flights servicing oil and gas and mining clients
Slide 16: Airnorth provides scale, stability and positive financial impact for Bristow
Airnorth provides scale, stability and positive financial impact for Bristow • Bristow Helicopters and Airnorth are culturally aligned with shared core values of safety, quality and service • Together, Bristow Helicopters and Airnorth are positioned to facilitate and expand passengers’ transport exp
Slide 17: Other International (OIBU)
Other International (OIBU) • Other International contributed 8% of Bristow operating revenue and 5% of adjusted EBITDAR* in Q3 FY15 • Operating revenue increased to $32.6M in Q3 FY15 vs. $30.8M in Q3 FY14 due to addition of a contract in Tanzania and increased activity in Trinidad • Adjusted EBITDAR
Slide 18: Líder update
Líder update • CY14 adjusted EBITDAR was flat year-over-year despite unfavorable changes in foreign currency rates • Absolute BVA contribution to Bristow from Líder was $5.1M* in Q3 FY15 (December 31, 2014) • Adjusted debt to TTM adjusted EBITDAR increased to 2.9x as of December 31, 2014 from 2.8x a
Slide 19: Current and future financial performance
Current and future financial performance John Briscoe, SVP and CFO
Slide 20: Financial highlights
Financial highlights: Adjusted EPS and adjusted EBITDAR summary year-over-year Q3 FY14 to Q3 FY15 adjusted EPS bridge $0.43 $0.30 $0.85 $0.28 $0.70 Q3 FY14 Operations Corporate and Other FX Changes Q3 FY15 Q3 FY14 to Q3 FY15 adjusted EBITDAR bridge (in millions) $36.5 $15.7 $12.4 $100.7 $109.1 Q3 FY
Slide 21: LACE and LACE rate continue to increase
LACE and LACE rate continue to increase led by new technology aircraft and improved utilization/terms FY15 average LACE guidance range changed to 165-170 and average LACE rate guidance range changed to $9.00 - $9.50 million * See appendix hereto for more information on LACE and LACE rate. Consolidat
Slide 22: Bristow Value Added drives improving Gross Cash Flow performance
Bristow Value Added (BVA) drives improving Gross Cash Flow (GCF) performance • Q3 FY15 absolute BVA is positive $19.7M, a $7.6M or 63% increase from Q3 FY14 • Year-over-year change in BVA is driven by: Solid revenue growth Margin improvement Capital efficiency efforts • EBU and NABU generated key im
Slide 23: Our progress on BVA yields stronger operating cash flow
Our progress on BVA yields stronger operating cash flow for growth, dividends and share repurchases Net cash provided by operating activities 1 Total liquidity 2 1) See 10-Q for more information on cash flow provided by operating activities. 2) At period end 23
Slide 24: FY15 guidance updated
FY15 guidance updated . . . • FY15 adjusted EPS guidance range is reduced to $4.05 - $4.45, excluding special items and aircraft sales. FY15 guidance includes: FY15 guidance as of December 31, 2014 Average LACE (Large AirCraft ~165-170 Interest expense ~ $28 - $32M Equivalent) Average LACE Rate ~ $9
Slide 25: As we continue to invest for Bristow's future
. . . as we continue to invest for Bristow’s future • Our Q3 FY15 financial performance is similar to our last quarter: excellent BVA and operating cash flow, with adjusted EPS lower than expectations • Declines in recent oil prices with a strengthening dollar are negatively impacting our business i
Slide 26: Appendix
Appendix
Slide 27: Organizational chart - as of December 31, 2014
Organizational chart - as of December 31, 2014 Operated Aircraft Bristow owned and/or operated 369 aircraft as of December 31, 2014 Affiliated Aircraft Bristow affiliates and joint ventures operated 131 aircraft as of December 31, 2014 Key Corporate Business Unit (% of FY15 operating revenue) Region
Slide 28: Aircraft fleet – medium and large
Aircraft fleet – medium and large as of December 31, 2014 Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Large capacity 16-25 passengers Large Helicopters AS332 L Super Puma 18 Twin Turbine 17 - 17 - AW189 16 Twin Turbine 2 - 2 15 EC175 16 Twin Turbine - - - 5 EC225 19 Twin Turbine 26 -
Slide 29: Aircraft fleet – small, training and fixed
Aircraft fleet – small, training and fixed as of December 31, 2014 (continued) Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Small capacity 4-7 passengers Small Helicopters AW109 6 Twin Turbine - 1 1 AS 350BB 4 Turbine - 2 2 Bell 206B 4 Turbine 1 2 3 - Bell 206 L Series 6 Turbine 5 6 1
Slide 30: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of December 31, 2014 Small Medium Large Total Leased LACE Total LACE % Leased EBU - 3 37 40 39 70 55% WASBU - 1 1 2 2 20 8% NABU 1 13 5 19 12 34 35% AUSBU 2 2 7 11 9 24 36% OIBU - - - - - 22 - Total 3
Slide 31: Consolidated fleet changes and aircraft sales for Q3 FY15
Consolidated fleet changes and aircraft sales for Q3 FY15 Fleet changes Held for sale aircraft in consolidated fleet Q1 FY15 Q2 FY15 Q3 FY15 Small Medium Large Training Total Fleet Count Beginning 363 363 363 EBU - - 8 - 8 Delivered WASBU - 2 2 - 4 Large 6 2 4 NABU - - - - - Medium 3 - 2 Total Deliv
Slide 32: Operating revenue, LACE and LACE rate by BU
Operating revenue, LACE and LACE rate by BU Operating Revenue, LACE, and LACE Rate by BU as of December 31, 2014 1 2,3 YTD op revenue LACE LACE Rate EBU $487 70 $9.33 WASBU 241 20 16.04 NABU 176 34 7.00 AUSBU 146 24 8.29 OIBU 104 22 6.44 4 Total $1,176 168 $9.33 1) $ in millions 2) LACE rate is annu
Slide 33: Historical LACE by BU
Historical LACE by BU LACE FY10 FY11 FY12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBU 45 45 45 42 42 43 48 46 44 46 46 45 WASBU 23 23 24 25 24 24 21 22 23 22 22 22 NABU 39 36 36 36 39 35 34 29 30 29 30 30 AUSBU 20 20 22 22 20 23 24 20 19 20 20 19 OIBU 36 34 34 35 33 33 33 38 39 38 38 34 Consolidated 163
Slide 34: Historical LACE rate by BU
Historical LACE rate by BU LACE Rate1,2 FY10 FY11 FY12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBU $8.36 $8.28 $8.40 $8.76 $8.20 $8.50 $7.90 $8.40 $9.80 $9.60 $9.63 $10.09 WASBU 9.08 8.81 8.66 8.34 9.70 9.40 10.70 9.90 9.10 10.30 11.17 11.46 NABU 5.05 5.44 5.26 5.23 5.40 6.10 6.00 6.60 5.80 6.30 5.89 5.
Slide 35: Order and options book as of December 31, 2014
Order and options book as of December 31, 2014 1 OPTIONS BOOK ORDER BOOK Helicopter Helicopter # Class Delivery Date # Class Delivery Date Location Contracted 2 Large June-16 3 Medium March-15 IBU 3 of 3 3 Medium June-16 3 Medium June-15 WASBU 3 Large September-16 2 2 Large September-15 EBU 2 Medium
Slide 36: Order and options book (continued) UK SAR configured order book
Order and options book as of December 31, 2014 (continued) UK SAR CONFIGURED ORDER BOOK Helicopter # Class Delivery Date Location Contracted 5 Large March-15 EBU 5 of 5 2 Large June-15 EBU 2 of 2 2 Large June-15 EBU 2 of 2 2 Large September-15 EBU 2 of 2 2 Large December-15 EBU 2 of 2 13 13 of 13 Th
Slide 37: Total net asset FMV with and without leased aircraft FMV
Total net asset FMV with and without leased aircraft FMV NOTE: The gray shaded area represents the range of FMV with and without the impact of leased aircraft (upper range includes leased aircraft and related NPV of lease payments; lower range excludes FMV of leased aircraft as well as the NPV of le
Slide 38: Net asset FMV reconciliation as of December 31, 2014
Net asset FMV reconciliation as of December 31, 2014 December 31, 2014 (in millions) Including leases Excluding leases (+) FMV of aircraft $1,944 $1,944 (+) FMV of leased aircraft 1,564 - (+) NBV of PPE without aircraft 576 576 (+) Working capital 259 259 (-) LT debt (804) (804) (-) Leased imputed d
Slide 39: UK SAR net asset FMV reconciliation
UK SAR net asset FMV reconciliation UK SAR contribution (in millions) December 31, 2014 FY16 - FY17 Implied (+) FMV of aircraft $1,944 $79 $2,023 (+) FMV of leased aircraft 1,564 172 1,737 (+) NBV of PPE without aircraft 576 113 689 (+) Working capital 259 174 433 (-) LT debt (804) (88) (892) (-) Le
Slide 40: Adjusted EBITDAR margin trend
Adjusted EBITDAR margin* trend FY12 FY13 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year EBU 33.0% 31.4% 30.7% 36.1% 32.9% 32.2% 34.6% 39.5% 38.3% 36.2% WASBU 29.5% 35.5% 37.2% 36.6% 35.0% 31.9% 26.5% 35.0% 31.8% 31.5% NABU 14.3% 20.6% 14.8% 19.4% 17.3% 23.2% 20.7% 29.1% 29.5% 25.7% AUSBU 20.2% 14.4% 23
Slide 41: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation Fiscal year ended, 3/31/2012 3/31/2013 ($ in millions) Q1 Q2 Q3 Q4 FY12 Q1 Q2 Q3 Q4 FY13 Net income $21 $3 $26 $15 $65 $24 $30 $37 $40 $132 Income tax expense $7 -$2 $7 $2 $14 $6 $8 $8 $13 $35 Interest expense $9 $9 $10 $10 $38 $9 $9 $15 $10 $42 Gain on disposal of a
Slide 42: Bristow Value Added (BVA) sample calculation
Bristow Value Added (BVA) Sample calculation for Q3 FY15 and Q3 FY14 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%**) Bristow Value Added calculation for Q3 FY15 $19.7 = $118.1* – ($3,751* x 2.625%**) Bristow Value Added calculation for Q3
Slide 43: Bristow gross cash flow reconciliation
Bristow gross cash flow reconciliation (in millions) Gross cash flow reconciliation Q3 FY14 Q3 FY15 Net income 19 (1) Depreciation and amortization 24 24 Interest expense 7 7 Interest income (0) (0) Rent 28 46 Other income/expense-net 1 1 Gain/loss on asset sale (4) 26 Special items 4 7 Tax effect f
Slide 44: Bristow adjusted gross operating assets reconciliation
Bristow adjusted gross operating assets reconciliation (in millions) Adjusted gross operating assets reconciliation Q3 FY14 Q3 FY15 Total assets 3,277 3,180 Accumulated depreciation 530 495 Capitalized operating leases 419 660 Cash and cash equivalents (323) (121) Investment in unconsolidated entiti
Slide 45: Líder Bristow Value Added (BVA) sample calculation
Líder Bristow Value Added (BVA) Sample calculation for Q3 FY15 and Q3 FY14 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%** ) Bristow Value Added calculation for Q3 FY15 $5.1 = $12.2* – ($269* x 2.625%**) Bristow Value Added calculation for
Slide 46: Líder gross cash flow reconciliation
Líder gross cash flow reconciliation ($ in millions) Gross cash flow reconciliation Q3 FY13 Q3 FY15 Net income (loss) $ 7.1 $ (6.5) Depreciation and amortization 3.6 3.5 Rent 6.5 7.4 Interest expense 3.7 4.4 Interest income (1.2) (1.4) FX (gains) losses 6.4 15.7 Other income/expense-net (1.2) (0.2)
Slide 47: Líder adjusted gross operating assets reconciliation
Líder adjusted gross operating assets reconciliation ($ in millions) Adjusted gross operating assets reconciliation Q3 FY14 Q3 FY15 Total assets $ 589 $ 611 Cash and cash equivalents (100) (67) Accumulated depreciation 75 80 Capitalized operating leases 129 148 Investments & escrow deposits (33) (46
Slide 48: Líder's adjusted EBITDAR reconciliation
Líder's adjusted EBITDAR* reconciliation ($ in millions) Q4 CY13 Q1 CY14 Q2 CY14 Q3 CY14 Q4 CY14 Gross revenue 119.3 121.2 113.7 116.4 100.9 (-) Revenue deductions (7.6) (5.9) (7.3) (7.7) (6.1) Net operating revenue 111.3 115.3 106.4 108.7 94.8 (-) Cost of products and services (87.0) (90.8) (79.5)
Slide 49: GAAP reconciliation
GAAP reconciliation Three months ended Nine months ended December 31, December 31, 2014 2013 2014 2013 (In thousands, except per share amounts) Adjusted operating income $43,564 $49,056 $161,303 $165,293 Gain (loss) on disposal of assets (26,331) 3,982 (25,594) (803) 1 Special items (8,317) (23,536)
Slide 50: Bristow leverage reconciliation
Bristow leverage reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of December 31, 2014 $ 818.2 $ 1,694.2 $ 2,512.4 32.6% Adjust for: Unfunded Pension Liability 62.1 62.1 NPV of Lease Obligations 649.7 649.7 Letters of credit 2.5 2.5 Adjusted $ 1,532.
Slide 51: Líder leverage reconciliation
Líder leverage reconciliation (in millions) Dec-13 Dec-14 Total book debt $ 279 $ 310 NPV of leases 69 46 Total adjusted debt 348 356 TTM adjusted EBITDAR $ 123 $ 124 Adjusted debt / TTM adj. EBITDAR 2.8x 2.9x 51
Slide 52: Contact us
Contact us Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com 52