Slide 1: Q2 2014 Earnings Presentation
Q2 2014 Earnings Presentation 0 August 6, 2014
Slide 2: Q2 2014 Earnings Call Agenda
I. Introduction Chris Bradshaw, EVP and CFO II. Operational Highlights Sten Gustafson, Chief Executive Officer III. Financial Review Chris Bradshaw, EVP and CFO IV. Closing Remarks Sten Gustafson, Chief Executive Officer V. Questions & Answers Q2 2014 Earnings Call Agenda 1
Slide 3: Forward-looking statements
2 This presentation contains “forward-looking statements.” Forward-looking statements give the Company’s current expectations or forecasts of future events. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “es
Slide 4: EBITDA and Adjusted EBITDA definitions
3 This presentation includes EBITDA and Adjusted EBITDA as supplemental measures of the Company’s operating performance. EBITDA is defined as Earnings before Interest (includes interest income, interest expense and interest expense on advances from SEACOR), Taxes, Depreciation and Amortization. Adju
Slide 5: Operational Highlights
4 Operational Highlights
Slide 6: Compared to Prior Year Quarter
5 Compared to Prior Year Quarter • Record Q2 operating revenues of $86.6mm represent a 17% increase over the prior year quarter ̶ Total increase of $12.3mm primarily due to strong results from our U.S. Gulf of Mexico operations ̶ Partially offset by lower revenues from dry-leasing activities and the
Slide 7: Oil and Gas
6 • Q2 operating revenues from oil and gas activities of $61.2mm ̶ 25% increase from Q2 2013 ̶ 8% increase from Q1 2014 • U.S. Gulf of Mexico operating revenues of $51.7mm ̶ 35% increase from Q2 2013 primarily due to the resumption of operations of the EC225 heavy helicopters, higher rates for mediu
Slide 8: Other Service Lines
7 • Dry-leasing revenues of $11.5mm in Q2 2014 ̶ 12% decrease from Q2 2013 due to fewer helicopters on dry-lease ̶ 5% increase from Q1 2014 ̶ Revenues from Aeróleo and a customer in India continue to be recognized on a cash receipts basis due to liquidity issues experienced by both customers • Searc
Slide 9: Helicopter Order and Options Book
8 C ur re nt O rd er B oo k O pt io ns Delivery Class Type Number Remaining Amount Firm Cancellable 2014 Heavy AW189 3 $35.8 – 2015 Heavy AW189 2 $14.1 $16.6 2015 Heavy S92 1 $17.2 – 2016 Heavy AW189 3 – $51.0 2016 Heavy S92 2 $51.3 – 2017 Heavy AW189 2 – $34.7 2017 Heavy S92 1 $26.4 – TBD Light Twi
Slide 10: Sale of Lake Palma interest
9 • Lake Palma, S.L. (“Lake Palma”) was a joint venture owned 51% by Era and 49% by Fumigacion Aerea Andaluza S.A. (“FAASA”), a Spain-based firefighting operator ̶ Lake Palma owns seven A119 single engine helicopters which it dry-leases to FAASA for firefighting operations in Spain and Chile ̶ As an
Slide 11: Financial Review
GROUP INC. Financial Review
Slide 12: Q2 2014 vs Q2 2013 results
11 Three Months Ended June 30, 2014 2013 $ Change % Variance ($000s) Operating revenues 86,580$ 74,237$ 12,343$ 17% Operating expenses 54,679 46,945 7,734 (16%) G&A expenses 10,065 9,545 520 (5%) Depreciation 11,425 11,431 (6) 0% Gains on asset dispositions 3,139 4,476 (1,337) (30%) Operating income
Slide 13: Q2 2014 vs Q1 2014 results
12 Three Months Ended 30-Jun 31-Mar $ Change % Variance ($000s) Operating revenues 86,580$ 79,443$ 7,137$ 9% Operating expenses 54,679 49,640 5,039 (10%) G&A expenses 10,065 11,334 (1,269) 11% Depreciation 11,425 11,287 138 (1%) Gains on asset dispositions 3,139 2,891 248 9% Operating income 13,550
Slide 14: Capitalization and Financial Policy
13 • Era continues to generate substantial free cash flow before growth capex • Flexibility to deploy capital for attractive opportunities ̶ growth via organic capex or strategic acquisitions ̶ return of capital to shareholders • Existing capital commitments can be funded via combination of cash-on-
Slide 15: Net Asset Value
14 Net Asset Value $15 $20 $25 $30 $35 $40 $45 $50 01/22/13 04/22/13 07/22/13 10/22/13 01/22/14 04/22/14 07/22/14 NAV per Share (excl. deferred taxes) Stock Price NAV per Share (net of deferred taxes) Book Value per Share
Slide 16: Appendix
Oro GROUP INC. Appendix
Slide 17: Fleet Overview
16 Owned Joint Ventured Leased-In Managed Total Average Age(a) Heavy: EC225 9 – – – 9 4 Total Heavy 9 – – – 9 Medium: AW139 37 1 – – 38 4 B212 9 – – – 9 36 B412 6 – – – 6 33 S76 A/A++ 2 – – – 2 24 S76 C+/C++ 5 – – 1 6 7 Total Medium 59 1 – 1 61 Light – twin engine: A109 7 – – 2 9 8 BK-117 – – 2 1 3
Slide 18: NAV per Share Calculation
17 Notes: 1) NAV calculation only includes fair market value of helicopters that we own; it does not include any value for leased-in or managed helicopters that we operate 2) Helicopter fair market values based on annual desktop appraisal performed by Ascend Worldwide; new helicopters delivered subs
Slide 19: Operating Revenues by Line of Service
18 (a) Primarily oil and gas services, but also includes revenues from activities such as firefighting and utility support Operating Revenues by Line of Service Three Months Ended ($000s) 30-Jun-14 31-Mar-14 31-Dec-13 30-Sep-13 30-Jun-13 Oil and gas:(a) U.S. Gulf of Mexico $51,715 $49,141 $45,435 $4
Slide 20: Flight Hours by Line of Service
19 Note: Does not include hours flown by helicopters in our dry-leasing line of service (a) Primarily oil and gas services, but also includes revenues from activities such as firefighting and utility support Flight Hours by Line of Service Three Months Ended 30-Jun-14 31-Mar-14 31-Dec-13 30-Sep-13 3
Slide 21: Historical financial summary
20 (a) See next page for Adjusted EBITDA reconciliation to Net Income (Loss) Fiscal Year 3 Mos. Ended June 30, ($ millions) 2009 2010 2011 2012 2013 2014 2013 Revenue 235.7$ 235.4$ 258.1$ 272.9$ 299.0$ 86.6$ 74.2$ Operating Expenses 148.0 147.2 162.7 167.2 186.6 54.7 46.9 G&A 21.4 25.8 31.9 34.8 38.
Slide 22: Adjusted EBITDA notes
• Historically, SEACOR charged its corporate costs and overhead charges to all of its operating divisions − These charges have been excluded from Adjusted EBITDA to more accurately reflect Era’s historical results if we had not been a SEACOR subsidiary • Effective as of the spin-off, Era pays SEACOR