Slide 1: First Quarter 2013 Earnings Presentation
First Quarter 2013 Earnings Presentation May 15, 2013 0
Slide 2: First Quarter 2013 Earnings Call Agenda
I. Introduction Chris Bradshaw, EVP and CFO II. Brief Company Overview Sten Gustafson, Chief Executive Officer III. Q1 Operational Highlights Sten Gustafson, Chief Executive Officer IV. Financial Review Chris Bradshaw, EVP and CFO V. Closing Remarks Sten Gustafson, Chief Executive Officer VI. Questi
Slide 3: Forward-looking statements
2 This presentation contains “forward-looking statements.” Forward-looking statements give Era Group’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,” “esti
Slide 4: EBITDA, Adjusted EBITDA and Adjusted EBITDAR definitions
3 This presentation includes EBITDA, Adjusted EBITDA and Adjusted EBITDAR as supplemental measures of Era Group’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 Am
Slide 5: Brief Company Overview
GROUP INC. Brief Company Overview
Slide 6: Business Summary
• Founded in Alaska in 1948, Era is the longest-serving helicopter transport company in the U.S. • Spin-off from SEACOR effective January 31, 2013 • NYSE: “ERA” • 173 helicopters supporting two primary businesses – Operations – Contract-leasing • Asset ownership strategy focused on returns over the
Slide 7: End Markets and Era Services
Oil & Gas 67% of Revenue(b) Contract- Leasing 21% of Revenue(b) Air Medical Services 6% of Revenue(b) Other 6% of Revenue(b) End Market Era Services • Independent, major integrated and national oil & gas companies – primarily serving drilling rigs and platforms • Approximately 800 offshore drilling
Slide 8: Areas of Operation
Areas of Operation Australia Continental United States Sweden Aircraft in Region (# of aircraft) Spain Canada India Mexico 2 UK 3 Norway Brazil Training Center Joint Venture 20 2 1 102 3 Joint Ventures 2 Indonesia Australia 12 1 24 Alaska 7 1 Uruguay
Slide 9: Fleet Overview
Owned Joint Ventured Leased-In Managed Total Average Age(a) Heavy: EC225 9 – – – 9 3 Total Heavy 9 – – – 9 3 Medium: AW139 34 1 – – 35 4 Bell 212 11 – – – 11 34 Bell 412 6 – – – 6 31 S76 A/A++ 5 – 1 – 6 27 S76 C/C++ 8 – – 1 9 6 Total Medium 64 1 1 1 67 14 Light – twin engine: A109 7 – – 2 9 7 BK-117
Slide 10: Asset Overview
Asset Overview LIGHT Single or twin engine MEDIUM Twin engine HEAVY Twin engine 500 units produced per year 160 units produced per year 50 units produced per year Cost: $2MM - $3MM (single) $5MM - $6MM (twin) Cost: $13 - 14MM Cost: $25 - 30MM Common missions: Oil & Gas, Emergency Medical Services (E
Slide 11: Helicopter Value Retention
Residual Value Retention (a) Indexed resale value of several helicopter types by vintage, inflation adjusted to 2011 dollars. Source: HeliValue$, Cowen and Co. (b) Index includes: Augusta Westland 109A Widebody (1988 model), Bell 212 (1979 model), Bell 412 (1984 model), Eurocopter BK 117A-4 (1988 mo
Slide 12: Q1 Operational Highlights
Q1 Operational Highlights 11
Slide 13: Q1 2013 Highlights
12 Q1 2013 Highlights • Strong operating performance in Q1 2013 reflected by record Q1 operating revenues of $67.7mm (11% increase from Q1 2012) • Q1 net income attributable to Era Group Inc. of $6.7mm, compared to Q1 2012 net loss of $4.6mm ̶ Q1 2013 gains on asset dispositions were $9.0mm higher (
Slide 14: Global Suspension of EC225s
Global Suspension of EC225s 13 • On October 22, 2012, following the second ditching of an EC225 in the North Sea, Era and the other large operators decided to suspend operations of the EC225 globally until a root cause is determined and a solution to address such issue is implemented • After months
Slide 15: Oil and Gas
14 Oil and Gas • Q1 operating revenues from oil and gas activities of $48.4mm (29% increase from Q1 2012) • U.S. Gulf of Mexico operating revenue of $39.4mm (15% increase from Q1 2012) ̶ Newly delivered medium helicopters placed in service and associated increase in flight hours ̶ Increase in servic
Slide 16: Market Environment Outlook
5,764 933 6,697 338 354 692 0 2,000 4,000 6,000 8,000 Current Planned additions YE 2017E Fixed Floating Market Environment Outlook Current and Potential Offshore Rigs Current and Planned Platforms 84 69 153 217 20 237 483 102 585 784 191 975 0 200 400 600 800 1000 Current Newbuilds Total Drillships
Slide 17: Other Service Lines
16 Other Service Lines • Contract-leasing revenues of $13.9mm in Q1 2013 (7% decrease from Q1 2012) ̶ Primarily due to the deferral of revenues from Aeroleo and a customer in India ̶ Partially offset by new contract-leases that commenced after Q1 2012 • Air medial revenues of $3.2mm in Q1 2013 (50%
Slide 18: Financial Review
Financial Review 17
Slide 19: Historical Financial Performance
• Revenue and Adjusted EBITDAR growth sustained despite market turbulence and commodity price volatility ̶ Significant investment to upgrade the fleet ̶ Contract-leasing business ̶ Operating fleet oriented to more stable parts of the oil and gas industry Historical Financial Performance 18 Revenue A
Slide 20: Period Over Period Comparison
19 Period Over Period Comparison Three Months Ended March 31, 2013 2012 $ Change % Variance ($000s) Operating revenues 67,727$ 61,052$ 6,675$ 11% Operating expenses 43,116 39,676 3,440 (9%) G&A expenses 9,134 9,677 (543) 6% Depreciation 11,661 9,630 2,031 (21%) Gains on asset dispositions 10,801 1,7
Slide 21: Q1 2013 Asset Dispositions
Q1 2013 Asset Dispositions Type Class Proceeds Gain Description BO-105 (2) Light Twin $0.7 million $0.6 million Two light twins which had previously been removed from service BH-212 (2) Medium $4.0 million $3.6 million Two BH-212s sold in February S76 A Medium $2.1 million $1.1 million Insurance pro
Slide 22: Quarterly Adjusted EBITDAR Growth
21 Quarterly Adjusted EBITDAR Growth • Given the seasonality in the business, the 2nd and 3rd quarters are generally stronger than 1st and 4th quarters − Longer days mean more potential flight hours − Alaska flightseeing business runs from May through September • Q1 2013 Adjusted EBITDAR represents
Slide 23: Future Capital Commitments
Future Capital Commitments C u r r e n t O r d e r B o o k O p t i o n s Delivery Class Type Number Remaining Amount(a) Firm Cancellable 2013 Medium AW139 1 $8.3 – 2014 Heavy AW189 2 – $32.2 2015 Heavy AW189 3 – $49.8 TBD Light Twin AW169 5 – $40.4 11 $8.3 $122.4 22(a) US$mm estimates • The AW189 an
Slide 24: Net Asset Value
23 Net Asset Value $15 $20 $25 $30 $35 $40 4-Feb 11-Feb 18-Feb 25-Feb 4-Mar 11-Mar 18-Mar 25-Mar 1-Apr 8-Apr 15-Apr 22-Apr 29-Apr 6-May 13-May Book Value per Share NAV per Share Stock Price
Slide 25: Capitalization and Financial Policy
Capitalization and Financial Policy 24 • Capital structure decisions are evaluated on: – Liquidity sufficient to support business in all operating conditions – Desire to maintain normalized leverage less than 4.5x Debt / EBITDA – Desire to maintain normalized interest coverage greater than 3.0x EBIT
Slide 26: Appendix
Lr GROUP INC.
Slide 27: Financial Highlights
Financial Highlights 26 (a) See next page for Adjusted EBITDAR reconciliation to Net Income (Loss) ($ millions) 2008 2009 2010 2011 2012 Q1 '13 Q1 '12 Revenue 248.6$ 235.7$ 235.4$ 258.1$ 272.9$ 67.7$ 61.1$ Operating Expenses 181.5 148.0 147.2 162.7 167.2 43.1 39.7 G&A 20.1 21.4 25.8 31.9 34.8 9.1 9.
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures • Historically, SEACOR charged its corporate costs and overhead charges to all of its operating divisions − These charges have been excluded from Adjusted EBITDA and Adjusted EBITDAR to more accurately reflect Era’s historical results if we had not been