Slide 1: Q4 and FY2015 Earnings Presentation
Q4 and FY2015 Earnings Presentation 0February 26, 2016
Slide 2: Q4 and FY2015 Earnings Call Agenda
I. Introduction Shefali Shah, SVP and General Counsel II. Operational Highlights Chris Bradshaw, President and CEO III. Financial Review Andy Puhala, SVP and CFO IV. Concluding Remarks Chris Bradshaw, President and CEO V. Questions & Answers Q4 and FY2015 Earnings Call Agenda 1
Slide 3: Cautionary Statement Regarding Forward-Looking Statements
2 Cautionary Statement Regarding Forward-Looking Statements 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
Slide 4: EBITDA and Adjusted EBITDA supplemental measures
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
Lora Operational Highlights
Slide 6: Operational Safety and Financial Stability
• Achieved objective of ZERO air accidents in FY2015 ̶ Extended clean sheet of ZERO air accidents in FY2014 • Generated positive operating cash flow of $44 million in FY2015 Cash Flow from Operating Activities ($mm) • Continue to protect the balance sheet(a) ̶ Total liquidity = $221 million ̶ Funded
Slide 7: Realize Cost Efficiencies
• Cost control initiatives began in Q4 2014, include all aspects of the Company’s business and remain ongoing • Staffing levels adjusted for market activity levels • Reduced average borrowing cost ̶ During 2015, the Company repurchased $50.2 million of its $200 million 7.75% Senior Notes at discount
Slide 8: Fleet Management
• Upgraded fleet by placing first two S92 heavy helicopters and two AW189 heavy helicopters in service ̶ Only operator with diversified heavy helicopter fleet in the U.S. Gulf of Mexico, offering customers superior flexibility • Sold 20 helicopters and related equipment in FY2015 for total considera
Slide 9: Financial Review
8 Financial Review
Slide 10: FY2015 Highlights
$90,775 $68,991 – $50,000 $100,000 $150,000 FY 2014 FY 2015 • Revenues of $281.8mm ̶ Down 15% primarily due to: ̶ Lower utilization of medium helicopters in the U.S. Gulf of Mexico and Alaska ̶ Contract expirations in Dry-leasing, SAR and Air Medical lines of service ̶ Sale of the FBO business in Q2
Slide 11: Q4 2015 Highlights – Year-over-Year Comparison
$18,583 $17,307 – $10,000 $20,000 $30,000 Q4 2014 Q4 2015 • Revenues of $73.9mm ̶ $0.7mm lower than Q4 2014 due to lower utilization and lower average rates in the U.S. Gulf of Mexico and Alaska, the sale of the FBO in Q2 2015, and the end of certain Dry-Leasing and Air Medical contracts ̶ Partially
Slide 12: Q4 2015 Highlights – Sequential Quarter Comparison
$17,087 $17,307 – $10,000 $20,000 $30,000 Q3 2015 Q4 2015 $69,741 $73,943 – $25,000 $50,000 $75,000 $100,000 $125,000 Q3 2015 Q4 2015 • Revenues of $73.9mm ̶ $4.2mm higher than Q3 2015 due to the consolidation of Aeróleo, partially offset by the end of seasonal activity in Alaska and lower fleet uti
Slide 13: Summary of Aeróleo Consolidation Impact in Q4 2015
12 • Prior to October 2015, revenues from Aeróleo were only recognized as Era received cash from Aeróleo and were reported in the Company’s Dry-leasing line of service • Beginning October 1, 2015, Aeróleo’s financials are included in Era’s consolidated results; revenues from end-customers are report
Slide 14: Healthy Leverage Metrics and Ample Liquidity
13 Leverage Metrics(a) Total Liquidity (US$mm)(b) Healthy Leverage Metrics and Ample Liquidity (a) Funded debt to EBITDA and interest coverage ratios calculated as defined in the Company’s Credit Facility (b) At period end $244 $244 $244 $214 $209 $219 $227 $207 $25 $15 $40 $41 $34 $17 $14 $14 $270
Slide 15: Appendix
14 Appendix
Slide 16: Fleet Overview
15 Owned Leased-In Managed Total Average Age(a) Heavy: H225 9 – – 9 6 S92 2 – – 2 0 AW189 2 – – 2 0 Total Heavy 13 – – 13 Medium: AW139 38 – – 38 6 S76 C+/C++ 5 – 1 6 9 S76 A++ 2 – – 2 26 B212 8 – – 8 37 B412 1 – – 1 35 Total Medium 54 – 1 55 Light – twin engine: A109 7 – – 7 10 EC135 14 2 1 17 8 EC
Slide 17: NAV per Share Calculation
16 Notes: 1) NAV calculation only includes fair market value of helicopters that the Company owns; it does not include any value for leased-in or managed helicopters that the Company operates 2) Helicopter fair market values based on annual desktop appraisal performed by Ascend Worldwide as of Decem
Slide 18: Capitalization and Financial Policy
17 • In 2015, the Company repurchased a total of $50.2mm of its 7.75% Senior Notes, funded with existing cash balances, cash from operating activities, proceeds from asset dispositions and borrowings under the Credit Facility • Era continues to generate substantial free cash flow • Existing capital
Slide 19: Operating Revenues and Flight Hours by Line of Service
18 Operating Revenues and Flight Hours by Line of Service Note: Flight hours exclude hours flown by helicopters in the Dry-leasing line of service (a) Primarily oil and gas services, but also includes revenues and flight hours from activities such as firefighting and utility support Three Months End
Slide 20: Financial Highlights
19 (a) See next page for Adjusted EBITDA reconciliation to Net Income (Loss) Financial Highlights Fiscal Year ($ millions) 2011 2012 2013 2014 2015 Revenue 258.1$ 272.9$ 299.0$ 331.2$ 281.8$ Operating Expenses 162.7 167.2 186.6 204.4 171.5 G&A 31.9 34.8 38.9 44.0 42.8 Depreciation 42.6 42.5 45.6 46.
Slide 21: Adjusted EBITDA special items
• Adjusted EBITDA reflects special items: – Executive severance adjustments of $4.2 million $0.7 million and $2.5 million in FY2011, 2012, and 2014, respectively – An adjustment for IPO related fees and expenses of $2.9 million in FY2012 – A pre-tax impairment of $5.9 million related to the Company’
Slide 22: Quarterly Reconciliation of Non-GAAP Financial Measures
21 Quarterly Reconciliation of Non-GAAP Financial Measures Quarterly Historical EBITDA and Adjusted EBITDA Three Months Ended (USD$ in thousands) 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 Net Income (Loss) 3,140 (239) 11,105 653 (3,620) Depreciation 11,854 11,602 11,398 12,186 12,151 Interes