Slide 1: Q3 2016 Earnings Presentation
Q3 2016 Earnings Presentation 0November 2, 2016
Slide 2: Q3 2016 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 Q3 2016 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: Non-GAAP Measures: EBITDA and Adjusted EBITDA
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: Safety and H225 Helicopter Update
• Safety is Era’s most important core value and highest operational priority • Since its founding, HeliOffshore has grown to over 100 members from around the world − Coordinating information exchange amongst industry participants regarding the operational suspension of H225 (also known as EC225LP) a
Slide 7: Liquidity and Cash Flow
• In October, Era’s revolving credit facility was amended to allow the Company to maintain access to liquidity and enhance flexibility through the downturn • Era continued to generate positive cash flow through the downturn including $18 million of cash flow from operations in Q3 2016, raising the y
Slide 8: Financial Review
7 Financial Review
Slide 9: Q3 2016 Highlights – Year-over-Year Comparison
• Revenues of $65.0mm ̶ $4.7mm lower than Q3 2015 primarily due to lower utilization and lower average rates in the U.S. and the end of certain dry-leasing contracts ̶ Partially offset by increased revenues resulting from the consolidation of Aeróleo and new contracts in Suriname • Operating expense
Slide 10: Q3 2016 Highlights – Sequential Quarter Comparison
• Revenues were $1.7mm higher than Q2 2016 primarily due to seasonal activities in Alaska and increased international oil & gas revenues, partially offset by the loss of a search and rescue subscriber • Operating expenses down $7.0mm primarily due to credits from the removal of our H225 helicopters
Slide 11: Summary of Aeróleo Consolidation Impact
10 • Prior to October 2015, revenues from Aeróleo were only recognized when Era received cash from Aeróleo and were reported in Era’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 reported in
Slide 12: Credit Facility Amendment
On October 27, 2016, we executed an amendment to our existing credit facility • Replaced the total leverage ratio maintenance covenant with a senior secured leverage ratio (“SSL”) with maximum levels of 3.00x for Q3 2016 through Q1 2017, 3.25x for Q2 2017 and 3.50x for Q3 2017 and thereafter − As of
Slide 13: Appendix
12 Appendix
Slide 14: Fleet Overview
13 Owned Leased-In Managed Total Average Age(a) Heavy: H225 9 – – 9 6 S92 2 – – 2 1 AW189 2 – – 2 1 Total Heavy 13 – – 13 Medium: AW139 38 – – 38 7 S76 C+/C++ 5 – 1 6 10 B212 7 – – 7 37 B412 1 – – 1 35 Total Medium 51 – 1 52 Light – twin engine: A109 7 – – 7 10 EC135 14 2 1 17 8 EC145 3 – 2 5 8 BK-1
Slide 15: Healthy Leverage Metrics and Ample Liquidity
14 • Era continues to generate substantial cash flow and reduced total debt and net debt by $33mm and $51mm, respectively, in the first 9 months of 2016 • The Company has opportunistically repurchased a total of $55mm of its 7.75% Senior Notes since Q1 2015 • Non-cancelable capital commitments can b
Slide 16: Operating Revenues and Flight Hours by Line of Service
15 Operating Revenues and Flight Hours by Line of Service Note: Flight hours exclude hours flown by helicopters in the Dry-leasing line of service (a) Primarily oil and gas services, but also includes revenues and flight hours from activities such as firefighting, utility support, and unmanned aeria
Slide 17: Financial Highlights
16 (a) See next page for Adjusted EBITDA reconciliation to Net Income (Loss) Financial Highlights Fiscal Year 9 Mos. Ended Sep. 30, ($ millions) 2011 2012 2013 2014 2015 2015 2016 Revenue 258.1$ 272.9$ 299.0$ 331.2$ 281.8$ 207.9$ 190.9$ Operating Expenses 162.7 167.2 186.6 204.4 171.5 126.4 132.1 G&
Slide 18: Adjusted EBITDA Special Items
• Adjusted EBITDA reflects special items: – Executive severance adjustments of $4.2 million, $0.7 million, and $2.5 million in 2011, 2012, and 2014, respectively – An adjustment for IPO related fees and expenses of $2.9 million in 2012 – A pre-tax impairment of $5.9 million related to the Company’s
Slide 19: Quarterly Reconciliation of Non-GAAP Financial Measures
18 Quarterly Reconciliation of Non-GAAP Financial Measures Quarterly Historical EBITDA and Adjusted EBITDA Three Months Ended (US$ in thousands) 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 Net Income (Loss) 653 (3,620) (3,950) (4,510) (802) Depreciation 12,186 12,151 12,766 12,691 12,519 Inter