Bristow Group Inc

Note 1 —BASIS OF PRESENTATION, CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The condensed consolidated financial statements include the accounts of Bristow Group Inc. and its consolidated entities. Unless the context otherwise indicates, any references to the “Company”, “Bristow”, “we”, “us” and “our” refer to Bristow Group Inc. and its consolidated entities.

The condensed consolidated financial information for the three and six months ended June 30, 2024 and 2023, has been prepared by the Company in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information reporting on Quarterly Form 10-Q and Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from that which would appear in the annual consolidated financial statements. The condensed consolidated financial statements on this Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Summary of Significant Accounting Policies and Other Accounting Considerations

Basis of Consolidation —The consolidated financial statements include the accounts of Bristow Group Inc., its wholly and majority-owned subsidiaries and entities that meet the criteria of variable interest entities of which the Company is the primary beneficiary. All significant inter-company accounts and transactions are eliminated in consolidation.

Reclassification — Certain amounts reported for prior periods in the consolidated financial statements have been reclassified to conform with the current period’s presentation.

Accounting Estimates —The preparation of these condensed consolidated financial statements and accompanying footnotes requires the Company to make estimates and assumptions; however, they include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair presentation of the condensed consolidated statements of operations and comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statements of changes in stockholders’ equity and the condensed consolidated statements of cash flows. Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the entire year.

Recent Accounting Standards — The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed within this Quarterly Report on Form 10-Q were assessed and determined as either not applicable or not material to the Company’s consolidated financial position or results of operations.

In November 2023, the FASB issued ASU 2023-07 -Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU applies to all public entities that are required to report segment information in accordance with Topic 280 and requires the disclosure of significant segment expenses on an annual and interim basis, incremental disclosures of measures of segment profit or loss and the identification of the Company’s chief operating decision maker. This standard will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is evaluating the potential impact of the adoption of this ASU on its consolidated financial statements.

Note 2 —REVENUES

The Company’s customers are primarily major integrated, national and independent offshore energy companies and government agencies. The Company derives its revenues primarily from aviation services generated through two types of contracts: helicopter services contracts and fixed wing services contracts. Revenues are generally recognized when the Company satisfies its performance obligations by providing aviation services to its customers in exchange for consideration.

The following table sets forth the disaggregation of operating revenues by service line for the applicable periods (in thousands):

As of June 30, 2024, the Company had a deferred revenue balance of $20.1 million compared to the December 31, 2023 balance of $20.3 million. Deferred revenues are primarily generated by fixed wing services where customers pay for tickets in advance of receiving the Company’s services, advanced payments from helicopter services customers, and mobilization fees received from customers in connection with new contract commencements. During the six months ended June 30, 2024 and 2023, revenues recognized that had previously been deferred were $10.3 million and $8.0 million, respectively.

Note 3 —RELATED PARTY TRANSACTIONS

The Company owns a 25% voting interest and a 40% economic interest in Cougar Helicopters Inc. (“Cougar”), an aviation services provider in Canada. The remaining 75% voting interest and 60% economic interest in Cougar are owned by VIH Aviation Group Ltd. (“VIH”). Due to common ownership of Cougar, the Company considers VIH a related party.

The Company and VIH lease certain aircraft and facilities and from time to time purchase inventory from one another. During the three months ended June 30, 2024 and 2023, the Company made payments of $1.0 million and $1.6 million to its related parties, respectively, and also generated total revenues of $10.0 million and $9.2 million from its related parties, respectively. During the six months ended June 30, 2024 and 2023, the Company made payments of $2.1 million and $3.0 million to its related parties, respectively, and also generated total revenues of $17.2 million and $13.8 million from its related parties, respectively. During the six months ended June 30, 2023, the Company and VIH entered into resale agreements under whichone S92 aircraft was sold in exchange for the purchase of another S92 aircraft in a non-monetary transaction. The exchange did not result in a gain or loss being recognized on the Company’s condensed consolidated statement of operations.

As of June 30, 2024 and December 31, 2023, accounts receivable from related parties included in accounts receivable on the condensed consolidated balance sheets were $3.6 million and $1.2 million, respectively.

Note 4 —DEBT

Debt as of June 30, 2024 and December 31, 2023, consisted of the following (in thousands):

6.875% Senior Notes— In February 2021, the Company issued $400.0 million aggregate principal amount of its 6.875% senior secured notes due March 2028 (the “6.875% Senior Notes”) and received net proceeds of $395.0 million. The 6.875% Senior Notes are fully and unconditionally guaranteed as to payment by a number of subsidiaries. Interest on the 6.875% Senior Notes is payable semi-annually in arrears on March 1 st and September 1 st of each year. The 6.875% Senior Notes may be redeemed at any time and from time to time, with sufficient notice and at the applicable redemption prices set forth in the indenture governing the 6.875% Senior Notes, inclusive of any accrued and unpaid interest leading up to the redemption date. The indenture governing the 6.875% Senior Notes contains covenants that restrict the Company’s ability to, among other things, incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem the Company’s capital stock, prepay, redeem or repurchase certain debt, make loans and investments, sell assets, incur liens, enter into transactions with affiliates, enter into agreements restricting its subsidiaries’ ability to pay dividends, and consolidate, merge or sell all or substantially all of its assets. In addition, upon a specified change of control trigger event, the Company must make an offer to repurchase each noteholder’s notes at an offer price of 101% of the aggregate principal amount, plus accrued and unpaid interest.

As of June 30, 2024 and December 31, 2023, the Company had $5.1 million and $5.8 million, respectively, of unamortized deferred financing fees associated with the 6.875% Senior Notes.

UKSAR Debt— In January 2023, the Company entered intotwo thirteen-year secured equipment financings for an aggregate amount of up to £145 million with National Westminster Bank Plc as arranger, agent and security trustee (“UKSAR Debt”, formerly known as “NatWest Debt”). The credit facilities bear interest at a rate equal to the Sterling Overnight Index Average (“SONIA”) plus 2.75% per annum and mature in March 2036, with repayment due in quarterly installments.

In January 2024, the Company entered into a long-term equipment financing to upsize the UKSAR Debt by an aggregate amount of up to £55 million. The upsizing will be used to support the Company’s capital commitments related to the Second-Generation UK Search and Rescue (“UKSAR2G”) contract. The credit facility has a 15-month availability period and will fund during 2024, subject to delivery of the new search and rescue (“SAR”) configured helicopters. The credit facility bears interest at a rate equal to SONIA plus 2.75% per annum. Bristow's obligations under the additional UKSAR Debt will be secured byfour new Leonardo S.p.A AW139 SAR configured helicopters. As of June 30, 2024, the Company had drawn approximately $32.7 million (£26.1 million) under this facility.

During the six months ended June 30, 2024 and 2023, the Company made principal payments of $7.3 million and $6.5 million, respectively. As of June 30, 2024 and December 31, 2023, the Company had unamortized deferred financing fees, inclusive of amounts related to the upsizing, associated with the UKSAR Debt of $9.6 million and $8.4 million, respectively.

IRCG Debt— In June 2024, the Company entered into a long-term equipment financing for an aggregate amount of up to €100.0 million with National Westminster Bank Plc as the original lender and UK Export Finance guaranteeing 80% of the facility (“IRCG Debt”, formerly known as “UKEF Debt”). The financing will be used, among other items, to support the Company’s acquisition offive new AW189 aircraft to fulfill contractual obligations with the Irish Department of Transport to provide SAR services to the Irish Coast Guard (“IRCG”). The credit facility has an availability period of up totwo years followed by afive-year term. The IRCG Debt bears interest at a rate equal to the Euro Interbank Offered Rate (“EURIBOR”)

plus 1.95% per annum with repayments due in semi-annual installments following the end of the availability period. As of June 30, 2024, the Company had drawn approximately $24.3 million (€22.7 million) and had $2.0 million of unamortized deferred financing fees associated with the IRCG Debt. Furthermore, in July 2024, the second utilization date occurred, and the Company drew approximately $25.4 million (€23.3 million) under this facility.

ABL Facility —The Company’s asset-backed revolving credit facility (the “ABL Facility”) provides that amounts borrowed under the ABL Facility (i) are secured by certain accounts receivable owing to the borrower subsidiaries and the deposit accounts into which payments on such accounts receivable are deposited, and (ii) are fully and unconditionally guaranteed as to payment by the Company, as a parent guarantor, and each of Bristow Norway AS, Bristow Helicopters Limited (“BHL”), Bristow U.S. LLC and Era Helicopters, LLC. As of June 30, 2024, the ABL Facility provided for commitments in an aggregate amount of $85.0 million with the ability to increase the total commitments up to a maximum aggregate amount of $120.0 million, subject to the terms and conditions therein.

As of June 30, 2024, there wereno outstanding borrowings under the ABL Facility nor had the Company made any draws during the six months ended June 30, 2024. Letters of credit issued under the ABL Facility in the aggregate face amount of $3.1 million were outstanding as of June 30, 2024.

Note 5 —FAIR VALUE DISCLOSURES

Authoritative guidance on fair value measurements provides a framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). The fair values of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to the short-term nature of these items.

The Company’s debt was measured at fair value using Level 2 inputs based on estimated current rates for similar types of arrangements using discounted cash flow analysis. Considerable judgment was required in developing certain of the estimates of fair value, and, accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

The carrying and fair values of the Company’s debt were as follows (in thousands):

(1)As of June 30, 2024 and December 31, 2023, the carrying values of unamortized deferred financing fees related to the 6.875% Senior Notes were $5.1 million and $5.8 million, respectively.

(2)As of June 30, 2024 and December 31, 2023, the carrying values of unamortized deferred financing fees related to the UKSAR Debt were $9.6 million and $8.4 million, respectively.

(3)The IRCG Debt was entered into in June 2024. Given the close proximity of the reporting date and entry into the financing agreements, and the variable EURIBOR attached to the IRCG Debt, the Company believes the fair value of this debt is materially the same as the carrying amount as of June 30, 2024. As of June 30, 2024, the carrying values of unamortized deferred financing fees related to the IRCG Debt were $2.0 million.

Note 6 —DERIVATIVE FINANCIAL INSTRUMENTS

From time to time, the Company may use derivatives to partially offset its business exposure to foreign currency risks on expected future cash flows. The Company enters into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty. The Company does not offset fair value amounts recognized for derivative instruments under master netting arrangements. The derivative agreements do not contain credit-risk-related contingent features. There are no amounts of related financial collateral received or pledged. The Company does not use any of its derivative instruments for speculative or trading purposes.

Cash Flow Hedges

The Company may use foreign exchange options or forward contracts to hedge a portion of its forecasted foreign currency denominated transactions. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions.

These foreign exchange hedge contracts, carried at fair value, have maturities of up to approximately 12 months. As of June 30, 2024 and December 31, 2023, total notional amounts of outstanding cash flow hedges were $148.8 million and $254.7 million, respectively. As of June 30, 2024, the estimated net amount of losses expected to be reclassified from accumulated other comprehensive income into earnings within the next 12 months is $2.6 million. For the six months ended June 30, 2024, there were no net gains or losses recognized in earnings relating to hedges of forecasted transactions that did not occur.

The Company’s derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy. The fair value of the Company’s derivatives is based on valuation methods which project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves and foreign currency rates. The fair value of derivative instruments on the Company’s Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 were as follows, presented on a gross basis (in thousands):

Note 7 —COMMITMENTS AND CONTINGENCIES

Fleet —The Company’s unfunded capital commitments as of June 30, 2024 consisted primarily of agreements to purchase helicopters and totaled $315.8 million, payable beginning in 2024.

Included in these commitments are orders to purchase eleven AW189 heavy helicopters, four AW139 medium helicopters, five AW169 light twin helicopters andfive H135 light twin helicopters. The AW189 helicopters are scheduled to be delivered between 2024 and 2026; the AW139 helicopters are scheduled to be delivered in 2024; and the H135 helicopters are scheduled to be delivered between 2024 and 2025. Delivery dates for the AW169 helicopters have yet to be determined. In addition, the Company has outstanding options to purchase up toten additional AW189 helicopters andten additional H135 helicopters. If these options are exercised, the AW189 helicopters would be scheduled for delivery between 2026 and 2028, and the H135 helicopters would be scheduled for delivery between 2027 and 2028. The Company may, from time to time, purchase aircraft for which it has no orders.

The Company may terminate $33.8 million of its unfunded capital commitments without further liability other than aggregate liquidated damages of approximately $1.1 million.

General Litigation and Disputes

The Company operates in jurisdictions internationally where it is subject to risks that include government action to obtain additional tax revenues. In a number of these jurisdictions, political unrest, the lack of well-developed legal systems and legislation that is not clear enough in its wording to determine the ultimate application, can make it difficult to determine whether legislation may impact the Company’s earnings until such time as a clear court or other ruling exists. The Company operates in jurisdictions currently where amounts may be due to governmental bodies that the Company is not currently recording liabilities for as it is unclear how broad or narrow legislation may ultimately be interpreted. The Company believes that payment of amounts in these instances is not probable at this time, but is reasonably possible.

In the normal course of business, the Company is involved in various litigation matters including, among other things, claims by third parties for alleged property damages and personal injuries. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its condensed consolidated financial statements related thereto as appropriate. It is possible that a change in its estimates related to these exposures could occur, but the Company does not expect such changes in estimated costs or uninsured losses, if any, would have a material effect on its business, consolidated financial position or results of operations.

Note 8 —INCOME TAXES

During the three months ended June 30, 2024 and 2023, the Company recorded an income tax expense of $9.2 million, resulting in an effective tax rate of 24.7%, and income tax benefit of $14.2 million, resulting in an effective tax rate of 89.7%, respectively. During the six months ended June 30, 2024 and 2023, the Company recorded an income tax expense of $11.8 million, resulting in an effective tax rate of 25.2%, and income tax benefit of $19.3 million, resulting in an effective tax rate of 85.9%, respectively.

The effective tax rate during the six months ended June 30, 2024 is impacted by the Company’s global mix of earnings in the current year, adjustments to valuation allowances against future realization of losses and deductible business interest expense, partially offset by the recognition of certain deferred tax assets. The effective tax rate during the six months ended June 30, 2023 was impacted by a lower U.S. statutory rate compared to higher foreign tax rates as a result of non-U.S. earnings in certain jurisdictions, adjustments to valuation allowances against future realization of deductible business interest expense and the recognition of certain deferred tax assets.

Note 9 —STOCKHOLDERS’ EQUITY

Accumulated Other Comprehensive Income (Loss)

The following table shows the changes in balances for accumulated other comprehensive income (loss), net of tax (in thousands):

Note 10 —EARNINGS PER SHARE

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share excludes options to purchase common stock and restricted stock units and awards which were outstanding during the period but were anti-dilutive. The following table shows the computation of basic and diluted earnings per share (in thousands, except per share amounts):

(1)Excludes weighted average shares of common stock of 34,265 and 2,115,069 for the three months ended June 30, 2024 and 2023, respectively, and 150,114 and 1,953,633 for the six months ended June 30, 2024 and 2023, respectively, for certain share awards as the effect of their inclusion would have been antidilutive.

Note 11 —SEGMENT INFORMATION

The Company conducts business inone segment: aviation services. The aviation services global operations include four regions as follows: Europe, the Americas, Africa and Asia Pacific. The Europe region comprises all of the Company’s operations and affiliates in Europe, including the Dutch Caribbean, the Falkland Islands, the Netherlands, Norway and the United Kingdom (“UK”). The Americas region comprises all of the Company’s operations and affiliates in North America and South America, including Brazil, Canada, Suriname, Trinidad and the U.S. Gulf of Mexico. The Africa region comprises all of the Company’s operations and affiliates on the African continent, including Nigeria. The Asia Pacific region comprises all of the Company’s operations and affiliates in Australia.

The following tables show region information prepared on the same basis as the Company’s condensed consolidated financial statements (in thousands):