Bristow Group Inc.

Results of Operations for Current Quarter compared to Preceding Quarter

(in thousands, except percentages)

The following table presents our operating results and other statement of operations information for the Current Quarter and Preceding Quarter.

nm = Not Meaningful

Flight Hours by Segment

Offshore Energy Services

Revenues from Offshore Energy Services were $5.6 million lower in the Current Quarter. Revenues in Europe were $10.9 million lower primarily due to lower utilization, partially offset by lower penalties and increased rates. Revenues in the Americas were $6.0 million higher primarily due to higher utilization and rates. Revenues in Africa were $0.7 million lower primarily due to higher penalties.

Operating income from Offshore Energy Services was $3.2 million higher in the Current Quarter primarily due to lower operating expenses of $8.3 million, lower depreciation and amortization expense of $1.6 million and lower general and administrative expenses of $1.1 million, offsetting the lower revenues of $5.6 million and lower earnings from unconsolidated affiliates of $2.3 million.

Other operating costs were $5.2 million lower in the Current Quarter primarily due to lower reimbursable expenses, lease costs, training and freight costs. Fuel costs were $3.2 million lower due to lower flight hours and lower global fuel prices. Repairs and maintenance costs were $2.7 million lower primarily due to lower power-by-the-hour (“PBH”) expense related to lower flight hours in Europe and Africa and higher vendor credits, partially offset by higher inventory reserves associated with the S76D medium helicopters. Leased-in equipment costs were $1.6 million higher primarily due to the introduction of new H160 medium helicopters in Africa. Personnel costs were $1.1 million higher primarily due to a seasonal personnel cost benefit in Norway in the Preceding Quarter, partially offset by lower headcount in the Current Quarter. Depreciation and amortization expense was lower primarily due to the absence of accelerated depreciation of certain assets recognized in the Preceding Quarter. The decrease in general and administrative expenses was primarily due to lower professional services fees. Earnings from unconsolidated affiliates were $2.3 million lower in the Current Quarter primarily due to the timing of dividends received.

Government Services

Revenues from Government Services were $17.8 million higher in the Current Quarter primarily due to the acquisition of Berry Aviation, Inc., now known as Bristow Special Mission Inc. (“BSM”), which contributed $16.9 million of revenues during the Current Quarter. Revenues on the UK search and rescue (“UKSAR”) contract were $1.6 million higher primarily due to lower penalties and increased fuel revenues. Revenues on the Irish Coast Guard ("IRCG") contract were $0.7 million lower primarily due to higher penalties related to aircraft availability.

Operating loss was $0.7 million lower in the Current Quarter primarily due to the increased revenues, partially offset by higher operating expenses of $13.0 million, general and administrative expenses of $2.4 million and depreciation and amortization expense of $1.7 million.

Other operating costs were $5.0 million higher in the Current Quarter primarily due to the inclusion of BSM. Personnel costs were $4.4 million higher primarily due to the inclusion of BSM personnel and the recognition of previously deferred personnel costs in Ireland following the completion of their training, partially offset by lower personnel costs in the UK. Repairs and maintenance costs were $2.4 million higher primarily due to the timing of repairs and lower vendor credits. Leased-in equipment, insurance and fuel costs were $1.2 million higher in total, primarily due to the inclusion of BSM. General and administrative expenses were $2.4 million higher primarily due to personnel and IT costs also related to the inclusion of BSM. Depreciation and amortization expense was $1.7 million higher primarily due to the inclusion of BSM assets and additional assets placed into service.

Other Services

Revenues from Other Services were $14.0 million higher in the Current Quarter primarily due to the acquisition of BSM of $9.2 million and increased activity in Australia of $4.8 million. Operating income was $6.9 million higher primarily due to the increased revenues, partially offset by higher operating expenses of $4.7 million, general and administrative expenses of $1.9 million and depreciation and amortization expense of $0.4 million, primarily attributable to the inclusion of BSM.

Corporate

Operating loss was $2.7 million higher in the Current Quarter primarily due to higher general and administrative expenses of $4.4 million primarily due to professional services fees related to the acquisition of BSM, partially offset by higher net gains on asset dispositions of $1.8 million.

During the Current Quarter, the Company sold one AW189 heavy helicopter as part of a sale lease-back transaction, two AW139 medium helicopters and sold or disposed of various other assets resulting in net gains of $1.9 million. During the Preceding Quarter, the Company sold one AW139 medium helicopter, one AS365 medium helicopter, one fixed wing aircraft and various other assets resulting in net gains of $0.1 million.

Interest income was $0.7 million lower due to lower investment balances.

Other expense, net of $1.0 million in the Current Quarter was primarily due to non-cash foreign exchange losses. Other expense, net of $8.9 million in the Preceding Quarter was primarily due to non-cash foreign exchange losses of $7.7 million and pension-related costs of $1.9 million, partially offset by gains related to insurance claims of $0.7 million.

Income tax expense was $9.0 million higher in the Current Quarter primarily due to higher pre-tax book income and the absence of a tax credit utilized in Nigeria in the Preceding Quarter.

Results of Operations for Current Year compared to Prior Year

(in thousands, except percentages)

The following table presents our operating results and other statement of operations information for the Current Year and Prior Year:

Flight Hours by Segment

Offshore Energy Services

Revenues from Offshore Energy Services were $28.9 million higher in the Current Year. Revenues in the Americas were $36.9 million higher primarily due to increased rates and utilization across multiple markets. Revenues in Africa were $5.0 million higher primarily due to lower penalties related to aircraft availability, higher rates, higher fuel revenues due to increased fuel prices and increased utilization, partially offset by the conclusion of fixed-wing operations. Revenues in Europe were $13.0 million lower primarily due to lower utilization and reimbursable revenues in the UK, partially offset by favorable foreign exchange rate impacts and higher ad hoc activity in Norway.

Operating income was $7.6 million higher in the Current Year primarily due to the higher revenues and earnings from unconsolidated affiliates of $2.8 million coupled with lower general and administrative expenses of $1.1 million, partially offset by higher depreciation and amortization expense of $24.8 million and operating expenses of $0.3 million.

Earnings from unconsolidated affiliates were higher in the Current Year primarily due to the timing of dividends received. The decrease in general and administrative expenses was primarily due to lower headcount, partially offset by higher professional services fees. Depreciation and amortization expense was higher primarily due to the acceleration of depreciation on S76D medium helicopters. Fuel costs were $10.1 million higher primarily due to increased global fuel prices and unfavorable foreign exchange rate impacts, partially offset by lower flight hours. Leased-in equipment costs were $5.7 million higher primarily due to additional aircraft and facilities leases. Personnel costs were $4.6 million higher primarily due to unfavorable foreign exchange rate impacts in Norway and higher headcount in Brazil and Africa, partially offset by lower headcount in the UK and U.S. Other operating costs were $16.0 million lower primarily due to lower subcontractor costs, reimbursable expenses primarily related to the conclusion of fixed wing operations in Africa and the UK and lower training costs, partially offset by higher property and other taxes, freight, and landing and passenger costs primarily related to increased activity and logistics rates. Repairs and maintenance costs were $4.4 million lower primarily due to higher vendor credits.

Government Services

Revenues from Government Services were $70.8 million higher in the Current Year primarily due to the commencement of IRCG and UKSAR2G operations of $51.4 million, the acquisition of BSM of $16.9 million and favorable foreign exchange rate impacts of $7.3 million, partially offset by lower utilization of $4.0 million and higher penalties of $1.3 million due to aircraft availability primarily attributable to supply chain challenges in the UK and Ireland, which have remained elevated in the Current Year.

Operating loss was $2.6 million in the Current Year compared to operating income of $6.7 million in the Prior Year primarily due to higher operating expenses of $68.7 million, depreciation and amortization expense of $5.9 million and general and administrative expenses of $5.4 million, offsetting the increased revenues.

Personnel costs were $27.7 million higher primarily due to increased headcount in Ireland, the recognition of costs that were previously deferred until the commencement of operations at the IRCG and UKSAR2G bases and the inclusion of BSM personnel. Other operating costs were $22.9 million higher primarily due to higher pass-through subcontractor costs related to the fixed-wing element of the IRCG and UKSAR2G contracts, increased amortization of deferred costs for the bases that have commenced operations and higher training and travel costs, which remain elevated through the completion of contract transitions. Repairs and maintenance costs were $11.1 million higher due to the timing of repairs. Fuel costs were $4.2 million higher due to higher global fuel prices and increased activity. Leased-in equipment costs were $2.8 million higher due to the inclusion of BSM leases and additional leased operating bases in the UK and Ireland. Depreciation and amortization expense was $5.9 million higher primarily due to additional assets placed into service, the inclusion of BSM assets and the accelerated depreciation of certain assets. General and administrative expenses were $5.4 million higher primarily due to higher personnel costs related to the commencement of operations at IRCG and the inclusion of BSM.

In summary, the operating income margin in the Current Year was adversely impacted by total penalties related to aircraft availability of $9.8 million in the UK and Ireland, fuel expenses in excess of fuel revenues and certain transition costs that have persisted beyond the commencement of operations at select bases.

Other Services

Revenues from Other Services were $25.4 million higher in the Current Year primarily due to increased activity and rates in Australia of $17.2 million, revenues associated with the acquisition of BSM of $9.2 million and higher fuel revenues in the UK of $0.9 million, partially offset by lower dry-lease revenues of $2.0 million resulting from the conclusion of certain dry-lease contracts.

Operating income was $3.2 million higher primarily due to the higher revenues, partially offset by higher operating expenses of $21.0 million and higher general and administrative expenses of $1.6 million. Fuel costs were $8.0 million higher due to increased fuel prices and unfavorable foreign exchange rate impacts in Australia. Personnel costs were $6.2 million higher primarily due to increased headcount in Australia and the inclusion of BSM personnel. Other operating costs were $5.2 million higher primarily due to costs associated with the inclusion of BSM and higher agent, landing and subcontractor costs related to increased activity in Australia. Repairs and maintenance costs were $0.9 million higher primarily due to increased activity. General and administrative expenses were $1.6 million higher primarily due to the inclusion of BSM.

Corporate

Operating losses were $6.2 million higher than the Prior Year primarily due to lower gains on disposal of assets of $4.2 million and higher general and administrative expenses of $1.7 million primarily due to professional services fees related to the acquisition of BSM, partially offset by lower compensation and lease costs. During the Current Year, the Company sold two AW189 heavy helicopters through sale lease-back transactions and three AW139 medium helicopters. The Company also sold or otherwise disposed of one S92 heavy helicopter, one AS365 medium helicopter and various other assets, resulting in overall net gains of $9.7 million. During the Prior Year, the Company sold or otherwise disposed of four AW139 medium helicopters and various other assets, resulting in net gains of $13.9 million.

Interest income was $2.5 million higher in the Current Year primarily due to higher investment balances as well as income from U.S. Treasury bill investments related to escrowed funds used in the satisfaction and discharge of the 6.875% Senior Secured Notes of $1.2 million.

Interest expense, net was $8.5 million higher in the Current Year primarily due to lower capitalized interest related to aircraft that were placed into service of $6.5 million and higher interest expense of $3.7 million on higher debt balances and concurrent interest expense incurred during the refinancing of the Senior Secured Notes, partially offset by lower amortization of deferred financing costs of $1.8 million due to prepayments of principal on the Company’s UKSAR Debt in the Prior Year.

Other expense, net was $15.3 million in the Current Year primarily due to foreign exchange losses of $13.3 million and pension-related costs of $2.8 million, partially offset by other income of $0.7 million related to insurance proceeds. Other income, net was $25.9 million in the Prior Year primarily due to foreign exchange gains.

Income tax expense was $6.0 million lower in the Current Year primarily due to lower pretax book income.