Bristow Group Inc. (VTOL) FY 2023 MD&A

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our financial condition and results of operations for the twelve months ended December 31, 2023 and 2022. Due to our fiscal year transition from March 31 to December 31, the comparative twelve months ended December 31, 2022, is reflected on an unaudited pro forma basis. This discussion and analysis should be read in conjunction with our consolidated financial statements and related notes and the other financial information included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under “Item 1.A. Risk Factors” and elsewhere in this Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements.

A discussion of the financial condition and results of operations for the nine months ended December 31, 2022 and 2021 can be found in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Transition Report on Form 10-KT, filed with the SEC on March 9, 2023.

Overview

We are the leading global provider of innovative and sustainable vertical flight solutions, primarily providing aviation services to a broad base of offshore energy companies and government entities. Our helicopters are primarily used to transport personnel to, from and between offshore energy installations. During the twelve months ended December 31, 2023 and 2022, approximately 64% and 67%, respectively, of our total operating revenues were derived from offshore energy services while approximately 27% and 24%, respectively, were derived from government services primarily consisting of public sector SAR services, and approximately 9% and 9%, respectively, were derived from fixed wing and other services.

We conduct our business out of one segment, aviation services, and serve customers in Australia, Brazil, Canada, Chile, the Dutch Caribbean, the Falkland Islands, India, Ireland, the Kingdom of Saudi Arabia, Mexico, the Netherlands, Nigeria, Norway, Spain, Suriname, Trinidad, the UK and U.S.

Recent Developments

Bristow Helicopter Accident

On February 28, 2024, one of Bristow’s SAR helicopters, registration LN-OIJ with six crew members onboard, was involved in an accident during a training exercise approximately 15 nautical miles west of Bergen, Norway. Very sadly, one fatality was confirmed. The other five crew members have either been released or are in stable condition in the hospital. Bristow’s highest priority is to take care of our crew and their family members and provide them with any assistance needed. The Company is in the process of collecting pertinent information and will provide updates as appropriate. Bristow is fully cooperating with authorities investigating the accident.

Agreement to Purchase New AW189 Helicopters

On February 27, 2024, Bristow signed an agreement with Leonardo for 10 AW189 super medium helicopters plus options to purchase an additional 10 AW189 helicopters. The new AW189 helicopters will support offshore transport as well as search and rescue (SAR) missions. Bristow currently operates 21 AW189 helicopters globally, with an additional five already scheduled for delivery beginning this year. In addition to its Offshore Energy Services business, Bristow also operates SAR-equipped AW189 helicopters in its Government Services business. The new aircraft will offer added flexibility as well as superior operational and environmental performance, including lower CO2 emissions than comparable aircraft types. The aircraft deliveries will occur over a three-year period from 2025-2028.

Strategic Partnership with The Helicopter and Jet Company (THC)

On February 28, 2024, Bristow announced a Memorandum of Understanding (MOU) with The Helicopter and Jet Company (THC), Saudi Arabia's premier provider of commercial helicopter services and fully owned by the Public Investment

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Fund (PIF). The two companies plan to work together on advanced air mobility (AAM) initiatives in the Kingdom of Saudi Arabia as well as other collaborative vertical lift endeavors.

Entry into a Long-Term Equipment Agreement

In January 2024, Bristow entered into a new twelve-year secured equipment financing for an aggregate principal amount of up to £55 million with a syndicate of banks led by National Westminster Bank Plc (“NatWest”). The proceeds from the financing will be used to support Bristow's capital commitments related to the UKSAR2G contract. Bristow's obligations will be secured by four new Leonardo AW139 SAR configured helicopters, yet to be delivered. The credit facility has a 15-month availability period and is expected to fund during 2024, subject to delivery of the new SAR configured helicopters. The credit facility will bear interest at a rate equal to the Sterling Overnight Index Average (“SONIA”) plus 2.75% per annum.

Bristow contemporaneously entered into amendments and restatements of the credit facilities with respect to the other two existing tranches of the NatWest Debt (as defined in Note 6 to the consolidated financial statement) in order to, among other things, reflect that certain subsidiaries will be providing guarantees of the term loans under the NatWest Debt.

Market Outlook

The offshore energy market is highly cyclical with demand linked to the price of oil and gas. The prices of oil and gas are critical factors in our customers’ investment and spending decisions. The price of crude oil had been range-bound for a number of years, and then the COVID-19 pandemic further devastated the global oil and gas industry, which negatively impacted the cash flows of our customers and led to reduced capital and operational expenditures, including reductions related to offshore exploration, development and production activities. As such, deliveries of new helicopters were limited during this period.

The offshore energy services market, following several years of challenging industry conditions, is now in the early stages of a multi-year growth cycle. The increasing activity in offshore energy is driving a constructive supply and demand balance for offshore helicopters. The market for AW139 medium helicopters as well as the market for super medium helicopters, such as the AW189 model, was expected to tighten significantly, and placing idle S92 heavy helicopters back to work on new contracts would be the best way to meet increased demand. Due to supply chain challenges that have delayed parts and repairs for the S92 helicopters, thereby limiting the number of S92s that are serviceable today, the overall market has tightened even more quickly than expected. The combination of these factors supports a positive 2024 financial outlook in our offshore energy business. Additionally, given our sector’s late cycle exposure and the lag effect involving new projects, we expect the benefits of increased activity to become evident in our financial results in the coming years. A tighter equipment market, constrained global labor force, and inflationary cost pressures are expected to drive meaningful rate increases for our business. And while we are encouraged by the improved fundamentals and outlook for Bristow’s business in 2024 and beyond, there are some headwinds, including the supply chain challenges and constrained global labor force noted above, as well as a strong U.S. dollar.

Government services, especially the public SAR market, are continuing to evolve, and while there are no current active tenders, we believe further outsourcing of public SAR services and other government contract work will become available to the private sector in the future, although the timing of these opportunities is uncertain. Over the past two years, we have experienced growth from notable awards of government services contracts. Operations on the recently awarded IRCG contract and the transition to the previously announced UKSAR2G contract are set to commence in the fourth quarter of 2024. We expect the full year impact of these contract commencements to have positive impacts on our financial results in 2025 and beyond, though the strengthening of the U.S. dollar relative to local currencies, particularly the British pound sterling, could offset a portion of the benefits we expect to derive from increased activity. For further commentary on our foreign exchange risk, see “Item 1.A. Risk Factors - Foreign exchange risks and controls may affect our financial position and results of operations” and “Item 7A. Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Risk.”

The duration of government services contracts generally lasts for ten or more years with options for renewal. Privatization of aviation services historically operated by the public sector depend heavily on governmental agencies receiving funding through budget appropriation, and the desire to outsource such services. As government agencies in various countries begin to see the advantages of outsourcing public SAR services, other opportunities such as firefighting, surveying, training,

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maintenance and emergency response services could become available. We believe that we are well positioned to continue to serve the market as more opportunities arise.

Components of Revenues and Expenses

We derive our revenues primarily from operating equipment, and our profits depend on our cost of capital, the acquisition costs of assets, our operating costs and our reputation. A majority of our revenues are generated through two types of contracts: helicopter services and fixed wing services. Revenues are recognized when control of the identified distinct goods or services has been transferred to the customer, the transaction price is determined and allocated to the satisfied performance obligations and we have determined that collection has occurred or is probable of occurring. Cost reimbursements from customers are recorded as reimbursable revenues with the related reimbursed cost recorded as reimbursable expense on our consolidated statements of operations.

Operating revenues recorded under our offshore energy line of service are primarily generated from offshore energy exploration, development and production activities with fixed-term contracts generally ranging between one to five years, subject to provisions permitting early termination by certain customers. Customers are invoiced on a monthly basis with payment terms of 30 to 60 days. Revenues are typically earned through a combination of fixed monthly fees plus an incremental charge based on flight hours flown. Ad hoc revenues are typically earned through either a combination of a daily fixed fee plus a charge based on hours flown or an hourly rate with a minimum number of hours to be charged daily.

Our customers for SAR services include both the offshore energy industry, where our revenues are primarily dependent on our customers’ operating expenditures, and governmental agencies, where our revenues are dependent on a country’s desire to privatize SAR and enter into long-term contracts. Operating revenues for these emergency response services are earned through a fixed monthly fee plus an incremental charge for flight hours flown, and charter revenues are typically earned through an hourly rate with a minimum number of hours to be charged daily.

We derive revenues from our fixed wing line of service by providing transportation services through passenger transport and charter services, with ticket sales initially recorded under deferred revenues on our consolidated balance sheets. Revenues are recognized over time at the earlier of the period in which the service is provided or the period in which the right to travel expires; this is determined by the terms and conditions of the ticket. For scheduled charter services, our contracts typically include variable rates based on the number of passengers, flights or flight hours. These agreements may also include a monthly standing charge; however, this is much less common as compared to helicopter contracts. Both chartered and scheduled airline services revenues are recognized net of passenger taxes and discounts.

Our policy of expensing all helicopter repair costs as incurred may result in operating expenses varying substantially when compared with a prior year or prior quarter if a disproportionate number of repairs, refurbishments or overhauls are undertaken. This variation can be exacerbated by the timing of entering or exiting third-party power-by-the-hour (“PBH”) programs and the timing of vendor credits.

For helicopters that we lease to third parties under arrangements whereby the customer assumes operational responsibility, we often provide technical parts support, but generally we incur no other material operating costs. In most instances, our leases require customers to procure adequate insurance, but we purchase contingent hull and liability coverage to mitigate the risk of a customer’s coverage failing to respond. In some instances, we may provide training and other services to support our lease customers.

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The aggregate cost of our operations depends primarily on the size and asset mix of the fleet. Our operating expenses are grouped into the following categories:

•personnel (includes wages, benefits, payroll taxes and savings plans);

•repairs and maintenance (primarily routine activities and hourly charges for PBH maintenance contracts that cover helicopter refurbishments and engine and major component overhauls that are performed in accordance with planned maintenance programs);

•insurance (including the cost of hull and liability insurance premiums and loss deductibles);

•fuel;

•leased-in equipment (includes the cost of leasing helicopters and equipment); and

•other (primarily base expenses, property, sales and use taxes, communication costs, freight expenses, and other).

Lines of Service

Offshore Energy Services. We primarily transport personnel to, from and between offshore production platforms, drilling rigs, and other installations and emergency response services for our offshore energy customers. The three main regions where we offer offshore energy transportation services are Europe, the Americas and Africa.

Government Services. We provide SAR services in the UK on behalf of the MCA and support helicopter services such as training, troop movement and SAR for the MOD. We also provide SAR services to the Netherlands and the Dutch Caribbean and will begin providing SAR services in Ireland in 2024. Additionally, we provide aviation services to various other government agencies globally.

Fixed Wing Services. Our fixed wing services are currently operating in Australia and Nigeria, providing regular passenger transport (scheduled airline service with individual ticket sales) and charter services.

Other Activities and Services. In order to diversify sources of our earnings and cash flow, we deploy a number of helicopters in support of other industries and activities, one of which includes entering into lease arrangements for our helicopters with operators primarily located in international markets such as Chile, India, Mexico and Spain. The helicopters are contracted to non-governmental local helicopter operators, which often prefer to lease helicopters rather than purchase them. Leasing affords us the opportunity to access new markets without significant infrastructure investment and generally without ongoing operating risk, as well as countries where we are not eligible to own and control our own operating certificate. Other aviation services not included in the three lines of service noted above would also be reflected in this line of service.

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Results of Operations

The following table presents our operating results and other statement of operations information for the twelve months ended December 31, 2023 and 2022 (in thousands, except percentages):

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Revenues by Service Line. The table below sets forth the operating revenues earned by service line for the applicable periods (in thousands, except percentages):

Operating revenues. Operating revenues were $90.8 million higher in the twelve months ended December 31, 2023 (the "Current Year”) compared to the twelve months ended December 31, 2022 (the "Prior Year").

Operating revenues from offshore energy services were $29.7 million higher in the Current Year.

Operating revenues from offshore energy services in the Africa region were $32.1 million higher primarily due to higher utilization and increased rates.

Operating revenues from offshore energy services in the Europe region were $11.6 million higher in the Current Year. Revenues in the UK were $13.0 million higher primarily due to higher utilization and increased rates. Revenues in Norway were $1.5 million lower primarily due to the weakening of the Norwegian krone (“NOK”) relative to the U.S. dollar and lower fuel revenues, partially offset by higher revenues due to the commencement of a new contract.

Operating revenues from offshore energy services in the Americas region were $13.9 million lower in the Current Year primarily due to the end of a contract in Guyana and lower utilization in Suriname, partially offset by higher utilization in Brazil and the U.S. Gulf of Mexico.

Operating revenues from government services were $53.7 million higher in the Current Year primarily due to new contracts in the Falkland Islands, Netherlands SAR and Dutch Caribbean Coast Guard.

Operating revenues from fixed wing services were $10.5 million higher in the Current Year primarily due to increased rates.

Operating revenues from other services were $3.0 million lower in the Current Year primarily due to lower dry-lease revenues and part sales.

Operating expenses. Operating expenses were $49.2 million higher in the Current Year. Other operating costs were $35.4 million higher in the Current Year primarily due to higher subcontractor and other costs associated with new contracts, higher training and travel costs, lower gains from foreign currency hedging contracts and higher freight costs. Personnel costs were $27.6 million higher primarily due to an increase in headcount. Insurance costs were $4.9 million higher primarily due to a non-cash, nonrecurring write-off related to amounts from legacy insurance policies recognized in the Current Year. Leased-in equipment costs were $2.6 million higher. These increases were partially offset by lower fuel costs of $14.9 million due to lower global fuel prices and decreased flight hours in the Americas region and in fixed wing services. Repairs and maintenance costs were $6.4 million lower primarily due to lower inventory write-offs and the timing of repairs, primarily related to the buy-in agreements entered in the Prior Year, partially offset by higher PBH expenses.

General and administrative expenses. General and administrative expenses were $17.1 million higher primarily due to increased headcount related to backfilling positions that were vacant in the Prior Year, higher non-cash stock compensation expense, severance costs, and higher tax expenses.

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Restructuring costs. During the Prior Year, restructuring costs were $2.1 million primarily due to severance costs in the Africa region.

Depreciation and amortization expense. Depreciation and amortization expenses were $4.1 million higher in the Current Year primarily due to the addition of assets related to new government services contracts.

Loss on impairment. During the Prior Year, the Company recognized a loss on impairment of $5.2 million related to a PBH intangible asset write-off.

Gains (losses) on disposal of assets. During the Current Year, the Company sold or otherwise disposed of eight helicopters and other assets, resulting in net gains of $1.1 million. During the Prior Year, the Company sold twelve helicopters and other assets resulting in net losses of $0.5 million.

Earnings from unconsolidated affiliates. During the Current Year, the Company recognized earnings of $7.2 million from unconsolidated affiliates compared to earnings of $1.1 million in the Prior Year.

Interest income. During the Current Year, the Company recognized interest income of $8.6 million compared to $1.7 million in the Prior Year due to higher investment balances, higher interest rates and income from sales-type leases.

Other, net. Other expense, net of $9.9 million in the Current Year primarily resulted from foreign exchange losses of $10.7 million, partially offset by a favorable interest adjustment to the Company’s pension liability of $0.4 million. Other income, net of $33.4 million in the Prior Year primarily resulted from foreign exchange gains of $20.9 million, government grants to fixed wing services of $6.2 million, a favorable interest adjustment to the Company’s pension liability of $2.7 million and a gain on sale of inventory of $1.9 million.

Income tax expense. Income tax expense was $24.9 million in the Current Year compared to $10.8 million in the Prior Year primarily due to the earnings mix of the Company’s global operations and changes to deferred tax valuation allowances and assets.

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Liquidity and Capital Resources

General

Our ongoing liquidity requirements arise primarily from working capital needs, meeting our capital commitments (including the purchase of aircraft and other equipment) and the repayment of debt obligations. In addition, we may use our liquidity to fund acquisitions, repay debt, repurchase stock or debt securities or make other investments. Our primary sources of liquidity are cash balances and cash flows from operations and, from time to time, we may obtain additional liquidity through the issuance of equity or debt or other financing options or through asset sales.

Summary of Cash Flows

Operating Activities

Cash flows provided by operating activities were $32.0 million in the Current Year compared to $7.7 million used in the Prior Year. The increase in operating cash flows was primarily due to an increase in net income before non cash charges such as depreciation and amortization, equity earnings from unconsolidated affiliates, impairment, foreign currency gains and losses from revaluations and asset dispositions of $32.6 million.

Working capital uses of $59.1 million in the Current Year were primarily due to increases in accounts receivables and inventories. Working capital uses of $117.5 million in the Prior Year were primarily due to payments on the PBH buy-in agreements of $55.4 million, increased receivables due to the timing of collections in 2021 and prepaid expenses.

Investing Activities

During the Current Year, net cash used in investing activities was $47.3 million primarily consisting of:

•Capital expenditures of $81.5 million primarily related to payments for aircraft, purchases of equipment and leasehold improvements, partially offset by

•Proceeds of $34.2 million from the sale or disposal of aircraft and other assets.

During the Prior Year, net cash used in investing activities was $52.0 million primarily as follows:

•Capital expenditures of $57.4 million primarily related to payments for aircraft, purchases of equipment and leasehold improvements,

•Cash paid for an acquisition, net of cash received, of $12.6 million, partially offset by

•Proceeds of $18.0 million from the sale or disposal of aircraft and other assets.

Financing Activities

During the Current Year, net cash provided by financing activities was $22.0 million primarily consisting of:

•Proceeds from borrowing of $169.5 million, partially offset by

•Net repayments of debt of $142.0 million primarily related to Lombard debt principal,

•Payment on deferred financing costs of $2.7 million, and

•Stock repurchases of $2.7 million.

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During the Prior Year, net cash used in financing activities was $24.6 million primarily as follows:

•Stock repurchases of $11.9 million,

•Net repayments of debt of $11.8 million related to the Lombard debt principal, and

•Payment on debt issuance costs $0.9 million.

Effect of Exchange Rate Changes

The effect of exchange rate changes on cash and cash equivalents denominated in currencies other than the reporting currency are reflected in a separate line on the condensed consolidated statement of cash flows. Through our foreign operations we are exposed to currency fluctuations, and changes in the value of the GBP and NOK relative to the U.S. dollar have the most significant impacts to the effect of exchange rate changes on our cash, cash equivalents and restricted cash.

Entry into a Long-Term Equipment Financing

In January 2023, we entered into two thirteen-year secured equipment financings with NatWest for aggregate proceeds of $169.5 million. The net proceeds from the financings were used to refinance the indebtedness of the Lombard Debt and will be used to provide additional financing to support our obligations under our SAR contracts in the UK. The credit facilities have approximately thirteen-year terms with repayment due in quarterly installments which commenced on March 31, 2023. The credit facilities bear interest at a rate equal to the SONIA plus 2.75% per annum. Bristow's obligations under the NatWest Debt are secured by ten SAR helicopters.

In January 2024, Bristow entered into a new twelve-year secured equipment financing for an aggregate principal amount of up to £55 million with a syndicate of banks led by NatWest. The credit facility has a 15-month availability period and is expected to fund during 2024, subject to delivery of the new SAR configured helicopters. Bristow contemporaneously entered into amendments and restatements of the credit facilities with respect to the other two existing tranches of the NatWest Debt (as defined in Note 6 to the consolidated financial statement) in order to, among other things, reflect that certain subsidiaries will be providing guarantees of the term loans under the NatWest Debt.

Material Cash Requirements

The factors that materially affect our overall liquidity include cash from or used to fund operations, capital expenditure commitments, debt service, pension funding, adequacy of bank lines of credit and our ability to attract capital on satisfactory terms. We believe that our cash flows from operating activities will be adequate to meet our working capital requirements. To support our capital expenditure program and/or other liquidity requirements, we may use any combination of operating cash flows, cash balances, borrowings under our ABL Facility, proceeds from sales of assets, issue debt or equity, or other financing options.

As of December 31, 2023, approximately 55% of our total cash balance was held outside the U.S. Most of our cash held outside the U.S. could be repatriated to the U.S., and any such repatriation could be subject to additional taxes. If cash held by non-U.S. operations is required for funding operations in the U.S., we may make a provision for additional taxes in connection with repatriating this cash, which is not expected to have a significant impact on our results of operations.

We have no near-term debt maturities, other than the current portion of long-term debt of $13.2 million, and believe that our cash flows from operations and other sources of liquidity will continue to be sufficient in fulfilling our capital requirements and other obligations. Our long-term liquidity is dependent upon our ability to generate operating profits sufficient to meet our requirements for working capital, debt service, capital expenditures and a reasonable return on investment. As of December 31, 2023, we had $180.3 million of unrestricted cash and $70.9 million of remaining availability under our ABL Facility for total liquidity of $251.2 million.

Our total principal debt balance as of December 31, 2023 was $548.1 million primarily comprised of the 6.875% Senior Notes due in March 2028 and two tranches of the NatWest Debt maturing in March 2036.

We plan to use a combination of cash on hand, operating cash flows, new debt financing and aircraft leasing to fund our projected future capital expenditures, which includes our aircraft purchase commitments, infrastructure and other growth expenditure plans primarily in support of new long term contracts such as the UKSAR2G and IRCG, among other growth opportunities.

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Contractual Obligations and Commercial Commitments

We have various contractual obligations that are recorded as liabilities on our consolidated balance sheets. Other items, such as certain purchase commitments and other executory contracts are not recognized as liabilities on our consolidated balance sheets.

As of December 31, 2023, we had unfunded capital commitments of $307.3 million, consisting primarily of agreements to purchase six AW189 heavy helicopters, six AW139 medium helicopters, five AW169 light twin helicopters and five H135 light twin helicopters. The AW139 helicopters are scheduled to be delivered in 2024, and the AW189 helicopters and 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 to six additional AW189 helicopters and ten additional H135 helicopters. If these options are exercised, the AW189 helicopters would be scheduled for delivery between 2025 and 2026, 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.

As of December 31, 2023, $35.6 million of our unfunded capital commitments (inclusive of deposits paid on options not yet exercised) may be terminated without further liability other than aggregate liquidated damages of approximately $1.1 million. If we do not exercise our rights to cancel these capital commitments, we expect to finance the remaining acquisition costs for these helicopters through a combination of cash on hand, cash provided by operating activities, asset sales and financing options.

Lease Obligations

From time to time we may, under favorable market conditions and when necessary, enter into opportunistic aircraft lease agreements in support of our global operations.

We have non-cancelable operating leases in connection with the lease of certain equipment, including leases for aircraft, and land and facilities used in our operations. The related lease agreements, which range from non-cancelable to month-to-month terms, generally provide for fixed monthly rentals and can also include renewal options. As of December 31, 2023, aggregate future payments under all non-cancelable operating leases that have initial or remaining terms in excess of one year, were as follows (in thousands):

During the twelve months ended December 31, 2023, our long-term operating lease assets and liabilities increased by $47.0 million and $49.0 million, respectively, as reflected on the consolidated balance sheets, primarily due to 14 aircraft lease extensions, three new aircraft leases, an operating base and other assets in support of new contracts.

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Pension Obligations

As of December 31, 2023, we had a net $3.3 million pension asset related to the BHL and Bristow International Aviation (Guernsey) Limited (“BIAGL”) pension plans as recorded on our consolidated balance sheets. The net asset represents the excess of the fair value of plan assets over the defined benefit pension plan of the present value of the liabilities that existed at that date. The minimum funding rules of the UK require the employer to agree to a funding plan with the plans’ trustee for securing that the pension plan has sufficient and appropriate assets to meet its technical provisions liabilities. The technical provisions are the measure of liabilities used for UK funding purposes and differs from that used to determine the balance sheet liabilities. When there is a shortfall in assets against these technical provisions, we are required to make scheduled contributions in amounts sufficient to bring the plan up to fully-funded status as quickly as can be reasonably afforded. The timing of the funding is dependent on actuarial valuations and resulting negotiations with the plan trustees. The employer contributions for the pension plan for the twelve months ended December 31, 2023, nine months ended December 31, 2022 and twelve months ended March 31, 2022 were $15.7 million, $11.1 million and $18.0 million, respectively.

Selected Financial Information on Guarantors of Securities

On February 25, 2021, Bristow Group Inc. (“the Parent”) issued its 6.875% Senior Notes due 2028. The 6.875% Senior Notes, issued under an indenture, are fully and unconditionally guaranteed as to payment by a number of subsidiaries of the Parent (collectively, the “Guarantors”). The Parent is a holding company with no significant assets other than the stock of its subsidiaries. In order to meet its financial needs and obligations, the Parent relies exclusively on income from dividends and other cash flow from such subsidiaries. The subsidiary guarantees provide that, in the event of a default on the 6.875% Senior Notes, the holders of the 6.875% Senior Notes may institute legal proceedings directly against the Guarantors to enforce the guarantees without first proceeding against the Parent.

None of the non-Guarantor subsidiaries of the Parent are under any direct obligation to pay or otherwise fund amounts due on the 6.875% Senior Notes or the guarantees, whether in the form of dividends, distributions, loans or other payments. If such subsidiaries are unable to transfer funds to the Parent or Guarantors and sufficient cash or liquidity is not otherwise available, the Parent or Guarantors may not be able to make principal and interest payments on their outstanding debt, including the 6.875% Senior Notes or the guarantees. The following selected financial information of the Guarantors presents a sufficient financial position of the Parent to continue to fulfill its obligations under the requirements of the 6.875% Senior Notes. This selected financial information should be read in conjunction with the accompanying consolidated financial statements and notes (in thousands).

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Contingencies

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. In addition, from time to time, the Company is involved in tax and other disputes with various government agencies. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its 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.

Critical Accounting Estimates

Critical accounting estimates are defined as those that are affected by significant judgments and uncertainties which could potentially result in materially different accounting under different assumptions and conditions. The Company has prepared the financial statements in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates under different assumptions or conditions. The following critical accounting estimates could potentially result in a material impact to our financial condition or operating results. The Company believes that of its significant accounting policies, as discussed in Note 1 to the consolidated financial statements included in this Annual Report on Form 10-K, the following involve a higher degree of judgment and complexity.

Taxes. Our annual tax provision is based on expected taxable income, statutory rates and tax planning opportunities available to us in the various jurisdictions in which we operate. The determination and evaluation of our tax provision and tax positions involves the interpretation of the tax laws in the various jurisdictions in which we operate and requires significant judgment and the use of estimates and assumptions regarding significant future events such as the amount, timing and character of income, deductions and tax credits. Changes in tax laws, regulations, agreements, tax treaties and foreign currency exchange restrictions or our level of operations or profitability in each jurisdiction would impact our tax liability in any given year.

We may recognize foreign tax credits available to us to offset the U.S. income taxes due on income earned from foreign sources. These credits are limited by the total income tax on the U.S. income tax return as well as by the ratio of foreign source income in each statutory category to total income. These estimates are subject to change based on changes in the market conditions in each statutory category, changes in U.S. income tax laws and the timing of certain deductions available to us in each statutory category.

The Tax Cuts and Jobs Act enacted on December 22, 2017 subjects a U.S. shareholder to tax on GILTI (“Global intangible low-taxed income”) earned by certain foreign subsidiaries. We recognize the tax on GILTI as an expense in the period the tax is incurred. Under this policy, we have not provided deferred taxes related to temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period.

We maintain reserves for estimated income tax exposures in jurisdictions of operation. The expenses reported for these taxes, including our annual tax provision, include the effect of reserve provisions and changes to reserves that we consider appropriate, as well as related interest. We believe that an appropriate liability has been established for estimated exposures. However, actual results may differ materially from these estimates.

As of December 31, 2023, we have established deferred tax assets for certain attributes we expect to be realizable. Our ability to realize the benefit of our deferred tax assets requires us to achieve certain future earnings levels. If we are unable to benefit from our deferred tax assets, valuation allowances will be established following the “more-likely-than-not” criteria. We periodically evaluate our ability to utilize our deferred tax assets and, in accordance with accounting guidance related to accounting for income taxes, will record any resulting adjustments that may be required to deferred income tax expense in the period for which an existing estimate changes.

We consider the earnings of certain foreign subsidiaries to be indefinitely invested outside the U.S. on the basis of estimates that future cash generation will be sufficient to meet future U.S. cash needs and specific plans for foreign reinvestment of those earnings. As such, as of December 31, 2023, we have not provided for deferred taxes on the unremitted earnings of certain foreign subsidiaries that are indefinitely invested abroad. Should our expectations change regarding the

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expected future tax consequences, we may be required to record additional U.S. federal deferred income taxes that could have a material adverse effect on our consolidated financial position, result of operations and cash flows.

Pension Benefits. Pension obligations are actuarially determined and are affected by assumptions including discount rates and compensation increases. The recognition of these obligations through the statement of operations is also affected by assumptions about expected returns on plan assets. We evaluate our assumptions periodically and adjust these assumptions as necessary.

Three critical assumptions are the expected long-term rate of return on plan assets, the assumed discount rate and the mortality rate. We evaluate our assumptions regarding the estimated long-term rate of return on plan assets based on historical experience and future expectations on investment returns, which are calculated by our third-party investment advisor utilizing the asset allocation classes held by the plans’ portfolios. We utilize a British pound sterling denominated AA corporate bond index as a basis for determining the discount rate for our UK plans. We base mortality rates utilized on actuarial research on these rates, which are adjusted to allow for expected mortality within our industry segment and, where available, individual plan experience data. Changes in these and other assumptions used in the actuarial computations could impact our projected benefit obligations, pension liabilities, pension expense and other comprehensive income. We base our determination of pension expense on a fair value valuation of assets and an amortization approach for assessed gains and losses that reduces year-to-year volatility. This approach recognizes investment and other actuarial gains or losses over the average remaining lifetime of the plan members. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market-related value of assets.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements that will, or could possibly, have an effect on our financial condition and results of operations, see Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K.