# Bristow Group Inc. (VTOL) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Bristow Group Inc.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1525221/000152522125000016/vtol-20241231.htm
Accession: 0001525221-25-000016
Filing date: 2025-02-27
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/VTOL/
All MD&A years: /company/VTOL/mda/
Previous year: /company/VTOL/mda/fy2023/ (FY 2023)
Next year: /company/VTOL/mda/fy2025/ (FY 2025)

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, 2024 and 2023. Also included is a discussion and analysis of our financial condition

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Table of Contents

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 that was applied on a prospective basis in December 2022, the discussion of the financial condition and results of operations for 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. Additional information on the fiscal year end change can be found in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2023, filed with the SEC on March 6, 2024. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under Part I, Item 1A, “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.

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 business comprises three reportable segments: Offshore Energy Services, Government Services and Other Services, using a fleet of 210 aircraft located across six continents and 18 different countries. Today, we 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 the U.S. Our offshore energy customers primarily use our services to transport personnel to, from and between offshore energy installations. Our government customers primarily outsource SAR activities whereby we operate specialized helicopters and provide highly trained personnel. Our other customers primarily include fixed wing passengers utilizing our regional airline in Australia and companies that dry-lease helicopters from us in support of other industries and markets where we do not directly compete or operate in.

During the twelve months ended December 31, 2024 and 2023, approximately 68% and 66%, respectively, of our total revenues were derived from Offshore Energy Services while approximately 23% and 26%, respectively, were derived from Government Services and approximately 9% and 8%, respectively, were derived from Other Services.

Recent Developments

Capital Allocation

In February 2025, we announced a new capital allocation framework with key priorities that include: (i) protect and maintain a strong balance sheet and liquidity position; (ii) pursue high impact, high return growth opportunities; and (iii) return capital to shareholders via opportunistic share repurchases and initiate quarterly dividend payments in 2026. Understanding that the Offshore Energy Services segment is inherently volatile, the Company recognizes the importance of maintaining a strong balance sheet that can withstand challenging market down cycles. As such, Bristow intends to pay down debt to a balance of approximately $500 million gross debt by the end of 2026. Bristow’s Board of Directors has approved a new $125 million share repurchase program that will be deployed on an opportunistic basis. In addition, the Company intends to initiate a quarterly dividend program beginning in the first quarter of 2026, with an initial dividend payment of $0.125 per share ($0.50 per share annualized).

Market Outlook

Recent concerns, amongst industry observers, around the offshore rig count and white space pose important questions about the outlook for global offshore energy markets. While there are headwinds that impact our business, including supply chain challenges and a strong U.S. dollar, the dynamics that continue to support the positive outlook for our sector differ from those of other oilfield services companies in key ways.

For instance, although the offshore energy market is highly cyclical with demand linked to the price of oil and gas, the impacts of short-term fluctuations in commodity prices are less severe on our primarily production-focused business. While long periods of depressed prices would have more significant impacts, we believe current prices can continue to provide the fundamentals needed for sustained growth.

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During the offshore energy downturn that began in late 2014, deliveries of new helicopters were limited, as the price of crude oil had been range-bound for a number of years. This 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. Throughout this downturn, numerous helicopters were sold or otherwise exited the offshore market. However, the recent increase in offshore energy activity that began in 2022 is driving a constructive supply and demand balance for offshore helicopters, and the once excess available capacity has shrunk, with utilization levels for offshore-configured medium, super medium and heavy helicopters at or near 100%. Furthermore, militaries and governments placing orders for aircraft models that share OEM production lines with civilian aircraft have led to longer lead times for new builds, in some instances taking upwards of 18 to 24 months for new order deliveries. The long lead times, coupled with at or near full utilization of relevant aircraft models, come at a time when we have only reset a portion of our Offshore Energy Services contracts at leading-edge rates, with the majority set to renew in late 2025 and 2026.

Severe supply chain challenges have also delayed parts and repairs for the S92 heavy helicopters, thereby limiting the number of S92s that are serviceable today and further tightening the overall supply; while this has helped raise rates to some extent, there is now unmet lift demand that serviceable S92s could absorb. Any further exacerbation of this supply chain issue could bias our guidance to the lower end of the range, while relief or return to pre-pandemic levels can positively influence our results.

Additionally, given our sector’s late cycle exposure and the lag effect involving new projects, helicopter operators are typically contracted later amongst the late-cycle businesses servicing offshore energy exploration and production platforms, often long after rig announcements. As a result of the lack of spare capacity and current helicopter market tightness, contract lead times are beginning to increase. Some of our contracts that recently commenced were awarded last year, and conversations with customers are just beginning for services set to commence in 2025 and 2026. Furthermore, markets such as Nigeria and Brazil continue to show growth and increased demand for vertical lift. We believe we are well positioned to meet this demand given our decades-long experience operating in these markets, our reputation for safety and reliability, and our performance history. The combination of all these factors continue to support our outlook that we are in the midst of a multi-year growth cycle that will benefit the offshore helicopter market.

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 few years, we have experienced growth from notable awards of government services contracts, and the investments we are making to grow and diversify our leading government services business are expected to result in attractive long-term cash flow yields for the Company well into the middle of the next decade. Operations for the previously announced IRCG contract commenced in late 2024 and are expected to finish transitioning in 2025. The transition to the previously announced UKSAR2G contract also commenced in the fourth quarter of 2024, and the last base will finish transitioning in late 2026. We expect the full year impact of these contract commencements to have positive impacts on our financial results in 2026 and beyond, though the strengthening of the U.S. dollar relative to local currencies, particularly the British pound sterling and the Euro, and the impacts of penalties due to aircraft availability, primarily related to supply chain challenges that are expected to persist, could offset a portion of the benefits we expect to derive from increased activity. Additionally, 2025 will largely remain a transition period for our Government Services segment as we incur costs related to these new contracts while revenues and operations fully ramp, and though the majority of capital expenditures will conclude in 2025, associated operating expenses and delays in contract transitions may not present the full earnings power and quality margins from this business until 2026 and beyond. For further commentary on these risks, see Part I, Item 1A, “Risk Factors” and Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Risk” in this Annual Report on Form 10-K.

The duration of Government Services contracts generally lasts for ten or more years with options for extensions. 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. We believe that we are well positioned to continue to serve the market as more opportunities arise.

Other Services has experienced growth in recent years from charter revenues in Australia, and we observed higher yields in scheduled passenger transport throughout the year. Performance for this market is largely tied to passenger demand in Northern and Western Australia. We believe the financial performance of this business

41

will remain consistent with at or near current levels of activity. Dry leasing, albeit a smaller portion of our Other Services, is expected to continue providing cash flows without significant operating or capital requirements.

Components of Revenues and Expenses

We derive our revenues primarily from providing aviation services, and our profits depend on our cost of capital, the acquisition costs of aircraft, our operating costs and our reputation. A majority of our revenues are generated through two types of contracts: helicopter services and fixed wing services. We operate in three segments: Offshore Energy Services, Government Services and Other Services.

The primary drivers of our revenues are utilization, rates and added capacity. Utilization can refer to either aircraft utilization, which is the number of hours an aircraft has flown during the period, or contract utilization, which is the commencement or end of contracts and the number of aircraft on contract in a given period. Rates refer to the Monthly Standing Charge (“MSC”), which is the fixed monthly fee charged to a customer for the right to use an aircraft, or the Fixed Hourly Rate (“FHR”), which is an incremental per flight hour charge for hours flown. Capacity can refer to new aircraft that have been added to the fleet, older aircraft that have been removed from the fleet, or when an existing aircraft has been moved to a different market, increasing or decreasing the capacity in that market.

Revenues under our Offshore Energy Services segment 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. Revenues are typically earned through a combination of a MSC plus an incremental FHR. 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.

In our Government Services segment, we provide public sector SAR and other aviation services to government agencies. Revenues for these emergency response services are also earned through an MSC plus an incremental FHR fee.

In our Other Services segment, we derive revenues from our fixed wing operations by providing transportation services through regular passenger transport (scheduled airline service with individual commercial ticket sales) and charter services. For charter services, our contracts typically include variable rates based on the number of passengers, flights or flight hours. These charter service agreements may also include an MSC; however, this is much less common as compared to helicopter contracts.

For helicopters that we lease to third parties under arrangements whereby the customer assumes operational responsibility (dry leases), we often provide technical parts support, but generally we incur no other material operating costs. In some instances, we may provide training and other services to support our leasing customers.

In many cases, aircraft components, such as engines and transmissions, are maintained by third-party vendors under contractual agreements also referred to as power-by-the-hour (“PBH”) maintenance agreements. Under these agreements, the Company is charged an agreed amount per hour of flying time related to maintenance, repair and overhaul of the parts and components covered. The costs under these arrangements are expensed in the period that the flight hours were incurred. When the Company places a helicopter in a PBH program after a maintenance period has begun, it may be necessary to pay an initial buy-in charge based on hours flown since the previous maintenance event. The timing of entering or exiting third-party PBH programs and the timing of vendor credits may create variation in our operating expenses between comparative periods.

For aircraft that are not on PBH programs, maintenance and repair costs, including major aircraft component overhaul costs, are recognized in the period they are incurred.

Our policy of expensing helicopter repair costs as incurred, particularly for those aircraft not on PBH agreements, 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.

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

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

•repairs and maintenance (includes hourly charges for PBH maintenance contracts, amortization of

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PBH buy-in agreements, vendor credits, inventory write-downs and additional maintenance and repair costs, including major aircraft component overhaul costs, to earnings as the costs are incurred);

•insurance (includes 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 and facility expenses, subcontractor costs, property, sales and use taxes, training, transportation, freight expenses, and other).

Results of Operations in 2024 Compared to 2023

The following table presents our operating results and other statement of operations information for the twelve months ended December 31, 2024 and 2023:

Annual Consolidated Statement of Operations by Segment

(in thousands, except percentages)

[[GREPCENT_TABLE]]
[["","Twelve Months Ended December 31,","","Favorable (Unfavorable)"],["","2024","","2023"],["Revenues:"],["Offshore Energy Services","$","966,064","","","$","852,956","","","$","113,108","","","13.3","%"],["Government Services","329,654","","","337,280","","","(7,626)","","","(2.3)","%"],["Other Services","119,773","","","107,193","","","12,580","","","11.7","%"],["Total revenues","1,415,491","","","1,297,429","","","118,062","","","9.1","%"],["Operating income (loss):"],["Offshore Energy Services","132,165","","","45,613","","","86,552","","","189.8","%"],["Government Services","21,070","","","29,610","","","(8,540)","","","(28.8)","%"],["Other Services","13,747","","","15,398","","","(1,651)","","","(10.7)","%"],["Corporate","(34,374)","","","(29,870)","","","(4,504)","","","(15.1)","%"],["Total operating income","132,608","","","60,751","","","71,857","","","118.3","%"],["Interest income","8,901","","","8,646","","","255","","","2.9","%"],["Interest expense, net","(37,581)","","","(41,417)","","","3,836","","","9.3","%"],["Other, net","(1,865)","","","(9,968)","","","8,103","","","81.3","%"],["Total other income (expense), net","(30,545)","","","(42,739)","","","12,194","","","28.5","%"],["Income before income taxes","102,063","","","18,012","","","84,051","","","nm"],["Income tax expense","(7,193)","","","(24,932)","","","17,739","","","71.1","%"],["Net income (loss)","94,870","","","(6,920)","","","101,790","","","nm"],["Net loss (income) attributable to noncontrolling interests","(73)","","","140","","","(213)","","","nm"],["Net income (loss) attributable to Bristow Group Inc.","$","94,797","","","$","(6,780)","","","$","101,577","","","nm"],["Operating income margins"],["Offshore Energy Services","14","%","","5","%"],["Government Services","6","%","","9","%"],["Other Services","11","%","","14","%"]]
[[/GREPCENT_TABLE]]

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Total Revenues by Segment

(in thousands, except percentages)

[[GREPCENT_TABLE]]
[["","Twelve Months Ended December 31,","","Favorable (Unfavorable)"],["","2024","","2023"],["Offshore Energy Services:"],["Europe","$","427,739","","","$","398,059","","","$","29,680","","7.5","%"],["Americas","368,319","","","332,259","","","36,060","","10.9","%"],["Africa(1)","170,006","","","122,638","","","47,368","","38.6","%"],["Total Offshore Energy Services","$","966,064","","","$","852,956","","","$","113,108","","13.3","%"],["Government Services","329,654","","","337,280","","","(7,626)","","(2.3)","%"],["Other Services","119,773","","","107,193","","","12,580","","11.7","%"],["","$","1,415,491","","","$","1,297,429","","","$","118,062","","9.1","%"]]
[[/GREPCENT_TABLE]]
___________________

(1) Includes revenues of approximately $10.8 million for the twelve months ended December 31, 2023, related to fixed wing revenues in Africa that were previously classified in Other Services.

Flight Hours by Segment

[[GREPCENT_TABLE]]
[["","Twelve Months Ended December 31,","","Favorable (Unfavorable)"],["","2024","","2023"],["Offshore Energy Services:"],["Europe","38,284","","","42,025","","","(3,741)","","(8.9)","%"],["Americas","42,583","","","36,677","","","5,906","","16.1","%"],["Africa","16,946","","","13,656","","","3,290","","24.1","%"],["Total Offshore Energy Services","97,813","","","92,358","","","5,455","","5.9","%"],["Government Services","18,811","","","18,661","","","150","","0.8","%"],["Other Services","13,682","","","11,069","","","2,613","","23.6","%"],["","130,306","","","122,088","","","8,218","","6.7","%"]]
[[/GREPCENT_TABLE]]

Annual Results of Operations

Offshore Energy Services. Revenues from Offshore Energy Services were $113.1 million higher in the Current Year compared to the Prior Year. Revenues in Africa were $47.4 million higher primarily due to higher utilization and increased rates. Revenues in the Americas were $36.1 million higher primarily due to higher utilization and the commencement of new contracts in Brazil. Revenues in Europe were $29.7 million higher primarily due to the commencement of a new contract in Norway. Operating income was $86.6 million higher in the Current Year primarily due to these higher revenues. Operating income was negatively impacted by higher repairs and maintenance costs of $20.1 million and operating personnel costs of $8.7 million, both primarily due to increased activity, partially offset by lower fuel costs of $5.5 million due to lower fuel prices.

Government Services. Revenues from Government Services were $7.6 million lower in the Current Year primarily due to a change in rates after transitioning to the long-term contract with the Dutch Caribbean Coast Guard (“DCCG”). Operating income was $8.5 million lower in the Current Year. In addition to lower revenues, operating income was also impacted by higher personnel costs of $6.8 million primarily due to the finalization of a labor agreement in the UK and higher other operating costs of $1.6 million due to the commencement of the IRCG and UKSAR2G contracts. These increases in operating expenses were partially offset by lower general and administrative expenses of $3.1 million in the Current Year, primarily due to lower professional services fees, and lower depreciation and amortization expense of $1.4 million. Fuel costs were $1.4 million lower due to lower global fuel prices, and repairs and maintenance costs were $1.0 million lower primarily due to decreased activity.

Other Services. Revenues from Other Services were $12.6 million higher in the Current Year primarily due to higher utilization and increased rates. Operating income from Other Services was $1.7 million lower in the Current Year primarily due to higher operating costs in fixed wing services of $12.7 million due to increased subcontractor costs, training and fuel expenses. Depreciation and amortization was $1.6 million higher than the Prior Year.

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Corporate. Total expenses for Corporate were $2.3 million higher in the Current Year primarily due to the full-year impact of increased headcount.

Gains (losses) on disposal of assets.

During the Current Year, the Company sold or otherwise disposed of 13 helicopters and various other assets, resulting in net losses of $1.0 million, compared to $1.1 million of net gains in the Prior Year primarily due to the sale of eight helicopters and disposal of various other assets.

Interest expense, net.

Interest expense was $3.8 million lower in the Current Year primarily due to higher capitalized interest.

Other, net.

Other expense was $1.9 million in the Current Year and $10.0 million in the Prior Year primarily due to foreign exchange losses.

Income tax expense.

Income tax expense was $17.7 million lower than the Prior Year primarily due to the earnings mix of the Company’s global operations, a tax benefit from double taxation relief of $8.1 million, a tax benefit from the expiration of the statute of limitation on uncertain tax positions of $4.1 million and a $3.2 million tax benefit associated with an adjustment to deferred tax liabilities.

Results of Operations in 2023 Compared to 2022

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

Annual Consolidated Statement of Operations by Segment

(in thousands, except percentages)

[[GREPCENT_TABLE]]
[["","Twelve Months Ended December 31,","","Favorable (Unfavorable)"],["","2023","","2022"],["Revenues:"],["Offshore Energy Services","$","852,956","","","$","828,764","","","$","24,192","","","2.9","%"],["Government Services","337,280","","","283,678","","","53,602","","","18.9","%"],["Other Services","107,193","","","97,526","","","9,667","","","9.9","%"],["Total revenues","1,297,429","","","1,209,968","","","87,461","","","7.2","%"],["Operating income (loss):"],["Offshore Energy Services","45,613","","","11,500","","","34,113","","","nm"],["Government Services","29,610","","","38,889","","","(9,279)","","","(23.9)","%"],["Other Services","15,398","","","2,243","","","13,155","","","nm"],["Corporate","(29,870)","","","(26,633)","","","(3,237)","","","(12.2)","%"],["Total operating income","60,751","","","25,999","","","34,752","","","nm"],["Interest income","8,646","","","1,668","","","6,978","","","nm"],["Interest expense, net","(41,417)","","","(40,948)","","","(469)","","","(1.1)","%"],["Other, net","(9,968)","","","33,244","","","(43,212)","","","nm"],["Total other income (expense), net","(42,739)","","","(6,036)","","","(36,703)","","","nm"],["Income before income taxes","18,012","","","19,963","","","(1,951)","","","(9.8)","%"],["Income tax expense","(24,932)","","","(10,754)","","","(14,178)","","","nm"],["Net income (loss)","(6,920)","","","9,209","","","(16,129)","","","nm"],["Net loss attributable to noncontrolling interests","140","","","6","","","134","","","nm"],["Net income (loss) attributable to Bristow Group Inc.","$","(6,780)","","","$","9,215","","","$","(15,995)","","","nm"],["Operating income margins"],["Offshore Energy Services","5","%","","1","%"],["Government Services","9","%","","14","%"],["Other Services","14","%","","2","%"]]
[[/GREPCENT_TABLE]]

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Total Revenues by Segment

(in thousands, except percentages)

[[GREPCENT_TABLE]]
[["","Twelve Months Ended December 31,","","Favorable (Unfavorable)"],["","2023","","2022"],["Offshore Energy Services:"],["Europe","$","398,059","","","$","388,859","","","$","9,200","","2.4","%"],["Americas","332,259","","","347,046","","","(14,787)","","(4.3)","%"],["Africa(1)","122,638","","","92,859","","","29,779","","32.1","%"],["Total Offshore Energy Services","$","852,956","","","$","828,764","","","$","24,192","","2.9","%"],["Government Services","337,280","","","283,678","","","53,602","","18.9","%"],["Other Services","107,193","","","97,526","","","9,667","","9.9","%"],["","$","1,297,429","","","$","1,209,968","","","$","87,461","","7.2","%"]]
[[/GREPCENT_TABLE]]
___________________

(1) Includes revenues of approximately $10.8 million and $13.1 million for the twelve months ended December 31, 2023 and twelve months ended December 31, 2022, respectively, related to fixed wing revenues in Africa that were previously classified in Other Services.

Flight Hours by Segment

[[GREPCENT_TABLE]]
[["","Twelve Months Ended December 31,","","Favorable (Unfavorable)"],["","2023","","2022"],["Offshore Energy Services:"],["Europe","42,025","","","42,559","","","(534)","","(1.3)","%"],["Americas","36,677","","","40,115","","","(3,438)","","(8.6)","%"],["Africa","13,656","","","10,663","","","2,993","","28.1","%"],["Total Offshore Energy Services","92,358","","","93,337","","","(979)","","(1.0)","%"],["Government Services","18,661","","","17,194","","","1,467","","8.5","%"],["Other Services","11,069","","","12,172","","","(1,103)","","(9.1)","%"],["","122,088","","","122,703","","","(615)","","(0.5)","%"]]
[[/GREPCENT_TABLE]]

Annual Results of Operations

Offshore Energy Services. Revenues from Offshore Energy Services were $24.2 million higher in the twelve months ended December 31, 2023 compared to the twelve months ended December 31, 2022. Revenues in Africa and Europe were $29.8 million and $9.2 million higher, respectively, primarily due to higher utilization and increased rates. These increases were partially offset by lower revenues in the Americas of $14.8 million primarily due to the end of a contract in Guyana. In addition to higher revenues in Africa and Europe, operating income was $34.1 million higher, due to lower fuel costs of $11.9 million and repairs and maintenance costs of $9.3 million due to lower fuel prices and decreased flight hours, respectively. These decreases in operating expenses were partially offset by higher subcontractor and other operating costs associated with new contracts of $10.9 million.

Government Services. Revenues from Government Services were $53.6 million higher in the twelve months ended December 31, 2023 primarily due to new contracts in the Falkland Islands, NLSAR and the DCCG. Operating income was $9.3 million lower primarily due to higher operating expenses of $54.5 million due to higher personnel costs of $20.4 million, other operating costs of $19.8 million, leased-in equipment costs of $6.5 million and repairs and maintenance costs of $5.9 million as a result of the new contracts. General and administrative expenses were $4.4 million higher primarily due to higher compensation costs. Depreciation and amortization expense was $4.1 million higher due to the addition of assets related to new contracts.

Other Services. Revenues from Other Services were $9.7 million higher in the twelve months ended December 31, 2023 due to increased rates. Operating income from Other Services was $13.2 million higher. Operating expenses were $5.7 million lower primarily due to lower leased-in equipment costs, repairs and maintenance, and fuel costs in fixed wing, partially offset by higher personnel and other operating costs.

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Corporate. Total expenses for Corporate were $4.9 million higher in the twelve months ended December 31, 2023 primarily due to the full year impact of increased headcount following attrition in prior years and higher non-cash stock compensation.

Gains (losses) on disposal of assets.

In the twelve months ended December 31, 2023, the Company sold eight helicopters and disposed of various other assets, resulting in net gains of $1.1 million. In the twelve months ended December 31, 2022, the Company sold twelve helicopters and other assets resulting in net losses of $0.5 million.

Interest income.

In twelve months ended December 31, 2023, the Company recognized interest income of $8.6 million compared to $1.7 million in 2022 due to higher investment balances, higher interest rates and income from sales-type leases.

Other, net.

Other expense, net of $9.9 million in twelve months ended December 31, 2023 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 twelve months ended December 31, 2022 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 twelve months ended December 31, 2023 compared to $10.8 million in the twelve months ended December 31, 2022 primarily due to the earnings mix of the Company’s global operations, particularly an increase in current income tax expense from U.S. earnings and non-U.S. earnings by $6.4 million and $5.0 million, respectively, and changes to deferred tax valuation allowances and deferred tax assets of $2.7 million.

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 payment of debt service obligations. In addition, we may use our liquidity to fund acquisitions, 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

[[GREPCENT_TABLE]]
[["","Twelve Months Ended December 31,"],["","2024","","2023"],["Cash flows provided by or (used in):"],["Operating activities","$","177,420","","","$","32,037"],["Investing activities","(245,954)","","","(47,319)"],["Financing activities","141,104","","","22,035"],["Effect of exchange rate changes on cash, cash equivalents and restricted cash","(4,951)","","","13,226"],["Net increase in cash, cash equivalents and restricted cash","$","67,619","","","$","19,979"]]
[[/GREPCENT_TABLE]]

Operating Activities

Cash flows provided by operating activities were $145.4 million higher in the Current Year primarily due to an increase in operating income and an improvement in working capital. Working capital uses of $0.7 million in the Current Year were primarily due to increases in inventory to support new contracts and to mitigate risks related

47

to supply chain constraints and the timing of payments to vendors. These working capital uses were partially offset by a decrease in defined benefit pension plan funding and a decrease in accounts receivables as a result of higher collections. Working capital uses of $59.1 million in the Prior Year were primarily due to increases in accounts receivables and inventories as a result of higher activity.

Investing Activities

During the Current Year, net cash used in investing activities was $246.0 million primarily consisting of:

•Capital expenditures of $255.4 million primarily related to payments for aircraft, purchases of equipment and leasehold improvements, partially offset by

•Proceeds of $9.4 million from the disposal of aircraft and other assets.

During the Prior 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 disposal of aircraft and other assets.

Financing Activities

During the Current Year, net cash provided by financing activities was $141.1 million primarily consisting of:

•Proceeds from borrowings of $164.6 million,

•Exercise of stock options of $0.5 million partially offset by

•Repayments of debt of $15.4 million,

•Debt issuance costs of $4.5 million, and

•Stock repurchases of $4.1 million.

During the Prior Year, net cash provided by financing activities was $22.0 million primarily as follows:

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

•Repayments of debt of $142.0 million,

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

•Stock repurchases of $2.7 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 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.

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, unrestricted cash balances, borrowings under our ABL Facility, proceeds from sales of assets, proceeds from debt or equity issuances, or other financing options.

As of December 31, 2024, approximately 74% 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.

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We have no near-term debt maturities, other than the current portion of long-term debt of $18.6 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, 2024, we had $247.5 million of unrestricted cash and $64.0 million of remaining availability under our ABL Facility for total liquidity of $311.5 million.

In January 2024, we entered into a long-term equipment financing to upsize the UKSAR Debt by an aggregate amount of up to £55 million. As of December 31, 2024, we had drawn approximately £52.0 million under this facility. Concurrently with the final draw on this facility, we voluntarily cancelled the remaining aggregate principal amount of approximately £3.0 million. As such, no further amounts remain available to be drawn under the UKSAR Debt.

In June 2024, we 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”). As of December 31, 2024, we had drawn approximately €93.4 million under this facility. In February 2025, the Company drew approximately €5.6 million under this facility leaving approximately €1.0 million available.

As of December 31, 2024, our total debt balance, net of deferred financing fees, was $689.8 million and was primarily comprised of the 6.875% Senior Notes due in March 2028 and the UKSAR Debt and IRCG Debt maturing in March 2036 and June 2031, respectively.

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

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, 2024, we had unfunded capital commitments of $202.4 million, consisting primarily of agreements to purchase eight AW189 heavy helicopters, two AW139 medium helicopters, five AW169 light twin helicopters and two H135 light twin helicopters. The AW189 helicopters are scheduled to be delivered between 2025 and 2026; and the AW139 helicopters and the H135 helicopters are scheduled to be delivered in 2025. Delivery dates for the AW169 helicopters have yet to be determined. In addition, the Company has outstanding options to purchase up to ten additional AW189 helicopters and ten 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.

As of December 31, 2024, $32.6 million of our unfunded capital commitments may be terminated without further liability other than aggregate liquidated damages of approximately $1.0 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

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options. As of December 31, 2024, aggregate undiscounted future payments under all non-cancelable operating leases that have initial or remaining terms in excess of one year, were as follows (in thousands):

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[[/GREPCENT_TABLE]]

Pension Obligations

We operate two defined benefit pension plans related to BHL and Bristow International Aviation (Guernsey) Limited (“BIAGL”). At December 2024, we had a net pension asset of $4.8 million as the value of the plan assets exceed 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. Any valuation deficits are funded by contributions by BHL and BIAGL.

The timing of the funding is dependent on actuarial valuations and resulting negotiations with the plan trustees. The employer contributions for the defined benefit pension plans for the twelve months ended December 31, 2024, twelve months ended December 31, 2023 and nine months ended December 31, 2022 were $5.0 million, $15.7 million and $11.1 million, respectively.

Selected Financial Information on Guarantors of Securities

On February 25, 2021, the Company 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 Company (collectively, the “Guarantors”). The Company 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 Company 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 Company.

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None of the non-Guarantor subsidiaries of the Company 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 Company or Guarantors and sufficient cash or liquidity is not otherwise available, the Company 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 Company 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).

[[GREPCENT_TABLE]]
[["","December 31,"],["","2024"],["Current assets","$","2,298,481"],["Non-current assets","2,370,128"],["Current liabilities","2,358,629"],["Non-current liabilities","706,056"],["","Twelve Months Ended December 31, 2024"],["Total revenues","$","773,304"],["Operating income","81,668"],["Net income","64,068"],["Net income attributable to Bristow Group Inc.","63,988"]]
[[/GREPCENT_TABLE]]

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

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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 Global intangible low-taxed income(“GILTI”) 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, 2024, we have recognized 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.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view on the future realization of deferred tax assets.

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, 2024, 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 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 for the defined benefit pension plans are actuarially determined. The obligations are measured using assumptions about the future. 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. The assumption for the estimated long-term rate of return on plan assets is evaluated by our actuarial advisor based on future expectations of investment returns for the asset classes held by the plans’ investment 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. 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.

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