Bristow Group Inc. - Annual Report: 2019 (Form 10-K)

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•	risks related to the Company’s recently announced combination (“the Merger”) with Bristow Group Inc. (“Bristow”), including:

◦	the ability of Bristow and the Company to obtain necessary shareholder approvals,

◦	the ability to satisfy all necessary conditions on the anticipated closing timeline or at all,

◦	the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be     instituted relating to the Merger,

◦	conditions imposed in order to obtain required regulatory approvals for the Merger,

◦	the costs incurred to consummate the Merger,

◦	the possibility that the expected synergies from the Merger will not be realized,

◦	difficulties related to the integration of the two companies,

◦	disruption from the anticipated Merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers, and

◦	the diversion of management time and attention to the anticipated combination;

•	the Company’s dependence on, and the cyclical and volatile nature of, offshore oil and gas exploration, development and production activity, and the impact of general economic conditions and fluctuations in worldwide prices of and demand for oil and natural gas on such activity levels;

•	the Company’s reliance on a limited number of customers and the reduction of its customer base as a result of bankruptcies or consolidation;

•	risks that the Company’s customers reduce or cancel contracted services or tender processes or obtain comparable services through other forms of transportation;

•	the Company’s dependence on United States (“U.S.”) government agency contracts that are subject to budget appropriations;

•	cost savings initiatives implemented by the Company’s customers;

•	risks inherent in operating helicopters;

•	the Company’s ability to maintain an acceptable safety record and level of reliability;

•	the impact of increased U.S. and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities;

•	the impact of a grounding of all or a portion of the Company’s fleet for extended periods of time or indefinitely on the Company’s business, including its operations and ability to service customers, results of operations or financial condition and/or the market value of the affected helicopters;

•	the Company’s ability to successfully expand into other geographic and aviation service markets;

•	risks associated with political instability, governmental action, war, acts of terrorism and changes in the economic condition in any foreign country where the Company does business, which may result in expropriation, nationalization, confiscation or deprivation of the Company’s assets or result in claims of a force majeure situation;

•	the impact of declines in the global economy and financial markets;

•	the impact of fluctuations in foreign currency exchange rates on the Company’s asset values and cost to purchase helicopters, spare parts and related services;

•	risks related to investing in new lines of aviation service without realizing the expected benefits;

•	risks of engaging in competitive processes or expending significant resources for strategic opportunities, with no guaranty of recoupment;

•	the Company’s reliance on a limited number of helicopter manufacturers and suppliers;

•	the Company’s ongoing need to replace aging helicopters;

•	the Company’s reliance on the secondary helicopter market to dispose of used helicopters and parts;

•	information technology related risks;

•	the impact of allocation of risk between the Company and its customers;

•	the liability, legal fees and costs in connection with providing emergency response services;

•	adverse weather conditions and seasonality;

•	risks associated with the Company’s debt structure;

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•	the Company’s counterparty credit risk exposure;

•	the impact of operational and financial difficulties of the Company’s joint ventures and partners and the risks associated with identifying and securing joint venture partners when needed;

•	conflict with the other owners of the Company’s non-wholly owned subsidiaries and other equity investees;

•	adverse results of legal proceedings;

•	risks associated with significant increases in fuel costs;

•	the Company’s ability to obtain insurance coverage and the adequacy and availability of such coverage;

•	the possibility of labor problems;

•	the attraction and retention of qualified personnel;

•	restrictions on the amount of foreign ownership of the Company’s common stock; and

•	various other matters and factors, many of which are beyond the Company’s control.

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•	A strong cultural alignment with uncompromising commitment to safety;

•	Global leadership in offshore helicopter operations with significant presence in key regions, supplemented by stable government services revenue;

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•	Increased fleet size and diversity with a complementary fleet mix that allows the Combined Company to optimally service customers;

•	Enhanced customer and end-market diversification;

•	Significant, sustainable cost savings, including highly achievable synergies that have already been identified;

•	The creation of a financially stronger company; and

•	An organization led by industry veterans with proven track record of capital discipline, protecting stakeholder value and generating free cash flow through industry cycles.

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Heavy helicopters, which have twin engines and a typical passenger capacity of 16 to 19, are primarily used in support of the deepwater offshore oil and gas industry, frequently in harsh environments or in areas with long distances from shore, such as those in the U.S. Gulf of Mexico, Brazil, Australia and the North Sea. Heavy helicopters are also used to support emergency response search and rescue (“SAR”) operations.

•	Medium helicopters, which have twin engines and a typical passenger capacity of 11 to 12, are primarily used to support the offshore oil and gas industry, emergency response services, utility services and corporate uses.

•	Light helicopters, which may have single or twin engines and a typical passenger capacity of four to nine, are used to support a wide range of activities, including the shallow water oil and gas industry, utility services and corporate uses.

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(1)	In typical configuration for our operations.

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•	customer assessments of offshore drilling prospects compared with land-based opportunities, including oil sands and shale formations;

•	customer assessments of cost, geological opportunity and political stability in host countries;

•	worldwide supply of and demand for oil and natural gas;

•	the price and availability of alternative fuels;

•	the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and pricing;

•	the level of production of non-OPEC countries;

•	the relative exchange rates for the U.S. dollar; and

•	various U.S. and international government policies regarding exploration and development of oil and gas reserves.

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•	general economic conditions;

•	actions of the OPEC and other oil producing countries to control prices or change production levels;

•	the price and availability of alternative fuels;

•	assessments of offshore drilling prospects compared with land-based opportunities that do not generally require our services, including new or non-traditional sources such as oil sands and shale;

•	the costs of exploration, development and production and delivery of oil and natural gas offshore;

•	expectations about future supply and demand for oil and gas;

•	advances in exploration, development and production technology;

•	availability and rates of discovery of new oil and natural gas reserves in offshore areas, as well as on land;

•	federal, state, local and international political conditions, and policies including those with respect to local content requirements and the exploration and development of oil and gas reserves;

•	uncertainty or instability resulting from an escalation or additional outbreak of armed hostilities or other crises in the Middle East or other geographic areas, or acts of terrorism in the U.S. or elsewhere;

•	technological advancements affecting exploration, development and production of oil and gas and energy consumption;

•	weather conditions, natural disasters, pandemics and other similar phenomena;

•	government regulation, including environmental regulation and drilling regulation, permitting and concessions;

•	regulation of drilling activities and the availability of drilling permits and concessions and environmental regulation; and

•	the ability of oil and natural gas companies to generate funds or otherwise obtain capital required for offshore oil and gas exploration, development and production and their capital expenditures budgets.

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•	general economic and market conditions affecting the oil and gas industry, including the price of oil and gas and the level of oil and gas exploration, development and production;

•	the number of comparable helicopters servicing the market;

•	the types and sizes of comparable helicopters available for sale or lease;

•	historical issues with helicopters of the same model;

•	the specific age and attributes of the helicopter;

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•	demand for the helicopter in different industries; and

•	changes in regulation or competition from other air transport companies and other modes of transportation.

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•	political conditions and events, including embargoes;

•	uncertainties concerning import and export restrictions, including the risk of fines or penalties assessed for violating export restrictions by the Office of Foreign Assets Controls of the U.S. Department of Treasury;

•	restrictive actions by U.S. and foreign governments, including those in Brazil, Colombia, and Suriname which could limit our ability to provide services in those countries;

•	the imposition of withholding or other taxes on foreign income, tariffs or restrictions on foreign trade and investment;

•	adverse tax consequences;

•	limitations on repatriation of earnings or currency exchange controls and import/export quotas;

•	nationalization, expropriation, asset seizure, blockades and blacklisting;

•	limitations in the availability, amount or terms of insurance coverage;

•	loss of contract rights and inability to adequately enforce contracts;

•	the lack of well-developed legal systems in some countries that could make it difficult for us to enforce contractual rights;

•	political, social and economic instability, war and civil disturbances, outbreak of pandemic viruses or other risks that may limit or disrupt markets, such as terrorist attacks, piracy and kidnapping;

•	fluctuations in currency exchange rates, hard currency shortages and controls on currency exchange that affect demand for our services and our profitability;

•	potential noncompliance with a wide variety of laws and regulations, such as the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), and similar non-U.S. laws and regulations, including the U.K. Bribery Act 2010 (the “UKBA”) and Brazil’s Clean Companies Act (the “BCCA”);

•	labor strikes;

•	changes in general economic conditions;

•	adverse changes in foreign laws or regulatory requirements, including those with respect to flight operations and environmental protections; and

•	challenges in staffing and managing widespread operations, including logistical and communication challenges.

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•	make investments;

•	incur or guarantee additional indebtedness;

•	incur liens or pledge the assets of certain of our subsidiaries;

•	pay dividends or make investments;

•	keep excess cash amounts;

•	maintain a maximum senior secured leverage ratio;

•	maintain a minimum interest coverage ratio;

•	maintain a minimum ratio of the sum of their fair market value of mortgaged helicopters, accounts receivable and inventory to total funded and committed debt;

•	enter into transactions with affiliates; and

•	enter into certain sales of all or substantially all of our assets, mergers and consolidations.

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•	limit our access to the capital markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all;

•	result in more restrictive covenants in agreements governing the terms of any future indebtedness that we may incur;

•	increase our cost of borrowing;

•	adversely affect the market price of our 7.750% Senior Notes; and

•	impair our business, financial condition and results of operations.

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•	issuance of administrative, civil and criminal penalties;

•	denial or revocation of permits or other authorizations;

•	imposition of limitations on our operations; and

•	performance of site investigatory, remedial or other corrective actions.

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•	certification and reporting requirements;

•	inspections;

•	maintenance standards;

•	personnel training standards; and

•	maintenance of personnel and aircraft records.

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•	market conditions in the broader stock market;

•	commodity prices, including oil and gas prices and the perceived level of off-shore oil and gas activities;

•	actual or anticipated fluctuations in our and our competitors’ quarterly financial condition and results of operations;

•	introduction of new equipment or services by us or our competitors;

•	grounding of all or a portion of our fleet;

•	issuance of new or changed securities analysts’ reports or recommendations;

•	sales, or anticipated sales, of large blocks of our stock;

•	business or asset acquisitions or dispositions;

•	additions or departures of key personnel;

•	regulatory or political developments including those related to budget appropriations;

•	market perception of the Merger;

•	litigation and governmental investigations; and

•	changing economic conditions.

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•	restrictions on the ability of our stockholders to fill a vacancy on the board of directors;

•	restrictions related to the ability of non-U.S. citizens owning our Common Stock;

•	our ability to issue preferred stock with terms that the board of directors may determine, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

•	the absence of cumulative voting in the election of directors which may limit the ability of minority stockholders to elect directors; and

•	advance notice requirements for stockholder proposals and nominations, which may discourage or deter a potential acquirer from soliciting proxies to elect a particular slate of directors or otherwise attempting to obtain control of us.

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(1)

On August 14, 2014, our Board of Directors authorized the repurchase of up to $25.0 million in value of our Common Stock from time to time at the discretion of a committee of our Board of Directors. As of December 31, 2019, $15.3 million of authority remained unutilized and available for purchases of our Common Stock at the discretion of a committee of our Board of Directors comprised of the Non-Executive Chairman, the Audit Committee Chairman and our President and Chief Executive Officer. This repurchase program was suspended upon the announcement of the Merger.

(2)	Shares purchased in connection with the surrender of shares by employees to satisfy certain tax withholding obligations. These repurchases are not a part of our publicly announced plan and do not affect our Board-approved share repurchase program.

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(1)

During the year ended December 31, 2019, we changed our peer group to include Air Transport Services Group, Inc., Allegiant Travel Company, Atlas Air Worldwide Holdings, Inc., Basic Energy Services, Inc., CARBO Ceramics Inc., Hornbeck Offshore Services, Inc., Key Energy Services, Inc., Newpark Resources, Inc., SEACOR Marine Holdings Inc. and Tidewater Inc. based on their industry and similar market capitalization. The decision to change our peer group was primarily due to the delisting of the companies that made up our former peer group as a result of Chapter 11 proceedings.

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

•	repairs and maintenance (primarily routine activities and hourly charges for power-by-the-hour (“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).

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(1)	Primarily oil and gas activities, but also includes revenues from utility services.

(2)	Includes property rental income for the year ended December 31, 2017 of approximately $0.3 million that was previously included in emergency response services and oil and gas service lines.

(3)	Includes SAR and air medical services.

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•	Net proceeds from the sale of equity investees were $34.7 million.

•	Proceeds from the disposition of property and equipment were $13.3 million.

•	Net principal payments on notes due from third-parties and equity investees were $7.8 million.

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•	Capital expenditures were $6.6 million, which consisted primarily of spare helicopter parts and leasehold improvements.

•	Net cash used on purchase and sale of investment was $0.6 million.

•	Proceeds from the disposition of property and equipment were $29.6 million.

•	Net principal payments on notes due from third-parties and equity investees were $1.5 million.

•	Dividends received from equity investees were $1.0 million.

•	Capital expenditures were $9.2 million, which consisted primarily of helicopter acquisitions, spare helicopter parts, and leasehold improvements.

•	Capital expenditures were $16.8 million, which consisted primarily of helicopter acquisitions and deposits on future helicopter deliveries.

•	Proceeds from the disposition of property and equipment were $9.4 million.

•	Net principal payments on notes due from third-parties and equity investees were $0.9 million.

•	Investments in and advances to equity investees were $0.1 million.

•	Purchases of treasury shares for $7.7 million.

•	Principal payments on long-term debt were $2.1 million.

•	Extinguishment of long-term debt was $0.7 million.

•	Proceeds from share-based award plans were $1.1 million.

•	Principal payments on long-term debt, including our Revolving Credit Facility were $41.9 million.

•	Issuance costs related to the amendment to our Revolving Credit Facility were $1.3 million.

•	Extinguishment of long-term debt was $1.2 million.

•	Proceeds from share-based award plans were $0.9 million.

•	Net principal payments on short and long-term debt were $45.3 million.

•	Borrowings under our Revolving Credit Facility were $17.0 million.

•	Proceeds from share-based award plans were $0.8 million.

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(1)	Maturities of our borrowings, interest payments pursuant to such borrowings and a capital commitment fee on our Revolving Credit Facility are based on contractual terms. Interest amounts represent the expected cash payments for interest on our long-term debt based on the interest rates in place and amounts outstanding as of December 31, 2019. We assume no borrowings under the revolver.

(2)

Capital purchase obligations as of December 31, 2019 represent commitments for the purchase of eight new helicopters, consisting of five AW169 light twin helicopters and three AW189 heavy helicopters. Of the total unfunded capital commitments, all may be terminated without further liability other than liquidated damages of $2.1 million in the aggregate. These commitments are not recorded as liabilities on our consolidated balance sheet as we had not yet received the goods or taken title to the property.

(3)	Operating leases primarily include leases of facilities that have a remaining term in excess of one year. Included in the $16.1 million is $5.3 million related to leases that are reasonably expected to extend.

(4)	Purchase obligations primarily include purchase orders for helicopter inventory and maintenance. These commitments are for goods and services to be acquired in the ordinary course of business and are fulfilled by our vendors within a short period of time.

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•	the conduct and integrity of management’s execution of the Company’s financial reporting process, including the reporting of any material events, transactions, changes in accounting estimates or changes in important accounting principles and any significant issues as to adequacy of internal controls;

•	the selection, performance, qualifications and compensation of the Company’s independent registered public accounting firm (including its independence), its conduct of the annual audit and its engagement for any other services;

•	the review of the financial reports and other financial information provided by the Company to any governmental or regulatory body, the public or other users thereof;

•	the Company’s systems of internal accounting and financial and disclosure controls, the annual independent audit of the Company’s financial statements and the integrated audit of internal controls over financial reporting;

•	risk management and controls, which includes assisting management with identifying and monitoring risks such as financial accounting and reporting, internal audit, information technology, cybersecurity and compliance, developing effective strategies to mitigate risk, and incorporating procedures into its strategic decision-making (and reporting developments related thereto to the Board);

•	the processes for handling complaints relating to accounting, internal accounting controls and auditing matters;

•	the Company’s legal and regulatory compliance;

•	the Company’s Code of Business Conduct and Ethics as established by management and the Board; and

•	the preparation of the audit committee report required by SEC rules to be included in the Company’s annual proxy statement.

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•	reviews the Company’s compensation practices, including corporate goals and annual performance objectives relevant to executive compensation;

•	establishes and approves compensation for the Chief Executive Officer, the Chief Financial Officer, other executive officers, and officers or managers who receive an annual base salary of more than $200,000;

•	evaluates officer and director compensation plans, policies and programs;

•	reviews and approves benefit plans;

•	approves all grants of equity awards and administers the Company’s incentive plans;

•	previews and discusses with management the Company’s Compensation Discussion and Analysis and produces a report on executive compensation to be included in the Company’s proxy statements and other SEC filings;

•	determines stock ownership guidelines for the Chief Executive Officer and other executive officers and monitors compliance with such guidelines;

•	annually evaluates the independence of any advisors retained by the Compensation Committee; and

•	reviews and recommends to the Board for approval the frequency with which the Company will conduct an advisory stockholder vote on executive compensation required by Section 14A of the Exchange Act (“Say on Pay Vote”), considering the results of the most recent Say on Pay Vote.

•	identifying, screening and reviewing individuals qualified to serve as directors and recommending to the Board candidates for election at the Company’s annual meeting of stockholders and to fill vacancies on the Board;

•	developing, recommending to the Board, and overseeing implementation of modifications, as appropriate, to the Company’s policies and procedures for identifying and reviewing candidates for the Board, including policies and procedures relating to candidates for the Board submitted for consideration by stockholders;

•	reviewing the composition of the Board as a whole, including whether the Board reflects the appropriate balance of independence, sound judgment, business specialization, technical skills, diversity and other desired qualities;

•	reviewing periodically the size of the Board and recommending any appropriate changes;

•	overseeing the evaluation of the Board and management; and

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•	reviewing on a regular basis, the overall corporate governance of the Company and recommending to the Board improvements when necessary.

•	experience investing in and/or guiding complex businesses as an executive leader or as an investment professional within an industry or area of importance to the Company;

•	proven judgment and competence, substantial accomplishments, and prior or current association with institutions noted for their excellence;

•	complementary professional skills and experience addressing the complex issues facing a multifaceted international organization;

•	an understanding of the Company’s businesses and the environment in which it operates; and

•	diversity as to business experiences, educational and professional backgrounds and gender, race and ethnicity.

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(1)	Represents the aggregate grant date fair value of stock awards granted in 2019 as computed in accordance with FASB ASC Topic 718. A discussion of the policies and assumptions used in the calculation of grant date value are set forth in Note 12 of the Notes to the Consolidated Financial Statements in Item 8.

(2)	Member of the Nominating and Corporate Governance Committee.

(3)	Member of the Audit Committee.

(4)	Member of the Compensation Committee.

(5)	Mr. Fogg served on the Board until June 2019.

•	Christopher Bradshaw, President and Chief Executive Officer

•	Crystal Gordon, Senior Vice President, General Counsel and Chief Administrative Officer

•	Jennifer Whalen, Senior Vice President and Chief Financial Officer

•	Stuart Stavley, Senior Vice President, Operations and Fleet Management

•	Paul White, Senior Vice President, Commercial

•	Grant Newman, Senior Vice President, Strategy and Corporate Development

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•	The Company achieved its dual goals of zero air accidents and zero recordable workplace incedents, extending the number of consecutive days without a recordable workplace incident to 892 as of March 2, 2020;

•	As of December 31, 2019, the Company strengthened its balance sheet with approximately $241.7 million of total available liquidity, including $117.4 million of cash balances. With a strong balance sheet and limited debt maturities prior to 2022, manageable fixed charge obligations and a flexible order book, the Company possesses industry leading financial flexibility; and

•	On January 24, 2020, the Company announced that it had entered into a definitive agreement with Bristow Group Inc. to combine the two companies in an all-stock transaction, which is expected to create a financially stronger company with enhanced size and diversification.

•	Hired an independent compensation consultant to review and modify, as necessary, the Company’s peer group, see Section titled “Role of Peer Companies”

•	Completed a comprehensive pay-for-performance analysis with the assistance of an independent third party executive compensation consultant;

•	Approved the 2019 annual cash bonus plan with challenging financial, safety and individual performance metrics; and

•	Continued to maintain the same level of director compensation since 2013.

•	Attract and Retain: Attract and retain talented, high-performing executives to achieve the Company’s mission and strategic goals in consideration of competitive market practices.

•	Reward for Performance: Reward NEOs for achieving both short-term and long-term objectives, including strategic and operational goals.

•	Align Management with Stockholders: Incentivize NEOs to create long-term value by aligning management’s and stockholders’ interests through equity compensation awards.

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(1)	Based on last available public information. De-listed in 2019.

(2)	Based on last available public information. Became privately held in 2019.

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•	Annual Review of Base Salaries in Effect for 2019. The Company reviewed Peer data from outside data services, such as Equilar and determined that base salaries were generally aligned with the Company’s Peer Companies.

•	Annual Cash Bonus Plan. The Company adopted an incentive annual cash bonus plan providing for payment of annual cash bonuses subject to, and based on, the attainment of certain pre-established safety, financial and individual performance goals.

•	Three-Year Vesting of Restricted Stock. Historically, each NEO’s long-term incentive grant is delivered as restricted stock, with a three-year ratable vesting period.

•	Clawback Policy. The Company has a clawback policy applicable to the NEOs’ executive compensation in the event the Company is required to publish a restatement to any of its previously published financial statements as a result of material noncompliance with financial reporting requirements or certain improper acts by a NEO.

•	Stock Ownership Guidelines. The Company has adopted Stock Ownership Guidelines that apply to the NEOs to ensure that minimum levels of stock ownership are attained and maintained.

•	Independent Oversight. The Compensation Committee is comprised of independent directors and has the ability to engage the services of an independent compensation consultant and outside legal counsel.

•	No Employment Contracts with NEOs.   The Company does not maintain any employment contracts with the NEOs.

•	No Guaranteed Bonuses. The Company believes that bonuses should reflect actual Company and individual performance; therefore, the Company does not guarantee bonus payments to the NEOs (i.e., annual bonuses are considered “at risk” pay).

•	No Excessive Severance Payments. The Company does not maintain a formal severance program outside of a change in control context.

•	No Supplemental Executive Retirement Plan (“SERP”). The Company does not provide a SERP to any NEO.

•	No Tax Gross-ups. The Company has never provided any tax gross-up payments to the NEOs and has no contract or agreement with any NEO that provides for a tax gross-up payment, including those related to change-of-control payments subject to Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”).

•	No Repricing or Replacing Outstanding Stock Options. The Company has never repriced or replaced any of its outstanding stock options.

•	Policies Restricting Hedging and Pledging By NEOs. The Company has adopted policies restricting hedging and pledging of the Company’s securities. Hedging is prohibited unless the Company’s General Counsel clears such transactions in advance; pledging transactions are subject to the restrictions and limitations set forth in the Company’s Insider Trading Policy.

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•	Financial Performance (Adjusted EBITDA) (40%): Financial performance for 2019 was measured by Adjusted EBITDA. “Adjusted EBITDA” is a non-GAAP financial metric defined in the 2019 Plan as earnings before interest, taxes, depreciation and amortization, adjusted to exclude special items. See Appendix A for reconciliation of non-GAAP financial metrics.

•	Safety Performance (25%): Safety is the Company’s #1 Core Value and its highest operational priority. Safety performance for 2019 included the Company’s (i) Total Recordable Incident Rate (“TRIR”) and (ii) Air Accident Rate (“AAR”). The TRIR and AAR account for 8% and 17%, respectively, of the 2019 Plan.

•	TRIR is determined by aggregating the total number of illnesses and injuries as defined by Occupational Safety and Health Administration (“OSHA”) of employees of Era Helicopters, LLC multiplied by 200,000, divided by the total number of hours worked by such employees.

•	AAR is determined by aggregating the total number of accidents involving helicopters operated by the Company and its consolidated subsidiaries in accordance with the industry standard defined by the Federal Aviation Administration, divided by the aggregated flight hours of the Company and its consolidated subsidiaries, multiplied by 100,000.

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Individual Objectives (35%): During 2019, the NEOs were assigned key objectives in furtherance of certain strategic goals of the Company including, but not limited to, (i) enhancement of customer and market diversification, (ii) maximization of efficiencies and promote cost-saving initiatives, (iii) further integration of the Company’s international operations, and (iv) evaluation of strategic opportunities to create additional value for stockholders.

•	Directed and oversaw the effort to enable the Company to expand its operations in Suriname;

•	Led, evaluated and pursued various strategic opportunities to create additional value for shareholders, including the recent Merger; and

•	Improved customer diversification and developed market analysis and business cases for potential new markets and lines of service.

•	Developed and executed a plan to enhance the integration of certain administrative functions across all of the Company’s operations;

•	Enhanced the Company’s external communications, brand awareness and presence in certain state and federal government affairs; and

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•	Enhanced the Company’s efforts to identify and develop top talent.

•	Enhanced the performance of certain accounting functions;

•	In concert with various internal stakeholders, conducted a thorough review of the Company’s domestic and international operations to identify and achieve efficiencies; and

•	Supported the evaluation, pursuit and execution of the strategic transaction with Bristow as directed by the CEO and Board.

•	Led operational efforts to support the Company’s expansion in certain addressable markets;

•	Improved the Company’s logistics performance and cost and expanded the maintenance program and capabilities of the Company’s international operations; and

•	Enhanced the quality and timing of repairs and maintenance (R&M) expense reporting, including benchmarking data against the budget.

•	Improved customer diversification and developed initiatives to increase aircraft utilization in the Gulf of Mexico;

•	Advanced the Company’s position in new and emerging markets and developed a business plan for the AW609 tiltrotor aircraft; and

•	Led the review of key cost drivers utilized in pricing modules for new bid proposals, in coordination with other internal stakeholders.

•	Established reporting processes for key business information;

•	Established evaluation processes for certain key strategic opportunities; and

•	Supported market research regarding next generation VTOL, including supporting potential business plans.

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(1)	Shares granted calculated dividing the executive’s respective total target grant date value by the closing price of the Company’s common stock on March 11, 2019.

(2)	Ms.Gordon joined the Company on January 3, 2019 and received a one-time, new-hire equity award.

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•	compensation summaries for each senior executive that total the dollar value of all compensation-related programs, including salary, annual incentive compensation, long-term compensation, deferred compensation and other benefits; and

•	the fact that the Company has not entered into employment contracts and does not provide supplemental retirement benefits.

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(1)

Represents amounts earned in respect of the Company’s annual bonus program. In January 2019, the Compensation Committee eliminated the partial deferral of bonus payments and accelerated the previously deferred portions of the 2016 and 2017 bonuses to be paid at the same time as the 2018 bonus. The acceleration of deferred bonus payments included twenty percent (20%) of the 2016 bonuses and forty percent (40%) of the 2017 bonuses, and included interest on the deferred portions of the bonus at the Company’s borrowing rate at the time of payment, LIBOR plus 225 bps or approximately 4.7% per annum. During the year ended December 31, 2018 the interest that would have accrued at the Company’s current borrowing rate on previously approved bonus amounts that have been deferred totaled $19,715, $4,128, and $4,128, for Messrs. Bradshaw, Stavley and White, respectively, and $2,928 for Ms. Whalen. The amounts paid in respect of these accelerated deferrals are not included as compensation for 2018 as the decision to eliminate the deferred bonus program and the payment of such deferred bonus amounts occurred in 2019. Of the $864,125 paid to to Ms. Gordon, $200,000 was in connection to her appointment to the Company.

(2)

The dollar amount of restricted stock set forth in these columns reflects the aggregate grant date fair value of restricted stock awards made during 2019, 2018 and 2017, respectively, in accordance with the FASB ASC Topic 718 without regard to forfeitures. Discussion of the policies and assumptions used in the calculation of the grant date fair value are set forth in Note 12 of the Notes to Consolidated Financial Statements included in Item 8. The amount shown for Ms. Gordon represents the value of 25,000 shares of restricted stock (with a grant date fair value of $224,000) granted in connection with Ms. Gordon’s appointment as Senior Vice President, General Counsel and Chief Administrative Officer. The amounts shown for Ms. Whalen include a grant of 17,200 shares of restricted stock (with a grant date fair value of $166,152) in 2018 in connection with her appointment as Senior Vice President, Chief Financial Officer. The amount shown for Mr. Newman represents the value of 22,500 shares of restricted stock (with a grant date fair value of $262,350) granted in connection with Mr. Newman’s appointment as Senior Vice President, Strategy & Corporate Development.

(3)

This column includes the Company’s contributions to match the pre-tax effective deferral contributions (included under Salary under the Company’s qualified 401(k) savings plan). It also includes the Company’s contributions for living costs related to hotel, flights, transportation, and meals to and from base residence to the Company’s home office. During 2019 only Ms. Gordon and Mr. Newman had other compensation related to living costs in the amount of $38,030 and $27,125, respectively. The duration of these costs are limited.

(4)	Ms. Whalen has served as Senior Vice President, Chief Financial Officer since February 2018. Ms. Whalen served as Vice President and Chief Accounting Officer since 2013 until her appointment as Vice President, Acting Chief Financial Officer in June 2017.

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(1)

The amounts set forth in this column reflect the number of shares of restricted stock granted in 2019. These awards vest in equal installments on each of the first three anniversaries of the grant date. These restricted stock awards vest immediately upon the death, disability, qualified retirement, termination of the employee by the Company “without cause,” or the occurrence of a “change-in-control” of the Company.

(2)	The grant date fair value of restricted stock awards set forth in this column reflects the aggregate grant date fair value calculated in accordance with the FASB ASC Topic 718 without regard to forfeitures. Discussion of the policies and assumptions used in the calculation of the grant date fair value are set forth in Note 12 of the Notes to Consolidated Financial Statements included in Item 8.

(3)	Ms. Gordon joined the Company on January 3, 2019 and received a one-time, new-hire equity award.

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(1)	Shares vest on March 10, 2020.

(2)	These amounts equal the applicable number of shares of restricted stock multiplied by the closing price of the Company’s Common Stock on December 31, 2019, which was $10.17.

(3)	These shares vest in equal portions on March 12, 2020 and 2021, assuming continued employment with the Company.

(4)	These shares vest in equal portions on March 11, 2020, 2021 and 2022, assuming continued employment with the Company.

(5)	These shares vest on June 16, 2020, assuming continued employment with the Company.

(6)	These shares vest in equal portions on September 4, 2020 and 2021, assuming continued employment with the Company.

(7)	These shares vest in equal portions on December 17, 2020 and 2021, assuming continued employment with the Company.

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(1)	The value realized on vesting is determined by multiplying the number of shares vesting by the market price at the close of business on the date of vesting.

(1)	Represents the value of unvested shares based on the closing price of the Common Stock as of December 31, 2019, which was $10.17.

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(1)	“Cash Payment” calculated as defined in the Severance Plan as described on page 65.

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•	each director of the Company;

•	each executive officer named in the summary compensation table;

•	all of the Company’s current directors and executive officers as a group; and

•	each of the Company’s stockholders who are known to be the beneficial owner of more than 5% of the Company’s outstanding shares of Common Stock.

*	Individually less than 1.00%.

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(1)

Includes: (i) 198,103 shares of Common Stock owned directly; (ii) 323,529 shares owned by Fabrikant International Corporation, of which Mr. Fabrikant is President, (iii) 60,000 shares held by the Charles Fabrikant 2012 GST Exempt Trust, of which Mrs. Fabrikant is a trustee, (iv) 37,821 shares held by the Charles Fabrikant 2009 Family Trust, of which Mr. Fabrikant is a trustee, (v) 12,000 shares owned by the Sara J. Fabrikant 2012 GST Exempt Trust, of which Mr. Fabrikant is a trustee, (vi) 800 shares owned by the Harlan Saroken 2009 Family Trust, of which Mrs. Fabrikant is a trustee, (vii) 800 shares owned by the Eric Fabrikant 2009 Family Trust, of which Mrs. Fabrikant is a trustee and (viii) 5,748 shares of restricted stock over which Mr. Fabrikant exercises sole voting power.

(2)	Includes 206,693 shares of restricted stock over which Mr. Bradshaw exercises sole voting power and options to purchase 100,000 shares of Common Stock that have vested.

(3)	Includes 49,424 shares of restricted stock over which Mr. Stavley exercises sole voting power and options to purchase 15,000 shares of Common Stock that have vested.

(4)	Includes 5,748 shares of restricted stock over which Mr. Webster exercises sole voting power and options to purchase 40,153 shares of Common Stock that have vested.

(5)	Includes 67,899 shares of restricted stock over which Ms. Whalen exercises sole voting power.

(6)	Includes 54,179 shares of restricted stock over which Mr. White exercises sole voting power and options to purchase 15,000 shares of Common Stock that have vested.

(7)	Includes 69,900 shares of restricted stock over which Ms. Gordon exercises sole voting power.

(8)	Includes 42,659 shares of restricted stock over which Mr. Newman exercises sole voting power.

(9)	Includes 5,748 shares of restricted stock over which Ms. Fairbanks exercises sole voting power.

(10)	Includes 5,748 shares of restricted stock over which Mr. Papouras exercises sole voting power.

(11)	Includes 5,748 shares of restricted stock over which Ms. Sun exercises sole voting power.

(12)	Includes Mmes. Fairbanks, Sun,Whalen and Gordon, and Messrs. Fabrikant, Bradshaw, Stavley, White, Papouras, Webster and Newman. The address for each such individual is c/o Era Group Inc., 945 Bunker Hill Rd., Suite 650, Houston, Texas 77024.

(13)

According to a Schedule 13G amendment filed on January 2, 2020 by BlackRock Inc. (“BlackRock”), BlackRock has sole voting power with respect to 3,093,861 shares of Common Stock and sole dispositive power with respect to 3,128,435 shares of Common Stock. BlackRock serves as a parent holding company, and, for purposes of the reporting requirements of the Exchange Act, may be deemed to beneficially own 3,128,435 shares of Common Stock. Various persons have the right to receive, or the power to direct, the receipt of dividends from, or the proceeds from the sale of, such shares of Common Stock. No one person’s interest in such shares of Common Stock is more than 5% of the total Common Stock outstanding.

(14)

According to a Schedule 13G amendment filed on February 14, 2020 by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investments Advisors Holdings LLP and Wellington Management Company LLC (collectively, “Wellington”), Wellington has shared voting power with respect to 1,758,897 shares of Common Stock and shared dispositive power with respect to 1,974,803 shares of Common Stock. Wellington serves as an investment advisor and for purposes of the reporting requirements of the Exchange Act may be deemed to beneficially own 1,974,803 shares of Common Stock. Various persons have the right to receive, or the power to direct, the receipt of dividends from, or the proceeds from the sale of, such shares of Common Stock. No one person’s interest in such shares of Common Stock is more than 5% of the total Common Stock outstanding.

(15)

According to a Schedule 13G amendment filed on February 12, 2020 by Dimensional Fund Advisors LP (“Dimensional”), Dimensional has sole voting power with respect to 1,691,157 shares of Common Stock and sole dispositive power with respect to 1,777,106 shares of Common Stock. Dimensional furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts (collectively, the “Funds”). In certain cases, subsidiaries of Dimensional may act as advisor or sub-advisor to certain Funds. In its role as investment advisor, sub-advisor and/or manager, neither Dimensional nor its subsidiaries possess voting and/or investment power over the shares of Common Stock owned by the Funds or may be deemed to be the beneficial owner of the shares of Common Stock. However, all of the Common Stock reported herein is owned by the Funds and Dimensional disclaims beneficial ownership of all such securities. Various Funds have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the securities held in their respective accounts. No one such Fund’s interest in such shares of Common Stock is more than 5% of the total Common Stock outstanding.

(16)

According to a Schedule 13G amendment filed on January 21, 2020 by Royce & Associates, LP ("Royce"), Royce has sole voting power and dispositive power over 1,675,447 shares of Common Stock. Royce is an investment adviser, and for purposes of the reporting requirements of the Exchange Act may be deemed to beneficially own 1,675,447 shares of Common Stock. Various persons have the right to receive, or the power to direct, the receipt of dividends from, or the proceeds from the sale of, such shares of Common Stock. No one person’s interest in such shares of Common Stock is more than 5% of the total Common Stock outstanding.

(17)

According to a Schedule 13G amendment filed on January 10, 2020 by Van Den Berg Management I, Inc. ("Van Den Berg"), Van Den Berg has sole voting power and dispositive power over 1,495,363 shares of Common Stock. Van Den Berg is an investment adviser, and for purposes of the reporting requirements of the Exchange Act may be deemed to beneficially own 1,495,363 shares of Common Stock. Various persons have the right to receive, or the power to direct, the receipt of dividends from, or the proceeds from the sale of, such shares of Common Stock. No one person’s interest in such shares of Common Stock is more than 5% of the total Common Stock outstanding.

(18)

According to a Schedule 13G amendment filed on February 10, 2020 by The Vanguard Group ("Vanguard"), Vanguard has sole voting power with respect to 1,385,481 shares of Common Stock and dispositive power with respect to 1,402,170 shares of Common Stock. Vanguard is an investment adviser, and for purposes of the reporting requirements of the Exchange Act may be deemed to beneficially own 1,402,170 shares of Common Stock. Various persons have the right to receive, or the power to direct, the receipt of dividends from, or the proceeds from the sale of, such shares of Common Stock. No one person’s interest in such shares of Common Stock is more than 5% of the total Common Stock outstanding.

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(1)

As of December 31, 2019, the plans with securities remaining available for future issuance consisted of the 2012 Share Incentive Plan and the ESPP. As of December 31, 2019, 1,839,835 shares of Common Stock remained available for issuance under the 2012 Share Incentive Plan with respect to awards (other than outstanding awards) and could be issued in the form of stock options, stock appreciation rights, stock awards and stock units, and 101,624 shares of Common Stock remained available for issuance under the ESPP.

(2)	Excluding securities reflected in the first column

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•	the Related Person’s relationship to the Company and his or her interest in the Transaction;

•	the material facts of the Transaction, including the proposed aggregate value of such Transaction;

•	the materiality of the Transaction to the Related Person and the Company, including the dollar value of the Transaction, without regard to profit or loss;

•	the business purpose for, and reasonableness of, the Transaction, taken in the context of the alternatives available to the Company for attaining the purposes of the Transaction;

•	whether the Transaction is comparable to an arrangement that could be available on an arms-length basis and is on terms that are generally available;

•	whether the Transaction is in the ordinary course of the Company’s business and was proposed and considered in the ordinary course of business; and

•	the effect of the Transaction on the Company’s business and operations, including on its internal control over financial reporting and system of disclosure controls or procedures, and any additional conditions or controls (including reporting and review requirements) that should be applied to such Transaction.

•	use of property, equipment or other assets owned or provided by the Company, including helicopters, vehicles, housing and computer or telephonic equipment, by a Related Person primarily for the Company’s business purposes where the value of any personal use during the course of a year is less than $10,000;

•	reimbursement of business expenses incurred by a director or executive officer in the performance of his or her duties and approved for reimbursement by the Company in accordance with the Company’s customary policies and practices;

•	compensation arrangements for non-employee directors for their services as such that have been approved by the Board or a committee thereof;

•	compensation arrangements, including base pay and bonuses (whether in the form of cash or equity awards), for employees or consultants (other than a director or nominee for election as a director) for their services as such that have been approved by the Compensation Committee and employee benefits regularly provided under plans and

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•	a Transaction in which the Related Person’s interest derives solely from his or her service as a non-employee or non-executive director of another corporation or organization that is a party to the Transaction;

•	a Transaction in which the Related Person’s interest derives solely from his or her service as a director, trustee or officer (or similar position) of a not-for-profit organization or charity that receives donations from the Company, which donations are made pursuant to the Company’s policies and approved by persons other than the Related Person;

•	a Transaction where the rates or charges involved are determined by competitive bids or involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority; and

•	a Transaction involving services as a bank depository of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.

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(1)	Special items include:

•	$1.6 million loss on impairment of H225 helicopter; $1.0 million loss on impairment of Company's Colombian air operator certificate

•	Loss on sale of corporate securities $0.6 million

•	Non-routine professional fees related to the Merger of $1.5 million and other special items of $0.4 million

•	Gains on the sale of capital assets other than aircraft of $1.8 million

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(a)	Documents filed as part of this report:

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1.	NATURE OF OPERATIONS AND ACCOUNTING POLICIES

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2.	FAIR VALUE MEASUREMENTS

3.	ACQUISITIONS AND DISPOSITIONS

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(1)	Includes six H225 heavy helicopters disposed via sales-type leases.

4.	LEASES

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5.	VARIABLE INTEREST ENTITIES AND EQUITY INVESTMENTS AND ADVANCES

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6.	INCOME TAXES

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8.	COMMITMENTS AND CONTINGENCIES

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9.	EARNINGS PER SHARE

(1)	Excludes weighted average common shares of 204,965, 218,844 and 273,255 for the years ended December 31, 2019, 2018 and 2017, respectively, for certain share awards as the effect of their inclusion would have been antidilutive.

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10.	REVENUES

1.	Identify the contract with a customer;

2.	Identify the performance obligations in the contract;

3.	Determine the transaction price;

4.	Allocate the transaction price to the performance obligations; and

5.	Recognize revenue as the performance obligations are satisfied.

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11.	RELATED PARTY TRANSACTIONS

12.	SHARE-BASED COMPENSATION

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13.	SEGMENT INFORMATION, MAJOR CUSTOMERS AND GEOGRAPHICAL DATA

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14.	SUPPLEMENTAL INFORMATION FOR STATEMENTS OF CASH FLOWS

15.	QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

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16.	SUBSEQUENT EVENTS

17.	GUARANTORS OF SECURITIES

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