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FILED PURSUANT TO
RULE 424(b)(4)
REGISTRATION NOS. 333-48803;
333-48803-1; 333-48803-2;
333-48803-3; 333-48803-4;
333-48803-5; 333-48803-6
PROSPECTUS OFFER FOR ALL OUTSTANDING
7 7/8% SERIES A SENIOR NOTES DUE 2008
[LOGO OF OFFSHORE IN EXCHANGE FOR
LOGISTICS APPEARS 7 7/8% SERIES B SENIOR NOTES DUE 2008
HERE] OF
OFFSHORE LOGISTICS, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON JUNE 12, 1998, UNLESS EXTENDED.
Offshore Logistics, Inc., a Delaware corporation (the "Company" or "OLOG"),
and the Guarantors (as defined herein) hereby offer, upon the terms and
subject to the conditions set forth in this Prospectus and the accompanying
letter of transmittal (the "Letter of Transmittal," and together with this
Prospectus, the "Exchange Offer"), to exchange $1,000 principal amount of
registered 7 7/8% Series B Senior Notes due 2008 of the Company (the "New
Notes") for each $1,000 principal amount of unregistered 7 7/8% Series A
Senior Notes due 2008 of the Company (the "Old Notes"), of which an aggregate
principal amount of $100,000,000 is outstanding. The form and terms of the New
Notes are identical in all material respects to the form and terms of the Old
Notes except that (i) the New Notes are being registered under the Securities
Act of 1933, as amended (the "Securities Act"), and, therefore, will not bear
any legends restricting their transfer and (ii) holders of the New Notes,
other than certain broker-dealers, will not be entitled to the rights of
holders of Transfer Restricted Securities (as defined herein) under the
Registration Rights Agreement (as defined herein). The New Notes will evidence
the same debt as the Old Notes and will be issued pursuant to, and entitled to
the benefits of, the Indenture (as defined herein) governing the Old Notes.
The New Notes and the Old Notes are sometimes collectively referred to herein
as the "Notes." See "The Exchange Offer" and "Description of the Notes."
Interest on the New Notes will be payable semi-annually in arrears on
January 15 and July 15 of each year, commencing July 15, 1998. Interest on the
New Notes will accrue from the date of issuance of the Old Notes, January 27,
1998. The New Notes will be redeemable at the option of the Company, in whole
or in part, at any time on or after January 15, 2003 at the redemption prices
set forth herein, plus accrued and unpaid interest and Liquidated Damages (as
defined herein), if any, thereon, to the redemption date. Notwithstanding the
foregoing, on or prior to January 22, 2001, the Company may redeem up to 35%
of the aggregate principal amount of Notes originally issued at a redemption
price of 107 7/8% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the redemption date, with
the net cash proceeds of one or more Qualified Equity Offerings (as defined
herein), provided that at least 65% of the aggregate principal amount of the
Notes originally issued remains outstanding following each such redemption.
Upon the occurrence of a Change of Control (as defined herein), the Company
will be required to make an offer to repurchase all or any part of each
holder's New Notes at a price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to
the date of repurchase. See "Description of the Notes."
The New Notes will be general unsecured obligations of the Company, ranking
pari passu in right of payment with all other future senior indebtedness of
the Company and senior in right of payment to all existing and future
subordinated indebtedness of the Company. The Indenture will permit the
Company and its subsidiaries to incur additional indebtedness, including
additional secured indebtedness, subject to certain conditions. The New Notes
will be unconditionally guaranteed ("Subsidiary Guarantees") on a senior basis
by certain of the Company's subsidiaries (the "Guarantors"). The Subsidiary
Guarantees will be general unsecured obligations of the Guarantors, ranking
pari passu in right of payment with all existing and future senior
indebtedness of the Guarantors and senior in right of payment to any
subordinated indebtedness of the Guarantors incurred in the future. See "Risk
Factors--Ranking of the Notes; Effective Subordination" and "Description of
the Notes--Certain Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock."
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE NEW NOTES OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------
THE DATE OF THIS PROSPECTUS IS MAY 6, 1998
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The Company and the Guarantors will accept for exchange any and all Old
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on June 12, 1998, unless extended (as so extended, the "Expiration
Date"). Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m.
New York City time on the Expiration Date. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered for
exchange; however, the Exchange Offer is subject to certain customary
conditions. Old Notes may be tendered only in denominations of $1,000
principal amount and integral multiples thereof. See "The Exchange Offer."
The Old Notes were sold by the Company on January 27, 1998 to Jefferies &
Company, Inc. (the "Initial Purchaser") in a private transaction not subject
to the registration requirements of the Securities Act. The Old Notes were
thereupon offered and sold by the Initial Purchaser only to "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) and
to a limited number of institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act), each of whom agreed
to comply with certain transfer restrictions and other conditions.
Accordingly, the Old Notes may not be offered, resold or otherwise transferred
unless registered under the Securities Act or unless an applicable exemption
from the registration requirements of the Securities Act is available. The New
Notes are being offered hereunder in order to satisfy the obligations of the
Company and the Guarantors under the Registration Rights Agreement entered
into with the Initial Purchaser in connection with the offering of the Old
Notes. See "The Exchange Offer" and "Description of the Notes--Registration
Rights; Liquidated Damages."
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to third
parties, the Company and the Guarantors believe the New Notes issued pursuant
to the Exchange Offer in exchange for Old Notes may be offered for resale,
resold and otherwise transferred by any holder thereof (other than broker-
dealers, as set forth below, and any such holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that (i) the New Notes are acquired in the ordinary
course of such holder's business, (ii) the holder is not engaging in and does
not intend to engage in a distribution of the New Notes, and (iii) the holder
does not have an arrangement or understanding with any person to participate
in the distribution of the New Notes. Any holder who tenders in the Exchange
Offer with the intention to participate, or for the purpose of participating,
in a distribution of the New Notes or who is an affiliate of the Company may
not rely upon such interpretations by the staff of the Commission and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
secondary resale transaction. Holders of Old Notes wishing to accept the
Exchange Offer must represent to the Company in the Letter of Transmittal that
such conditions have been met. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Notes received in exchange for Old Notes where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The Company and the Guarantors have agreed, for a period of one
year after the effective date of the Registration Statement of which this
Prospectus forms a part, to make this Prospectus available to any broker-
dealer for use in connection with any such resale.
The Old Notes are eligible for trading in the National Association of
Securities Dealers' Private Offering, Resales and Trading through Automated
Linkages ("PORTAL") Market. The Company does not intend to list the New Notes
on any securities exchange.
Neither the Company nor the Guarantors will receive any proceeds from the
Exchange Offer.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder, and in accordance therewith files periodic reports,
proxy and other information statements with the Commission. All reports, proxy
and information statements, and other information filed by the Company with
the Commission may be inspected at the public reference facilities maintained
by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048, and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a
Web site (http://www.sec.gov) that contains reports, proxy and information
statements regarding registrants, such as the Company, that file
electronically with the Commission. The Company's Common Stock is traded on
the Nasdaq National Market and reports, proxy statements and other information
concerning the Company can also be inspected at the offices of the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington,
D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's (i) Annual Report on Form 10-K for the transition period from
July 1, 1996 to March 31, 1997; (ii) Quarterly Reports on Form 10-Q for the
fiscal quarters ended June 30, 1997, September 30, 1997 and December 31, 1997;
and (iii) Current Reports on Form 8-K dated December 19, 1996, May 1, 1997,
July 30, 1997, January 28, 1998 and March 27, 1998, which have been filed by
the Company with the Commission pursuant to the Exchange Act, are by this
reference incorporated in and made a part of this Prospectus.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Exchange Offer shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon the written or oral request of such
person, a copy of any and all of the documents which have been or may be
incorporated by reference in this Prospectus, except that exhibits to such
documents will not be provided unless they are specifically incorporated by
reference into such documents. Requests for copies of any such document should
be directed to Offshore Logistics, Inc., Attention: Corporate Secretary, 224
Rue de Jean, P.O. Box 5-C, Lafayette, Louisiana 70505 (telephone:
(318) 233-1221).
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SUMMARY
The following summary is qualified in its entirety by and should be read in
conjunction with the more detailed information and financial statements,
including the notes thereto, appearing elsewhere herein or incorporated by
reference in this Prospectus. Unless the context indicates otherwise, any
reference in this Prospectus to "Bristow" refers to Bristow Aviation Holdings
Limited and its subsidiaries and any reference to "OLOG" or the "Company"
refers to Offshore Logistics, Inc. and its consolidated entities, including
Bristow. "Air Log" refers to Air Logistics, L.L.C., a wholly owned subsidiary
of OLOG. Unless otherwise defined herein, capitalized terms used in this
Summary have the respective meanings ascribed to them elsewhere in this
Prospectus or in the Indenture.
THE COMPANY
OLOG is a leading international provider of helicopter transportation
services to the oil and gas industry. Through Air Log, OLOG is the second
largest owner and operator of helicopters in the U.S., primarily in the Gulf of
Mexico, with a fleet of 145 aircraft. In December 1996, OLOG acquired a
significant economic interest in Bristow (the "Bristow Transaction"), making
Air Log and Bristow the largest owners and operators of helicopters in the
North Sea/Europe with a current fleet of 83 aircraft. Air Log and Bristow also
own and operate an additional 68 aircraft serving most other major offshore oil
and gas regions, including Australia, Brazil, Brunei, China, Colombia, Egypt,
the Falklands, Mexico, Nigeria and Trinidad. For the 12 months ended December
31, 1997, the Company generated pro forma total revenues and EBITDA of $414.5
million and $91.3 million, respectively. The Company estimates that the fair
market value of its fleet exceeds $500 million.
The Company charters its helicopters to a broad base of major oil and gas
companies to transport personnel and equipment from onshore bases to offshore
drilling rigs, platforms and other installations. The Company believes that its
helicopter revenues are primarily attributable to oil and gas production
activities which, during industry downturns, represent more stable sources of
revenue than exploration and development activities. In addition, the Company
believes that the geographic diversity of its operations makes it less
susceptible to regional economic downturns.
Although the ongoing operational requirements of offshore production
platforms create a baseline demand for helicopter services, incremental demand
is primarily driven by the level of offshore oil and gas drilling activity.
This level of drilling activity is influenced by a number of factors, including
oil and gas prices and drilling budgets of exploration and production
companies. The Company believes that strong demand for helicopter services will
continue due to (i) recent increases in capital expenditure budgets of many oil
and gas companies for offshore drilling and development, (ii) technological
advancements that have increased drilling success rates, (iii) the high level
of seismic activity and bidding for leases in the Gulf, and (iv) the increased
focus on deepwater exploration and production projects, particularly in the
U.S. Gulf. Since June 1996, the Company has increased flight rates in the Gulf
of Mexico three times, including an approximate 10% increase in November 1997.
INDUSTRY CONDITIONS
In recent years, improved technology such as 3-D seismic surveys and subsea
completions has stimulated offshore exploration and development activity. In
addition, this improved technology has resulted in increased drilling and
development activity in new, deeper water areas, a positive trend for
helicopter transportation service providers as these areas are typically
located farther offshore.
Although the Company's business is primarily dependent upon activity levels
in the offshore oil and gas industry, the existence of other markets for
helicopter services distinguishes the Company's business from other
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segments of the oil service industry. Other markets for helicopters include
emergency medical transportation, agricultural and forestry support, and
general aviation activities. These other markets enable the Company to better
manage its helicopter fleet by providing both a source of additional aircraft
during times of high demand and potential purchasers for excess Company
aircraft during times of reduced demand.
PRODUCTION MANAGEMENT SERVICES
In addition to its helicopter transportation services business, the Company's
wholly owned subsidiary Grasso Production Management, Inc. ("GPM") is the
leading independent operator of oil and gas production facilities in the Gulf
of Mexico. GPM operates oil and gas production facilities for major and
independent oil and gas companies and also provides contract personnel and
support services for such facilities. For the 12 months ended December 31,
1997, GPM generated total revenues and EBITDA of $40.1 million and $4.0
million, respectively.
BUSINESS STRATEGY
The Company's business strategy is to remain the world's premier provider of
helicopter services. The key elements of this strategy include:
INDUSTRY CONSOLIDATION. The Company has achieved its position as a leader
in the provision of helicopter services to the offshore oil and gas
industry primarily through a series of strategic acquisitions and
partnering arrangements which have contributed to the consolidation of this
industry over the past several years. The Company believes that the
consolidation trend in the oil and gas helicopter services industry will
continue due to the increasing difficulty of smaller operators in
maintaining an adequate shore-based infrastructure and providing the
working capital required to conduct such operations. The Company plans to
pursue these consolidation opportunities in its existing and selected
geographic markets.
GEOGRAPHIC DIVERSIFICATION. OLOG began domestic helicopter operations in
the Gulf of Mexico in 1972. Since such time, OLOG has expanded its presence
in certain domestic and international markets, including Alaska, Central
and South America, and Africa. With Bristow, the Company believes it has
the most geographically diverse helicopter fleet serving the worldwide
offshore oil and gas industry, with operations in most of the major oil and
gas exploration and production areas of the world. OLOG has primarily
expanded in international markets through alliances and joint ventures with
local helicopter operators in order to comply with governmental
restrictions on foreign ownership or operation of aircraft. The Company
believes that its presence in multiple markets enhances its asset
utilization by enabling it to deploy helicopters to different geographic
regions to take advantage of cyclical market opportunities, and reduces its
dependence on market conditions in individual regions.
COST-EFFICIENT OPERATIONS. OLOG has focused on maximizing profitability
through stringent cost controls and asset rationalization. The Company
believes that OLOG is the most profitable helicopter operator serving the
worldwide offshore oil and gas industry. The Company also believes that
further opportunities exist for profitability enhancements through
continued consolidation savings from Bristow and other operating
efficiencies.
FLEET CAPABILITIES. OLOG intends to continue to upgrade the Company's
fleet to meet market demands for newer, better equipped aircraft. Demand
for helicopters continues to be strong in the U.S. Gulf and the North Sea.
The Company plans on adding 12 aircraft to its fleet in calendar 1998, the
majority of which will be committed to contracts of at least 12 months. The
Company believes that it has the most diversified and extensive fleet of
any operator, which should allow the Company to meet customer requirements
regardless of the mission.
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THE ORIGINAL OFFERING AND USE OF PROCEEDS
The Old Notes were sold by the Company on January 27, 1998 to the Initial
Purchaser and were thereupon offered and sold by the Initial Purchaser only to
certain qualified buyers. The Company used $66.7 million of the $97.2 million
net proceeds from the Original Offering to repay certain indebtedness of
Bristow and $18.7 million to replace general corporate funds used to repay
certain indebtedness of Bristow in October 1997. The Company intends to use the
remaining net proceeds for general corporate purposes.
THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $100 million aggregate
principal amount of New Notes for up to $100 million aggregate principal amount
of the Old Notes. The form and terms of the New Notes are identical in all
material respects to the form and terms of the Old Notes except that (i) the
New Notes are being registered under the Securities Act and, therefore, will
not bear any legends restricting their transfer and (ii) holders of the New
Notes, other than certain broker-dealers, will not be entitled to the rights of
holders of Transfer Restricted Securities under the Registration Rights
Agreement. The New Notes will evidence the same debt as the Old Notes and will
be issued pursuant to, and entitled to the benefits of, the Indenture. The Old
Notes and the New Notes are sometimes referred to collectively herein as the
"Notes." See "Description of the Notes."
The Exchange Offer...... Pursuant to the Exchange Offer, $1,000 principal
amount of New Notes will be issued in exchange for
each $1,000 principal amount of Old Notes that are
validly tendered and not withdrawn. As of the date
hereof, Old Notes representing $100 million aggregate
principal amount are outstanding. The terms of the
New Notes and the Old Notes are substantially
identical.
Resales................. Based on interpretations by the staff of the
Commission set forth in no-action letters issued to
third parties unrelated to the Company and the
Guarantors, the Company and the Guarantors believe
that the New Notes issued pursuant to the Exchange
Offer in exchange for Old Notes may be offered for
resale, resold and otherwise transferred by any
holder thereof (other than broker-dealers, as set
forth below, and any such holder or such other person
that is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act),
without compliance with the registration and
prospectus delivery provisions of the Securities Act,
provided that (i) the New Notes are acquired in the
ordinary course of such holder's business, (ii) such
holder is not engaging in and does not intend to
engage in a distribution of the New Notes, and (iii)
such holder does not have an arrangement or
understanding with any person to participate in the
distribution of the New Notes. Any holder who tenders
in the Exchange Offer with the intention to
participate, or for the purpose of participating, in
a distribution of the New Notes or who is an
affiliate of the Company may not rely upon such
interpretations by the staff of the Commission and,
in the absence of an exemption therefrom, must comply
with the registration and prospectus delivery
requirements of the Securities Act in connection with
any secondary resale transaction. Failure to comply
with such requirements in such instance may result in
such holder incurring liabilities under the
Securities Act for which the holder is not
indemnified by the Company. Each broker-dealer that
receives New
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Notes for its own account in exchange for Old Notes,
where those Old Notes were acquired by the broker-
dealer as a result of its market-making activities or
other trading activities, must acknowledge that it
will deliver a prospectus in connection with any
resale of such New Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning
of the Securities Act. The Company has agreed that,
for a period of one year after the effective date of
the Registration Statement of which this Prospectus
is a part, it will make this Prospectus available to
any broker-dealer for use in connection with any such
resale.
The Exchange Offer is not being made to, nor will the
Company accept surrenders for exchange from, holders
of Old Notes in any jurisdiction in which this
Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of
such jurisdiction.
Expiration Date......... The Exchange Offer will expire at 5:00 p.m., New York
City time, on June 12, 1998, unless extended, in
which case, the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is
extended. See "The Exchange Offer--Terms of the
Exchange Offer--Expiration Date; Extension;
Amendments."
Conditions to the
Exchange Offer.......... The Exchange Offer is subject to certain customary
conditions, certain of which may be waived by the
Company. See "The Exchange Offer--Terms of the
Exchange Offer--Conditions to the Exchange Offer."
The Exchange Offer is not conditioned upon any
minimum principal amount of Old Notes being tendered.
Procedures for
Tendering Old Notes.... Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and
therein, and mail or otherwise deliver the Letter of
Transmittal, or a facsimile, together with the Old
Notes and any other required documentation, to the
Exchange Agent (as defined herein) at the address set
forth herein and in the Letter of Transmittal.
Persons holding Old Notes through the Depository
Trust Company ("DTC") and wishing to accept the
Exchange Offer must do so pursuant to DTC's Automated
Tender Offer Program, by which each tendering
Participant will agree to be bound by the Letter of
Transmittal. By executing or agreeing to be bound by
the Letter of Transmittal, each holder will represent
to the Company that, among other things, (i) the New
Notes acquired pursuant to the Exchange Offer are
being acquired in the ordinary course of such
holder's business, (ii) such holder is not engaging
and does not intend to engage in a distribution of
such New Notes, (iii) such holder does not have an
arrangement or understanding with any person to
participate in the distribution of such New Notes,
and (iv) such holder is not an "affiliate," as
defined under Rule 405 promulgated under the
Securities Act, of the Company.
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Special Procedures for
Beneficial Owners...... Any beneficial owner whose Old Notes are registered
in the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender such Old Notes in the Exchange Offer should
contact such registered holder promptly and instruct
such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to
tender on its own behalf, such owner must, prior to
completing and executing the Letter of Transmittal
and delivering its Old Notes, either make appropriate
arrangements to register ownership of the Old Notes
in such owner's name or obtain a properly completed
bond power from the registered holder. The transfer
of registered ownership may take considerable time
and may not be able to be completed prior to the
Expiration Date. See "The Exchange Offer--Terms of
the Exchange Offer--Procedures for Tendering Old
Notes."
Guaranteed Delivery
Procedures.............. Holders of Old Notes who wish to tender their Old
Notes and whose Old Notes are not immediately
available or who cannot deliver their Old Notes, the
Letter of Transmittal or any other documents required
by the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date, must tender their Old
Notes according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Terms of the
Exchange Offer--Guaranteed Delivery Procedures."
Withdrawal.............. The tender of Old Notes pursuant to the Exchange
Offer may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date. Any
Old Notes not accepted for exchange for any reason
will be returned without expense to the tendering
holder thereof as promptly as practicable after the
expiration or termination of the Exchange Offer. See
"The Exchange Offer--Terms of the Exchange Offer--
Withdrawal Rights."
Acceptance of Old Notes
and Delivery of New
Notes.................. Subject to certain conditions (as described more
fully in "The Exchange Offer--Terms of the Exchange
Offer--Conditions to the Exchange Offer"), the
Company will accept for exchange any and all Old
Notes which are properly tendered in the Exchange
Offer prior to 5:00 p.m., New York City time, on the
Expiration Date. The New Notes issued pursuant to the
Exchange Offer will be delivered promptly following
the Expiration Date. See "The Exchange Offer--Terms
of the Exchange Offer."
Interest on the New
Notes and the Old
Notes.................. Interest on each New Note will accrue from the date
of issuance of the Old Note for which the New Note is
exchanged.
Exchange Agent.......... State Street Bank and Trust Company is serving as
Exchange Agent in connection with the Exchange Offer.
The address, telephone number and facsimile number of
the Exchange Agent are set forth in "The Exchange
Offer--Exchange Agent."
Effect of Not
Tendering............... Old Notes that are not tendered or that are tendered
but not accepted will, following the completion of
the Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof. The
Company will have no
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further obligation (other than as described in
"Description of the Notes--Registration Rights;
Liquidated Damages" with respect to the Shelf
Registration Statement (as defined herein)) to
provide for the registration under the Securities Act
of such Old Notes.
TERMS OF NEW NOTES
Securities Offered...... $100.0 million aggregate principal amount of 7 7/8%
Series B Senior Notes due 2008.
Maturity................ January 15, 2008.
Interest Payment Dates.. Interest on the New Notes will be payable semi-
annually in arrears on January 15 and July 15 of each
year, commencing July 15, 1998.
Ranking................. The New Notes will be general unsecured obligations
of the Company, ranking pari passu in right of
payment with all future senior indebtedness of the
Company and senior in right of payment to all
existing and future subordinated indebtedness of the
Company. The Indenture will permit the Company and
its restricted subsidiaries to incur additional
indebtedness, subject to certain conditions. Although
the New Notes will be guaranteed by the Guarantors,
initially neither Bristow nor its subsidiaries will
guarantee the New Notes, with the result that the New
Notes will be structurally subordinated to all
existing and future indebtedness of Bristow and its
subsidiaries. As of December 31, 1997, after giving
pro forma effect to the Original Offering and the use
of proceeds therefrom, the New Notes would have been
effectively subordinated to approximately $43.6
million of indebtedness of Bristow and its
subsidiaries and to an additional $18.6 million of
indebtedness of a foreign subsidiary of OLOG that
also will not guarantee the New Notes (excluding
indebtedness owed to the Company).
Guarantees.............. The New Notes will be jointly and severally
guaranteed on a senior unsecured basis by certain of
the Company's present and future subsidiaries.
Initially, neither Bristow nor its subsidiaries will
be Guarantors. See "Description of the Notes--
Subsidiary Guarantees."
Optional Redemption..... The New Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or after
January 15, 2003, at redemption prices set forth
herein, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the
redemption date. Notwithstanding the foregoing, on or
prior to January 22, 2001, the Company may redeem up
to 35% of the aggregate principal amount of the New
Notes originally issued at a redemption price of 107
7/8% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any,
thereon, to the redemption date, with the net cash
proceeds of one or more Qualified Equity Offerings,
provided that at least 65% of the aggregate principal
amount of New Notes remains outstanding following
each such redemption. See "Description of the Notes--
Optional Redemption."
Change of Control....... Upon the occurrence of a Change of Control, the
Company will be required to make an offer to
repurchase all or any part of each holder's New Notes
at a price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the date of
repurchase. See "Risk Factors--Potential Inability to
Fund a
6
<PAGE>
Change of Control Offer" and "Description of the
Notes--Repurchase at the Option of Holders--Change of
Control."
Certain Covenants....... The indenture pursuant to which the New Notes will be
issued (the "Indenture") contains certain covenants
that, among other things, limits the ability of the
Company and certain of its subsidiaries to incur
additional Indebtedness (as defined herein), pay
dividends or make other distributions, repurchase
Equity Interests (as defined herein) or subordinated
indebtedness, create certain liens, enter into
certain transactions with affiliates, issue or sell
capital stock of subsidiaries, engage in sale-and-
leaseback transactions, sell assets or enter into
certain mergers or consolidations. See "Description
of the Notes--Certain Covenants."
Exchange Offer;
Registration Rights.... Pursuant to a registration rights agreement by and
among the Company, the Guarantors and the Initial
Purchaser (the "Registration Rights Agreement"), the
Company and the Guarantors agreed to file the
Registration Statement of which this Prospectus forms
a part (the "Exchange Offer Registration Statement")
with the Commission under the Securities Act with
respect to the Exchange Offer. If (a) the Company and
the Guarantors are not permitted to consummate the
Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy or
(b) any holder of Transfer Restricted Securities
notifies the Company prior to the 20th day following
consummation of the Exchange Offer that (i) it is
prohibited by law or Commission policy from
participating in the Exchange Offer or (ii) that it
may not resell the New Notes acquired by it in the
Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the
Exchange Offer Registration Statement would not be
available for such resales, the Company will file
with the Commission a shelf registration statement
(the "Shelf Registration Statement") to cover resales
of the Notes by holders thereof who satisfy certain
conditions relating to the provision of information
in connection with the Shelf Registration Statement.
If the Company fails to satisfy these registration
obligations, it will be required to pay liquidated
damages to the holders of the Old Notes under certain
circumstances ("Liquidated Damages"). See
"Description of the Notes--Registration Rights;
Liquidated Damages."
For further information regarding the Notes, see "Description of the Notes."
USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of the New Notes
pursuant to this Prospectus.
RISK FACTORS
For a discussion of certain factors that should be considered in connection
with the Exchange Offer and an investment in the New Notes offered hereby, see
"Risk Factors."
7
<PAGE>
RISK FACTORS
In addition to the other information set forth elsewhere in this Prospectus,
the following factors relating to the Company and this Offering should be
considered by prospective investors when evaluating an investment in the New
Notes offered hereby.
SUBSTANTIAL INDEBTEDNESS
At December 31, 1997, on a pro forma basis, after giving effect to the sale
of the Old Notes (the "Original Offering") and the application of the net
proceeds therefrom, the Company would have had $260.3 million of indebtedness
and stockholders' equity of $266.6 million. In addition, the terms of the
Notes permit the Company to incur $50 million of indebtedness under the Credit
Facilities (as defined herein) and certain other indebtedness. See "Use of
Proceeds." The Company's level of indebtedness has several important effects
on its future operations, including (i) the Company's ability to obtain
additional financing in the future for working capital, capital expenditures,
acquisitions, general corporate purposes or other purposes may be impaired,
(ii) a reduction of funds available to the Company for its operations or for
capital expenditures as a result of the dedication of a substantial portion of
the Company's cash flow to the payment of principal of and interest on the
Company's indebtedness, including indebtedness under the Notes, (iii)
restrictions in the Indenture that limit the Company's ability to borrow
additional funds or to dispose of assets, which may affect the Company's
flexibility in planning for, and reacting to, changes in its business,
including possible acquisition activities, (iv) the possibility of an event of
default under the financial and operating covenants contained in the Company's
debt instruments, including the Indenture, which, if not cured or waived,
could have a material adverse effect on the Company and (v) an inability to
adjust to rapidly changing market conditions and consequent vulnerability in
the event that a downturn in general economic conditions or its business
because of the Company's reduced financial flexibility. Moreover, future
acquisitions may require the Company to alter its capitalization
significantly. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources" and
"Description of the Notes--Certain Covenants."
The Company's ability to meet its debt service obligations and to reduce its
total indebtedness will be dependent upon the Company's future performance,
which will be subject to levels of activity in offshore oil and gas
exploration, development and production, general economic conditions and to
financial, business and other factors affecting the operations of the Company,
many of which are beyond its control. There can be no assurance that the
Company's future performance will not be adversely affected by such economic
conditions and financial, business and other factors. See "Capitalization."
If the Company is unable to generate sufficient cash flow from operations in
the future to service its debt, it may be required to refinance all or a
portion of its existing debt, including the Notes, or to obtain additional
financing. There can be no assurance that any such refinancing would be
possible or that any additional financing could be obtained. The inability to
obtain additional financing could have a material adverse effect on the
Company. For example, a default by the Company under the terms of the
Indenture could result in a default under the terms of the Credit Facilities.
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The Indenture restricts, among other things, the ability of the Company and
its subsidiaries to incur additional indebtedness, pay dividends or make
certain other restricted payments, incur liens to secure pari passu or
subordinated indebtedness, apply net proceeds from certain asset sales, merge
or consolidate with any other person, sell, assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of the Company, or enter
into certain transactions with affiliates. In addition, the Credit Facilities
contain, and future credit facilities may contain, other and more restrictive
covenants and prohibits the Company from prepaying other indebtedness
(including the Notes) before indebtedness outstanding under the Credit
Facilities or such other credit facility. As a result of these covenants, the
ability of the Company to respond to changes in business and economic
conditions and to secure additional financing, if needed, may be significantly
restricted, and the
8
<PAGE>
Company may be prevented from engaging in transactions that might otherwise be
considered beneficial to the Company. See "Description of the Notes--Certain
Covenants." The Credit Facilities also require, and future credit facilities
may require, the Company to maintain specified financial ratios and satisfy
certain financial condition tests. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources." The Company's ability to meet these financial ratios and tests can
be affected by events beyond its control, and there can be no assurance that
the Company will meet those tests. The breach of any of these covenants could
result in a default under the Credit Facilities or such other credit facility.
Upon the occurrence of an event of default under the Credit Facilities or such
other credit facility, the lenders thereunder could elect to declare all
amounts outstanding under such credit facilities, including accrued interest
or other obligations to be immediately due and payable. If the Company were
unable to repay those amounts, such lenders could proceed against the
collateral granted to them to secure that indebtedness. If amounts outstanding
under such credit facilities were to be accelerated, there can be no assurance
that the assets of the Company would be sufficient to repay in full that
indebtedness and other indebtedness of the Company, including the Notes.
RANKING OF THE NOTES; EFFECTIVE SUBORDINATION
The Old Notes are, and the New Notes will be, senior unsecured obligations
of the Company ranking pari passu with all existing or future senior
indebtedness of the Company. Although the Old Notes are, and the New Notes
will be, guaranteed by the Guarantors, initially neither Bristow nor its
subsidiaries will guarantee the Notes, with the result that the Old Notes are,
and the New Notes will be, structurally subordinated to all existing and
future indebtedness of Bristow and its subsidiaries. As of December 31, 1997,
after giving pro forma effect to the Original Offering and the use of proceeds
therefrom, the Notes would have been effectively subordinated to approximately
$43.6 million of indebtedness of Bristow and its subsidiaries and to an
additional $18.6 million of indebtedness of a foreign subsidiary of OLOG that
also will not guarantee the Notes (excluding indebtedness owed to the
Company).
POTENTIAL INABILITY TO FUND A CHANGE OF CONTROL OFFER
Upon a Change of Control (as defined in the Indenture), the Company will be
required to offer to repurchase all outstanding Notes at 101% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of repurchase. Certain events involving a Change of Control
may result in an event of default under OLOG's Credit Facility and may result
in an event of default under certain other indebtedness of the Company that
may be incurred in the future. There can be no assurance that sufficient funds
will be available to the Company at the time of any Change of Control to make
any required repurchases of Notes tendered, pay its obligations under such
Credit Facility or other indebtedness upon the occurrence of a Change of
Control. These provisions may be deemed to have anti-takeover effects and may
delay, defer or prevent a merger, tender offer or other takeover attempt.
Notwithstanding these provisions, the Company could enter into certain
transactions, including certain recapitalizations, that would not constitute a
Change of Control but would increase the amount of debt outstanding at such
time. See "Description of the Notes--Repurchase at the Option of Holders."
DEPENDENCE ON OIL AND GAS INDUSTRY
The Company's operations are largely dependent upon the levels of activity
in oil and natural gas exploration, development and production. Such activity
levels are affected by trends in oil and natural gas prices. Historically, the
prices for oil and natural gas have been volatile and are subject to wide
fluctuations in response to changes in the supply of and demand for oil and
natural gas, market uncertainty and a variety of additional factors beyond the
control of the Company. The Company cannot predict future oil and natural gas
price movements with any certainty. Any prolonged reduction in oil and natural
gas prices, however, will depress the level of exploration, development and
production activity and result in a corresponding decline in the demand for
the Company's services and, therefore, have a material adverse effect on the
Company's revenues and profitability.
9
<PAGE>
INTERNATIONAL OPERATIONS
The Company's international operations are focused in the North Sea,
Nigeria, Australia, Brazil, China, Colombia, Mexico, Trinidad and Egypt with
less significant operations in other international areas. Operations in
foreign countries generally are subject to various risks attendant to doing
business outside the United States, including risks of war, general strikes,
civil disturbances, guerilla activity, currency fluctuations and devaluations
and governmental activities that may limit or disrupt markets, restrict
payments or the movement of funds or result in the deprivation of contract
rights or the taking of property without fair compensation. No prediction can
be made as to what foreign governmental regulations may be enacted in the
future that could be applicable to helicopter operations.
EXCHANGE RATE RISKS
Bristow's revenues and expenses are reported in British Pounds Sterling. In
addition, a portion of the Company's revenues is denominated in other
currencies (including Australian Dollars, French Francs, Nigerian Naira and
Trinidad and Tobago Dollars) to cover expenses in the areas in which such
expenses are incurred. To the extent operating revenues are denominated in the
same currency as operating expenses, the Company can reduce its vulnerability
to exchange rate fluctuations. Because the Company maintains its financial
statements in U.S. Dollars, it is vulnerable to fluctuations in the exchange
rate between the pound and the dollar.
COMPETITION
The Company's helicopter business is highly competitive on a worldwide
basis. Chartering of helicopters is usually done on the basis of competitive
bidding among those having the necessary equipment and resources. The
technical requirements of operating helicopters offshore have increased as oil
and gas activities have moved into deeper water and more sophisticated
aircraft are required to service the market. The number of small helicopter
operators in the Gulf of Mexico has declined over the past several years, as
it has become increasingly difficult to maintain an adequate shore-based
infrastructure and provide the working capital required to conduct such
operations, especially when the associated costs must be spread over a
relatively small number of helicopters. One of the Company's competitors has
substantially more helicopters in service in the Gulf of Mexico. The Company
has two significant competitors in the North Sea.
GPM's business is highly competitive. There are a number of competitors that
are smaller than GPM but maintain a Gulf-wide presence. In addition, there are
many smaller operators that compete on a local basis or for single projects or
jobs.
UNION REPRESENTATION
On August 6, 1997, the domestic pilots at OLOG voted to become members of
the Office and Professional Employees International Union ("OPEIU"). OLOG
began negotiations with the OPEIU in April 1998. During the nine months ended
December 31, 1997, $85.3 million of operating revenues were from OLOG's
domestic operations. In January 1998, the National Mediation Board ("NMB") set
aside the September 4, 1997, election in which the pilots for OLOG's principal
competitor elected not to be represented by the OPEIU. The NMB called another
election that was completed in April 1998, and such competitors' pilots again
voted not to be represented by the OPEIU. The OPEIU has protested the outcome
of this second election. In January 1998, the OPEIU petitioned the NMB to
organize OLOG's mechanics. Certain objections to this petition have been filed
and the date of a possible election has not been established. Similar efforts
may also be taking place at some of OLOG's competitors. The Company does not
believe that the result of these organizing efforts will place the Company at
a competitive disadvantage with its competitors as management believes that
pay scales and work rules will continue to be similar throughout the industry.
10
<PAGE>
INDUSTRY HAZARDS AND INSURANCE
Hazards, such as adverse weather and marine conditions, crashes, collisions,
and fires are inherent in the offshore transportation and supply industry, and
may result in losses of equipment, revenues or death of personnel. The Company
maintains hull and liability insurance which generally insures the Company
against certain legal liabilities to others, as well as to damage to its
aircraft. It is also the Company's policy to carry insurance for, or require
its customers to provide indemnification against, expropriation, war risk, and
confiscation of its helicopters employed in international operations. There is
no assurance that in the future the Company will be able to maintain its
existing coverage or that the premiums therefore will not increase
substantially.
GPM's operations are subject to the normal risks associated with working on
oil and gas production facilities. These risks could result in damage to or
loss of property and injury to or death of personnel. GPM carries normal
business insurance including general liability, worker's compensation,
automobile liability and property and casualty insurance coverages.
GOVERNMENT REGULATION
United States. As a commercial operator of small aircraft, Air Log is
subject to regulations pursuant to the Federal Aviation Act of 1958, as
amended, and other statutes. Air Log carries persons and property in its
helicopters pursuant to an Air Taxi Certificate granted by the Federal
Aviation Administration ("FAA").
The FAA regulates the flight operations of Air Log, and in this respect,
exercises jurisdiction over personnel, aircraft, ground facilities, and
certain technical aspects of its operations. The National Transportation
Safety Board is authorized to investigate aircraft and to recommend improved
safety standards. Air Log is also subject to the Communications Act of 1934
because of the use of radio facilities in its operations.
Under the Federal Aviation Act, it is unlawful to operate certain aircraft
for hire within the United States unless such aircraft are registered with the
FAA and the operator of such aircraft has been issued an operating certificate
by the FAA. As a general rule, aircraft may be registered under the Federal
Aviation Act only if the aircraft is owned or controlled by one or more
citizens of the United States, and an operating certificate may be granted
only to a citizen of the United States. For the purposes of these
requirements, a corporation is deemed to be a citizen of the United States
only if, among other things, at least 75% of the voting interest therein is
owned or controlled by United States citizens. In the event that persons other
than United States citizens should come to own or control more than 25% of the
voting interest in the Company, the Company has been advised that the
Company's aircraft may be subject to deregistration under the Federal Aviation
Act and loss of the privilege of operating within the United States. At March
31, 1997, the Company had 2,267,745 common shares held by persons with foreign
addresses representing approximately 10.8% of the 21,081,133 common shares
outstanding.
The Company's domestic operations are subject to federal, state, and local
laws and regulations controlling the discharge of materials into the
environment or otherwise relating to the protection of the environment. To
date, such laws and regulations have not had a material adverse effect on the
Company's business or financial condition. Increased public awareness and
concern over the environment, however, may result in future changes in the
regulation of the oil and gas industry, which in turn could adversely affect
the Company. See "Business--Other Matters--Legal Proceedings."
United Kingdom. As a commercial operator of aircraft, Bristow is subject to
the Licensing of Air Carriers Regulations 1992, and Regulations made under the
Civil Aviation Act 1992 and other statutes. Bristow carries persons and
property in its helicopters pursuant to an operating license issued by the
Civil Aviation Authority ("CAA").
The CAA regulates the flight operations of Bristow, and in this respect,
exercises jurisdiction over personnel, aircraft, ground facilities, and
certain technical aspects of Bristow's operations. Accident investigations are
carried out by the Accident Investigation Branch of the Department of
Transport. The CAA often imposes improved safety standards on the basis of a
report of the Inspector.
11
<PAGE>
Under the Licensing of Air Carriers Regulations 1992, it is unlawful to
operate certain aircraft for hire within the United Kingdom unless such
aircraft are approved by the CAA. The holder of an operating license must meet
the ownership and control requirements of Council Regulation 2407/92 (i.e.--
the entity that operates under the license must be owned directly or through
majority ownership by United Kingdom or European Economic Area nationals and
must at all times be effectively controlled by them).
Bristow's operations are subject to local laws and regulations controlling
the discharge of materials into the environment or otherwise relating to the
protection of the environment. To date, such laws and regulations have not had
a material adverse effect on Bristow's business or financial condition.
Increased public awareness and concern over the environment, however, may
result in future changes in the regulation of the oil and gas industry.
International. The Company's operations other than in the United States and
the United Kingdom are subject to local governmental regulations and to
uncertainties of economic and political conditions in those areas. Because of
the impact of local laws, these operations are conducted primarily through
entities (including joint ventures) in which local citizens own interests and
Air Log or Bristow holds only a minority interest, or pursuant to arrangements
under which the Company operates assets or conducts operations under contracts
with local entities. There can be no assurance that there will not be changes
in local laws, regulations or administrative requirements, or the
interpretation thereof, any of which could have a material adverse effect on
the business or financial condition of the Company or on its ability to
continue operations in certain regions.
FRAUDULENT TRANSFER CONSIDERATIONS
Under applicable provisions of the United States Bankruptcy Code or
comparable provisions of state fraudulent transfer or conveyance law, if a
Guarantor, at the time it incurred the Subsidiary Guarantee, (a) incurred such
indebtedness with the intent to hinder, delay or defraud creditors, or (b)(i)
received less than reasonably equivalent value or fair consideration and
(ii)(A) was insolvent at the time of such incurrence, (B) was rendered
insolvent by reason of such incurrence (and the application of the proceeds
thereof), (C) was engaged or was about to engage in a business or transaction
for which its remaining assets constituted unreasonably small capital to carry
on its business, or (D) intended to incur, or believed that it would incur,
debts beyond its ability to pay such debts as they mature, then, in each such
case, a court of competent jurisdiction could void, in whole or in part, such
Subsidiary Guarantee or, in the alternative, subordinate such Subsidiary
Guarantee to existing and future indebtedness of such Guarantor. Among other
things, a legal challenge of the Subsidiary Guarantees issued by any Guarantor
on fraudulent conveyance grounds may focus on the benefits, if any, realized
by such Guarantor as a result of the issuance by the Company of the Notes. To
the extent the Subsidiary Guarantee was voided as a fraudulent conveyance or
held unenforceable for any other reason, the holders of the Notes would cease
to have any claim against such Guarantor and would be creditors solely of the
Company and any Guarantor whose Subsidiary Guarantees were not voided or held
unenforceable. In such event, the claims of the holders of the Notes against
the issuer of an invalid Subsidiary Guarantee would be subject to the prior
payment of all liabilities of such Guarantor. There can be no assurance that,
after providing for all prior claims, there would be sufficient assets to
satisfy the claims of the holders of the Notes relating to any avoided
portions of any of the Subsidiary Guarantees.
The measure of insolvency for purposes of the foregoing would likely vary
depending upon the law applied in such case. Generally, however, a Guarantor
would be considered insolvent if the sum of its debts, including contingent
liabilities, was greater than all of its assets at a fair valuation, or if the
present fair saleable value of its assets was less than the amount that would
be required to pay the probable liabilities on its existing debts, including
contingent liabilities, as such debts become absolute and matured. The Company
believes that, for purposes of the United States Bankruptcy Code and state
fraudulent transfer or conveyance laws, the Subsidiary Guarantees will be
issued without the intent to hinder, delay or defraud creditors and for proper
purposes and in good faith, and that the Guarantors will receive reasonably
equivalent value or fair consideration therefor, and that after the issuance
of the Subsidiary Guarantees and the application of the net proceeds
therefrom, the Guarantors will be solvent, have sufficient capital for
carrying on their businesses and will be able to pay their debts as they
mature. However, there can be no assurance that a court passing on such issues
would agree with the determination of the Company.
12
<PAGE>
ABSENCE OF A PUBLIC MARKET FOR THE NOTES
The New Notes are a new issue of securities for which there currently is no
public market. The Company does not intend to list the New Notes on any
securities exchange. Although the Initial Purchaser has informed the Company
that it intends to make a market in the New Notes, the Initial Purchaser is
not obligated to make a market in the New Notes and any market making may be
discontinued at any time at the sole discretion of the Initial Purchaser. If a
market develops for the New Notes, there can be no assurance as to the
liquidity of such market, the ability of holders to sell their New Notes or
the prices at which holders would be able to sell the New Notes. If a market
for the New Notes does develop, the New Notes may trade at a discount to their
principal amount, depending on prevailing interest rates, the market for
similar securities, the performance of the Company, the performance of the oil
and gas industry and other factors. Pursuant to the Registration Rights
Agreement, the Company is required to commence the Exchange Offer for the New
Notes or file the Shelf Registration Statement covering resales of the New
Notes within specified time periods.
FORWARD LOOKING STATEMENTS
This Prospectus contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
statements included herein other than statements of historical fact are
forward-looking statements. Such forward-looking statements include, without
limitation, the statements herein, or incorporated by reference herein,
regarding the timing of future events regarding the Company's operations, the
statements under the captions "Summary," "Risk Factors," Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" herein or incorporated by reference herein regarding, without
limitation, the ability of the Company to react to market conditions,
outsourcing and cost structure and the market for production management
operations, the effect of the Company's pilots electing to be represented by a
union, the Company's potential liability for environmental claims,
concentration and globalization of the helicopter industry, restructuring of
the oil and gas industry, increased levels of activity and their effects on
the Company's future prospects and the Company's anticipated future financial
position and cash requirements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Important factors that could cause
actual results to differ materially from the Company's expectations
("Cautionary Statements") may include, but are not limited to, demand for
Company services, worldwide activity levels in oil and natural gas
exploration, development and production, fluctuations in oil and natural gas
prices, unionization and the response thereto of the Company's customers,
currency fluctuations, and international political conditions. All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
Cautionary Statements.
13
<PAGE>
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. In consideration for issuing the New Notes as
contemplated in this Prospectus, the Company will receive in exchange a like
principal amount of Old Notes, the terms of which are identical in all
material respects to the New Notes. The Old Notes surrendered in exchange for
the New Notes will be retired and canceled and cannot be reissued.
Accordingly, issuance of the New Notes will not result in any change in
capitalization of the Company. The Company used all the net proceeds of the
Original Offering (approximately $97.2 million) to repay certain indebtedness
of Bristow ($66.7 million) and to replace general corporate funds used to
repay certain indebtedness of Bristow in October 1997 ($18.7 million). The
Company intends to use the remaining net proceeds for general corporate
purposes.
CAPITALIZATION
The following table sets forth the consolidated unaudited cash and cash
equivalents, current portion of long-term debt and capitalization of the
Company as of December 31, 1997, and as adjusted to reflect the sale of the
Old Notes and the application of the net proceeds therefrom as described under
"Use of Proceeds." This table should be read in conjunction with the Company's
consolidated financial statements and notes thereto included elsewhere herein
or incorporated by reference into this Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................ $ 22,631 $ 51,154
======== ========
Current portion of long-term debt........................ $ 6,112 $ 6,112
======== ========
Long-term debt (less current maturities):
7 7/8% Senior Notes due 2008............................ $ -- $100,000
6% Convertible Subordinated Notes due 2003.............. 98,000 98,000
7.9% Term loan.......................................... 18,645 18,645
Bristow debt............................................ 104,212 37,513
-------- --------
Total long-term debt................................. 220,857 254,158
-------- --------
Stockholders' equity:
Common Stock, $.01 par value, authorized 35,000,000
shares; outstanding 21,854,921 at December 31, 1997
(exclusive of 517,550 treasury shares)(1)............. 219 219
Additional paid in capital............................. 123,061 123,061
Retained earnings...................................... 143,455 143,455
Cumulative translation adjustment...................... (112) (112)
-------- --------
Total stockholders' equity........................... 266,623 266,623
-------- --------
Total capitalization................................. $487,480 $520,781
======== ========
</TABLE>
- --------
(1) Excludes 690,500 shares of Common Stock reserved for issuance upon
exercise of employee and director stock options outstanding at December
31, 1997 and 4,286,964 shares reserved for issuance upon conversion of the
6% Convertible Subordinated Notes due 2003 (the "Convertible Notes").
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The following table sets forth selected consolidated financial data for the
dates and periods indicated. The financial information for each of the years
ended June 30, 1993, 1994, 1995 and 1996 and the transition period ended
March 31, 1997 and as of June 30, 1994, 1995 and 1996 and March 31, 1997 is
derived from the Company's audited consolidated financial statements and notes
thereto. The selected consolidated financial data as of December 31, 1996 and
1997 and for the nine month periods then ended are derived from the unaudited
consolidated statements of the Company for such periods. In the opinion of
management, the unaudited financial statements of the Company reflect all
adjustments (consisting of only normal recurring adjustments) necessary for
fair presentation of the financial condition and results of operations for
these periods. This information should be read in conjunction with the
consolidated financial statements and notes thereto included elsewhere herein
and "Management's Discussion and Analysis of Financial Condition and Results
of Operations" set forth in the Company's Annual Report on Form 10-K for the
transition period from July 1, 1996 to March 31, 1997 and the Quarterly
Reports on Form 10-Q for the fiscal quarters ended June 30, 1997, September
30, 1997 and December 31, 1997 incorporated by reference into this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31,
------------------------------------ NINE MONTHS ENDED ------------------
1993 1994 1995 1996 MARCH 31, 1997 1996 1997
-------- -------- -------- -------- ----------------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Gross Revenue:
Operating revenue...... $ 80,201 $ 91,666 $118,336 $117,289 $167,128 $104,088 $320,969
Gain (loss) on disposal
of equipment.......... 1,675 3,018 586 (446) 1,222 392 (473)
-------- -------- -------- -------- -------- -------- --------
81,876 94,684 118,922 116,843 168,350 104,480 320,496
-------- -------- -------- -------- -------- -------- --------
Operating Expenses:
Direct cost............ 50,610 59,617 80,708 85,693 119,106 73,164 233,903
Depreciation and
amortization.......... 6,542 7,519 9,200 8,549 12,624 7,439 24,401
General and
administrative........ 5,461 6,576 8,745 9,235 11,406 7,479 20,517
-------- -------- -------- -------- -------- -------- --------
62,613 73,712 98,653 103,477 143,136 88,082 278,821
-------- -------- -------- -------- -------- -------- --------
Operating income........ 19,263 20,972 20,269 13,366 25,214 16,398 41,675
Earnings from
unconsolidated
entities............... 2,247 2,020 4,050 4,056 2,602 3,374 5,006
Interest income......... 1,443 1,771 2,947 4,025 3,300 3,373 2,151
Interest expense........ 1,501 1,138 569 300 5,528 810 15,584
-------- -------- -------- -------- -------- -------- --------
Income From Continuing
Operations Before
Provision for Income
Taxes and Extraordinary
Item................... 21,452 23,625 26,697 21,147 25,588 22,335 33,248
Provision for income
taxes.................. 5,409 6,378 7,735 6,123 7,675 6,965 9,973
Minority interest
expense................ -- -- -- -- (288) (34) (760)
-------- -------- -------- -------- -------- -------- --------
Income from Continuing
Operations Before
Extraordinary Item..... 16,043 17,247 18,962 15,024 17,625 15,336 22,515
Discontinued operations. -- -- (512) 252 (393) 178 154
-------- -------- -------- -------- -------- -------- --------
Income Before
Extraordinary Item..... 16,043 17,247 18,450 15,276 17,232 15,514 22,669
Extraordinary Item, Net
of Income Taxes....... 1,012 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income.............. $ 17,055 $ 17,247 $ 18,450 $ 15,276 $ 17,232 $ 15,514 $ 22,669
======== ======== ======== ======== ======== ======== ========
Earnings per common
share:
Basic:
Continuing operations
before extraordinary
item.................. $ 0.91 $ 0.98 $ 1.00 $ 0.77 $ 0.88 $ 0.78 $ 1.06
Discontinued
operations............ -- -- (0.03) 0.01 (0.02) 0.01 --
Extraordinary item..... .06 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income per common
share................. $ 0.97 $ 0.98 $ 0.97 $ 0.78 $ 0.86 $ $0.79 $ 1.06
======== ======== ======== ======== ======== ======== ========
Diluted:
Continuing operations
before extraordinary
item.................. $ 0.90 $ 0.96 $ 0.98 $ 0.76 $ 0.85 $ 0.77 $ 0.99
Discontinued
operations............ -- -- (0.02) 0.01 (0.02) 0.01 --
Extraordinary item..... .06 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income per common
share................. $ 0.96 $ 0.96 $ 0.96 $ 0.77 $ 0.83 $ 0.78 $ 0.99
======== ======== ======== ======== ======== ======== ========
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31,
-------------------------------------- NINE MONTHS ENDED ------------------
1993 1994 1995 1996 MARCH 31, 1997 1996 1997
-------- -------- -------- -------- ----------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER FINANCIAL DATA
(UNAUDITED):
EBITDA(1).............. $ 28,052 $ 30,511 $ 33,519 $ 25,971 $ 40,440 $ 27,211 $ 71,082
Capital expenditures... 4,291 11,510 3,208 12,535 10,106 4,290 59,260
Ratio of EBITDA to
interest expense(1)... 18.7x 26.8x 58.9x 86.6x 7.3x 33.6x 4.6x
Ratio of earnings to
fixed charges(2)...... 15.3x 21.8x 47.9x 71.5x 5.6x 28.6x 3.2x
Ratio of debt to
EBITDA................ .5x .2x .2x .2x 6.2x 9.2x 3.2x
BALANCE SHEET DATA (END
OF PERIOD):
Cash, cash equivalents
and investment in
marketable securities. $ 46,941 $ 47,175 $ 67,879 $ 76,906 $ 29,829 $ 26,692 $ 22,631
Property, plant and
equipment, net........ 70,432 73,917 67,163 71,741 436,382 450,661 464,488
Total assets........... 164,231 174,245 217,983 230,741 674,213 665,508 684,492
Total long-term debt... 9,322 2,000 -- -- 199,631 205,401 220,857
Total stockholders'
equity................ 123,919 141,567 183,851 199,683 234,906 236,911 266,623
</TABLE>
- --------
(1) EBITDA means earnings from continuing operations before extraordinary
item, interest, taxes, depreciation and amortization excluding minority
interest and including earnings from unconsolidated entities which are
accounted for on the cost method. EBITDA is commonly used by debt holders
and financial statement users as a measurement to determine the ability of
an entity to meet its interest obligations. EBITDA is not a measurement
presented in accordance with generally accepted accounting principles
("GAAP") and is not intended to be used in lieu of GAAP presentations of
results of operations and cash provided by operating activities.
(2) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income from continuing operations before extraordinary item,
and provision for income taxes plus interest expense; and fixed charges
consist of interest expense.
16
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT
The Old Notes were sold by the Company on January 27, 1998 to the Initial
Purchaser in a private transaction not subject to the registration
requirements of the Securities Act. The Initial Purchaser offered and sold the
Old Notes only (i) to "qualified institutional buyers" (as defined in Rule
144A) in compliance with Rule 144A and (ii) to a limited number of other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) that, prior to their purchase of Old Notes,
delivered to the Initial Purchaser a letter containing certain representations
and agreements. In connection with the sale of the Old Notes, the Company
entered into the Registration Rights Agreement, which requires that the
Company and the Guarantors conduct the Exchange Offer. The Registration Rights
Agreement further provides that the Company and the Guarantors must use their
reasonable best efforts to (i) cause the Exchange Offer Registration Statement
to be declared effective on or before the 120th day after the date on which
the Old Notes were originally issued under the Indenture (the "Closing Date")
and (ii) consummate the Exchange Offer on or before the 180th day after the
Closing Date. Except as provided below, upon the completion of the Exchange
Offer, the Company's obligation with respect to the registration of the Old
Notes and the New Notes will terminate. The summary herein of certain
provisions of the Registration Rights Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference
thereto. Copies of the Registration Rights Agreement are available as set
forth under "Description of the Notes--Additional Information." As a result of
the filing and the effectiveness of the Exchange Offer Registration Statement,
certain Liquidated Damages provided for in the Registration Rights Agreement
will not become payable by the Company. Following the completion of the
Exchange Offer (except as set forth in the paragraph immediately below),
certain holders of Old Notes not tendered will not have any further
registration rights and those Old Notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for the Old
Notes could be adversely affected upon completion of the Exchange Offer.
In order to participate in the Exchange Offer, a holder must represent to
the Company, among other things, that (i) the New Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of such holder's
business, (ii) such holder is not engaging in and does not intend to engage in
a distribution of the New Notes, (iii) such holder does not have an
arrangement or understanding with any person to participate in the
distribution of the New Notes and (iv) such holder is not an "affiliate," as
defined under Rule 405 promulgated under the Securities Act, of the Company.
Pursuant to the Registration Rights Agreement, the Company is required to file
a Shelf Registration Statement for a continuous offering pursuant to Rule 415
under the Securities Act in respect of the Old Notes (and cause such shelf
registration statement to be declared effective by the Commission and keep it
continuously effective, supplemented and amended for prescribed periods) if
(i) the Company is not permitted to consummate the Exchange Offer because the
Exchange Offer is not permitted by applicable law or Commission policy, or
(ii) any holder of Transfer Restricted Securities notifies the Company prior
to the 20th day following consummation of the Exchange Offer (A) that such
holder is prohibited by law or Commission policy from participating in the
Exchange Offer or (B) that such holder may not resell the New Notes acquired
by it in the Exchange Offer to the public without delivering a prospectus and
the prospectus contained in the Exchange Offer Registration Statement would
not be available for such resale by such holder. Other than as set forth in
this paragraph, no holder will have the right to participate in the Shelf
Registration Statement nor otherwise to require that the Company register such
holder's shares of Old Notes under the Securities Act. See "Description of the
Notes--Registration Rights; Liquidated Damages."
The Company has not requested, and does not intend to request, an
interpretation by the staff of the Commission with respect to whether the New
Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may
be offered for sale, resold or otherwise transferred by any holder without
compliance with the registration and prospectus delivery provisions of the
Securities Act. Based on interpretations by the staff of the Commission set
forth in no-action letters issued to third parties unrelated to the Company
and the Guarantors, the Company and the Guarantors believe that New Notes
issued pursuant to the Exchange Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by holders thereof (other than
any such
17
<PAGE>
holder or such other person that is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that (i) the New Notes are acquired in the ordinary course of such
holder's business, (ii) such holder is not engaging in and does not intend to
engage in a distribution of the New Notes, and (iii) such holder does not have
an arrangement or understanding with any person to participate in the
distribution of the New Notes. Any holder who tenders in the Exchange Offer
with the intention to participate, or for the purpose of participating, in a
distribution of the New Notes or who is an affiliate of the Company may not
rely upon such interpretation by the staff of the Commission and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
secondary resale transaction. Failure to comply with such requirements in such
instance may result in such holder incurring liabilities under the Securities
Act for which the holder is not indemnified by the Company. Each broker-dealer
that receives New Notes for its own account in exchange for Old Notes, where
those Old Notes were acquired by the broker-dealer as a result of its market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of these New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. The Company has agreed
that, for a period of one year after the effective date of the Exchange Offer
Registration Statement, it will make the Prospectus available to any broker-
dealer for use in connection with any such resale.
The Exchange Offer is not being made to, nor will the Company accept
surrenders for exchange from, holders of Old Notes in any jurisdiction in
which this Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Old Notes are urged to
consult their financial and tax advisors in making their own decisions on
whether to participate in the Exchange Offer.
CONSEQUENCES OF FAILURE TO EXCHANGE
Old Notes which are not tendered for exchange in the Exchange Offer will
remain outstanding and interest thereon will continue to accrue. Following the
completion of the Exchange Offer (except as set forth above in the second
paragraph under "--Purpose and Effect"), holders of Old Notes not tendered
will not have any further registration rights and those Old Notes will remain
restricted securities within the meaning of Rule 144 of the Securities Act.
Accordingly, the liquidity of the market for a holder's Old Notes could be
adversely affected upon completion of the Exchange Offer if the holder does
not participate in the Exchange Offer.
TERMS OF THE EXCHANGE OFFER
General
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Company will issue $1,000 principal amount
of New Notes in exchange for each $1,000 principal amount of outstanding Old
Notes accepted in the Exchange Offer. Holders may tender some or all of their
Old Notes pursuant to the Exchange Offer. However, Old Notes may be tendered
only in integral multiples of $1,000 in principal amount.
The form and terms of the New Notes are identical in all material respects
to the form and terms of the Old Notes except that (i) the New Notes are being
registered under the Securities Act and, therefore, will not bear legends
restricting their transfer and (ii) holders of the New Notes, other than
certain broker-dealers, will not be entitled to the rights of holders of the
Transfer Restricted Securities under the Registration Rights Agreement. The
New Notes will evidence the same debt as the Old Notes, will be issued
pursuant to, and entitled to the benefits of, the Indenture pursuant to which
the Old Notes were issued and will be treated as a single class
18
<PAGE>
thereunder with any Old Notes that remain outstanding. The Exchange Offer is
not conditioned upon any minimum aggregate principle amount of Old Notes being
tendered for exchange.
As of April 27, 1998, the Old Notes representing $100,000,000 aggregate
principal amount were outstanding and there were 22 registered holders. This
Prospectus, together with the Letter of Transmittal, is being sent to such
registered holders and to others believed to have beneficial interests in the
Old Notes. Holders of Old Notes do not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware or the
Indenture in connection with the Exchange Offer. The Company intends to
conduct the Exchange Offer in accordance with the applicable requirements of
the Exchange Act and the rules and regulations of the Commission promulgated
thereunder.
As of the date of this Prospectus, $100,000,000 aggregate principal amount
of Old Notes are issued and outstanding. In connection with the issuance of
the Old Notes, the Company arranged for the Old Notes to be eligible for
trading in the Private Offering, Resale and Trading through Automated Linkages
Market (PORTAL), the National Association of Securities Dealers' screen based,
automated market trading of securities eligible for resale under Rule 144A.
The Company will be deemed to have accepted validly tendered Old Notes when,
as and if the Company has given oral or written notice thereof to the Exchange
Agent. The Exchange Agent will act as agent for the tendering holders for the
purpose of receiving the New Notes from the Company and delivering the New
Notes to such holders. If any tendered Old Notes are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes, in connection with the Exchange
Offer. See "--Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on June
12, 1998, unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended. In order to extend the Exchange
Offer, the Company will notify the Exchange Agent and each registered holder
of any extension by oral or written notice prior to 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
During any extension of the Exchange Offer, all Old Notes previously tendered
pursuant to the Exchange Offer and not withdrawn will remain subject to the
Exchange Offer. The date of the exchange of the New Notes for Old Notes will
be the first Nasdaq National Market ("NNM") trading day following the
Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or, if any of the
conditions set forth under "--Conditions to the Exchange Offer" have not been
satisfied and have not been waived by the Company, to terminate the Exchange
Offer, by giving oral or written notice of such delay, extension or
termination to the Exchange Agent, or (ii) to amend the terms of the Exchange
Offer in any manner deemed by it to be advantageous to the holders of the Old
Notes. Any such delay in acceptance, extension, termination or amendment will
be followed as promptly as practicable by oral or written notice thereof to
the registered holders. If the Exchange Offer is amended in any manner
determined by the Company to constitute a material change, the Company will
promptly disclose such amendment by means of a prospectus supplement that will
be distributed to the registered holders, and the Company will extend the
Exchange Offer for a period of time, depending upon the significance of the
amendment and the manner of disclosure to the registered holders, if the
Exchange Offer would otherwise expire during such period.
19
<PAGE>
Interest on the New Notes
The New Notes will bear interest payable semi-annually in arrears on January
15 and July 15 of each year, commencing July 15, 1998. Holders of record of
New Notes on July 1, 1998 will receive interest on July 15, 1998 from the date
of issuance of the New Notes, plus an amount equal to the accrued interest on
the Old Notes from the date of issuance of the Old Notes, January 27, 1998, to
the date of exchange thereof. Consequently, assuming the Exchange Offer is
consummated prior to the record date in respect of the July 15, 1998 interest
payment for the Old Notes, holders who exchange their Old Notes for New Notes
will receive the same interest payment on July 15, 1998 that they would have
received had they not accepted the Exchange Offer. Interest on the Old Notes
accepted for exchange will cease to accrue upon issuance of the New Notes.
Procedures for Tendering Old Notes
The tender to the Company of Old Notes by a holder thereof pursuant to one
of the procedures set forth below will constitute an agreement between such
holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal. A holder of the
Old Notes may tender such Old Notes by (i) properly completing, signing and
dating a Letter of Transmittal or a facsimile thereof (all references in this
Prospectus to a Letter of Transmittal shall be deemed to include a facsimile
thereof) and delivering the same, together with any corresponding certificate
or certificates representing the Old Notes being tendered (if in certificated
form) and any required signature guarantees, to the Exchange Agent at its
address set forth in the Letter of Transmittal on or prior to the Expiration
Date (or complying with the procedure for book-entry transfer described
below), or (ii) complying with the guaranteed delivery procedures described
below.
If tendered Old Notes are registered in the name of the signer of the Letter
of Transmittal and the New Notes to be issued in exchange therefor are to be
issued (and any untendered Old Notes are to be reissued) in the name of the
registered holder (which term, for the purposes described herein, shall
include any participant in DTC (also referred to as a book-entry facility)
whose name appears on a security listing as the owner of Old Notes), the
signature of such signer need not be guaranteed. In any other case, the
tendered Old Notes must be endorsed or accompanied by written instruments of
transfer in form satisfactory to the Company and duly executed by the
registered holder and the signature on the endorsement or instrument of
transfer must be guaranteed by an eligible guarantor institution that is a
member of or a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program, the Stock
Exchange Medallion Program or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"). If
the New Notes or Old Notes not exchanged are to be delivered to an address
other than that of the registered holder appearing on the note register for
the Old Notes, the signature in the Letter of Transmittal must be guaranteed
by an Eligible Institution.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE
SENT TO THE COMPANY. ONLY HOLDERS OF OLD NOTES MAY TENDER SUCH OLD NOTES IN
THE EXCHANGE OFFER. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES, OR NOMINEES TO EFFECT THESE TRANSACTIONS
FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company, or other nominee and who wishes to
tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. If the
beneficial owner wishes to tender on the owner's own behalf, the owner must,
prior to completing and executing the Letter of Transmittal and delivering the
owner's Old Notes, either make appropriate arrangements to register ownership
of the Old Notes
20
<PAGE>
in the beneficial owner's name or obtain a properly completed bond power from
the registered holder. The transfer of registered ownership may take
considerable time.
The Company understands that the Exchange Agent has confirmed with DTC that
any financial institution that is a participant in DTC's system may utilize
DTC's Automated Tender Offer Program ("ATOP") to tender Old Notes. The Company
further understands that the Exchange Agent will request, within two business
days after the date the Exchange Offer commences, that DTC establish an
account with respect to the Old Notes for the purpose of facilitating the
Exchange Offer, and any participant may make book-entry delivery of Old Notes
by causing DTC to transfer such Old Notes into the Exchange Agent's account in
accordance with DTC's ATOP procedures for transfer. However, the exchange of
the Old Notes so tendered will only be made after timely confirmation (a
"Book-Entry Confirmation") of such book-entry transfer and timely receipt by
the Exchange Agent of an Agent's Message (as defined in the next sentence),
and any other documents required by the Letter of Transmittal. The term
"Agent's Message" means a message, transmitted by DTC and received by the
Exchange Agent and forming a part of Book-Entry Confirmation, which states
that DTC has received an express acknowledgment from a participant tendering
Old Notes which are the subject of such Book-Entry Confirmation and that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the Company may enforce such agreement against such
participant.
A tender will be deemed to have been received as of the date when (i) the
tendering holder's properly completed and duly signed Letter of Transmittal
accompanied by the Old Notes (or a confirmation of book-entry transfer of such
Old Notes into the Exchange Agent's account at DTC), is received by the
Exchange Agent, or (ii) a Notice of Guaranteed Delivery or letter, telegram or
facsimile transmission to similar effect from an Eligible Institution is
received by the Exchange Agent. Issuances of New Notes in exchange for Old
Notes tendered pursuant to a Notice of Guaranteed Delivery or letter, telegram
or facsimile transmission to similar effect by an Eligible Institution will be
made only against submission of a duly signed Letter of Transmittal (and any
other required documents) and deposit of the tendered Old Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of tendered Old Notes will be determined
by the Company, in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any or all tenders
not in proper form or the acceptance for exchange of which may, in the opinion
of counsel for the Company, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Exchange Offer or any
defect or irregularity in the tender of any Old Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the instructions in the Letter of Transmittal) will be final and binding on
all parties. Unless waived, any defects or irregularities in connection with
tenders of Old Notes must be cured within such time as the Company shall
determine. Although the Company intends to notify holders of defects or
irregularities with respect to tenders of Old Notes, neither the Company, the
Exchange Agent, nor any other person shall be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give such notification. Tenders of Old Notes will not
be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering
holders, unless otherwise provided in the Letter of Transmittal, as soon as
practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding after the
Expiration Date or, as set forth under "Conditions to the Exchange Offer," to
terminate the Exchange Offer and, to the extent permitted by applicable law,
purchase Old Notes in the open market, in privately negotiated transactions,
or otherwise. The terms of any such purchases or offers could differ from the
terms of the Exchange Offer.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-
Entry Confirmation of such Old Notes into the Exchange Agent's account at DTC,
a properly completed
21
<PAGE>
and duly executed Letter of Transmittal (or, with respect to DTC and its
participants, electronic instructions in which the tendering holder
acknowledges its receipt of and agreement to be bound by the Letter of
Transmittal), and all other required documents. If any tendered Old Notes are
not accepted for any reason set forth in the terms and conditions of the
Exchange Offer or if Old Notes are submitted for a greater principal amount
than the holder desires to exchange, such unaccepted or non-exchanged Old
Notes will be returned without expense to the tendering Holder thereof (or, in
the case of Old Notes tendered by book-entry transfer into the Exchange
Agent's account at DTC pursuant to the book-entry transfer procedures
described below, such nonexchanged Old Notes will be credited to an account
maintained with such book-entry transfer facility) as promptly as practicable
after the expiration or termination of the Exchange Offer.
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes, where the Old Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes.
Guaranteed Delivery Procedures
If the holder desires to accept the Exchange Offer and time will not permit
a Letter of Transmittal or Old Notes to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed
on a timely basis, a tender may be effected if the Exchange Agent has received
at its office, on or prior to the Expiration Date, a letter, telegram or
facsimile transmission from an Eligible Institution setting forth the name and
address of the tendering holder, the name(s) in which the Old Notes are
registered and the certificate number(s) of the Old Notes to be tendered, and
stating that the tender is being made thereby and guaranteeing that, within
three NNM trading days after the date of execution of such letter, telegram or
facsimile transmission by the Eligible Institution, such Old Notes, in proper
form for transfer (or a confirmation of book-entry transfer of such Old Notes
into the Exchange Agent's account at DTC), will be delivered by such Eligible
Institution together with a properly completed and duly executed Letter of
Transmittal (and any other required documents). Unless Old Notes being
tendered by the above-described method are deposited with the Exchange Agent
within the time period set forth above (accompanied or preceded by a properly
completed Letter of Transmittal and any other required documents), the Company
may, at its option, reject the tender. Copies of a Notice of Guaranteed
Delivery which may be used by Eligible Institutions for the purposes described
in this paragraph are available from the Exchange Agent.
Terms and Conditions of the Letter of Transmittal
The Letter of Transmittal contains, among other things, certain terms and
conditions which are summarized below and are part of the Exchange Offer.
Each holder who participates in the Exchange Offer will be required to
represent that any New Notes received by it will be acquired in the ordinary
course of its business, that such holder is not participating in, and has no
arrangement with any person to participate in, the distribution (within the
meaning of the Securities Act) of the New Notes, and that such holder is not
an affiliate of the Company.
Old Notes tendered in exchange for New Notes (or a timely confirmation of a
book-entry transfer of such Old Notes into the Exchange Agent's account at
DTC) must be received by the Exchange Agent, with the Letter of Transmittal
and any other required documents, by the Expiration Date or within the time
periods set forth above pursuant to a Notice of Guaranteed Delivery from an
Eligible Institution. Each holder tendering the Old Notes for exchange sells,
assigns and transfers the Old Notes to the Exchange Agent, as agent of the
Company, and irrevocably constitutes and appoints the Exchange Agent as the
holder's agent and attorney-in-fact to cause the Old Notes to be transferred
and exchanged. The holder warrants that it has full power and authority to
tender, exchange, sell, assign and transfer the Old Notes and to acquire the
New Notes issuable upon the exchange of such tendered Old Notes, that the
Exchange Agent, as agent of the Company, will acquire good and unencumbered
title to the tendered Old Notes, free and clear of all liens, restrictions,
charges and encumbrances, and that the Old Notes tendered for exchange are not
subject to any adverse claims when accepted by the
22
<PAGE>
Exchange Agent, as agent of the Company. The holder also warrants and agrees
that it will, upon request, execute and deliver any additional documents
deemed by the Company or the Exchange Agent to be necessary or desirable to
complete the exchange, sale, assignment and transfer of the Old Notes. All
authority conferred or agreed to be conferred in the Letter of Transmittal by
the holder will survive the death, incapacity or dissolution of the holder and
any obligation of the holder shall be binding upon the heirs, personal
representatives, successors and assigns of such holder.
Withdrawal Rights
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date
unless previously accepted for exchange.
To withdraw a tender of Old Notes in the Exchange Offer, a written,
facsimile or (for DTC participation) electronic ATOP transmission notice of
withdrawal must be received by the Exchange Agent at its address set forth
herein prior to 5:00 p.m., New York City time, on the Expiration Date prior to
acceptance for exchange thereof by the Company. Any such notice of withdrawal
must (i) specify the name of the person having deposited the Old Notes to be
withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn
(including the certificate number or numbers and principal amount of such Old
Notes), (iii) contain a statement that such holder is withdrawing its election
to have such Old Notes exchanged, (iv) be signed by the holder in the same
manner as the original signature on the Letter of Transmittal by which such
Old Notes were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee register
the transfer of such Old Notes in the name of the person withdrawing the
tender, and (v) specify the name in which any such Old Notes are to be
registered, if different from that of the Depositor. If Old Notes have been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at the book-entry
transfer facility. All questions as to the validity, form, and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the Exchange Offer and no Exchange Notes will be issued with respect thereto
unless the Old Notes so withdrawn are validly returned. Any Old Notes which
have been tendered but which are not exchanged for any reason will be returned
to the holder thereof without cost to such holder as soon as practicable after
withdrawal, rejection of tender, or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures (described above) under "--Procedures for Tendering Old Notes" at
any time on or prior to the Expiration Date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company will
not be required to accept for exchange, or to issue New Notes in exchange for,
any Old Notes and may terminate or amend the Exchange Offer if at any time
before the acceptance of such Old Notes for exchange or the exchange of the
New Notes for such Old Notes, the Company determines that the Exchange Offer
violates applicable law or Commission policy.
If the Company determines that it may terminate the Exchange Offer, as set
forth above, the Company may (i) refuse to accept any Old Notes and return any
Old Notes that have been tendered to the holders thereof, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the Expiration of
the Exchange Offer, subject to the rights of such holders of tendered Old
Notes to withdraw their tendered Old Notes or (iii) waive such termination
event with respect to the Exchange Offer and accept all properly tendered Old
Notes that have not been withdrawn. If such waiver constitutes a material
change in the Exchange Offer, the Company will disclose such change by means
of a supplement to this Prospectus that will be distributed to each registered
holder of Old Notes, and the Company will extend the Exchange Offer for a
period of time, depending upon the significance of the waiver and the manner
of disclosure to the registered holders of the Old Notes, if the Exchange
Offer would otherwise expire during such period. Holders of Old Notes will
have certain rights against the Company under the Registration Rights
Agreement should the Company fail to consummate the Exchange Offer. See
"Description of the Notes--Registration Rights; Liquidated Damages."
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<PAGE>
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition or may be waived by the Company in whole or in part at any time
and from time to time in its sole discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no New Notes will be issued in exchange for, any such Old Notes,
if at such time any stop order shall be threatened or in effect with respect
to the Registration Statement of which this Prospectus constitutes a part of
the qualification of the Indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). In any such event the Company is required
to use every reasonable effort to obtain the withdrawal of any stop order at
the earliest possible time.
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as Exchange Agent for
the Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
For Information by Telephone:
(800) 531-0368
By Registered or Certified Mail: By Hand or Overnight Delivery Service:
State Street Bank and Trust Company State Street Bank and Trust Company
Corporate Trust Department Corporate Trust Department
P.O. Box 778 Fourth Floor
Boston, MA 02102-0078 Two International Place
Boston, MA 02110
By Facsimile Transmission (for Eligible Institutions only):
(617) 664-5739
(Facsimile Confirmation)
(617) 664-5456
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<PAGE>
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional
solicitations may be made by telecopy, telephone or in person by officers and
regular employees of the Company. No additional compensation will be paid to
any such officers and employees who engage in soliciting tenders. The Company
will not make any payments to brokers, dealers or other persons soliciting
acceptances of the Exchange Offer. The Company, however, will pay the Exchange
Agent reasonable and customary fees for its services and will reimburse the
Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith. The Company may also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by
them in forwarding copies of this Prospectus, Letters of Transmittal and
related documents to the beneficial owners of the Old Notes and in handling or
forwarding tenders for exchange.
The estimated cash expenses to be incurred in connection with the Exchange
Offer, including fees and expenses of the Exchange Agent, accounting, legal
and related fees and expenses, will be paid by the Company.
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<PAGE>
DESCRIPTION OF THE NOTES
GENERAL
The Old Notes were issued pursuant to an Indenture dated January 27, 1998
among the Company, the initial Guarantors (as defined below) and State Street
Bank and Trust Company, as trustee (the "Trustee"). The New Notes will be
issued under the Indenture, which will be qualified under the Trust Indenture
Act, upon the effectiveness of the Registration Statement of which this
Prospectus forms a part. The terms of the Notes will include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes will be subject to all such terms, and prospective
investors are referred to the Indenture and the Trust Indenture Act for a
statement thereof. The following summary of certain provisions of the
Indenture does not purport to be complete. Copies of the Indenture and the
Registration Rights Agreement are available as set forth under "--Additional
Information." The definitions of certain terms used in the following summary
are set forth below under "--Certain Definitions." As used in this
"Description of the Notes," the "Company" means Offshore Logistics, Inc., but
not any of its subsidiaries.
The Notes will be general unsecured obligations of the Company, ranking pari
passu in right of payment with all other future senior indebtedness of the
Company and senior in right of payment to all existing and future subordinated
indebtedness of the Company. The Notes will be unconditionally guaranteed on a
senior unsecured basis by certain of the Company's present and future
Significant Subsidiaries; provided, however, that initially neither Bristow
nor any of its Subsidiaries will guarantee the Notes. As a consequence, the
Notes will be structurally subordinated to all existing and future
indebtedness of Bristow and its Subsidiaries. As of December 31, 1997, after
giving pro forma effect to the Original Offering and the use of proceeds
therefrom, the Notes would have been effectively subordinated to approximately
$43.6 million of indebtedness of Bristow and its Subsidiaries and to an
additional $18.6 million of indebtedness of a foreign subsidiary of OLOG that
also will not guarantee the Notes (excluding indebtedness owed to the
Company). See "Risk Factors--Ranking of the Notes; Effective Subordination,"
"Use of Proceeds" and "Capitalization."
The Indenture provides for the issuance of up to $100.0 million of Old Notes
in connection with the Original Offering and an equal aggregate principal
amount of New Notes that may be issued in exchange for Old Notes pursuant to
the Exchange Offer. The Indenture also provides the Company the flexibility of
issuing additional Notes in the future in an unlimited amount; however, any
issuance of such additional Notes would be subject to the covenant described
in the first paragraph under "--Certain Covenants--Incurrence of Indebtedness
and Issuance of Preferred Stock." The Old Notes, the New Notes and any such
additional Notes are collectively referred to as the "Notes" in this
"Description of the Notes."
Any Old Notes that remain outstanding after the completion of the Exchange
Offer, together with the New Notes issued in connection with the Exchange
Offer, will be treated as a single class of securities under the Indenture.
As of the date of the Indenture, Bristow and all of the Company's principal
Subsidiaries are Restricted Subsidiaries. Under certain circumstances, the
Company will be able to designate current or future Subsidiaries as
Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants set forth in the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The New Notes will be limited in aggregate principal amount to $100.0
million and will mature on January 15, 2008. Interest on the Notes will accrue
at the rate of 7 7/8% per annum and will be payable semi-annually in arrears
on January 15 and July 15 of each year, commencing on July 15, 1998, to
holders of record on the immediately preceding January 1 and July 1. Interest
on the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original issuance of
the Old Notes. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Principal of and premium,
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<PAGE>
interest and Liquidated Damages, if any, on the Notes will be payable at the
office or agency of the Company maintained for such purpose in New York, New
York or, at the option of the Company, payment of interest and Liquidated
Damages, if any, may be made by check mailed to holders of the Notes at their
respective addresses set forth in the register of holders; provided, however,
that all payments with respect to Notes the holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
holders thereof. Until otherwise designated by the Company, the Company's
office or agency in New York, New York will be the office of the Trustee
maintained for such purpose. The Notes will be issued in denominations of
$1,000 and integral multiples thereof.
SUBSIDIARY GUARANTEES
The Company's payment obligations under the Notes will be jointly and
severally guaranteed (the "Subsidiary Guarantees") by all of the Company's
present active domestic and certain future Subsidiaries (the "Guarantors").
Initially neither Bristow nor its Subsidiaries will be Guarantors. In the
circumstances described under "--Certain Covenants--Additional Subsidiary
Guarantees," the Indenture requires that Bristow and its Restricted
Subsidiaries execute Subsidiary Guarantees. The obligations of each Guarantor
under its Subsidiary Guarantee will be a general unsecured obligation of such
Guarantor, ranking pari passu in right of payment with all other current or
future senior indebtedness of such Guarantor and senior in right of payment to
any subordinated indebtedness, if any, incurred by such Guarantor in the
future.
The Indenture provides that no Guarantor may consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person
(other than the Company or another Guarantor), whether or not affiliated with
such Guarantor, unless (i) subject to the provisions of the following
paragraph, the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) shall execute a Guarantee and deliver an
Opinion of Counsel in accordance with the terms of the Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists; (iii) such Guarantor, or any Person formed by or surviving any
such consolidation or merger, would have Consolidated Net Worth (immediately
after giving effect to such transaction), equal to or greater than the
Consolidated Net Worth of such Guarantor immediately preceding the
transaction; and (iv) the Company would be permitted by virtue of the
Company's pro forma Consolidated Interest Coverage Ratio, immediately after
giving effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set
forth in the covenant described below the caption "--Certain Covenants--
Incurrence of Indebtedness and Issuance of Preferred Stock."
The Indenture provides that, in the event of a sale or other disposition
(including by way of merger or consolidation) of all or substantially all of
the assets or all of the Capital Stock of any Guarantor (or at least a
majority of the Capital Stock of any Guarantor that is primarily engaged in
the production management services business), then such Guarantor will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided, however, that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture. See
"--Repurchase at the Option of Holders--Asset Sales." In addition, the Indenture
provides that, in the event the Board of Directors designates a Guarantor to
be an Unrestricted Subsidiary, then such Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee, provided that such
designation is conducted in accordance with the applicable provisions of the
Indenture.
27
<PAGE>
OPTIONAL REDEMPTION
The Notes will not be redeemable at the Company's option prior to January
15, 2003. Thereafter, the Notes will be subject to redemption at any time at
the option of the Company, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the 12 month period beginning on January
15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003......................................................... 103.938%
2004......................................................... 102.953
2005......................................................... 101.969
2006......................................................... 100.984
2007 and thereafter.......................................... 100.000
</TABLE>
Notwithstanding the foregoing, on or prior to January 22, 2001, the Company
may redeem up to 35% of the aggregate principal amount of Notes originally
issued at a redemption price of 107 7/8% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, with the net cash proceeds of one or more Qualified Equity
Offerings, provided that (a) at least 65% of the aggregate principal amount of
Notes originally issued remains outstanding immediately after the occurrence
of each such redemption and (b) each such redemption occurs within 60 days of
the date of the closing of each such Qualified Equity Offering.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided,
however, that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than
60 days before the redemption date to each holder of Notes to be redeemed at
its registered address. Notices of redemption may not be conditional. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in principal amount equal to the unredeemed portion
thereof will be issued in the name of the holder thereof upon cancellation of
the original Note. Notes called for redemption become due on the date fixed
for redemption. On and after the redemption date, interest ceases to accrue on
Notes or portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under "--Repurchase at the Option of Holders," the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
The Indenture provides that, upon the occurrence of a Change of Control, the
Company will be required to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of each holder's Notes at an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of repurchase (the "Change of
Control Payment"). Within 30 days following a Change of Control, the Company
will mail a notice to each holder of Notes and the Trustee describing the
transaction that constitutes the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date shall be no earlier
than 30 days and
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<PAGE>
no later than 60 days from the date such notice is mailed (the "Change of
Control Payment Date"), pursuant to the procedures required by the Indenture
and described in such notice. The Company will comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of Notes as a result of a Change of Control.
On or before the Change of Control Payment Date, the Company will, to the
extent lawful, (a) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (b) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (c) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to each holder
of Notes so tendered the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided, however, that
each such new Note will be in a principal amount of $1,000 or an integral
multiple thereof. The Company will publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
Except as described above with respect to a Change of Control, the Indenture
does not contain provisions that permit the holders of the Notes to require
that the Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction. In addition, the Company could enter
into certain transactions, including acquisitions, refinancing or other
recapitalizations, that could affect the Company's capital structure or the
value of the Notes, but that would not constitute a Change of Control. The
occurrence of a Change of Control may result in a default under the Credit
Facilities and give the lenders thereunder the right to require the Company to
repay all outstanding obligations thereunder. The Company's ability to
repurchase Notes following a Change of Control may also be limited by the
Company's then existing financial resources.
The Company will not be required to make a Change of Control Offer following
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
A "Change of Control" will be deemed to have occurred upon the occurrence of
any of the following: (a) the sale, lease, transfer, conveyance or other
disposition (other than by merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the Company
and its Subsidiaries, taken as a whole, (b) the adoption of a plan relating to
the liquidation or dissolution of the Company, (c) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as such term is used in Section 13(d)
(3) of the Exchange Act) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, of more than 50% of the voting
power of the outstanding voting stock of the Company or (d) the first day on
which more than a majority of the members of the Board of Directors are not
Continuing Directors; provided, however, that a transaction in which the
Company becomes a Subsidiary of another Person (other than a Person that is an
individual) shall not constitute a Change of Control if (i) the stockholders
of the Company immediately prior to such transaction "beneficially own" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act),
directly or indirectly through one or more intermediaries, at least a majority
of the voting power of the outstanding voting stock of the Company immediately
following the consummation of such transaction and (ii) immediately following
the consummation of such transaction, no "person" (as such term is defined
above), other than such other Person (but including the holders of the Equity
Interests of such other Person), "beneficially owns" (as such term is defined
above), directly or indirectly through one or more intermediaries, more than
50% of the voting power of the outstanding voting stock of the Company.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors who (a) was a member of the Board of Directors on the
date of original issuance of the Notes or (b) was nominated
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<PAGE>
for election to the Board of Directors with the approval of, or whose election
to the Board of Directors was ratified by, at least two-thirds of the
Continuing Directors who were members of the Board of Directors at the time of
such nomination or election.
Asset Sales
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless (a) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in accordance with the definition of such term, the
results of which determination shall be set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (b) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash
or Cash Equivalents; provided, however, that the amount of (i) any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet) of the Company or such Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes
or any guarantee thereof) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability and (ii) any securities,
notes or other obligations received by the Company or such Restricted
Subsidiary from such transferee that are converted within ten business days by
the Company or such Restricted Subsidiary into cash (to the extent of the cash
received) shall be deemed to be cash for purposes of this provision.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or any such Restricted Subsidiary may apply such Net Proceeds to
(a) permanently repay the principal of any Indebtedness of the Company ranking
in right of payment at least pari passu with the Notes or any Indebtedness of
Bristow or (b) to acquire (including by way of a purchase of assets or stock,
merger, consolidation or otherwise) Productive Assets. Pending the final
application of any such Net Proceeds, the Company or any such Restricted
Subsidiary may temporarily reduce outstanding revolving credit borrowings,
including borrowings under the Credit Facility, or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph will be deemed to constitute "Excess
Proceeds."
When the aggregate amount of Excess Proceeds exceeds $5.0 million (or the
equivalent thereof in any other currency or currency units), the Company will
be required to make an offer to all holders of Notes (an "Asset Sale Offer")
to purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture; provided, however, that, if the Company
is required to apply such Excess Proceeds to repurchase, or to offer to
repurchase, any Pari Passu Indebtedness, the Company shall only be required to
offer to repurchase the maximum principal amount of Notes that may be
purchased out of the amount of such Excess Proceeds multiplied by a fraction,
the numerator of which is the aggregate principal amount of Notes outstanding
and the denominator of which is the aggregate principal amount of Notes
outstanding plus the aggregate principal amount of Pari Passu Indebtedness
outstanding. To the extent that the aggregate principal amount of Notes
tendered pursuant to an Asset Sale Offer is less than the amount that the
Company is required to repurchase, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Notes surrendered by holders thereof exceeds the amount that the Company is
required to repurchase, the Trustee shall select the Notes to be purchased on
a pro rata basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.
CERTAIN COVENANTS
Restricted Payments
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any other payment or distribution on account
30
<PAGE>
of the Company's or any of its Restricted Subsidiaries' Equity Interests
(including, without limitation, any such payment in connection with any merger
or consolidation involving the Company) or to the direct or indirect holders
of the Company's Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company); (b) purchase, redeem or otherwise acquire
or retire for value (including without limitation, in connection with any
merger or consolidation involving the Company) any Equity Interests of the
Company (other than any such Equity Interests owned by the Company or any
Wholly Owned Restricted Subsidiary of the Company); (c) make any payment on or
with respect to, or purchase, redeem, defease or otherwise acquire or retire
for value, any Indebtedness that is subordinated to the Notes, except a
payment of interest or principal at Stated Maturity; or (d) make any
Restricted Investment (all such payments and other actions set forth in
clauses (a) through (d) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(i) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(ii) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Interest Coverage Ratio test set forth in the first paragraph
of the covenant described under the caption "--Incurrence of Indebtedness
and Issuance of Preferred Stock"; and
(iii) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Indenture (excluding Restricted Payments
permitted by clauses (b), (c), (d) and (f), but including, without
duplication, Restricted Payments permitted by clauses (a) and (e), of the
next succeeding paragraph), is less than the sum of (A) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from January 1, 1998 to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated
Net Income for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds received by the Company from
the issue or sale since the date of the Indenture of Equity Interests of
the Company (other than Disqualified Stock) or of Disqualified Stock or
debt securities of the Company that have been converted into such Equity
Interests (other than any such Equity Interests, Disqualified Stock or
convertible debt securities sold to a Restricted Subsidiary of the Company
and other than Disqualified Stock or convertible debt securities that have
been converted into Disqualified Stock), plus (C) to the extent that any
Restricted Investment that was made after the date of the Indenture is sold
for cash or otherwise liquidated or repaid for cash, the lesser of (1) the
cash return of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (2) the initial amount of such Restricted
Investment, plus (D) in the event that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary, the lesser of (1) an amount equal
to the fair market value of the Company's Investments in such Restricted
Subsidiary and (2) the amount of Restricted Investments previously made by
the Company and its Restricted Subsidiaries in such Unrestricted
Subsidiary, plus (E) $10.0 million.
The foregoing provisions will not prohibit any of the following: (a) the
payment of any dividend within 60 days after the date of declaration thereof
if at said date of declaration such payment would have complied with the
provisions of the Indenture; (b) the redemption, repurchase, retirement,
defeasance or other acquisition of any subordinated Indebtedness or Equity
Interests of the Company in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified Stock),
provided that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (iii) (B) of the preceding paragraph; (c) the
defeasance, redemption, repurchase, retirement or other acquisition of
subordinated Indebtedness with the net cash proceeds from an incurrence of, or
in exchange for, Permitted Refinancing Indebtedness; (d) the payment of any
dividend or distribution by a Restricted Subsidiary of the Company to the
Company or any of its Wholly Owned Restricted Subsidiaries; (e) so long as no
Default or Event of Default shall have occurred and be continuing, the
repurchase, redemption or
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other acquisition or retirement for value of any Equity Interests of the
Company held by any employee of the Company's or any of its Restricted
Subsidiaries, provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $500,000 (or
the equivalent thereof in any other currency or currency unit) in any calendar
year and (f) the acquisition of Equity Interests by the Company in connection
with the exercise of stock options or stock appreciation rights by way of
cashless exercise or in connection with the satisfaction of withholding tax
obligations.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated will be deemed to be Restricted Payments at
the time of such designation. All such outstanding Investments will be deemed
to constitute Investments in an amount equal to the fair market value of such
Investments at the time of such designation. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined
in the manner contemplated by the definition of the term "fair market value,"
and the results of such determination shall be evidenced by an Officers'
Certificate delivered to the Trustee. Not later than five business days
following the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment
is permitted and setting forth the basis upon which the calculations required
by the covenant "Restricted Payments" were computed.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur" or an
"incurrence") any Indebtedness and that the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company and
its Restricted Subsidiaries may incur Indebtedness, and the Company may issue
Disqualified Stock, if the Consolidated Interest Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least 2.25 to 1, determined on a pro forma basis (including
a pro forma application of the net proceeds therefrom), as if the additional
Indebtedness or Disqualified Stock had been issued or incurred at the
beginning of such four-quarter period.
The foregoing provisions will not apply to:
(a) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness under the Credit Facilities in an aggregate principal amount
at any one time outstanding not to exceed $50.0 million (or the equivalent
thereof in any other currency or currency unit), plus any fees, premiums,
expenses (including costs of collection), indemnities and similar amounts
payable in connection with such Indebtedness, and less any amounts repaid
permanently in accordance with the covenant described under the caption
"--Repurchase at the Option of Holders--Asset Sales";
(b) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(c) the incurrence by the Company and its Restricted Subsidiaries of
Hedging Obligations;
(d) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the Offered Notes, the Exchange Notes, the
Subsidiary Guarantees and the Indenture;
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(e) the incurrence of intercompany Indebtedness between or among the
Company and any of its Wholly Owned Restricted Subsidiaries, provided that
any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a Wholly
Owned Restricted Subsidiary of the Company, or any sale or other transfer
of any such Indebtedness to a Person that is neither the Company nor a
Wholly Owned Restricted Subsidiary of the Company, shall be deemed to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(f) Indebtedness in respect of bid, performance or surety bonds issued
for the account of the Company or any Restricted Subsidiary thereof in the
ordinary course of business, including guarantees or obligations of the
Company or any Restricted Subsidiary thereof with respect to letters of
credit supporting such bid, performance or surety obligations (in each case
other than for an obligation for money borrowed); and
(g) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund
Indebtedness that was permitted by the Indenture to be incurred (other than
pursuant to clause (a) or (e) of this covenant).
The Indenture also provides that the Company will not, and will not permit
any Guarantor to, directly or indirectly, incur any Indebtedness which by its
terms (or by the terms of any agreement governing such Indebtedness) is
subordinated to any other Indebtedness of the Company or of such Guarantor, as
the case may be, unless such Indebtedness is also by its terms (or by the
terms of any agreement governing such Indebtedness) made expressly subordinate
to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may
be, to the same extent and in the same manner as such Indebtedness is
subordinated pursuant to subordination provisions that are most favorable to
the holders of any other Indebtedness of the Company or of such Guarantor, as
the case may be.
Liens
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired, or
any income or profits therefrom or assign or convey any right to receive
income therefrom, except Permitted Liens, to secure (a) any Indebtedness of
the Company or such Restricted Subsidiary (if it is not also a Guarantor),
unless prior to, or contemporaneously therewith, the Notes are equally and
ratably secured, or (b) any Indebtedness of any Guarantor, unless prior to, or
contemporaneously therewith, the Subsidiary Guarantees are equally and ratably
secured; provided, however, that if such Indebtedness is expressly
subordinated to the Notes or the Subsidiary Guarantees, the Lien securing such
Indebtedness will be subordinated and junior to the Lien securing the Notes or
the Subsidiary Guarantees, as the case may be, with the same relative priority
as such Indebtedness has with respect to the Notes or the Subsidiary
Guarantees.
Sale-and-Leaseback Transactions
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, enter into any sale-and-leaseback transaction;
provided, however, that the Company or any Restricted Subsidiary, as
applicable, may enter into a sale-and-leaseback transaction if (i) the Company
or such Restricted Subsidiary could have (a) incurred Indebtedness in an
amount equal to the Attributable Indebtedness relating to such sale-and-
leaseback transaction pursuant to the Consolidated Interest Coverage Ratio
test set forth in the first paragraph of the covenant described above under
the caption "--Incurrence of Indebtedness and Issuance of Preferred Stock" and
(b) incurred a Lien to secure such Indebtedness pursuant to the covenant
described under the caption "--Liens," (ii) the gross cash proceeds of such
sale-and-leaseback transaction are at least equal to the fair market value (as
determined in accordance with the definition of such term, the results of
which determination shall be set forth in an Officers' Certificate delivered
to the Trustee) of the property that is the subject of such sale-and-leaseback
transaction and (iii) the transfer of assets in such sale-and-leaseback
transaction is permitted
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by, and the Company applies the proceeds of such transaction in compliance
with, the covenant described above under the caption "--Repurchase at the
Option of Holders--Asset Sales."
Issuances and Sales of Capital Stock of Wholly Owned Restricted Subsidiaries
The Indenture provides that the Company (i) will not, and will not permit
any Wholly Owned Restricted Subsidiary of the Company to, transfer, convey,
sell, or otherwise dispose of any Capital Stock of any Wholly Owned Restricted
Subsidiary of the Company (other than any such Subsidiary that is primarily
engaged in the production management services business) to any Person (other
than the Company or a Wholly Owned Restricted Subsidiary of the Company),
unless (a) such transfer, conveyance, sale, or other disposition is of all the
Capital Stock of such Wholly Owned Restricted Subsidiary and (b) the Net
Proceeds from such transfer, conveyance, sale, or other disposition are
applied in accordance with the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales," and (ii) will not permit
any Wholly Owned Restricted Subsidiary of the Company to issue any of its
Equity Interests to any Person other than to the Company or a Wholly Owned
Restricted Subsidiary of the Company, except, in the case of both clauses (i)
and (ii) above, with respect to dispositions or issuances by a Wholly Owned
Restricted Subsidiary of the Company as contemplated in clauses (a) and (b) of
the definition of "Wholly Owned Restricted Subsidiary."
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) (i) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries on
its Capital Stock or with respect to any other interest or participation in,
or measured by, its profits, or (ii) pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries, (b) make loans or advances to the
Company or any of its Restricted Subsidiaries or (c) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of
(1) the Credit Facilities or Existing Indebtedness, each as in effect on the
date of the Indenture, (2) the Indenture and the Notes, (3) applicable law,
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person or the properties
or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred, (5)
by reason of customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices, (6) purchase
money obligations for property acquired in the ordinary course of business
that impose restrictions of the nature described in clause (c) above on the
property so acquired, (7) customary provisions in bona fide contracts for the
sale of property or assets or (8) Permitted Refinancing Indebtedness with
respect to any Indebtedness referred to in clauses (1) and (2) above, provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness being
refinanced.
Merger, Consolidation, or Sale of Assets
The Indenture provides that the Company may not consolidate or merge with or
into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to
another Person unless (a) the Company is the surviving corporation or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia, (b) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes and the
Indenture pursuant to a
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supplemental indenture in a form reasonably satisfactory to the Trustee, (c)
immediately after such transaction no Default or Event of Default exists and
(d) except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will have Consolidated Net Worth immediately after
the transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction and (B) will, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Interest Coverage Ratio test set forth in the
first paragraph of the covenant described above under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock."
Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or
such Restricted Subsidiary with an unrelated Person or, if there is no such
comparable transaction, on terms that are fair and reasonable to the Company
or such Restricted Subsidiary, and (b) the Company delivers to the Trustee (i)
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million (or
the equivalent thereof in any other currency or currency unit), a resolution
of the Board of Directors set forth in an Officers' Certificate certifying
that such Affiliate Transaction complies with clause (a) above and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors and (ii) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million (or the equivalent thereof in any
other currency or currency unit), in each case other than any such
transactions with an Affiliate engaged in the business of providing helicopter
transportation services to the oil and gas industry (or a business that is
reasonably complementary or related thereto as determined in good faith by the
Board of Directors), an opinion as to the fairness to the Company or the
relevant Subsidiary of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm that is, in
the judgment of the Board of Directors, qualified to render such opinion and
is independent with respect to the Company; provided, however, that the
following shall be deemed not to be Affiliate Transactions: (A) any employment
agreement or other employee compensation plan or arrangement entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business of the Company or such Restricted Subsidiary; (B) transactions
between or among the Company and its Restricted Subsidiaries; (C) Permitted
Investments and Restricted Payments that are permitted by the provisions of
the Indenture; (D) loans or advances to officers, directors and employees of
the Company or any Restricted Subsidiary made in the ordinary course of
business and consistent with past practices of the Company and its Restricted
Subsidiaries in an aggregate amount not to exceed $500,000 (or the equivalent
thereof in any other currency or currency unit) outstanding at any one time;
(E) indemnities of officers, directors and employees of the Company or any
Restricted Subsidiary permitted by bylaw or statutory provisions; (F) the
payment of reasonable and customary regular fees to directors of the Company
or any of its Restricted Subsidiaries who are not employees of the Company or
any Subsidiary; and (G) the payment to Caledonia of Existing Indebtedness of
Bristow.
Additional Subsidiary Guarantees
The Indenture provides that (a) if the Company or any of its Restricted
Subsidiaries (except, so long as Bristow is not a Guarantor, either Bristow or
any Subsidiary thereof) shall, after the date of the Indenture, acquire or
create another Significant Subsidiary, or (b) if, after such date, (1) a
Restricted Subsidiary (except, so long as Bristow is not a Guarantor, either
Bristow or any Subsidiary thereof) shall provide a guarantee under a Credit
Facility or incur any Funded Indebtedness, or (2) Bristow or any Restricted
Subsidiary thereof shall incur any
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Indebtedness (including any guarantee of Indebtedness of the Company) except
Permitted Bristow Indebtedness, then such newly acquired or created
Significant Subsidiary, in the case of clause (a) above, or such Restricted
Subsidiary described in clause (b)(1) above or Bristow and all of its
Restricted Subsidiaries, in the case of clause (b)(2) above, shall execute a
Subsidiary Guarantee and deliver an opinion of counsel in accordance with the
terms of the Indenture.
Reports
Whether or not the Company is required to do so by the rules and regulations
of the Commission, the Company will file with the Commission (unless the
Commission will not accept such a filing) and, within 15 days of filing, or
attempting to file, the same with the Commission, furnish to the holders of
the Notes (a) all quarterly and annual financial and other information with
respect to the Company and its Subsidiaries that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by the Company's
certified independent accountants, and (b) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, the Company and the Guarantors
will furnish to the holders of the Notes, prospective purchasers of the Notes
and securities analysts, upon their request, the information, if any, required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (a) default for 30 days in the payment when due of interest or
Liquidated Damages on the Notes; (b) default in payment when due of the
principal of or premium, if any, on the Notes; (c) failure by the Company to
comply with the provisions described under the caption "--Repurchase at the
Option of Holders" or "--Certain Covenants--Merger, Consolidation, or Sale of
Assets"; (d) failure by the Company for 60 days after notice to comply with
any of its other agreements in the Indenture or the Notes; (e) default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the date of the
Indenture, which default (i) is caused by a failure to pay principal of or
premium or interest on such Indebtedness prior to the expiration of any grace
period provided in such Indebtedness, including any extension thereof (a
"Payment Default") or (ii) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates in excess of $5.0 million (or the
equivalent thereof in any other currency or currency unit) and provided,
further, that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 10 days from the
continuation of such default beyond the applicable grace period or the
occurrence of such acceleration, as the case may be, such Event of Default and
any consequential acceleration of the Notes shall be automatically rescinded,
so long as such rescission does not conflict with any judgment or decree; (f)
failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $5.0 million (or the equivalent thereof in
any other currency or currency unit), which judgments are not paid, discharged
or stayed for a period of 60 days; (g) failure by any Guarantor to perform any
covenant set forth in its Subsidiary Guarantee, or the repudiation by any
Guarantor of its obligations under its Subsidiary Guarantee or the
unenforceability of any Subsidiary Guarantee against a Guarantor for any
reason and (h) certain events of bankruptcy or insolvency with respect to the
Company, any Guarantor or any Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the then outstanding Notes may declare
all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company, any Guarantor or any
Significant Subsidiary, all outstanding Notes will
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become due and payable without further action or notice. The holders of a
majority in principal amount of the then outstanding Notes by written notice
to the Trustee may on behalf of all of the holders rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal,
interest, premium or Liquidated Damages that have become due solely because of
the acceleration) have been cured or waived. Holders of the Notes may not
enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, holders of a majority in principal amount of
the then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes.
The holders of a majority in principal amount of the Notes then outstanding
by notice to the Trustee may on behalf of the holders of all of the Notes
waive any existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of
the principal of or interest or Liquidated Damages on the Notes.
The Company will be required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company will be required,
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator, member, partner or stockholder
or other owner of Capital Stock of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, the Subsidiary Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws, and it is the view of the Commission that such a
waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of the
obligations of itself and the Guarantors discharged with respect to the
outstanding Notes ("Legal Defeasance") except for (a) the rights of holders of
outstanding Notes to receive payments in respect of the principal of and
premium, interest and Liquidated Damages on such Notes when such payments are
due from the trust referred to below, (b) the Company's obligations with
respect to the Notes concerning issuing temporary Notes, registration of
Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payment and money for security payments held in trust,
(c) the rights, powers, trusts, duties and immunities of the Trustee, and the
Company's obligations in connection therewith and (d) the Legal Defeasance
provisions of the Indenture. ln addition, the Company may, at its option and
at any time, elect to have the obligations of the Company released with
respect to certain covenants that are described in the Indenture ("Covenant
Defeasance"), and thereafter any omission to comply with such obligations
shall not constitute a Default or Event of Default with respect to the Notes.
In the event Covenant Defeasance occurs, certain other events (not including
non-payment, bankruptcy, receivership, rehabilitation and insolvency events)
described under "Events of Default and Remedies" will no longer constitute an
Event of Default with respect to the Notes.
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In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium, interest and Liquidated
Damages, if any, on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date, (ii) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from,
or there has been published by, the Internal Revenue Service a ruling or (B)
since the date of the Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred, (iii) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that the holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred, (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of
funds to be applied to such deposit), (v) such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a
default under any material agreement or instrument (other than the Indenture)
to which the Company or any of its Restricted Subsidiaries is a party or by
which the Company or any of its Restricted Subsidiaries is bound, (vi) the
Company must have delivered to the Trustee an opinion of counsel to the effect
that the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others and (viii) the Company must deliver to the
Trustee an Officers' Certificate and an opinion of counsel, each stating that
all conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
TRANSFER AND EXCHANGE
A holder of Notes may transfer or exchange Notes in accordance with the
Indenture. The Registrar and the Trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company will not be required to transfer or
exchange any Note selected for redemption. Also, the Company will not be
required to transfer or exchange any Note for a period of 15 days before a
selection of Notes to be redeemed.
The registered holder of a Note will be treated as the owner of it for all
purposes, and all references to "holders" in this "Description of the Notes"
are to registered holders unless otherwise indicated.
AMENDMENT AND WAIVER
Except as provided below, the Indenture or the Notes may be amended with the
consent of the holders of at least a majority in principal amount of the Notes
then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or compliance with any provision of the Indenture or
the Notes may be waived with the consent of the holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes).
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Without the consent of each holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting holder): (a) reduce the
principal amount of Notes whose holders must consent to an amendment or
waiver, (b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other
than provisions relating to the covenants described above under the caption
"--Repurchase at the Option of Holders"), (c) reduce the rate of or change the
time for payment of interest on any Note, (d) waive a Default or Event of
Default in the payment of principal of or premium, interest or Liquidated
Damages on the Notes (except a rescission of acceleration of the Notes by the
holders of at least a majority in principal amount of the Notes and a waiver
of the payment default that resulted from such acceleration), (e) make any
Note payable in money other than that stated in the Notes, (f) make any change
in the provisions of the Indenture relating to waivers of past defaults or the
rights of holders of Notes to receive payments of principal of or premium,
interest or Liquidated Damages on the Notes (except as permitted in clause (g)
hereof), (g) waive a redemption payment with respect to any Note (other than a
payment required by one of the covenants described above under the caption
"--Repurchase at the Option of Holders"), (h) make any change in the ranking of
the Notes relative to other Indebtedness of the Company or the Subsidiary
Guarantees, in either case in a manner adverse to the holders, or (i) make any
change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any holder of Notes,
the Company, the Guarantors and the Trustee may amend or supplement the
Indenture or the Notes to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to holders
of Notes in the case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the holders of Notes or
that does not adversely affect the legal rights under the Indenture of any
such holder, to secure the Notes pursuant to the requirements of the "Liens"
covenant, to add any additional Guarantor or to release any Guarantor from its
Subsidiary Guarantee, in each case as provided in the Indenture, or to comply
with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Notes for or as an inducement
to any consent, waiver or amendment of any terms or provisions of the
Indenture or the Notes, unless such consideration is offered to be paid or
agreed to be paid to all holders of the Notes which so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.
The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the
Indenture at the request of any holder of Notes, unless such holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
State Street Bank and Trust Company is also the trustee under the
Convertible Notes Indenture. Pursuant to the Trust Indenture Act, should a
default occur with respect to either the Convertible Notes or the Notes, State
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Street Bank and Trust Company would be required to resign as trustee under one
of the indentures within 90 days of such default, unless such default were
cured, duly waived or otherwise eliminated.
GOVERNING LAW
The Indenture, the Notes and the Subsidiary Guarantees provide that they are
governed by the laws of the State of New York.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to Offshore Logistics,
Inc., 224 Rue de Jean, P.O. Box 5-C, Lafayette, Louisiana 70505, Attention:
Corporate Secretary.
FORM, DENOMINATION AND REGISTRATION
Global Notes; Book Entry Form
Except as set forth in the next paragraph, the Notes will be evidenced
initially by one or more global notes (the "Global Note") which will be
deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in the name of Cede & Co., as DTC's nominee. Except as set forth
below, record ownership of the Global Note may be transferred, in whole or in
part, only to another nominee of DTC or to a successor of DTC or its nominee.
Notes (i) originally purchased by or transferred to "foreign purchasers" or
Institutional Accredited Investors who are not Qualified Institutional Buyers
or (ii) held by Qualified Institutional Buyers who elect to take physical
delivery of their certificates instead of holding their interests through the
Global Note (and which are thus ineligible to trade through DTC) (collectively
referred to herein as the "Non-Global Purchasers") will be issued in
registered certificated form ("Certificated Notes"). Upon the transfer to a
Qualified Institutional Buyer of any Certificated Note initially issued to a
Non-Global Purchaser, such Certificated Note will, unless the transferee
requests otherwise or the Global Note has previously been exchanged in whole
for Certificated Notes as described below, be exchanged for an interest in the
Global Note.
Owners of beneficial interests in the Global Note may hold their interests
in the Global Note directly through DTC if such person is a participant in DTC
or indirectly through organizations that are participants in DTC (the
"Participants"). Persons who are not Participants may beneficially own
interests in the Global Note held by DTC only through Participants or certain
banks, brokers, dealers, trust companies and other parties that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede & Co., as the nominee of
DTC, is the registered owner of the Global Note, Cede & Co. for all purposes
will be considered the sole holder of the Global Note. Owners of beneficial
interests in the Global Note will be entitled to have certificates registered
in their names and to receive physical delivery of Certificated Notes.
Payment of principal of and premium, interest and Liquidated Damages, if
any, on the Global Note will be made to Cede & Co., the nominee for DTC, as
registered owner of the Global Note, by wire transfer of immediately available
funds on the applicable payment date. Neither of the Company nor the Trustee,
nor any agent of either of them, will have any responsibility or liability for
any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interest.
The Company has been informed by DTC that, with respect to any payment of
principal of, or premium, interest or Liquidated Damages, if any, on the
Global Note, DTC's practice is to credit Participants' accounts on the
applicable payment date, with payments in amounts proportionate to their
respective beneficial interests in
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the Notes represented by the Global Note as shown on the records of DTC,
unless DTC has reason to believe that it will not receive payment on such
payment date. Payments by Participants to owners of beneficial interests in
the Notes represented by the Global Note held through such Participants will
be the responsibility of such Participants, as is now the case with securities
held for the accounts of customers registered in "street name."
Transfers between Participants will be effected in the ordinary way in
accordance with DTC's rules and will be settled in immediately available
funds. The laws of some states require that certain persons take physical
delivery of securities in definitive form. Consequently, the ability to
transfer beneficial interests in the Global Note to such persons may be
limited. Because DTC can only act on behalf of Participants, who in turn act
on behalf of Indirect Participants and certain banks and other parties, the
ability of a person having a beneficial interest in the Notes represented by
the Global Note to pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate evidencing
such interest.
Neither the Company nor the Transfer Agent, nor any agent of either of them,
will have responsibility for the performance of DTC or its Participants or
Indirect Participants of their respective obligations under the rules and
procedures governing their operations. DTC has advised the Company that it
will take any action permitted to be taken by a holder of Notes (including,
without limitation, the presentation of Notes for exchange as described below)
only at the direction of one or more Participants to whose account with DTC
interests in the Global Note are credited, and only in respect of the Notes
represented by the Global Note as to which such Participant or Participants
has or have given such direction.
DTC has also advised the Company that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC was created to hold securities for its
Participants and to facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entry changes to
accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers,
banks, trust companies and clearing corporations and may include certain other
organizations such as the Initial Purchaser. Certain of such Participants (or
their representatives), together with other entities, own DTC. Indirect access
to the DTC system is available to others such as banks, brokers, dealers and
trust companies that clear through, or maintain a custodial relationship with,
a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among Participants, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will cause Certificated Notes to be
issued in exchange for the Global Notes.
Certificated Notes
Investors in the Notes may request that Certificated Notes be issued in
exchange for Notes represented by the Global Note. Furthermore, Certificated
Notes may be issued in exchange for Notes represented by the Global Note if no
successor depositary is appointed by the Company as set forth above.
Unless determined otherwise by the Company in accordance with applicable
law, Certificated Notes issued upon transfer or exchange of beneficial
interests in Notes represented by the Global Note will bear a legend setting
forth transfer restrictions under the Securities Act as set forth under
"Notice to Investors." Any request for the transfer of Certificated Notes
bearing the legend, or for removal of the legend from Certificated Notes, must
be accompanied by satisfactory evidence, in the form of an opinion of counsel,
that such transfer complies with the Securities Act or that neither the legend
nor the restrictions on transfer set forth therein are required to ensure
compliance with the provisions of the Securities Act, as the case may be.
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REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors agreed to file the Exchange Offer Registration Statement with the
Commission with respect to the Exchange Offer. If (a) the Company and the
Guarantors are not permitted to consummate the Exchange Offer because the
Exchange Offer is not permitted by applicable law or Commission policy or (b)
any holder of Transfer Restricted Securities notifies the Company prior to the
20th day following consummation of the Exchange Offer that (i) it is
prohibited by law or Commission policy from participating in the Exchange
Offer or (ii) that it may not resell the New Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement is not
available for such resales, the Company will file with the Commission a Shelf
Registration Statement to cover resales of the Old Notes by the holders
thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Company
will use its reasonable best efforts to cause the applicable registration
statement to be declared effective as promptly as possible by the Commission.
For purposes of the foregoing, "Transfer Restricted Securities" means each Old
Note until (A) the date on which such Old Note has been exchanged by a person
other than a broker-dealer for New Note in the Exchange Offer, (B) following
the exchange by a broker-dealer in the Exchange Offer of an Old Note for a New
Note, the date on which such New Note is sold to a purchaser who receives from
such broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Offer Registration Statement, (C) the
date on which such Old Note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (D) the date on which such Old Note is distributed to the public
pursuant to Rule 144 under the Securities Act or may be distributed to the
public pursuant to Rule 144(k) under the Securities Act.
The Registration Rights Agreement provides that (a) the Company will file an
Exchange Offer Registration Statement with the Commission on or prior to 60
days after the date on which the Old Notes are originally issued under the
Indenture (the "Closing Date"), (b) the Company will use its reasonable best
efforts to have the Exchange Offer Registration Statement declared effective
by the Commission on or prior to 120 days after the Closing Date, (c) unless
the Exchange Offer would not be permitted by applicable law or Commission
policy, the Company will commence the Exchange Offer and use its reasonable
best efforts to issue, on or prior to 180 days after the Closing Date, New
Notes in exchange for all Old Notes tendered prior thereto in the Exchange
Offer and (d) if obligated to file the Shelf Registration Statement, the
Company will use its reasonable best efforts to file the Shelf Registration
Statement with the Commission on or prior to 60 days after such filing
obligation arises and to cause the Shelf Registration Statement to be declared
effective by the Commission on or prior to 120 days after such obligation
arises. If (i) the Company fails to file any of the Registration Statements
required by the Registration Rights Agreement on or before the date specified
for such filing, (ii) any of such Registration Statements is not declared
effective by the Commission on or prior to the date specified for such
effectiveness, (iii) the Company fails to consummate the Exchange Offer within
180 days of the Closing Date with respect to the Exchange Offer Registration
Statement or (iv) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the periods specified in the Registration Rights Agreement
(each such event referred to in clauses (i) through (iv) above, a
"Registration Default"), then the Company will pay Liquidated Damages to each
holder of Transfer Restricted Securities with respect to the first 90-day
period immediately following the occurrence of the first Registration Default
in an amount equal to $.05 per week per $1,000 principal amount of Notes held
by such holder. The amount of Liquidated Damages will increase by an
additional $.05 per week per $1,000 principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $.20 per week per $1,000 principal amount of Transfer Restricted
Securities. All accrued Liquidated Damages with respect to Transfer Restricted
Securities will be paid by the Company on each Damages Payment Date (as
defined in the Registration Rights Agreement) to the Global Note holder by
wire transfer of immediately available funds or by federal funds check and to
holders of Certificated Securities by wire transfer to the accounts
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specified by them or by mailing checks to their registered addresses if no
such accounts have been specified. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will cease.
Holders of Old Notes will be required to make certain customary
representations to the Company (as described in the Registration Rights
Agreement) in order to participate in the Exchange Offer and will be required
to deliver information to be used in connection with the Shelf Registration
Statement and to provide comments on the Shelf Registration Statement within
the time periods set forth in the Registration Rights Agreement in order to
have their Notes included in the Shelf Registration Statement and benefit from
the provisions regarding Liquidated Damages set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Affiliate" of any specified Person means an "affiliate" of such Person, as
such term is defined for purposes of Rule 144 under the Securities Act.
"Asset Sale" means (a) the sale, lease, conveyance or other disposition (a
"disposition") of any assets or rights (including, without limitation, by way
of a sale and leaseback), excluding dispositions in the ordinary course of
business (provided that the disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole will be governed
by the provisions of the Indenture described above under the caption
"--Repurchase at the Option of Holders--Change of Control" and the provisions
described above under the caption "--Certain Covenants--Merger, Consolidation,
or Sale of Assets" and not by the provisions of the Asset Sales covenant), (b)
the issue or sale by the Company or any of its Restricted Subsidiaries of
Equity Interests of any of the Company's Subsidiaries, and (c) any Event of
Loss, whether, in the case of clause (a), (b) or (c), in a single transaction
or a series of related transactions, provided that such transaction or series
of transactions (i) has a fair market value in excess of $1.0 million (or the
equivalent thereof in any other currency or currency unit) or (ii) results in
the payment of net proceeds (including insurance proceeds from an Event of
Loss) in excess of $3.0 million (or the equivalent thereof in any other
currency or currency unit). Notwithstanding the foregoing, the following
transactions will be deemed not to be Asset Sales: (A) a disposition of
obsolete or excess equipment or other assets; (B) a disposition of assets by
the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned
Restricted Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary; (C) a disposition of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary;
(D) a Restricted Payment that is permitted by the Indenture or a Permitted
Investment; (E) a disposition of assets by the Company or any of its
Restricted Subsidiaries to a Person that is an Affiliate of the Company or
such Restricted Subsidiary and is engaged in the business of providing
helicopter transportation services to the oil and gas industry (or a business
that is reasonably complementary or related thereto as determined in good
faith by the Board of Directors), which Person is an Affiliate solely because
the Company or such Restricted Subsidiary has an Investment in such Person,
provided that such transaction complies with the covenant described under the
caption "--Certain Covenants--Transactions with Affiliates"; (F) any charter
or lease of any equipment or other assets entered into in the ordinary course
of business and with respect to which the Company or any Restricted Subsidiary
thereof is the lessor, except any such charter or lease that provides for the
acquisition of such assets by the lessee during or at the end of the term
thereof for an amount that is less than the fair market value thereof at the
time the right to acquire such assets occurs; (G) any trade or exchange by the
Company or any Restricted Subsidiary of equipment or other assets for
equipment or other assets owned or held by another Person, provided that the
fair market value of the assets traded or exchanged by the Company or such
Restricted Subsidiary (together with any cash or Cash Equivalents) is
reasonably equivalent to the fair market value of the assets (together with
any cash or Cash Equivalents) to be received by the Company or such Restricted
Subsidiary and (H) a disposition (whether by way of merger, sale of assets,
sale of Capital Stock or otherwise) of the Company's production management
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services business. The fair market value of any non-cash proceeds of a
disposition of assets and of any assets referred to in the foregoing clause
(G) of this definition shall be determined in the manner contemplated in the
definition of the term "fair market value," the results of which determination
shall be set forth in an Officers' Certificate delivered to the Trustee.
"Attributable Indebtedness" in respect of a sale-and-leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale-and-lease-back transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended). As used in the preceding sentence, the "net rental
payments" under any lease for any such period shall mean the sum of rental and
other payments required to be paid with respect to such period by the lessee
thereunder, excluding any amounts required to be paid by such lessee on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges. In the case of any lease that is terminable by the lessee
upon payment of penalty, such net rental payment shall also include the amount
of such penalty, but no rent shall be considered as required to be paid under
such lease subsequent to the first date upon which it may be so terminated.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (a) in the case of a corporation, corporate stock, (b)
in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(d) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b) securities issued or
directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (c) certificates of deposit and
Eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any commercial bank organized
under the laws of any country that is a member of the Organization for
Economic Cooperation and Development having capital and surplus in excess of
$500 million (or the equivalent thereof in any other currency or currency
unit), (d) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications
specified in clause (c) above, (e) commercial paper having the highest rating
obtainable from Moody's Investors Service, Inc. or Standard & Poor's Ratings
Services and in each case maturing within 270 days after the date of
acquisition, (f) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (c) above,
provided all such deposits do not exceed $3.0 million (or the equivalent
thereof in any other currency or currency unit) in the aggregate at any one
time, and (g) money market mutual funds substantially all of the assets of
which are of the type described in the foregoing clauses (a) through (e).
"Common Stock" means the Common Stock of the Company, par value $.01 per
share.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus, to the extent
deducted or excluded in calculating Consolidated Net Income for such period,
(a) an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (or any disposition described in clause (H) of
the definition of Asset Sale), (b) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries, (c) Consolidated
Interest Expense of such Person and its Restricted Subsidiaries, and (d)
depreciation and amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior
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period) of such Person and its Restricted Subsidiaries, in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Consolidated Interest Expense of such Person for such period;
provided, however, that the Consolidated Interest Coverage Ratio shall be
calculated giving pro forma effect to each of the following transactions as if
each such transaction had occurred at the beginning of the applicable four-
quarter reference period: (a) any incurrence, assumption, guarantee or
redemption by the Company or any of its Restricted Subsidiaries of any
Indebtedness (other than revolving credit borrowings) subsequent to the
commencement of the period for which the Consolidated Interest Coverage Ratio
is being calculated but prior to the date on which the event for which the
calculation of the Consolidated Interest Coverage Ratio is made (the
"Calculation Date"); (b) any acquisition that has been made by the Company or
any of its Restricted Subsidiaries, or approved and expected to be consummated
within 30 days of the Calculation Date, including, in each case, through a
merger or consolidation, and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date (in which case Consolidated
Cash Flow for such reference period shall be calculated without giving effect
to clause (c) of the proviso set forth in the definition of Consolidated Net
Income); and (c) any other transaction that may be given pro forma effect in
accordance with Article 11 of Regulation S-X as in effect from time to time;
provided further, however, that (i) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded and
(ii) the Consolidated Interest Expense attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Consolidated
Interest Expense will not be obligations of the referent Person or any of its
Restricted Subsidiaries following the Calculation Date.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of (a) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid
or accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations but excluding
amortization of debt issuance costs) and (b) the consolidated interest expense
of such Person and its Restricted Subsidiaries that was capitalized during
such period.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP,
provided that (a) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (b) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary or its
stockholders, (c) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded and (d) the cumulative effect of a change in accounting
principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (a) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (b)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration
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and payment, but only to the extent of any cash received by such Person upon
issuance of such preferred stock, less (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets
of a going concern business made within 12 months after the acquisition of
such business) subsequent to the date of the Indenture in the book value of
any asset owned by such Person or a consolidated Restricted Subsidiary of such
Person, (ii) all investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Restricted Subsidiaries and (iii) all unamortized
debt discount and expense and unamortized deferred charges as of such date, in
each case determined in accordance with GAAP.
"Credit Facilities" means (a) the Restated and Amended Credit Agreement,
dated as of January 31, 1997, by and between the Company and First National
Bank of Lafayette and (b) the Credit Agreement, dated June 30, 1995, among
Bristow Helicopter Group Limited and certain of its English Subsidiaries, the
banks named therein and National Westminster Bank Plc, as Facility Agent and
Security Trustee, in each case as amended, restated, modified, supplemented,
extended, renewed, replaced, refinanced or restructured from time to time,
whether by the same or any other agent or agents, lender or group of lenders,
whether represented by one or more agreements and whether one or more
Subsidiaries are added or removed as borrowers or guarantors thereunder or as
parties thereto.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as a result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is 91 days after the date on which the Notes mature or
are redeemed or retired in full; provided, however, that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof
(or of any security into which it is convertible or for which it is
exchangeable) have the right to require the issuer to repurchase such Capital
Stock (or such security into which it is convertible or for which it is
exchangeable) upon the occurrence of any of the events constituting an Asset
Sale or a Change of Control shall not constitute Disqualified Stock if such
Capital Stock (and all such securities into which it is convertible or for
which it is exchangeable) provides that the issuer thereof will not repurchase
or redeem any such Capital Stock (or any such security into which it is
convertible or for which it is exchangeable) pursuant to such provisions prior
to compliance by the Company with the provisions of the Indenture described
under the caption "Repurchase at the Option of Holders--Change of Control" or
"Repurchase at the Option of Holders--Asset Sales," as the case may be.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Loss" means, with respect to any property or asset of the Company
or any Restricted Subsidiary, (a) any damage to such property or asset that
results in an insurance settlement with respect thereto on the basis of a
total loss or a constructive or compromised total loss or (b) the
confiscation, condemnation or requisition of title to such property or asset
by any government or instrumentality or agency thereof. An Event of Loss shall
be deemed to occur as of the date of the insurance settlement, confiscation,
condemnation or requisition of title, as applicable.
"Existing Indebtedness" means Indebtedness of the Company and its Restricted
Subsidiaries (other than Indebtedness under the Credit Facilities) in
existence on the date of the Indenture (including, in the case of Bristow and
its Subsidiaries, any Indebtedness of Bristow and its Subsidiaries resulting
from the refinancing of Indebtedness of Bristow and its Subsidiaries in
existence on the date hereof that is completed prior to February 10, 1998),
until such amounts are repaid.
The term "fair market value" means, with respect to any asset or Investment,
the fair market value of such asset or Investment at the time of the event
requiring such determination, as determined in good faith by the
46
<PAGE>
Board of Directors of the Company, or, with respect to any asset or Investment
in excess of $5.0 million (other than cash or Cash Equivalents), as determined
by a reputable appraisal firm that is, in the judgment of such Board of
Directors, qualified to perform the task for which such firm has been engaged
and independent with respect to the Company.
"Funded Indebtedness" means any Indebtedness for money borrowed that by its
terms matures at, or is extendible or renewable at the option of the obligor
to, a date more than 12 months after the date of the incurrence of such
Indebtedness.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates and (c) any foreign currency futures contract, option or similar
agreement or arrangement designed to protect such Person against fluctuations
in foreign currency rates, in each case to the extent such obligations are
incurred in the ordinary course of business of such Person.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable,
if and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP. The amount of any
Indebtedness outstanding as of any date shall be (a) the accreted value
thereof, in the case of any Indebtedness that does not require current
payments of interest, and (b) the principal amount thereof, in the case of any
other Indebtedness.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees by the referent Person of, and Liens on
any assets of the referent Person securing, Indebtedness or other obligations
of other Persons), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided, however, that the following shall not
constitute Investments: (i) extensions of trade credit or other advances to
customers on commercially reasonable terms in accordance with normal trade
practices or otherwise in the ordinary course of business, (ii) Hedging
Obligations and (iii) endorsements of negotiable instruments and documents in
the ordinary course of business. If the Company or any Restricted Subsidiary
of the Company sells or otherwise disposes of any Equity Interests of any
direct or indirect Restricted Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of the Company, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Restricted Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the caption "--Certain Covenants--Restricted
Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any
47
<PAGE>
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction other than a precautionary financing statement respecting
a lease not intended as a security agreement).
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (a) any gain (but
not loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (i) any Asset Sale (including, without
limitation, dispositions pursuant to sale-and-leaseback transactions) or (ii)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any
of its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain
(but not loss), together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of
any non-cash consideration received in any Asset Sale), net of (without
duplication) (a) the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees, sales
commissions, recording fees, title transfer fees, title insurance premiums,
appraiser fees and costs incurred in connection with preparing such asset for
sale) and any relocation expenses incurred as a result thereof, (b) taxes paid
or estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), (c)
amounts required to be applied to the repayment of Indebtedness (other than
under the Credit Facilities) secured by a Lien on the asset or assets that
were the subject of such Asset Sale and (d) any reserve established in
accordance with GAAP or any amount placed in escrow, in either case for
adjustment in respect of the sale price of such asset or assets, until such
time as such reserve is reversed or such escrow arrangement is terminated, in
which case Net Proceeds shall include only the amount of the reserve so
reversed or the amount returned to the Company or its Restricted Subsidiaries
from such escrow arrangement, as the case may be.
"Non-Recourse Debt" means Indebtedness (a) as to which neither the Company
nor any of its Restricted Subsidiaries (i) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness) or is otherwise directly or indirectly liable (as a guarantor or
otherwise) or (ii) constitutes the lender, (b) no default with respect to
which (including any rights the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) the holders of Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity and
(c) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.
"Pari Passu Indebtedness" means, with respect to any Net Proceeds from Asset
Sales, Indebtedness of the Company and its Restricted Subsidiaries the terms
of which require the Company or such Restricted Subsidiary to apply such Net
Proceeds to offer to repurchase such Indebtedness.
"Permitted Bristow Indebtedness" means (a) any Indebtedness incurred
pursuant to clauses (a) through (f) of the second paragraph of the covenant
entitled "--Incurrence of Indebtedness and Issuance of Preferred Stock" and
(b) any additional Indebtedness in an aggregate principal amount not in excess
of $10.0 million at any time outstanding.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company, (b) any Investment in Cash
Equivalents, (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person if as a result of such Investment (i) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys all or substantially all of its assets to, or is liquidated into, the
Company or a Wholly Owned Restricted Subsidiary of the Company, (d) any
Investment made as a result of the receipt of non-cash consideration from (i)
an Asset Sale that was made pursuant to and in compliance with the
48
<PAGE>
covenant described above under the caption "--Repurchase at the Option of
Holders--Asset Sales" or (ii) a disposition of assets that does not constitute
an Asset Sale, and (e) Investments in a Person engaged principally in the
business of providing helicopter transportation services to the oil and gas
industry or businesses reasonably complementary or related thereto, provided
that the aggregate amount of such Investments pursuant to this clause (e) in
Persons that are not Guarantors shall not exceed $20.0 million at any one
time.
"Permitted Liens" means (a) Liens securing Indebtedness incurred pursuant to
clause (a) of the second paragraph of the covenant entitled "--Incurrence of
Indebtedness and Issuance of Preferred Stock," (b) Liens in favor of the
Company and its Restricted Subsidiaries, (c) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Company or any Restricted Subsidiary of the Company, provided that such Liens
were in existence prior to its contemplation of such merger or consolidation
and do not extend to any property other than those of the Person merged into
or consolidated with the Company or any of its Restricted Subsidiaries, (d)
Liens on property existing at the time of acquisition thereof by the Company
or any Restricted Subsidiary of the Company, provided that such Liens were in
existence prior to its contemplation of such acquisition and do not extend to
any other property, (e) Liens to secure the performance of statutory
obligations, surety or appeal bonds, bid or performance bonds, insurance
obligations or other obligations of a like nature incurred in the ordinary
course of business, (f) Liens securing Hedging Obligations, (g) Liens existing
on the date of the Indenture, (h) Liens securing Non-Recourse Debt, (i) any
interest or title of a lessor under a Capital Lease Obligation or an operating
lease, (j) Liens arising by reason of deposits necessary to obtain standby
letters of credit in the ordinary course of business, (k) Liens on real or
personal property or assets of the Company or a Restricted Subsidiary thereof
to secure Indebtedness incurred for the purpose of (i) financing all or any
part of the purchase price of such property or assets incurred prior to, at
the time of, or within 120 days after, the acquisition of such property or
assets or (ii) financing all or any part of the cost of construction of any
such property or assets, provided that the amount of any such financing shall
not exceed the amount expended in the acquisition of, or the construction of,
such property or assets and such Liens shall not extend to any other property
or assets of the Company or a Restricted Subsidiary (other than any associated
accounts, contracts and insurance proceeds) and (l) Liens securing Permitted
Refinancing Indebtedness with respect to any Indebtedness referred to in
clauses (c), (d), (g) and (k) above.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted
Subsidiaries; provided, however, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing Indebtedness does not
exceed the principal amount of (or accreted value, if applicable), plus
premium, if any, and accrued interest on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith), (b) such Permitted
Refinancing Indebtedness has a final maturity date no earlier than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded, (c) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness is subordinated in right of payment to the Notes on
terms at least as favorable, taken as a whole, to the holders of Notes as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded and (d) such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
that is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; provided, however, that a Restricted
Subsidiary that is also a Guarantor may guarantee Permitted Refinancing
Indebtedness incurred by the Company, whether or not such Restricted
Subsidiary was an obligor or guarantor of the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; provided further,
however, that if such Permitted Refinancing Indebtedness is subordinated to
the Notes, such guarantee shall be subordinated to such Restricted
Subsidiary's Subsidiary Guarantee to at least the same extent.
"Productive Assets" means aircraft or other assets (other than assets that
would be classified as current assets in accordance with GAAP) of the kind
used or usable by the Company or its Restricted Subsidiaries in the
49
<PAGE>
business of providing helicopter transportation services to the oil and gas
industry (or any business that is reasonably complementary or related thereto
as determined in good faith by the Board of Directors).
"Qualified Equity Offering" means (a) any sale of Equity Interests (other
than Disqualified Stock) of the Company pursuant to an underwritten offering
registered under the Securities Act or (b) any sale of Equity Interests (other
than Disqualified Stock) of the Company so long as, at the time of
consummation of such sale, the Company has a class of common equity securities
registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of such Person that
is not an Unrestricted Subsidiary.
"Significant Subsidiary" means any Restricted Subsidiary of the Company
incorporated or organized in any state of the United States that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of the Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof), (b) any partnership (i) the sole general
partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (ii) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof) and (c) any other Person whose results for financial reporting
purposes are consolidated with those of such Person in accordance with GAAP.
"Unrestricted Subsidiary" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary at the time of such
designation (a) has no Indebtedness other than Non-Recourse Debt, (b) is not
party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless such agreement,
contract, arrangement or understanding does not violate the terms of the
Indenture described under the caption "--Certain Covenants--Transactions with
Affiliates," and (c) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation (i)
to subscribe for additional Equity Interests or (ii) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results, in each case, except to the extent
otherwise permitted by the Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by the covenant described above under
the caption "--Certain Covenants--Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock," the Company
shall be in default of such covenant). The Board of Directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary,
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a
50
<PAGE>
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (A)
such Indebtedness is permitted under the covenant described under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on
a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period, and (B) no Default or Event of Default would be
in existence following such designation.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person to the extent (a) all of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned directly or indirectly by such Person or
(b) such Restricted Subsidiary is organized in a foreign jurisdiction and is
required by the applicable laws and regulations of such foreign jurisdiction
to be partially owned by the government of such foreign jurisdiction or
individual or corporate citizens of such foreign jurisdiction or another
foreign jurisdiction in order for such Restricted Subsidiary to transact
business in such foreign jurisdiction, provided that such Person, directly or
indirectly, owns the remaining Capital Stock or ownership interests in such
Restricted Subsidiary and, by contract or otherwise, derives the economic
benefits of ownership of such Restricted Subsidiary to substantially the same
extent as if such Restricted Subsidiary were a wholly owned Restricted
Subsidiary.
LEGAL MATTERS
The validity of the Notes will be passed upon for the Company by Fulbright &
Jaworski L.L.P., Houston, Texas. Howard Wolf, a partner in the firm of
Fulbright & Jaworski L.L.P. and a director of the Company, beneficially owns
18,990 shares of the Company's Common Stock.
EXPERTS
The audited Consolidated Financial Statements of Offshore Logistics, Inc. as
of March 31, 1997 and June 30, 1996, and for the nine month period ended March
31, 1997 and each of the two years ended June 30, 1996 and 1995 included in
this Prospectus, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included or incorporated by reference herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
The audited Consolidated Financial Statements of Bristow as of December 31,
1995 and 1994, and for each of the three years in the period ended December
31, 1995 incorporated by reference in this Prospectus, have been audited by
KPMG, chartered accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
51
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Consolidated Financial Statements:
Offshore Logistics, Inc. and Subsidiaries
Report of Independent Public Accountants.............................. F-2
Consolidated Balance Sheets as of March 31, 1997 and June 30, 1996.... F-3
Consolidated Statements of Income for the nine months ended March 31,
1997 and for the 12 months ended June 30, 1996 and 1995.............. F-4
Consolidated Statements of Stockholders' Investment for the nine
months ended March 31, 1997 and for the 12 months ended June 30, 1996
and 1995............................................................. F-5
Consolidated Statements of Cash Flows for the nine months ended March
31, 1997 and for the 12 months ended June 30, 1996 and 1995.......... F-6
Notes to Consolidated Financial Statements............................ F-7
Consolidated Financial Statements (Unaudited):
Offshore Logistics, Inc. and Subsidiaries
Consolidated Statement of Income for the nine months ended December
31, 1997 and 1996.................................................... F-33
Consolidated Balance Sheet as of December 31, 1997 and March 31, 1997. F-34
Consolidated Statement of Cash Flows for the nine months ended
December 31, 1997 and 1996........................................... F-35
Notes to Consolidated Financial Statements............................ F-36
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of Offshore Logistics, Inc.:
We have audited the accompanying consolidated balance sheets of Offshore
Logistics, Inc. (a Delaware corporation) and subsidiaries as of March 31, 1997
and June 30, 1996, and the related consolidated statements of income,
stockholders' investment, and cash flows for the nine month period ended March
31, 1997 and each of the two years ended June 30, 1996 and 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Offshore Logistics, Inc.
and subsidiaries as of March 31, 1997 and June 30, 1996, and the results of
their operations and their cash flows for the nine month period ended March
31, 1997 and each of the two years in the period ended June 30, 1996 in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
May 23, 1997
(Except with respect to the matters
discussed in Note N as to which the
date is January 27, 1998)
F-2
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
ASSETS 1997 1996
------ --------- --------
(THOUSANDS OF
DOLLARS)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................ $ 29,829 $ 56,939
Investment in marketable securities...................... -- 19,967
Accounts receivable...................................... 88,268 22,210
Inventories.............................................. 70,827 22,817
Net assets of discontinued operations.................... 6,686 7,221
Prepaid expenses......................................... 887 484
-------- --------
Total current assets................................... 196,497 129,638
Investments in unconsolidated entities..................... 9,250 8,792
Property and equipment--at cost
Land and buildings....................................... 13,175 2,977
Aircraft and equipment................................... 497,672 132,466
-------- --------
510,847 135,443
Less Accumulated depreciation and amortization........... (74,465) (63,702)
-------- --------
436,382 71,741
Other assets, primarily goodwill........................... 32,084 20,570
-------- --------
$674,213 $230,741
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable......................................... $ 31,166 $ 1,404
Accrued liabilities...................................... 38,592 6,841
Deferred taxes........................................... 17,968 --
Current maturities of long-term debt..................... 51,240 --
-------- --------
Total current liabilities.............................. 138,966 8,245
Long-term debt, less current maturities.................... 199,631 --
Deferred credits........................................... 622 2,487
Deferred taxes............................................. 91,445 19,271
Minority interest.......................................... 8,643 1,055
Commitments and contingencies.............................. -- --
Stockholders' investment
Common stock, $.01 par value, authorized 35,000,000
shares; outstanding 21,081,133 in 1997 and 19,498,398 in
1996 (exclusive of 517,550 treasury shares)............. 211 195
Additional paid in capital............................... 115,346 95,934
Retained earnings........................................ 120,786 103,554
Cumulative translation adjustment........................ (1,437) --
-------- --------
234,906 199,683
-------- --------
$674,213 $230,741
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
NINE TWELVE TWELVE
MONTHS MONTHS MONTHS
MARCH JUNE 30, JUNE 30,
31, 1997 1996 1995
-------- -------- --------
(THOUSANDS OF DOLLARS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Gross revenue:
Operating revenue.............................. $167,128 $117,289 $118,336
Gain (loss) on disposal of equipment........... 1,222 (446) 586
-------- -------- --------
168,350 116,843 118,922
-------- -------- --------
Operating expenses:
Direct cost.................................... 119,106 85,693 80,708
Depreciation and amortization.................. 12,624 8,549 9,200
General and administrative..................... 11,406 9,235 8,745
-------- -------- --------
143,136 103,477 98,653
-------- -------- --------
Operating income................................. 25,214 13,366 20,269
Earnings from unconsolidated entities............ 2,602 4,056 4,050
Interest income.................................. 3,300 4,025 2,947
Interest expense................................. 5,528 300 569
-------- -------- --------
Income from continuing operations before provi-
sion for income taxes........................... 25,588 21,147 26,697
Provision for income taxes....................... 7,675 6,123 7,735
Minority interest................................ (288) -- --
-------- -------- --------
Income from continuing operations................ 17,625 15,024 18,962
Discontinued operations:
Income (Loss) from CPS operations.............. (393) 252 (512)
-------- -------- --------
Net income....................................... $ 17,232 $ 15,276 $ 18,450
======== ======== ========
Income (Loss) per common share:
Continuing operations.......................... $ 0.86 $ 0.76 $ 0.98
Discontinued operations........................ (0.02) 0.01 (0.02)
-------- -------- --------
Net income per common share and common equivalent
share........................................... $ 0.84 $ 0.77 $ 0.96
======== ======== ========
Dividends per common share....................... $ -- $ -- $ --
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
CUMULATIVE
FOREIGN
COMMON STOCK ADDITIONAL CURRENCY TOTAL
----------------- PAID IN TRANSLATION RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL ADJUSTMENT EARNINGS INVESTMENT
---------- ------ ---------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE-June 30, 1994... 17,602,379 $176 $ 71,563 $ -- $ 69,828 $141,567
Net income............ -- -- -- -- 18,450 18,450
Stock options......... 83,031 1 414 -- -- 415
Warrants exercised.... 200,000 2 1,635 -- -- 1,637
Stock issued for GPM.. 1,498,906 15 21,114 -- -- 21,129
GPM warrants exer-
cised................ 44,466 -- 480 -- -- 480
Restricted stock is-
sued................. 13,332 -- 173 -- -- 173
---------- ---- -------- ------- -------- --------
BALANCE-June 30, 1995... 19,442,114 194 95,379 -- 88,278 183,851
Net income............ -- -- -- -- 15,276 15,276
Stock options......... 24,460 -- 197 -- -- 197
GPM warrants exer-
cised................ 26,553 1 286 -- -- 287
Restricted stock is-
sued................. 5,271 -- 72 -- -- 72
---------- ---- -------- ------- -------- --------
BALANCE-June 30, 1996... 19,498,398 195 95,934 -- 103,554 199,683
Net income............ -- -- -- -- 17,232 17,232
Stock options......... 114,000 1 883 -- -- 884
GPM warrants exer-
cised................ 94,040 1 1,015 -- -- 1,016
Restricted stock is-
sued................. 306 -- 4 -- -- 4
Stock issued for
Bristow investment... 1,374,389 14 17,510 -- -- 17,524
Translation adjust-
ments................ -- -- -- (1,437) -- (1,437)
---------- ---- -------- ------- -------- --------
BALANCE-March 31, 1997.. 21,081,133 $211 $115,346 $(1,437) $120,786 $234,906
========== ==== ======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED JUNE
ENDED 30,
MARCH 31, -----------------
1997 1996 1995
----------- -------- -------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................... $ 17,232 $ 15,276 $18,450
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................ 13,196 9,230 9,670
Increase in deferred taxes................... 1,059 1,241 1,121
(Gain) Loss on asset dispositions............ (1,212) 537 (586)
Equity in earnings from unconsolidated enti-
ties over dividends received................ 145 -- (41)
Minority interest in earnings................ 67 (36) (415)
Change in assets and liabilities net of effects
from investment in Bristow, GPM, and CPS:
(Increase) Decrease in accounts receivable... (16,736) 12 897
Increase in inventories...................... (4,168) (558) (1,145)
(Increase) Decrease in prepaid expenses and
other....................................... (2,381) (63) 227
Increase in accounts payable................. 5,801 225 1,288
Increase (Decrease) in accrued liabilities... 4,833 (3,055) 1,309
Decrease in deferred credits................. (1,865) (13) --
--------- -------- -------
Net cash provided by operating activities...... 15,971 22,796 30,775
--------- -------- -------
Cash flows from investing activities:
Capital expenditures......................... (10,106) (12,535) (3,208)
Proceeds from asset dispositions............. 6,026 185 3,046
Investment in marketable securities.......... -- (11,952) --
Proceeds from sale or maturity of marketable
securities.................................. 20,001 11,988 --
Bristow investment........................... (155,451) -- --
Acquisitions, net of cash received........... (1,675) -- (8,234)
--------- -------- -------
Net cash used in investing activities.......... (141,205) (12,314) (8,396)
--------- -------- -------
Cash flows from financing activities:
Proceeds from borrowings..................... 96,636 -- --
Repayment of debt............................ (434) (2,000) (4,235)
Issuance of common stock..................... 1,899 556 2,532
--------- -------- -------
Net cash provided by (used in) financing activ-
ities......................................... 98,101 (1,444) (1,703)
--------- -------- -------
Effect of exchange rate changes in cash........ 23 -- --
Net increase (decrease) in cash and cash equiv-
alents........................................ (27,110) 9,038 20,676
Cash and cash equivalents at beginning of peri-
od............................................ 56,939 47,901 27,225
--------- -------- -------
Cash and cash equivalents at end of period..... $ 29,829 $ 56,939 $47,901
========= ======== =======
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A--SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation--The consolidated financial statements include the
accounts of Offshore Logistics, Inc., a Delaware corporation ("OLOG") and its
majority owned entities and non-majority owned entities including Bristow
Aviation Holdings Limited ("Bristow"), collectively referred to as "the
Company", after elimination of all significant intercompany accounts and
transactions. Investments in 50% or less owned affiliates over which the
Company has the ability to exercise significant influence are accounted for
using the equity method. Investments in which the Company does not exercise
significant influence are accounted for under the cost method.
Nature of Operations--The Company's most significant area of operation is a
major supplier of helicopter transportation services to the worldwide offshore
oil and gas industry. The Company also provides production personnel and
medical support services to the worldwide oil and gas industry.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents--The Company's cash equivalents includes funds
invested in highly liquid debt instruments with original maturities of 90 days
or less.
Accounts Receivable--Trade and other receivables are stated at net
realizable value and the allowance for uncollectible accounts was $1,449,000
and $1,382,000 at March 31, 1997 and June 30, 1996, respectively. The Company
grants short-term credit to its customers, primarily major and independent oil
and gas companies.
Inventories--Inventories are stated at the lower of average cost or market
and consist primarily of spare parts. The valuation reserve related to
obsolete and excess inventory was $4,074,000 and $4,141,000 at March 31, 1997
and June 30, 1996. There were no related charges to operations in 1997, 1996,
or 1995.
Other Assets--In 1997, $22,283,000 of goodwill, net of accumulated
amortization of $2,890,000, was included in other assets. Goodwill is
amortized using the straight-line method over a period of 20 years. Goodwill
is recognized for the excess of the purchase price over the value of the
identifiable net assets. See Note E. Realization of goodwill is periodically
assessed by management based on the expected future profitability and
undiscounted future cash flows of acquired companies and their contribution to
the overall operations of the Company.
On July 1, 1996, the Company adopted the provisions of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of." The adoption had no material effect on the Company's
results of operations or financial position.
Depreciation and Amortization--Depreciation and amortization are provided on
the straight-line method over the estimated useful lives of the assets.
Estimated residual value used in calculating depreciation of aircraft is
primarily 30% of cost.
Maintenance and repairs are expensed as incurred; betterments and
improvements are capitalized. The costs and related reserves of assets sold or
otherwise disposed of are removed from the accounts and resultant gains or
losses included in income.
F-7
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Income Taxes--Income taxes are accounted for in accordance with the
provisions of the SFAS No. 109, "Accounting for Income Taxes." Under this
statement, deferred income taxes are provided for by the asset and liability
method.
Earnings per Common Share--Earnings per common share is based on the
weighted average number of shares of common stock and common stock equivalents
outstanding during the years (20,476,825 in 1997; 19,767,039 in 1996; and
19,313,276 in 1995) computed on the treasury stock method.
The Company adopted a stockholder rights plan on February 9, 1996, designed
to assure that the Company's stockholders receive fair and equal treatment in
the event of any proposed takeover of the Company and to guard against partial
tender offers, squeeze-outs, open market accumulations, and other abusive
tactics to gain control without paying all stockholders a fair price. The
rights plan was not adopted in response to any specific takeover proposal.
Under the rights plan, the Company declared a dividend of one right ("Right")
on each share of the Company's common stock. Each Right will entitle the
holder to purchase one one-hundredth of a share of a new Series A Junior
Participating Preferred Stock, par value $1.00 per share, at an exercise price
of $50.00. Each Right will entitle its holder to purchase a number of common
shares of the Company having a market value of twice the exercise price. The
Rights are not currently exercisable and will become exercisable only in the
event a person or group acquires beneficial ownership of 10 percent or more of
the Company's common stock. The dividend distribution was made on February 29,
1996 to stockholders of record on that date. The Rights will expire on
February 26, 2006.
Foreign Currency Translation--Bristow maintains their accounting records in
their local currency (British Sterling). The currencies are converted to
United States Dollars with the effect of the foreign currency translation
reflected as a component of shareholders' investment in accordance with SFAS
No. 52, "Foreign Currency Translation." Foreign currency transaction gains or
losses are credited or charged to income; and such amounts are insignificant
for the periods presented.
Derivative Financial Instruments--The Company enters into forward exchange
contracts from time to time to hedge known transactional exposures denominated
in currencies other than the functional currency of the business. Foreign
currency positions mature at the anticipated currency requirement date and
rarely exceed three months. The purpose of the Company's foreign currency
hedging activities is to protect the Company from the risk that foreign
currency outflows resulting from payments for services and parts to foreign
suppliers will be adversely affected by changes in exchange rates.
Stock Compensation--On July 1, 1996, the Company elected to continue to use
the intrinsic value method of accounting for stock-based compensation
prescribed by Accounting Principles Board ("APB") Opinion No. 25 and,
accordingly, adopted the disclosure provisions of SFAS No. 123, "Accounting
for Stock-Based Compensation."
Fiscal-Year Change--On May 1, 1997, the Board of Directors approved a change
in the Company's fiscal year end from June 30 to March 31, effective for
fiscal year ended March 31, 1997. A nine month fiscal transition period from
July 1, 1996 through March 31, 1997 will precede the start of the new fiscal
year cycle. Other fiscal years presented and referred to in these consolidated
financial statements and notes thereto are on a June 30 fiscal year basis
unless otherwise indicated.
Effect of Recent Accounting Changes--In February 1997, the FASB issued SFAS
No. 128, "Earnings per Share" which establishes standards for computing and
presenting earnings per share ("EPS"). Under SFAS No. 128, primary EPS is
replaced with basic EPS. Basic EPS is computed by dividing income available to
common shareholders by the weighted average shares outstanding; no dilution
for any potentially convertible shares is included in the calculation. Fully
diluted EPS, now called diluted EPS, is still required; however, when applying
F-8
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
the treasury stock method, the average stock price is used rather than the
greater of the average or closing stock price for the period. The Company
expects that the basic EPS will be slightly higher than primary earnings per
share and that diluted EPS will not differ materially from primary earnings
per share. SFAS No. 128 is effective for financial statements issued for
periods ending after December 15, 1997.
In March 1997, the FASB issued SFAS No. 129, "Disclosure of Information
about Capital Structure." SFAS 129 is effective for the Company's fiscal year
ending March 31, 1998. Management believes that this pronouncement will not
have a material effect on the Company's financial statements taken as a whole.
B--LONG-TERM DEBT
Long-term debt at March 31, 1997 consisted of (thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31,
1997
---------
<S> <C>
6% Convertible Subordinated Notes due 2003............................ $ 98,000
Term Loan with a syndicate of United Kingdom banks.................... 40,983
Series A Guaranteed Deep Discount Loan Note 1997...................... 31,568
Series B Guaranteed Deep Discount Loan Note 1998...................... 18,413
Unsecured Subordinated Loan Stock..................................... 34,647
Revolving Credit Facility............................................. 8,197
Capital Lease Obligations............................................. 13,836
Management Fee Debt (see Note C)...................................... 4,910
Other................................................................. 317
--------
Total debt.......................................................... 250,871
Less current maturities............................................. 51,240
--------
Total long-term debt................................................ $199,631
========
</TABLE>
On December 17, 1996, the Company issued $98 million of 6% Convertible
Subordinated Notes ("6% Notes") due 2003. The 6% Notes are convertible at any
time into the Company's Common Stock at a conversion price of $22.86 per share
(equivalent to a conversion rate of approximately 43.74 shares per $1,000
principal amount of 6% Notes). The 6% Notes are redeemable at the option of
the Company beginning December 1999. The Company issued $7.5 million of the 6%
Notes to Caledonia (See Note C) in conjunction with the investment in Bristow.
Proceeds of $88.4 million, after debt issuance costs of $2.1 million, were
used to finance the investment in Bristow.
Bristow has a term loan with a syndicate of United Kingdom banks that is
repayable in semi-annual installments varying from $2.2 to $9.8 million
((Pounds)1.3 to (Pounds)6.0 million) through December 1, 2001, and can be
prepaid by Bristow in minimum increments of (Pounds)0.5 million upon 30 days
notice with no prepayment penalty. The term loan bears interest at 2.0% above
the three or six month London Interbank Offering Rate ("LIBOR"), limited to a
maximum rate of 10.8%. The average interest rate for the term loan during the
period from investment through March 31, 1997 was 8.8%. The term loan is
guaranteed by all United Kingdom subsidiaries of Bristow and is secured by a
negative pledge on all Bristow assets. The balance at March 31, 1997 was $41.0
million ((Pounds)25.0 million).
Bristow's Series A Guaranteed Deep Discount Loan Note 1997 ("A Note") yields
interest at 8.5% interest resulting in a face value at maturity of $33.9
million ((Pounds)20.7 million). There are no interest or principal payments
due on this debt until its maturity on November 7, 1997. This A Note is
guaranteed by Caledonia. (See Note C).
F-9
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Bristow's Series B Deep Discount Loan Note 1998 ("B Note") yields interest
at 8.5% interest resulting in a face value at maturity of $22.2 million
((Pounds)13.6 million). There are no interest or principal payments due on
this debt until its maturity on November 7, 1998.
Bristow's Subordinated Unsecured Loan Stock ("SULS") yields interest at 8.5%
and matures at various dates through November 7, 2001. Interest is payable
semi-annually. The SULS are held by Caledonia. OLOG and Caledonia have agreed
that OLOG, Bristow, or a designated affiliate can repurchase the SULS held by
Caledonia after the repayment of the A Note due on November 7, 1997.
The A Note, B Note, and SULS have contractual rates of 12.89%, 12.36%, and
18.8%, respectively. The Company, in applying the purchase method of
accounting, valued the yield on this debt at 8.5%.
Obligations under capital leases bear interest at various rates and require
quarterly payments. The leases are secured by the aircraft and the guarantee
of Bristow.
Bristow has a revolving credit facility, with the same syndicate of United
Kingdom banks, as with the term loan, which matures June 30, 1999, and is
available for working capital requirements and general corporate purposes.
Availability under the revolving credit facility is subject to certain
borrowing base limitations based on eligible United Kingdom accounts
receivable and inventory. All advances under the revolving credit facility
bear interest at 2.0% above one, three, or six month LIBOR rates. The
revolving credit facility is guaranteed by all United Kingdom subsidiaries of
Bristow and is secured by a negative pledge of all assets. The availability
under the revolving credit facility is $24.5 million ((Pounds)15 million) and
reduces to $16.4 million ((Pounds)10 million) on July 31, 1997. Bristow had
$8.2 million ((Pounds)5.0 million) drawn under this revolving credit facility
as of March 31, 1997.
As of March 31, 1997, the Company had a $20 million unsecured line of credit
with a U.S. bank that expires on January 31, 1998. There were no borrowings
under this line as of March 31, 1997. The rate of interest payable under the
line of credit is, at the Company's option, prime rate or LIBOR rate plus
1.25%. The agreement requires the Company to pay a quarterly commitment fee at
an annual rate of .025% on the average unused portion of the line.
Aggregate annual maturities for all long-term debt, including the
capitalized lease, for the next five years are as follows: 1998--$51,240,000;
1999 --$43,965,000; 2000--$17,278,000; 2001--$18,939,000; and 2002--
$15,322,000.
In May 1997, the Company acquired five aircraft (including four Super Pumas
which had previously been leased by Bristow under short-term operating leases)
for $32.3 million. The Company used existing cash and incurred an additional
$20.0 million of 7.9% fixed rate financing, that amortizes over five years, to
complete this transaction.
Interest paid during the year was $3,620,000; $300,000; and $569,000 for
1997, 1996, and 1995, respectively.
In the Company's opinion, based on the borrowing rates currently available
to the Company and Bristow for loans with similar terms and maturities, total
debt at March 31, 1997 approximates the fair value of the debt.
C--INVESTMENT IN BRISTOW
On December 19, 1996, OLOG acquired 49% of the common stock and a
significant amount of Bristow subordinated debt as detailed below. Bristow is
incorporated in England and holds all of the outstanding shares
F-10
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
in Bristow Helicopter Group Limited ("BHGL"). Bristow provides helicopter
services to the North Sea oil and gas industry. Services consist of short and
long range crew change flights, offshore-based and inter-platform shuttle
operations, and search and rescue missions. Bristow also operates aircraft in
Australia, Brunei, Cambodia, China, Nigeria, South America, and Vietnam among
others.
Bristow was organized with three different classes of ordinary shares
(common stock) having disproportionate voting rights. The Company, Caledonia
Investments plc and its subsidiary, Caledonia Industrial & Services Limited
(collectively, "Caledonia"), and a Norweign investor (the "E.U. Investor"),
own 49%, 49%, and 2%, respectively, of Bristow's total outstanding ordinary
shares.
The Company paid (Pounds)80.2 million (approximately $132 million) in cash
(funded from existing cash balances and the proceeds of the 6% Notes), issued
$7.5 million of the 6% Notes to Caledonia and issued 1,374,389 shares of
common stock on December 19, 1996. In addition, the Company acquired
(Pounds)5.0 million ($8.4 million) principal amount of BHGL's subordinated
debt for cash of approximately (Pounds)5.4 million ($8.9 million) including
accrued interest. Caledonia received 1,300,000 shares of the common stock and
BHGL's management received 74,389 shares.
In addition to its ownership of 49% of Bristow's outstanding ordinary shares
and (Pounds)5.0 million principal amount of Bristow's subordinated debt, the
Company acquired (Pounds)91.0 million (approximately $150 million) principal
amount of subordinated unsecured loan stock (debt) of Bristow bearing interest
at an annual rate of 13.5% and payable semi-annually. Bristow has the right to
defer payment of interest on such debt until January 31, 2002. Any such
deferred interest would also accrue interest at an annual rate of 13.5%.
The Company, Caledonia, the E.U. Investor, and Bristow entered into a
shareholders' agreement respecting, among other things, the composition of the
board of directors of Bristow. On matters coming before Bristow's board,
Caledonia's appointees have a total of five votes and the four other directors
have one vote each. So long as Caledonia has a significant interest in the
shares of Common Stock issued to it pursuant to the transaction or maintains
its voting control of Bristow, Caledonia will have the right to nominate two
persons to the board of directors of the Company and to replace any such
directors so nominated.
Caledonia, the Company, and the E.U. Investor also entered into a Put/Call
Agreement whereunder, upon giving specified prior notice, the Company has the
right to buy all the Bristow shares held by Caledonia and the E.U. Investor,
who, in turn, each has the right to sell such shares to the Company. Under
current United Kingdom law, the Company would be required, in order for
Bristow to retain its operating license, to find a qualified European investor
to own any Bristow shares it has the right to acquire under the Put/Call
Agreement. Any put or call of the Bristow shares will be subject to the
approval of the Civil Aviation Authority ("CAA"). Caledonia will receive
management fees from Bristow that will be payable semi-annually in advance
ranging from (Pounds)500,000 to (Pounds)900,000 annually for the next seven
years.
The investment was accounted for by the purchase method of accounting under
Accounting Principals Board Opinion No. 16, as amended, and accordingly, the
results of operations of Bristow for the period from December 19, 1996 are
included in the accompanying consolidated financial statements. The total
consideration has been allocated to Bristow's assets and liabilities based on
the estimated fair market value as of December 19, 1996. The purchase price
allocation is based on preliminary estimates of fair value and may be revised
at a later date.
The following unaudited pro forma financial information for the Company
gives effect to the Bristow investment as if it had occurred on July 1, 1995.
These pro forma results have been prepared for comparative purposes only and
do not purport to be indicative of the results of operations which actually
would have resulted
F-11
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
had the acquisitions occurred on the date indicated, or which may result in
the future. The pro forma results follow (in thousands, except per share
data):
<TABLE>
<CAPTION>
NINE MONTHS
MARCH 31, TWELVE MONTHS
1997 JUNE 30, 1996
----------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Gross revenue............. $296,094 $357,249
======== ========
Income from continuing
operations............... $ 19,348 $ 19,821
======== ========
Earnings per common share
and common equivalent
share
Income from continuing
operations:
Primary................. $ 0.91 $ 0.94
======== ========
Fully diluted........... $ 0.87 $ 0.93
======== ========
</TABLE>
D--INVESTMENTS IN UNCONSOLIDATED ENTITIES
The Company has two principal unconsolidated entities that are accounted for
on the cost method as the Company is unable to exert significant influence
over the operations.
The Company has a 49% investment in Hemisco Helicopters International, Inc.
("HHII") and related venture companies. The Company's investment in HHII was
$2,637,000 at March 31, 1997 and June 30, 1996. In the following unaudited
table, HHII represents $3,492,000 and $3,755,000 of the assets and $2,230,000
and $2,241,000 of the equity for March 31, 1997 and June 30, 1996,
respectively. HHII also represents $9,806,000; $10,727,000; and $13,685,000 of
revenues and $2,702,000; $1,834,000; and $(305,000) of net income for the nine
month period ended March 31, 1997 and the fiscal years ended June 30, 1996,
and 1995, respectively. During 1997, 1996, and 1995, $1,539,000; $1,556,000;
and $1,550,000, respectively, in dividends were received from HHII.
The Company has a 25% investment in an Egyptian helicopter venture. The
Company's investment in the venture was $5,986,000 at March 31, 1997 and at
June 30, 1996 and 1995. During 1997, 1996, and 1995, $1,827,000; $2,500,000;
and $2,500,000, respectively, in dividends were received from the venture.
During 1997, the venture's Board of Directors approved a cash dividend, of
which the Company's share applicable to fiscal year 1998 is approximately
$2,250,000.
A summary of unaudited financial information of these principal
unconsolidated entities is set forth below (thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Current assets.......................................... $58,162 $48,418
Non-current assets...................................... 26,858 29,521
------- -------
Total assets.......................................... $85,020 $77,939
======= =======
Current liabilities..................................... $10,063 $ 8,769
Non-current liabilities................................. 1,931 3,335
Equity.................................................. 73,026 65,835
------- -------
Total liabilities and equity.......................... $85,020 $77,939
======= =======
</TABLE>
F-12
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
NINE MONTHS JUNE 30,
ENDED MARCH -----------------------
31, 1997 1996 1995
----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Revenues.................................... $41,026 $51,629 $54,180
======= ======= =======
Gross profit................................ $14,122 $20,229 $18,859
======= ======= =======
Net income.................................. $ 9,918 $12,537 $11,135
======= ======= =======
</TABLE>
During 1997, 1996, and 1995, respectively, revenues of $4,673,000;
$5,169,000; and $5,295,000 were recognized for services provided to these
affiliates by the Company.
In 1996, Bristow, with two partners, formed FBS Limited ("FBS") which was
awarded a contract to provide pilot training and maintenance services to
Defense Helicopter Flying School ("DHFS"), a newly established training school
for all branches of the British military, under a fifteen year program valued
at approximately (Pounds)500 million. FBS will purchase and specially modify
47 aircraft and maintain a staff of approximately 600 employees dedicated to
conducting these training activities which began in May 1997. Each of the
partners owns one-third (33%) of FBS. Prior to FBS, Bristow had provided
similar pilot training and maintenance services to the British Army Air Corp.
since 1963. Bristow's partners in FBS had similar experience at providing
training service to other branches of the British military. At March 31, 1997,
Bristow had advanced FBS (Pounds)7.3 million ($11.9 million) for its share of
the acquisition of aircraft. Subsequent to year end, Bristow advanced FBS an
additional (Pounds)3.0 million ($4.9 million) to acquire aircraft for this
contract. FBS is finalizing its long term financing of these aircraft and
expects to repay this advance by August 31, 1997. Bristow and its partners
have given joint and several guarantees related to the performance of this
contract.
E--PRODUCTION MANAGEMENT SERVICES
The Company expanded its operations in July 1992 to include production
management services. During fiscal 1993 and until October 29, 1993, the
Company owned 50% of Seahawk Services Ltd. ("Seahawk"), a company which
provided platform and production management services, offshore medical support
services, and temporary personnel to the oil and gas industry. On October 29,
1993, the Company further expanded its interest in production management
services when the Company exchanged its 50% investment in Seahawk for a 27.5%
interest in Grasso Corporation whose wholly-owned subsidiary, Grasso
Production Management, Inc. ("GPM"), also was engaged in the production
management services business. Revenues of approximately $1,556,000 were
recognized for helicopter services provided to GPM during 1995, prior to
consolidation. The Company's share of net income related to production
management services was not material.
On September 16, 1994, GPM became a wholly-owned subsidiary of the Company
in a merger in which the Company acquired the remaining 72.5% interest in
Grasso Corporation by issuing .49 of a share of the Company's common stock for
each share of Grasso Corporation common stock owned. In addition, holders of
Grasso Corporation Class B Warrants received similar warrants for shares of
the Company's common stock. The warrants expired on December 22, 1996. The
merger was treated as a purchase for accounting purposes which resulted in
goodwill of approximately $22.3 million after stepping up the assets and
liabilities of Grasso Corporation. The goodwill is being amortized over a 20
year period.
F-13
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following summarized unaudited income statement data reflects the impact
the GPM merger would have had on the Company's results of operations for 1995
had the transaction taken place on July 1, 1994:
<TABLE>
<CAPTION>
PRO FORMA RESULTS
FOR THE YEAR
ENDED JUNE 30,
1995
-----------------
(UNAUDITED)
<S> <C>
Gross Revenue................................................. $152,866
========
Income from continuing operations............................. $17,924
========
Earnings per common share and common equivalent share:
Income from continuing operations........................... $0.91
========
</TABLE>
F--DISCONTINUED OPERATIONS
In May 1997, the Company adopted a plan to discontinue its investment in
Cathodic Protection Services Company ("CPS"). CPS manufactures, installs and
maintains cathodic protection systems to arrest corrosion in oil and gas
drilling and production facilities, pipelines, oil and gas well casings,
hydrocarbon processing plants, and other metal structures. As a result of the
Company's adoption of the plan, the consolidated financial statements of the
Company and the related Notes to Consolidated Financial Statements and
supplemental data have been adjusted and restated to reflect the results of
operations and net assets of CPS as a discontinued operation in accordance
with generally accepted accounting principles. Assets and liabilities of CPS
at March 31, 1997 primarily consist of trade accounts receivable, inventory,
fixed assets and current payables, accruals and debt. Revenues of CPS totalled
$24.6 million, $39.5 million, and $25.3 million for 1997, 1996, and 1995,
respectively.
G--UNAUDITED SUPPLEMENTAL DATA FOR THE NINE MONTHS ENDED MARCH 31, 1996
During 1997, the Company changed its fiscal year end from June 30 to March
31. Therefore, the Company's fiscal year end for 1997 is a nine month period.
The following table represents unaudited data for the nine month period ended
March 31, 1996.
<TABLE>
<S> <C>
Operating revenue....................................................... $86,694
=======
Operating income........................................................ $ 9,774
=======
Income taxes............................................................ $ 4,494
=======
Income from continuing operations....................................... $10,991
=======
Net Income.............................................................. $11,226
=======
Earnings per common share............................................... $ 0.57
=======
</TABLE>
H--INVESTMENT IN MARKETABLE SECURITIES
Under the provisions of SFAS No. 115, investments in debt and equity
securities are required to be classified in one of three categories: held-to-
maturity, available-for-sale, or trading. As of March 31, 1997, the Company
had no such investments. There were $12,001,000 sales of investments in U.S.
Treasury investments during the nine month period ended March 31, 1997. The
proceeds approximated the carrying cost of the investments. There were
$3,985,000 sales of investments in U.S. Treasury investments for the year
ended June 30, 1996, and no sales of investments in U.S. Treasury investments
for the year ended June 30, 1995.
F-14
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
I--COMMITMENTS AND CONTINGENCIES
The Company has noncancelable operating leases in connection with the lease
of certain equipment, land, and facilities. Rental expense incurred under
these leases was $1,925,000 in 1997; $1,998,000 in 1996; and $2,195,000 in
1995. As of March 31, 1997, aggregate future payments under noncancelable
operating leases are as follows: 1998--$1,937,000; 1999--$1,858,000; 2000--
$1,798,000; 2001--$1,554,000; and 2002--$1,522,000. These amounts do not
include future payments related to the four aircraft under operating lease at
March 31, 1997 and purchased subsequent to that date.
The Company's employees are not represented by unions. However, in May 1997,
the Office and Professional Employees International Union filed with the
National Mediation Board an application for representation of Offshore
Logistics' pilots. A similar application has also been filed against Air Log's
principal competitor in the United States in what appears to be an effort to
organize the pilots of all major helicopter operators in the Gulf of Mexico.
The Company believes that if the pilots were to elect to be represented by a
union, the Company would be placed at a competitive disadvantage against
existing or future non-unionized competitors in the industry. This could have
a material adverse effect on its revenues from helicopter operations in the
Gulf of Mexico and on its results of operations. At this point, the Company is
unable to predict the probable outcome of any election.
J--INCOME TAXES
The components of deferred tax assets and liabilities are as follows
(thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
--------- --------
<S> <C> <C>
Deferred Tax Assets:
Foreign tax credits...................................... $ 111,650 $ --
Other.................................................... 13,183 2,823
Valuation allowance...................................... (53,783) --
--------- --------
Total deferred tax assets.............................. 71,050 2,823
--------- --------
Deferred Tax Liabilities:
Property and equipment................................... (155,699) (17,518)
Inventories.............................................. (12,197) --
Accrual for repairs and maintenance...................... (5,771) --
Other.................................................... (6,796) (4,576)
--------- --------
Total deferred tax liabilities......................... (180,463) (22,094)
--------- --------
Net deferred tax liabilities............................... $(109,413) $(19,271)
========= ========
</TABLE>
A valuation allowance of $53,783,000 was established as of March 31, 1997
for the deferred tax asset related to foreign tax credits. Companies may use
foreign tax credits to offset the United States income taxes due on income
earned from foreign sources. However, the credit is limited by the total
income on the United States income tax return as well as by the ratio of
foreign source income in each statutory category to total income. Excess
foreign tax credits may be carried back two years and forward five years. As
of March 31, 1997, the Company did not believe it was more likely than not
that it would generate sufficient foreign sourced income within the
appropriate period to utilize all the foreign tax credits.
F-15
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Income before provision for income taxes for the nine months ended March 31,
1997 and the two years ended June 30, 1996 and 1995 was as follows (thousands
of dollars):
<TABLE>
<CAPTION>
NINE MONTHS FOR THE YEAR
ENDED ENDED JUNE 30,
MARCH 31, ---------------
1997 1996 1995
----------- ------- -------
<S> <C> <C> <C>
Domestic............................................ $13,774 $ 9,791 $16,295
Foreign............................................. 11,814 11,356 10,402
------- ------- -------
Total............................................... $25,588 $21,147 $26,697
======= ======= =======
</TABLE>
The provision for income taxes for the nine month period ended March 31,
1997 and the two years ended June 30, 1996 and 1995 consisted of the following
(thousands of dollars):
<TABLE>
<CAPTION>
FOR THE YEAR
NINE MONTHS ENDED JUNE
ENDED 30,
MARCH 31, -------------
1997 1996 1995
----------- ------ ------
<S> <C> <C> <C>
Current............................................... $5,005 $4,882 $6,614
Deferred.............................................. 2,670 1,241 1,121
------ ------ ------
Total................................................. $7,675 $6,123 $7,735
====== ====== ======
</TABLE>
The reconciliation of Federal statutory and effective income tax rates is
shown below:
<TABLE>
<CAPTION>
FOR THE
YEAR
ENDED
NINE MONTHS JUNE 30,
ENDED MARCH -----------
31, 1997 1996 1995
----------- ---- ----
<S> <C> <C> <C>
Statutory rate.......................................... 35% 35% 35%
Utilization of foreign tax credits...................... (3)% (5)% (7)%
Additional taxes on foreign source income............... 5% 2% 3%
Foreign source income not taxable....................... (6)% (7)% (4)%
State taxes provided.................................... 2% 2% 3%
Other, net.............................................. (3)% 2% (1)%
--- --- ---
Effective tax rate...................................... 30% 29% 29%
=== === ===
</TABLE>
The Internal Revenue Service has examined the Company's Federal income tax
returns for all years through 1994. The years have been closed through 1993,
either through settlement or expiration of the statute of limitations. The
Company believes that it has made adequate provision for income taxes that may
become payable with respect to open tax years.
Unremitted foreign earnings reinvested abroad upon which deferred income
taxes have not been provided aggregated approximately $18.8 million at March
31, 1997. Due to the timing and circumstances of repatriation of such
earnings, if any, it is not practicable to determine the unrecognized deferred
tax liability relating to such amounts. Withholding taxes, if any, upon
repatriation would not be significant.
Income taxes paid during 1997, 1996, and 1995 were $8,454,000; $5,656,000;
and $3,843,000, respectively.
K--EMPLOYEE BENEFIT PLANS
Savings and Retirement Plans
The Company currently has two qualified defined contribution plans which
cover substantially all employees other than Bristow employees.
F-16
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Offshore Logistics, Inc. Employee Savings and Retirement Plan ("OLOG
Plan") covers Corporate and Air Log employees. Under the OLOG Plan, except for
those employees working in the state of Alaska, the Company matches each
participant's contributions up to 3% of the employee's compensation. In
addition, if net income exceeds 10% of stockholders' investment at the
beginning of the year, the Company contributes funds to acquire Company stock
up to an additional 3% of the employee's compensation, subject to a scheduled
vesting period. Under the OLOG Plan, for Air Log employees working in the
state of Alaska, the Company matches each participant's contributions up to 4%
of the employee's compensation.
The Grasso Production Management, Inc. Thrift & Profit Sharing Trust covers
eligible GPM employees. The Company matches 25% of each participant's
contributions up to 6% of the employee's compensation.
Bristow has a defined benefit retirement plan which covers all full-time
employees of Bristow. The plan is funded by contributions partly from
employees and partly from Bristow. Members contribute up to 7.5% of
pensionable salary (as defined) and can pay additional voluntary contributions
to provide additional benefits. The benefits are based on the employee's
annualized average of employees' last three years pensionable salaries. Plan
assets are held in separate trustee administered funds which are primarily
invested in United Kingdom and other overseas equities and bonds.
The following table sets forth the plan's funded status and pension costs
recognized by the Company:
Actuarial Present Value of Benefit Obligations (thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31,
1997
---------
<S> <C>
Vested benefit obligation............................................ $(164,750)
Accumulated benefit obligation....................................... $(164,750)
Projected benefit obligation......................................... $(179,995)
Plan assets at fair value............................................ 184,762
---------
Plan assets in excess of projected benefit obligation................ 4,767
Unrecognized net gain................................................ (4,767)
Prior service cost not yet recognized in net periodic pension cost... --
Unrecognized net obligation being recognized over 15 years........... --
---------
Accrued pension asset................................................ $ --
=========
</TABLE>
Net periodic pension cost for the nine months ended March 31, 1997 was
approximately $1,200,000.
Actuarial assumptions used to develop these components were as follows:
Discount rate--8%, expected long-term rate of return on assets--9.5%, and rate
of increase in Pension benefits over United Kingdom statutory benefits--3.5%.
The Company's contributions to the three plans were $2,575,000; $680,000;
and $1,074,000 for the nine month period ended March 31, 1997 and the years
ended June 30, 1996 and 1995, respectively.
Incentive and Stock Option Plans
Under the 1994 Long-Term Management Incentive Plan ("1994 Plan"), a total of
900,000 shares of Common Stock, or cash equivalents of Common Stock, are
available for awards to officers and key employees. Awards granted under the
1994 Plan may be in the form of stock options, stock appreciation rights,
restricted stock, deferred stock, other stock-based awards or any combination
thereof. Options become exercisable at such
F-17
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
time or times as determined at the date of grant, and expire no more than ten
years after the date of grant. Incentive stock option prices are determined by
the Board and cannot be less than fair market value at date of grant. Non-
qualified stock option prices cannot be less than 50% of the fair market value
at date of grant.
The Annual Incentive Compensation Plan ("Annual Plan") provides for an
annual award of cash bonuses to key employees based on pre-established
objective measures of Company performance. Participants are permitted to
receive all or any part of their annual incentive bonus in the form of shares
of Restricted Stock in accordance with the terms of the 1994 Plan. The amount
of bonuses related to this plan were $565,000; $124,000; and $407,000 for the
nine month period ended March 31, 1997 and the years ended June 30, 1996 and
1995, respectively. As of March 31, 1997 there were 18,908 shares of
Restricted Stock outstanding.
The 1991 Non-qualified Stock Option Plan for Non-employee Directors ("1991
Plan") provides for 200,000 shares of Common Stock to be reserved for issuance
pursuant to such plan. As of the date of each annual meeting each non-employee
director, who meets certain attendance criteria, will automatically be granted
an option to purchase 2,000 shares of the Company's Common Stock. The exercise
price of the options granted shall be equal to the fair market value of the
Common Stock on the date of grant and are exercisable not earlier than six
months after the date of grant.
Under the Company's stock option plans there were 1,650,000 shares of Common
Stock reserved for issue at March 31, 1997.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which is effective for the Company's fiscal year beginning July
1, 1995. Under SFAS No. 123, companies can either record expense based on the
fair value of stock-based compensation upon issuance or elect to remain under
the APB 25 method whereby no compensation cost is recognized upon grant if
certain requirements are met. The Company elected to continue to account for
its stock-based compensation under APB 25. However, pro forma disclosures as
if the Company adopted the cost recognition requirements under SFAS No. 123
are presented below.
Had compensation cost been determined based on the fair value at the grant
date consistent with the provisions of SFAS No. 123, the Company's net income
and earnings per common share would have approximated the pro forma amounts
below:
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS
ENDED MARCH ENDED
31, 1997 JUNE 30, 1996
----------- -------------
<S> <C> <C>
Net Income (in thousands):
As reported........................................ $17,232 $15,276
Pro forma.......................................... $16,607 $14,800
Earnings per share:
As reported........................................ $ 0.84 $ 0.77
Pro forma.......................................... $ 0.81 $ 0.75
</TABLE>
The pro forma effect on net earnings for 1997 and 1996 is not representative
of the pro forma effect on net earnings in future years because it does not
take into consideration pro forma compensation expense related to grants prior
to July 1, 1995.
F-18
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
A summary of the Company's stock options as of March 31, 1997 and June 30,
1996 and 1995 and changes during the periods ended on those dates is presented
below:
<TABLE>
<CAPTION>
WEIGHTED-AVERAGE NUMBER OF
EXERCISE PRICE SHARES
---------------- ---------
<S> <C> <C>
Balance at June 30, 1994............................ $ 7.98 721,500
Granted........................................... 11.54 244,391
Exercised......................................... 5.00 (83,031)
Expired or cancelled.............................. 11.31 (19,900)
------ ---------
Balance at June 30, 1995............................ 9.20 862,960
Granted........................................... 12.70 164,000
Exercised......................................... 8.03 (24,460)
Expired or cancelled.............................. 10.97 (14,000)
------ ---------
Balance at June 30, 1996............................ 9.78 988,500
Granted........................................... 15.48 366,500
Exercised......................................... 7.75 (114,000)
Expired or cancelled.............................. 12.94 (10,000)
------ ---------
Balance at March 31, 1997........................... $11.64 1,231,000
====== =========
</TABLE>
As of March 31, 1997, June 30, 1996 and 1995, the number of options
exercisable under the stock option plans was 864,500; 838,500; and 699,960,
respectively; and the weighted average exercise price of those options was
$10.02, $9.25 and $8.32, respectively.
The weighted average fair value at date of grant for options granted during
1997 and 1996 was $5.30 and $4.35 per option, respectively. The fair value of
options granted during the periods presented is estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions:
(a) dividend yield of 0.00%; (b) expected volatility of 40%; (c) risk-free
interest rate of 6.4%; and (d) expected life of 3 years.
The following table summarizes information about stock options outstanding
as of March 31, 1997:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------- ----------------------
WGTD. AVG.
REMAINING WGTD. AVG. WGTD. AVG.
NUMBER CONTR. EXERCISE NUMBER EXERCISE
RANGE OF EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
- ------------------------ ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
$ 6.75--$ 8.25.......... 416,500 4.05 $ 7.16 416,500 $ 7.16
$11.50--$13.00.......... 642,500 7.71 $12.53 438,000 $12.61
$15.44--$19.625......... 172,000 9.57 $19.16 10,000 $15.44
$ 6.75--$19.625......... 6.73 $11.64 $10.02
--------- -------
1,231,000 864,500
========= =======
</TABLE>
L--SEGMENT INFORMATION
The Company operates principally in two business segments: Helicopter
Activities and GPM. Air Log and Bristow are major suppliers of helicopter
transportation services to the worldwide offshore oil and gas industry. GPM
provides production management services, contract personnel, and medical
support services to the domestic and international oil and gas industry. The
information presented has been restated to reflect CPS as discontinued
operations. Identifiable assets include net assets relating to CPS of $6.7
million, $7.2 million, and $6.3 million
F-19
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
as of March 31, 1997 and June 30, 1996 and 1995, respectively. The following
shows industry segment information for the nine months ended March 31, 1997
and the twelve months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
TWELVE MONTHS
NINE MONTHS ------------------
MARCH 31, JUNE 30, JUNE 30,
1997 1996 1995
----------- -------- --------
<S> <C> <C> <C>
Operating Revenues: (1)
Helicopter Activities......................... $143,647 $ 86,080 $ 85,526
GPM........................................... 23,481 31,209 32,810
-------- -------- --------
Total....................................... $167,128 $117,289 $118,336
======== ======== ========
Operating Profit (loss):
Helicopter Activities......................... $ 27,142 $ 17,612 $ 24,079
GPM........................................... 1,182 (183) 223
-------- -------- --------
Total segment operating profit.............. $ 28,324 $ 17,429 $ 24,302
Corporate overhead.............................. (3,110) (4,063) (4,033)
Earnings from unconsolidated entities........... 2,602 4,056 4,050
Interest income, net............................ (2,228) 3,725 2,378
-------- -------- --------
Pretax income................................... $ 25,588 $ 21,147 $ 26,697
======== ======== ========
</TABLE>
- --------
(1) Net of Inter-Segment revenues of $2,246,000; $3,823,000 and $4,428,000 for
March 31, 1997 and June 30, 1996 and 1995, respectively.
<TABLE>
<CAPTION>
CAPITAL EXPENDITURES
---------------------
1997 1996 1995
------ ------- ------
<S> <C> <C> <C>
Helicopter Activities..................................... $9,835 $11,908 $2,609
GPM....................................................... 112 99 198
------ ------- ------
Total................................................... $9,947 $12,007 $2,807
====== ======= ======
</TABLE>
<TABLE>
<CAPTION>
DEPRECIATION AND
AMORTIZATION
---------------------
1997 1996 1995
------- ------ ------
<S> <C> <C> <C>
Helicopter Activities..................................... $11,531 $7,083 $7,357
GPM....................................................... 1,003 1,347 1,727
Corporate................................................. 90 119 116
------- ------ ------
Total................................................... $12,624 $8,549 $9,200
======= ====== ======
</TABLE>
<TABLE>
<CAPTION>
IDENTIFIABLE ASSETS
--------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Helicopter Activities................................ $607,458 $164,560 $152,150
GPM.................................................. 26,279 26,684 30,529
Corporate and other.................................. 40,476 39,497 35,304
-------- -------- --------
Total.............................................. $674,213 $230,741 $217,983
======== ======== ========
</TABLE>
F-20
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Segment information by geographic areas for the nine month period ended
March 31, 1997 and the years ended June 30, 1996 and 1995 is as follows
(thousands of dollars):
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS
ENDED ENDED JUNE 30,
MARCH 31, -----------------
1997 1996 1995
----------- -------- --------
<S> <C> <C> <C>
Operating Revenue:
United States................................... $ 83,875 $102,071 $104,545
United Kingdom/Europe........................... 41,736 -- --
International................................... 41,517 15,218 13,791
-------- -------- --------
$167,128 $117,289 $118,336
======== ======== ========
Operating Profit:
United States................................... $ 16,602 $ 12,655 $ 19,736
United Kingdom/Europe........................... 4,067 -- --
International................................... 7,655 4,774 4,566
-------- -------- --------
$ 28,324 $ 17,429 $ 24,302
======== ======== ========
Identifiable Assets:
United States................................... $163,766 $170,081 $165,510
United Kingdom/Europe........................... 336,693 -- --
International................................... 173,754 60,660 52,473
-------- -------- --------
$674,213 $230,741 $217,983
======== ======== ========
</TABLE>
During 1997, 1996, and 1995, Air Log and Bristow conducted operations in
approximately ten foreign countries as well as in the United States and the
United Kingdom. Due to the nature of the principal assets of the Company, they
are regularly and routinely moved between operating areas (both domestic and
foreign) to meet changes in market and operating conditions. Revenue earned
from any single customer did not exceed 10% of total revenues during 1997,
1996, or 1995. Equipment registered in one country is chartered to other
operating areas from time to time at rates sufficient to cover costs plus a
reasonable return. These revenues ($7,063,000 in 1997; $7,441,000 in 1996; and
$7,118,000 in 1995) have been eliminated in the amounts shown above.
F-21
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
M--QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following quarterly financial data has been restated to reflect CPS as
discontinued operations.
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------
SEPT.
30 DEC. 31 MAR. 31 JUNE 30
------- ------- ------- -------
(THOUSANDS OF DOLLARS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
1997
Gross revenue.............................. $32,872 $41,459 $94,019 N/A
Gross profit............................... 8,690 9,347 18,583 N/A
Income from continuing operations.......... 5,781 5,522 6,322 N/A
Income from discontinued operations........ 74 86 (553) N/A
Net income................................. $ 5,855 $ 5,608 $ 5,769 N/A
Net income (loss) per common share:
Income from continuing operations........ $ 0.30 $ 0.28 $ 0.29 N/A
Income from discontinued operations...... -- -- (0.02) N/A
------- ------- -------
Net income............................. $ 0.30 $ 0.28 $ 0.27 N/A
======= ======= ======= =======
1996
Gross revenue.............................. $28,959 $29,143 $28,592 $30,149
Gross profit............................... 6,001 4,877 5,883 5,840
Income from continuing operations.......... 3,693 3,238 4,060 4,033
Income from discontinued operations........ (34) 218 51 17
Net income................................. $ 3,659 $ 3,456 $ 4,111 $ 4,050
Net income (loss) per common share:
Income from continuing operations........ $ 0.19 $ 0.17 $ 0.21 $ 0.20
Income from discontinued operations...... -- 0.01 -- --
------- ------- ------- -------
Net income............................. $ 0.19 $ 0.18 $ 0.21 $ 0.20
======= ======= ======= =======
1995
Gross revenue.............................. $26,225 $32,561 $30,175 $29,961
Gross profit............................... 7,691 7,414 6,640 7,269
Income from continuing operations.......... 5,018 5,120 4,258 4,566
Income from discontinued operations........ -- 99 (377) (234)
Net income................................. $ 5,018 $ 5,220 $ 3,880 $ 4,332
Net income (loss) per common share:
Income from continuing operations........ $ 0.28 $ 0.26 $ 0.22 $ 0.23
Income from discontinued operations...... -- 0.01 (0.02) (0.01)
------- ------- ------- -------
Net income............................. $ 0.28 $ 0.27 $ 0.20 $ 0.22
======= ======= ======= =======
</TABLE>
F-22
<PAGE>
N--SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
On January 27, 1998, the Company completed the sale of $100 million 7 7/8%
Senior Notes due 2008, which were discounted to yield 7.915%. The net proceeds
to the Company were $97.2 million. In connection with the sale of the Senior
Notes, certain of the Company's subsidiaries (the "Guarantor Subsidiaries")
jointly, severally and unconditionally guaranteed the payment obligations
under the Senior Notes. The following supplemental financial information sets
forth, on an unconsolidated basis, the balance sheet, statement of income and
cash flow information for Offshore Logistics, Inc. ("Parent Company Only"),
for the Guarantor Subsidiaries and for Offshore Logistics, Inc.'s other
subsidiaries (the "Non-Guarantor Subsidiaries").
F-23
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ASSETS ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ -------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents.......... $ 21,459 $ 3,545 $ 4,825 $ -- $ 29,829
Accounts receivable... 1,383 20,036 71,034 (4,185) 88,268
Inventories........... -- 25,258 45,569 -- 70,827
Net assets of
discontinued
operations........... -- -- 6,338 348 6,686
Prepaid expenses...... 334 518 35 -- 887
-------- -------- -------- --------- --------
Total current
assets............. 23,176 49,357 127,801 (3,837) 196,497
Intercompany investment. 276,946 -- -- (276,946) --
Investments in
unconsolidated
entities............... 1,109 229 7,912 -- 9,250
Intercompany notes
receivable............. 36,691 (111) -- (36,580) --
Property and equipment--
at cost:
Land and buildings.... -- 2,983 10,192 -- 13,175
Aircraft and
equipment............ 3,486 122,593 371,593 -- 497,672
-------- -------- -------- --------- --------
3,486 125,576 381,785 -- 510,847
Less: accumulated
depreciation and
amortization........... (2,533) (60,625) (11,307) -- (74,465)
-------- -------- -------- --------- --------
953 64,951 370,478 -- 436,382
Other assets, primarily
goodwill............... 10,537 21,106 350 91 32,084
-------- -------- -------- --------- --------
$349,412 $135,532 $506,541 $(317,272) $674,213
======== ======== ======== ========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C> <C> <C> <C>
Current Liabilities:
Accounts payable...... $ 151 $ 4,051 $ 26,964 $ -- $ 31,166
Accrued liabilities... 6,366 6,700 27,422 (1,896) 38,592
Deferred taxes........ -- -- 17,968 -- 17,968
Current maturities of
long-term debt....... -- -- 51,240 -- 51,240
-------- -------- -------- --------- --------
Total current
liabilities........ 6,517 10,751 123,594 (1,896) 138,966
Long-term debt, less
current maturities... 98,000 -- 101,631 -- 199,631
Intercompany notes
payable.............. -- -- 29,236 (29,236) --
Deferred credits...... -- -- 622 -- 622
Deferred taxes........ -- 19,572 80,162 (8,289) 91,445
Minority interests.... 8,643 -- 833 (833) 8,643
Stockholders'
Investment:
Common Stock.......... 211 1,041 4,033 (5,074) 211
Additional paid-in
capital.............. 115,346 24,269 123,362 (147,631) 115,346
Retained earnings..... 120,786 79,899 43,047 (122,946) 120,786
Cumulative translation
adjustment........... (91) -- 21 (1,367) (1,437)
-------- -------- -------- --------- --------
236,252 105,209 170,463 (277,018) 234,906
-------- -------- -------- --------- --------
$349,412 $135,532 $506,541 $(317,272) $674,213
======== ======== ======== ========= ========
</TABLE>
F-24
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 18 $83,440 $83,670 $ -- $167,128
Intercompany revenue.... 105 7,463 3 7,571 --
Gain (loss) on disposal
of equipment........... 20 1,090 112 -- 1,222
------- ------- ------- ------- --------
143 91,993 83,785 7,571 168,350
OPERATING EXPENSES
Direct cost............. (1) 65,762 53,345 -- 119,106
Intercompany expense.... -- 3 7,568 (7,571) --
Depreciation and
amortization........... 90 5,849 6,685 -- 12,624
General and
administrative......... 3,110 3,839 4,457 -- 11,406
------- ------- ------- ------- --------
3,199 75,453 72,055 (7,571) 143,136
------- ------- ------- ------- --------
OPERATING INCOME........ (3,056) 16,540 11,730 -- 25,214
Earnings from
unconsolidated
entities............... 19,666 -- 2,784 19,848 2,602
Interest income......... 1,990 237 1,478 405 3,300
Interest expense........ 1,734 23 4,176 (405) 5,528
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 16,866 16,754 11,816 19,848 25,588
Allocation of
consolidated income
taxes.................. (1,040) 5,403 3,312 -- 7,675
Minority interest....... (281) -- (7) -- (288)
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 17,625 11,351 8,497 19,848 17,625
Discontinued operations:
Income (Loss) from CPS
operations........... (393) -- (890) (890) (393)
------- ------- ------- ------- --------
NET INCOME.............. $17,232 $11,351 $ 7,607 $18,958 $ 17,232
======= ======= ======= ======= ========
</TABLE>
F-25
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $ 9,120 $ 4,598 $ 1,319 $ 934 $ 15,971
Cash flows from
investing activities:
Capital expenditures.. (30) (7,108) (2,968) -- (10,106)
Proceeds from asset
dispositions......... 20 1,599 4,407 -- 6,026
Bristow investment.... (109,286) -- (46,165) -- (155,451)
Acquisitions, net of
cash received........ -- -- (1,675) -- (1,675)
Proceeds from maturity
of marketable
securities........... 5,000 -- 15,001 -- 20,001
--------- ------- -------- ------ ---------
Net cash used in
investing activities... (104,296) (5,509) (31,400) -- (141,205)
Cash flows from
financing activities:
Proceeds from
borrowings........... 89,094 -- 8,542 (1,000) 96,636
Repayment of debt..... -- -- (434) -- (434)
Issuance of common
stock................ 1,899 -- -- -- 1,899
--------- ------- -------- ------ ---------
Net cash provided by
(used in) financing
activities............. 90,993 -- 8,108 (1,000) 98,101
--------- ------- -------- ------ ---------
Effect of exchange rate
changes in cash........ -- -- 23 -- 23
--------- ------- -------- ------ ---------
Net decrease in cash and
cash equivalents....... (4,183) (911) (21,950) (66) (27,110)
Cash and cash
equivalents at
beginning of period.... 25,642 4,456 26,775 66 56,939
--------- ------- -------- ------ ---------
Cash and cash
equivalents at end of
period................. $ 21,459 $ 3,545 $ 4,825 $ -- $ 29,829
========= ======= ======== ====== =========
</TABLE>
F-26
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ASSETS ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ -------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents.......... $ 25,642 $ 4,456 $26,775 $ 66 $ 56,939
Investments in
marketable
securities........... 4,992 -- 14,975 -- 19,967
Accounts receivable... 909 20,347 3,521 (2,567) 22,210
Inventories........... -- 22,099 718 -- 22,817
Net assets of
discontinued
operations........... -- -- 7,221 -- 7,221
Prepaid expenses...... 71 358 55 -- 484
-------- -------- ------- --------- --------
Total current
assets............. 31,614 47,260 53,265 (2,501) 129,638
Intercompany investment. 147,618 -- -- (147,618) --
Investments in
unconsolidated
entities............... 1,276 229 7,287 -- 8,792
Intercompany note
receivables............ 19,894 (52) -- (19,842) --
Property and equipment--
at cost:
Land and buildings.... -- 2,977 -- -- 2,977
Aircraft and
equipment............ 3,456 116,967 12,043 -- 132,466
-------- -------- ------- --------- --------
3,456 119,944 12,043 -- 135,443
Less: accumulated
depreciation and
amortization........... (2,443) (56,526) (4,733) -- (63,702)
-------- -------- ------- --------- --------
1,013 63,418 7,310 -- 71,741
Other assets, primarily
goodwill............... 5 20,295 158 112 20,570
-------- -------- ------- --------- --------
$201,420 $131,150 $68,020 $(169,849) $230,741
======== ======== ======= ========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C> <C> <C> <C>
Current Liabilities:
Accounts payable...... $ 79 $ 1,877 $ 234 $ (786) $ 1,404
Accrued liabilities... 1,658 5,307 1,433 (1,557) 6,841
-------- -------- ------- --------- --------
Total current
liabilities........ 1,737 7,184 1,667 (2,343) 8,245
Intercompany notes
payable.............. -- 693 19,083 (19,776) --
Deferred credits...... -- -- 2,487 -- 2,487
Deferred taxes........ -- 15,097 4,174 -- 19,271
Minority interest..... -- -- 1,055 -- 1,055
Stockholders'
Investment:
Common Stock.......... 195 1,041 3,541 (4,582) 195
Additional paid-in
capital.............. 95,934 24,269 413 (24,682) 95,934
Retained earnings..... 103,554 82,866 35,600 (118,466) 103,554
-------- -------- ------- --------- --------
199,683 108,176 39,554 (147,730) 199,683
-------- -------- ------- --------- --------
$201,420 $131,150 $68,020 $(169,849) $230,741
======== ======== ======= ========= ========
</TABLE>
F-27
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 18 $101,762 $15,509 $ -- $117,289
Intercompany revenue.... 124 7,714 -- 7,838 --
Gain (loss) on disposal
of equipment........... -- (446) -- -- (446)
------- -------- ------- ------- --------
142 109,030 15,509 7,838 116,843
OPERATING EXPENSES
Direct cost............. (14) 83,674 2,033 -- 85,693
Intercompany expense.... -- -- 7,838 (7,838) --
Depreciation and
amortization........... 119 7,663 767 -- 8,549
General and
administrative......... 3,614 5,516 105 -- 9,235
------- -------- ------- ------- --------
3,719 96,853 10,743 (7,838) 103,477
------- -------- ------- ------- --------
OPERATING INCOME........ (3,577) 12,177 4,766 -- 13,366
Earnings from
unconsolidated
entities............... 16,286 -- 4,056 16,286 4,056
Interest income......... 1,762 230 2,168 135 4,025
Interest expense........ 298 137 -- (135) 300
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 14,173 12,270 10,990 16,286 21,147
Allocation of
consolidated income
taxes.................. (851) 3,987 2,987 -- 6,123
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 15,024 8,283 8,003 16,286 15,024
Discontinued operations:
Income (Loss) from CPS
operations........... 252 -- (143) (143) 252
------- -------- ------- ------- --------
NET INCOME.............. $15,276 $ 8,283 $ 7,860 $16,143 $ 15,276
======= ======== ======= ======= ========
</TABLE>
F-28
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $ 5,398 $7,760 $ 9,572 $66 $ 22,796
Cash flows from
investing activities:
Capital expenditures.. -- (7,360) (5,175) -- (12,535)
Proceeds from asset
dispositions......... -- 128 57 -- 185
Investments in
marketable
securities........... (2,988) -- (8,964) -- (11,952)
Proceeds from maturity
of marketable
securities........... 2,997 -- 8,991 -- 11,988
------- ------ ------- --- --------
Net cash provided by
(used in) investing
activities............. 9 (7,232) (5,091) -- (12,314)
Cash flows from
financing activities:
Repayment of debt..... (2,000) -- -- -- (2,000)
Issuance of common
stock................ 556 -- -- -- 556
------- ------ ------- --- --------
Net cash provided by
(used in) financing
activities............. (1,444) -- -- -- (1,444)
------- ------ ------- --- --------
Net increase in cash and
cash equivalents....... 3,963 528 4,481 66 9,038
Cash and cash
equivalents at
beginning of year...... 21,679 3,928 22,294 -- 47,901
------- ------ ------- --- --------
Cash and cash
equivalents at end of
year................... $25,642 $4,456 $26,775 $66 $ 56,939
======= ====== ======= === ========
</TABLE>
F-29
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 99 $104,445 $13,792 $ -- $118,336
Intercompany revenue.... 160 6,686 -- 6,846 --
Gain (loss) on disposal
of equipment........... -- 586 -- -- 586
------- -------- ------- ------- --------
259 111,717 13,792 6,846 118,922
OPERATING EXPENSES
Direct cost............. (27) 78,472 2,263 -- 80,708
Intercompany expense.... -- -- 6,846 (6,846) --
Depreciation and
amortization........... 116 8,628 456 -- 9,200
General and
administrative......... 3,694 4,948 103 -- 8,745
------- -------- ------- ------- --------
3,783 92,048 9,668 (6,846) 98,653
------- -------- ------- ------- --------
OPERATING INCOME........ (3,524) 19,669 4,124 -- 20,269
Earnings from
unconsolidated
entities............... 20,501 -- 4,050 20,501 4,050
Interest income......... 1,300 68 1,785 206 2,947
Interest expense........ 537 237 1 (206) 569
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 17,740 19,500 9,958 20,501 26,697
Allocation of
consolidated income
taxes.................. (1,222) 6,212 2,745 -- 7,735
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 18,962 13,288 7,213 20,501 18,962
Discontinued operations:
Income (Loss) from CPS
operations........... (512) -- (1,228) (1,228) (512)
------- -------- ------- ------- --------
NET INCOME.............. $18,450 $ 13,288 $ 5,985 $19,273 $ 18,450
======= ======== ======= ======= ========
</TABLE>
F-30
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $20,972 $ 2,582 $ 7,221 $-- $30,775
Cash flows from
investing activities:
Capital expenditures.. (2,609) (199) (400) -- (3,208)
Proceeds from asset
dispositions......... -- 2,989 57 -- 3,046
Acquisitions, net of
cash received........ (608) -- (7,626) -- (8,234)
------- ------- ------- --- -------
Net cash used in
investing activities... (3,217) 2,790 (7,969) -- (8,396)
Cash flows from
financing activities:
Repayment of debt..... (2,000) (2,235) -- -- (4,235)
Issuance of common
stock................ 2,532 -- -- -- 2,532
------- ------- ------- --- -------
Net cash provided by
(used in) financing
activities............. 532 (2,235) -- -- (1,703)
------- ------- ------- --- -------
Net increase (decrease)
in cash and cash
equivalents............ 18,287 3,137 (748) -- 20,676
Cash and cash
equivalents at
beginning of year...... 3,392 791 23,042 -- 27,225
------- ------- ------- --- -------
Cash and cash
equivalents at end of
year................... $21,679 $ 3,928 $22,294 $-- $47,901
======= ======= ======= === =======
</TABLE>
F-31
<PAGE>
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
(1) The supplemental condensed consolidating financial information has been
prepared pursuant to the rules and regulations for condensed financial
information and does not include all disclosures included in annual
financial statements, although the Company believes that the disclosures
made are adequate to make the information presented not misleading.
Certain reclassifications were made to conform all of the financial
information to the financial presentation on a consolidated basis. The
principal eliminating entries eliminate investments in subsidiaries,
intercompany balances and intercompany revenues and expenses.
(2) Subsequent to December 31, 1997, the Company formed a new wholly owned
subsidiary and contributed the Company's operating assets, separate from
its investment in its subsidiaries, to the newly formed subsidiary. The
subsidiary is a Guarantor Subsidiary. For purposes of the historical
supplemental financial information, the Company has presented the
aforementioned operating assets and related operating results together
with the operating assets and results of the other Guarantor Subsidiaries.
(3) The allocation of the consolidated income tax provision was allocated
using the with and without allocation method.
F-32
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
------------------
1997 1996
-------- --------
(THOUSANDS OF DOLLARS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Gross revenue:
Operating revenue................................ $320,969 $104,088
Gain (loss) on disposal of equipment............. (473) 392
-------- --------
320,496 104,480
Operating expenses:
Direct cost...................................... 233,903 73,164
Depreciation and amortization.................... 24,401 7,439
General and administrative....................... 20,517 7,479
-------- --------
278,821 88,082
-------- --------
Operating income................................... 41,675 16,398
Earnings from unconsolidated entities.............. 5,006 3,374
Interest income.................................... 2,151 3,373
Interest expense................................... 15,584 810
-------- --------
Income from continuing operations before provision
for income taxes.................................. 33,248 22,335
Provision for income taxes......................... 9,973 6,965
Minority interest.................................. (760) (34)
-------- --------
Income from continuing operations.................. 22,515 15,336
Discontinued operations:
Income (Loss) from CPS operations................ (230) 178
Gain on sale of CPS.............................. 384 --
-------- --------
154 178
-------- --------
Net income......................................... $ 22,669 $ 15,514
======== ========
Basic:
Income per common share:
Continuing operations............................ $ 1.06 $ 0.78
Discontinued operations.......................... -- 0.01
-------- --------
Net income per common share.................... $ 1.06 $ 0.79
======== ========
Diluted:
Income per common share:
Continuing operations.......................... $ 0.99 $ 0.77
Discontinued operations........................ -- 0.01
-------- --------
Net income per common share.................. $ 0.99 $ 0.78
======== ========
</TABLE>
F-33
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
ASSETS 1997 1997
------ ------------ ---------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Current Assets:
Cash and cash equivalents............................. $ 22,631 $ 29,829
Accounts receivable................................... 79,456 88,268
Inventories........................................... 74,851 70,827
Net assets of discontinued operations................. -- 6,686
Prepaid expenses...................................... 1,994 887
--------- --------
Total current assets................................ 178,932 196,497
Investments in unconsolidated entities.................. 10,234 9,250
Property and equipment--at cost:
Land and buildings.................................... 13,033 13,175
Aircraft and equipment................................ 542,329 497,672
--------- --------
555,362 510,847
Less: accumulated depreciation and amortization......... (90,874) (74,465)
--------- --------
464,488 436,382
Other assets, primarily goodwill........................ 30,838 32,084
--------- --------
$ 684,492 $674,213
========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C>
Current Liabilities:
Accounts payable...................................... $ 32,570 $ 31,166
Accrued liabilities................................... 37,497 38,592
Deferred taxes........................................ 18,105 17,968
Current maturities of long-term debt.................. 6,112 51,240
--------- --------
Total current liabilities........................... 94,284 138,966
Long-term debt, less current maturities............... 220,857 199,631
Deferred credits...................................... 1,187 622
Deferred taxes........................................ 92,063 91,445
Minority interest..................................... 9,478 8,643
Stockholders' Investment:
Common Stock, $.01 par value, authorized 35,000,000
shares; outstanding 21,854,921 and 21,081,133 at
December 31, and March 31, respectively (exclusive of
517,550 treasury shares)............................. 219 211
Additional paid-in capital............................ 123,061 115,346
Retained earnings..................................... 143,455 120,786
Cumulative translation adjustment..................... (112) (1,437)
--------- --------
266,623 234,906
--------- --------
$ 684,492 $674,213
========= ========
</TABLE>
F-34
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
------------------
1997 1996
-------- --------
(THOUSANDS OF
DOLLARS)
<S> <C> <C>
Cash flows from operating activities:
Net income.............................................. $ 22,669 $ 15,514
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization........................... 24,401 7,990
Increase (decrease) in deferred taxes................... 7,283 (162)
(Gain) loss on asset dispositions....................... 473 (344)
Equity in earnings from unconsolidated entities over
dividends received..................................... (666) --
Minority interest in earnings........................... 760 (1)
Discontinued operations................................. 230 (178)
(Increase) decrease in accounts receivable.............. 9,817 (5,500)
Increase in inventories................................. (3,454) (1,729)
Increase in prepaid expenses and other.................. (1,581) (2,887)
Decrease in accounts payable............................ (993) (1,900)
Increase (decrease) in accrued liabilities.............. (2,733) 10,269
Increase in deferred credits............................ 566 618
-------- --------
Net cash provided by operating activities................. 56,772 21,690
-------- --------
Cash flows from investing activities:
Capital expenditures.................................... (59,260) (4,290)
Proceeds from asset dispositions........................ 10,540 1,046
Proceeds from CPS disposal.............................. 5,700 --
Proceeds from maturity of marketable securities......... -- 20,001
Cash used in Bristow transaction, net of cash received.. -- (153,029)
Acquisitions, net of cash received...................... (353) --
-------- --------
Net cash used in investing activities..................... (43,373) (136,272)
-------- --------
Cash flows from financing activities:
Proceeds from borrowings................................ 27,120 88,418
Repayment of debt....................................... (55,844) (2,000)
Issuance of common stock................................ 7,723 1,576
-------- --------
Net cash provided by (used in) financing activities....... (21,001) 87,994
-------- --------
Effect of exchange rate changes in cash................... 404 7
Net decrease in cash and cash equivalents................. (7,198) (26,581)
Cash and cash equivalents at beginning of period.......... 29,829 53,273
-------- --------
Cash and cash equivalents at end of quarter............... $ 22,631 $ 26,692
======== ========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest................................................ $ 16,514 $ 2,827
Income taxes............................................ 957 6,338
</TABLE>
F-35
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations for condensed financial
statements and do not include all information and footnotes necessary for a
fair presentation of financial position, results of operations, and cash flows
in conformity with generally accepted accounting principles. In the opinion of
management, any adjustments considered necessary for a fair presentation have
been included. Operating results for the nine months ended December 31, 1997,
are not necessarily indicative of the results that may be expected for the
year ending March 31, 1998. For further information, refer to the consolidated
financial statements and footnotes included in the Company's Annual Report on
Form 10-K for the nine month period ended March 31, 1997.
NOTE B--INVESTMENT IN BRISTOW
On December 19, 1996, OLOG acquired 49% of the common stock and a
significant amount of Bristow Aviation Holdings, Ltd. ("Bristow") subordinated
debt as detailed below. Bristow is incorporated in England and holds all of
the outstanding shares in Bristow Helicopter Group Limited ("BHGL"). Bristow
provides helicopter services to the North Sea oil and gas industry. Services
consist of short and long range crew change flights, offshore-based and inter-
platform shuttle operations, and search and rescue missions. Bristow also
operates aircraft in Australia, Brunei, Cambodia, China, Nigeria, South
America and Vietnam among others.
The investment was accounted for by the purchase method of accounting under
Accounting Principals Board Opinion No. 16, as amended, and accordingly, the
results of operations of Bristow for the nine months ended December 31, 1997
are included in the accompanying consolidated financial statements. The total
consideration has been allocated to Bristow's assets and liabilities based on
the estimated fair market value as of December 19, 1996.
The following unaudited pro forma financial information for the Company
gives effect to the Bristow investment as if it had occurred on April 1, 1996.
These pro forma results have been prepared for comparative purposes only and
do not purport to be indicative of the results of operations which actually
would have resulted had the acquisitions occurred on the date indicated, or
which may result in the future. The pro forma results follow (in thousands,
except per share data):
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, 1996
-----------------
(UNAUDITED)
<S> <C>
Gross revenue........................................... $293,168
========
Income from continuing operations....................... $ 17,521
========
Earnings per common share
Income from continuing operations:
Basic................................................. $ 0.84
========
Diluted............................................... $ 0.81
========
</TABLE>
NOTE C--EARNINGS PER SHARE
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share". SFAS No.
128 replaced the previously reported primary and fully-diluted earnings per
share with basic and diluted earnings per share.
F-36
<PAGE>
Basic earnings per common share were computed by dividing net income by the
weighted average number of shares of common stock outstanding during the year.
Diluted earnings per common share for the three months and nine months ended
December 31, 1996 and 1997 were determined on the assumptions that the
convertible debt was converted upon issuance on December 17, 1996 and on April
1, 1997, respectively. The Company adopted SFAS No. 128, "Earnings per Share,"
effective December 15, 1997. All income per share amounts for all periods have
been presented, and where necessary, restated to conform to the requirements
of SFAS No. 128. The following table sets forth the computation of basic and
diluted income from continuing operations per share:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
---------------------
1997 1996
---------- ----------
<S> <C> <C>
Income from Continuing Operations (thousands of dollars):
Income available to common stockholders................ $ 22,669 $ 15,336
Interest on convertible debt, net of taxes............. 3,087 149
---------- ----------
Income available to common stockholders, plus assumed
conversions........................................... $ 25,756 $ 15,485
========== ==========
Shares:
Weighted average number of common shares outstanding... 21,355,546 19,572,791
Options................................................ 322,277 314,400
Warrants............................................... -- 26,174
Convertible debt....................................... 4,286,520 186,370
---------- ----------
Weighted average number of common shares outstanding,
plus assumed conversions.............................. 25,964,343 20,099,735
========== ==========
Income from Continuing Operations:
Basic earnings per share............................... $ 1.06 $ 0.78
========== ==========
Diluted earnings per share............................. $ 0.99 $ 0.77
========== ==========
</TABLE>
NOTE D--DISCONTINUED OPERATIONS
On July 16, 1997, the Company finalized the sale of its investment in
Cathodic Protection Services to Corrpro Companies, Inc. As a result of the
sale, the consolidated financial statements of the Company have been adjusted
and restated to reflect the results of operations and net assets of CPS as a
discontinued operation in accordance with generally accepted accounting
principles.
NOTE E--SENIOR NOTES
On January 27, 1998, the Company completed the sale of $100 million
aggregate principal amount of 7.875% Senior Notes due 2008 discounted to yield
7.915%, which resulted in net proceeds to the Company of $97.2 million. On
January 29, 1998, the Company repaid approximately (Pounds)40.9 million ($67.5
million) of Bristow debt outstanding as of December 31, 1997. The weighted
average of the stated rates of interest on the indebtedness retired was 16.6%,
but had been adjusted to 8.5% as a result of purchase accounting for the
Company's investment in Bristow.
In connection with the sale of the Senior Notes, certain of the Company's
subsidiaries (the "Guarantor Subsidiaries") jointly, severally and
unconditionally guaranteed the payment obligations under the Senior Notes. The
following supplemental financial information sets forth, on an unconsolidated
basis, the balance sheet, statement of income and cash flow information for
the Company ("Parent Company Only"), for the Guarantor Subsidiaries and for
the Company's other subsidiaries (the "Non-Guarantor Subsidiaries").
F-37
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ASSETS ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ -------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents.......... $ 3,334 $ 3,625 $ 15,672 $ -- $ 22,631
Accounts receivable... (487) 23,321 58,887 (2,265) 79,456
Inventories........... -- 30,525 44,326 -- 74,851
Prepaid expenses...... 272 748 974 -- 1,994
-------- -------- -------- --------- --------
Total current
assets............. 3,119 58,219 119,859 (2,265) 178,932
Intercompany investment. 306,963 -- -- (306,963) --
Investments in
unconsolidated
entities............... 1,108 229 8,897 -- 10,234
Intercompany notes
receivable............. 43,797 (108) -- (43,689) --
Property and equipment--
at cost:
Land and buildings.... -- 3,099 9,934 -- 13,033
Aircraft and
equipment............ 3,501 134,698 404,130 -- 542,329
-------- -------- -------- --------- --------
3,501 137,797 414,064 -- 555,362
Less: accumulated
depreciation and
amortization........... (2,626) (60,420) (27,828) -- (90,874)
-------- -------- -------- --------- --------
875 77,377 386,236 -- 464,488
Other assets, primarily
goodwill............... 10,378 22,528 375 (2,443) 30,838
-------- -------- -------- --------- --------
$366,240 $158,245 $515,367 $(355,360) $684,492
======== ======== ======== ========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C> <C> <C> <C>
Current Liabilities:
Accounts payable...... $ 89 $ 3,844 $ 28,637 $ -- $ 32,570
Accrued liabilities... 3,373 7,711 30,471 (4,058) 37,497
Deferred taxes........ -- -- 18,105 -- 18,105
Current maturities of
long-term debt....... -- -- 6,112 -- 6,112
-------- -------- -------- --------- --------
Total current
liabilities........ 3,462 11,555 83,325 (4,058) 94,284
Long-term debt, less
current maturities... 98,000 -- 122,857 -- 220,857
Intercompany notes
payable.............. -- -- 44,390 (44,390) --
Deferred credits...... -- -- 1,187 -- 1,187
Deferred taxes........ (11,415) 26,024 77,454 -- 92,063
Minority interests.... 9,478 -- -- -- 9,478
Stockholders'
Investment:
Common Stock.......... 219 1,041 3,796 (4,837) 219
Additional paid-in
capital.............. 123,061 24,269 124,654 (148,923) 123,061
Retained earnings..... 143,455 95,356 57,663 (153,019) 143,455
Cumulative translation
adjustment........... (20) -- 41 (133) (112)
-------- -------- -------- --------- --------
266,715 120,666 186,154 (306,912) 266,623
-------- -------- -------- --------- --------
$366,240 $158,245 $515,367 $(355,360) $684,492
======== ======== ======== ========= ========
</TABLE>
F-38
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 16 $106,135 $214,818 $ -- $320,969
Intercompany revenue.... -- 7,698 182 7,880 --
Gain (loss) on disposal
of equipment........... -- (688) 215 -- (473)
------- -------- -------- ------- --------
16 113,145 215,215 7,880 320,496
OPERATING EXPENSES
Direct cost............. 7 82,724 151,172 -- 233,903
Intercompany expense.... -- 182 7,698 (7,880) --
Depreciation and
amortization........... 402 6,640 17,359 -- 24,401
General and
administrative......... 4,518 3,793 12,206 -- 20,517
------- -------- -------- ------- --------
4,927 93,339 188,435 (7,880) 278,821
------- -------- -------- ------- --------
OPERATING INCOME........ (4,911) 19,806 26,780 -- 41,675
Earnings from
unconsolidated
entities............... 28,128 -- 5,000 28,122 5,006
Interest income......... 2,282 197 1,066 1,394 2,151
Interest expense........ 4,540 -- 12,438 (1,394) 15,584
------- -------- -------- ------- --------
Income before Taxes..... 20,959 20,003 20,408 28,122 33,248
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES..................
Alocation of
consolidated income
taxes.................. (2,321) 6,449 5,845 -- 9,973
Minority interest....... (765) -- 5 -- (760)
------- -------- -------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 22,515 13,554 14,568 28,122 22,515
Discontinued operations:
Income (Loss) from CPS
operations........... (230) -- (337) (337) (230)
Gain on sale of CPS... 384 -- 384 384 384
------- -------- -------- ------- --------
Income (loss) from
discontinued
operations............. 154 -- 47 47 154
------- -------- -------- ------- --------
NET INCOME.............. $22,669 $ 13,554 $14,615 $28,169 $ 22,669
======= ======== ======== ======= ========
</TABLE>
F-39
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $(27,348) $ 18,547 $ 44,134 $21,439 $ 56,772
Cash flows from
investing activities:
Capital expenditures.. -- (19,569) (39,691) -- (59,260)
Proceeds from asset
dispositions......... -- 1,102 9,438 -- 10,540
Proceeds from CPS
disposal............. -- -- 5,700 -- 5,700
Acquisitions, net of
cash received........ -- -- (353) -- (353)
-------- -------- -------- ------- --------
Net cash used in
investing activities. -- (18,467) (24,906) -- (43,373)
Cash flows from
financing activities:
Proceeds from
borrowings........... 1,500 -- 47,059 (21,439) 27,120
Repayment of debt..... -- -- (55,844) -- (55,844)
Issuance of common
stock................ 7,723 -- -- -- 7,723
-------- -------- -------- ------- --------
Net cash provided by
(used in) financing
activities............. 9,223 -- (8,785) (21,439) (21,001)
Effect of exchange rate
changes in cash........ -- -- 404 -- 404
-------- -------- -------- ------- --------
Net increase (decrease)
in cash and cash
equivalents............ (18,125) 80 10,847 -- (7,198)
Cash and cash
equivalents at
beginning of period.... 21,459 3,545 4,825 -- 29,829
-------- -------- -------- ------- --------
Cash and cash
equivalents at end of
period................. $ 3,334 $ 3,625 $ 15,672 $ -- $ 22,631
======== ======== ======== ======= ========
</TABLE>
F-40
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 17 $81,970 $22,101 $ -- $104,088
Intercompany revenue.... 124 6,901 -- 7,025 --
Gain (loss) on disposal
of equipment........... 19 373 -- -- 392
------- ------- ------- ------- --------
160 89,244 22,101 7,025 104,480
OPERATING EXPENSES
Direct cost............. (13) 65,047 8,130 -- 73,164
Intercompany expense.... -- -- 7,025 (7,025) --
Depreciation and
amortization........... 90 5,824 1,525 -- 7,439
General and
administrative......... 2,915 3,875 689 -- 7,479
------- ------- ------- ------- --------
2,992 74,746 17,369 (7,025) 88,082
------- ------- ------- ------- --------
OPERATING INCOME........ (2,832) 14,498 4,732 -- 16,398
Earnings from
unconsolidated
entities............... 16,997 -- 3,374 16,997 3,374
Interest income......... 1,508 212 1,738 85 3,373
Interest expense........ 306 41 548 (85) 810
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 15,367 14,669 9,296 16,997 22,335
Allocation of
consolidated income
taxes.................. (3) 4,623 2,345 -- 6,965
Minority interest....... (34) -- -- -- (34)
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 15,336 10,046 6,951 16,997 15,336
Discontinued operations:
Income (Loss) from CPS
operations........... 178 -- (228) (228) 178
------- ------- ------- ------- --------
NET INCOME.............. $15,514 $10,046 $ 6,723 $16,769 $ 15,514
======= ======= ======= ======= ========
</TABLE>
F-41
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $ 9,528 $ 2,860 $ 9,302 $-- $ 21,690
Cash flows from
investing activities:
Capital expenditures.. -- (3,873) (417) -- (4,290)
Proceeds from asset
dispositions......... -- 1,022 24 -- 1,046
Proceeds from maturity
of marketable
securities........... 5,000 -- 15,001 -- 20,001
Cash used in Bristow
transaction, net of
cash received........ (106,864) -- (46,165) -- (153,029)
--------- ------- -------- --- ---------
Net cash used in
investing activities... (101,864) (2,851) (31,557) -- (136,272)
Cash flows from
financing activities:
Proceeds from
borrowings........... 88,418 -- -- -- 88,418
Repayment of debt..... (2,000) -- -- -- (2,000)
Issuance of common
stock................ 1,576 -- -- -- 1,576
--------- ------- -------- --- ---------
Net cash provided by
financing activities... 87,994 -- -- -- 87,994
Effect of exchange rate
changes in cash........ -- -- 7 -- 7
--------- ------- -------- --- ---------
Net decrease in cash and
cash equivalents....... (4,342) 9 (22,248) -- (26,581)
Cash and cash
equivalents at
beginning of period.... 27,080 1,836 24,357 -- 53,273
--------- ------- -------- --- ---------
Cash and cash
equivalents at end of
period................. $ 22,738 $ 1,845 $ 2,109 $-- $ 26,692
========= ======= ======== === =========
</TABLE>
F-42
<PAGE>
NOTE F--COMMITMENTS AND CONTINGENCIES
On August 6, 1997, the domestic pilots at Air Logistics ("Air Log") voted to
become members of the Office and Professional Employees International Union
("OPEIU"). As of March 27, 1998, the Company has not begun negotiations with
the OPEIU. During the nine months ended December 31, 1997, $85.3 million of
operating revenues were from Air Log's domestic operations. In January, 1998,
the National Mediation Board (NMB) set aside the September 4, 1997, election
in which the pilots for Air Log's principal competitor elected not to be
represented by the Union. The NMB has called another election to be completed
in late March, 1998. In January, 1998, the OPEIU petitioned the NMB to
organize Air Log's mechanics. Certain objections to this petition have been
filed and the date of a possible election has not been established. Similar
efforts may also be taking place at some of Air Log's competitors. The Company
does not believe that the result of these organizing efforts will place Air
Logistics at a competitive disadvantage with its competitors as management
believes that pay scales and work rules will continue to be similar throughout
the industry.
F-43
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT IN, OR INCORPORATED IN, THIS
PROSPECTUS, IN CONNECTION WITH THE EXCHANGE OFFER COVERED BY THIS PROSPECTUS.
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITY OTHER
THAN THE NEW NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE NEW NOTES TO ANYONE OR BY ANYONE
IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT WOULD BE UNLAWFUL TO
MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN A CHANGE IN THE INFORMATION SET FORTH IN
THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... ii
Incorporation of Certain Documents by Reference............................ ii
Summary.................................................................... 1
Risk Factors............................................................... 8
Use of Proceeds............................................................ 14
Capitalization............................................................. 14
Selected Consolidated Financial and Operating Data......................... 15
The Exchange Offer......................................................... 17
Description of the Notes................................................... 26
Legal Matters.............................................................. 51
Experts.................................................................... 51
Index to Consolidated Financial Statements................................. F-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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$100,000,000
OFFSHORE LOGISTICS, INC.
----------------
OFFER FOR ALL OUTSTANDING
7 7/8% SERIES A SENIOR NOTES DUE 2008
IN EXCHANGE FOR
7 7/8% SERIES B SENIOR NOTES DUE 2008
----------------
PROSPECTUS
----------------
May 6, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
