item 14 principal accountant fees services information required disclosed pursuant item 14 incorporated reference company’s definitive proxy statement filed commission pursuant regulation 14a within 120 days end company’s fiscal year ended december 31 2012 part iv item 15item 14 principal accountant fees services fees professional services provided ernst young years ended december 31 follows audit fees represent fees professional services provided connection audit companys financial statements services provided connection statutory regulatory filings auditrelated fees represent fees professional services provided consulting interpretations application fasb pronouncements sec regulations tax fees represent fees services connection preparation filing tax returns jurisdictions outside united states audit committee determined provision services described compatible maintaining independence ernst young llp services described foregoing table approved audit committee respect year ended december 31 2013 seacors audit committee respect year ended december 31 2012 case manner consistent committees policies preapproval process preapproval policy services independent registered public accounting firm audit committees policy preapprove audit services auditrelated services permitted law provided independent registered public accounting firm accordance policy committee expected annually review approve list specific services categories services including audit related tax permitted services current upcoming fiscal year subject specified terms cost levels service included approved list services modification previously approved services including changes fees must specifically preapproved audit committee proposed additions modifications relate tax nonaudit services provided independent registered public accounting firm audit committee may delegate responsibility preapproval chair audit committee ensure prompt handling unforeseeable unexpected matters arise audit committee meetings audit committee delegated authority members audit committee review appropriate approve advance request independent registered public accounting firm provide tax andor nonaudit services part iv item 15item 14 principal accountant fees services information required item presented 2015 proxy statement filed sec later 120 days fiscal year ended december 31 2014 incorporated herein reference part iv item 15item 14 principal accountant fees services information required item presented 2016 proxy statement filed sec later 120 days fiscal year ended december 31 2015 incorporated herein reference part iv item 15item 14 principal accountant fees services information required item presented 2017 proxy statement filed sec later 120 days fiscal year ended december 31 2016 incorporated herein reference part iv item 15item 14 principal accountant fees services information required item presented 2018 proxy statement filed sec later 120 days fiscal year ended december 31 2017 incorporated herein reference part iv item 15item 14 principal accountant fees services information required item presented 2019 proxy statement filed sec later 120 days fiscal year ended december 31 2018 incorporated herein reference part iv item 15item 14 principal accountant fees services independent registered public accounting firm fee information fees professional services provided grant thornton years ended december 31 follows audit fees represent fees professional services provided connection audit company’s financial statements review quarterly reports form 10q services provided connection statutory audits subsidiaries company regulatory filings including sec registration statements reports auditrelated fees represent fees accounting consultations related performance audit committee determined provision services described compatible maintaining independence independent registered public accountants services described foregoing table approved audit committee respect years ended december 31 2019 2018 manner consistent committee’s policies preapproval process preapproval policy services independent registered public accounting firm audit committee’s policy preapprove audit services auditrelated services provided independent registered public accounting firm accordance policy audit committee expected review approve least annually list specific services categories services including audit related tax permitted services current upcoming fiscal year subject specified terms fees service included approved list services modification previously approved services must specifically preapproved audit committee proposed additions modifications relate services provided independent registered public accounting firm audit committee may delegate responsibility preapproval chair audit committee ensure prompt handling unforeseeable unexpected matters arise audit committee meetings audit committee delegated authority chair audit committee review appropriate approve advance request independent registered public accounting firm provide services audit committee reviews approves services next audit committee meeting appendix adjusted ebitda reported reconciliation following table provides reconciliation net income directly comparable gaap measure adjusted ebitda year ended december 31 2019 thousands 1 special items include • 16 million loss impairment h225 helicopter 10 million loss impairment companys colombian air operator certificate • loss sale corporate securities 06 million • nonroutine professional fees related merger 15 million special items 04 million • gains sale capital assets aircraft 18 million part iv item 15 item 7 management’s discussion analysis financial condition results operations overview january 31 2013 seacor holdings inc “seacor” completed spinoff “spinoff” company means dividend seacor’s stockholders company’s issued outstanding common stock company filed registration statement form 10 securities exchange commission “sec” declared effective january 14 2013 prior spinoff seacor company entered distribution agreement several agreements govern postspinoff relationship era group independent company common stock listed new york stock exchange symbol “era” year ended december 31 2012 company’s historical financial position results operations cash flows included consolidated results seacor annual report form 10k one largest helicopter operators world longest serving helicopter transport operator us primary area operations year ended december 31 2012 approximately 56 15 total operating revenues earned us gulf mexico alaska respectively year ended december 31 2011 46 16 total operating revenues earned regions respectively also provide helicopters related services thirdparty helicopter operators countries addition us customers currently customers brazil canada india indonesia mexico norway spain sweden united kingdom uruguay helicopters primarily used transport personnel offshore installations drilling rigs platforms december 31 2012 owned operated total 175 helicopters consisting ten heavy helicopters 69 medium helicopters 37 light twin engine helicopters 59 light single engine helicopters december 31 2012 addition existing fleet one aw139 helicopter delivered 2012 become operational 2013 december 31 2012 commitments purchase 11 new helicopters consisting one aw139 medium helicopter five aw169 light twin helicopters five aw189 medium helicopters aw139 medium helicopter delivered january 2013 aw189 medium helicopters scheduled delivered 2014 2015 delivery dates aw169 light twin helicopters yet determined addition outstanding options purchase additional nine aw139 medium helicopters five aw189 medium helicopters options exercised helicopters would delivered beginning 2013 2016 subsequent december 31 2012 exercised option purchase one aw139 medium helicopter primary users transport services major integrated independent oil gas companies us government agencies years ended december 31 2012 2011 approximately 64 54 operating revenues respectively derived helicopter services including emergency search rescue services provided clients primarily involved oil gas activities addition serving oil gas industry provide helicopters contractlease air medical services firefighting support alaska flightseeing tours among activities historically operations primarily served us offshore oil gas industry initiated efforts diversify revenue base take advantage mobility versatility helicopters order expand geographic regions demand new sophisticated equipment continues grow particularly response requirements offshore oil gas industry become focused deepwater activities service new areas exploration helicopters must greater payloads range helicopters supporting air medical search rescue operations public uses also require new technology safety improvements according pfc energy may 2011 global helicopter fleet update presentation approximately 28 global helicopter fleet 25 years old replacement hampered following factors four major helicopter original equipment manufacturers “oems” full range service models ii lead times delivery new equipment long three years iii prevailing economic conditions recently favorable raising capital finance new equipment iv many smaller operators still unable raise capital prior entry senior secured revolving credit facility “revolving credit facility” participated cash management program whereby certain operating capital expenditures funded advances seacor certain cash collections forwarded seacor consequence arrangement historically maintained minor balances cash hand december 31 2012 december 31 2011 cash hand 115 million 791 million respectively december 22 2011 entered revolving credit facility intended replace prior cash management program seacor revolving credit facility requires maintain maximum funded debt ebitda defined revolving credit facility ratio “rc leverage ratio” 50 10 increased 40 10 result issuance senior notes comply certain financial ratios failure meet ratios event default facility therefore borrowing capacity limited ability comply ratios december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes used net proceeds offering repay 1900 million borrowings outstanding revolving credit facility connection issuance senior notes permanently reduced borrowing capacity revolving credit facility 3500 million 2000 million december 20 2012 borrowed 500 million revolving credit facility fund cash repurchase 500000 shares series b preferred stock seacor series b exchange december 31 2012 ability borrow additional 923 million revolving credit facility taking account financial ratios required maintain facility december 23 2011 issued 14 million shares series preferred stock seacor exchange 1400 million aggregate advances previously provided us seacor also contributed additional 1800 million capital us respect additional prior advances addition seacor purchased 10 million shares series b preferred stock including 300000 shares series b preferred stock june 8 2012 700000 shares series b preferred stock september 25 2012 aggregate proceeds 1000 million used portion proceeds issuances repay borrowings revolving credit facility would able maintain compliance financial ratios see “liquidity capital resources” prior time spinoff repurchased cash consideration exchanged common stock preferred stock previously issued seacor subsequent spinoff longer preferred stock remaining outstanding believe revolving credit facility extent borrowing capacity thereunder strong relationships oems help position us add new helicopters fleet upgrade existing helicopters thereby maintaining asset base suitable use within operations contractleasing operators also leverage strong relationships oems support growth services selling specialty equipment accessories helicopters training offshore oil gas support offshore oil gas market highly cyclical demand linked price oil gas tends fluctuate depending many factors including global economic activity levels inventory addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior year ended december 31 2010 market assets us gulf mexico disrupted events related sinking deepwater horizon drilling rig deepwater horizon incident us department interior imposed moratorium offshore deepwater drilling operations caused dramatic decrease demand helicopters supporting oil gas activities region although moratorium lifted process issuing permits drill remains slow continues negative impact demand helicopter services us gulf mexico believe slowdown significantly impact future results us gulf mexico activities mainly focused longerterm production maintenance inspection work rather shortterm exploration development projects last six years provided transportation services government inspectors offshore installations drilling rigs platforms contract renewed 2011 expected run 2016 december 31 2012 20 helicopters operating contract customer options increase number 30 helicopters brazil among important markets offshore oil gas activity worldwide believe brazilian market require significant additions medium heavy helicopter fleet currently operation country expands production efforts time us energy information administration stated recent discoveries large offshore presalt oil deposits could transform brazil one larger oil producers world petroelo brasileiro sa “petrobras brazil” estimated achieve oil production target approximately six million barrels per day 2020 committed participate market acquiring ownership interest aeróleo taxi aereo sa “aeróleo” brazilian helicopter operator july 2011 subsequently however aeróleo experienced operating difficulties fully described item 1 business “marketsinternational markets” due resulting liquidity issues experienced aeróleo december 31 2012 deferred recognition 70 million revenues aeróleo together partner also contributed 92 million additional debt capital aeróleo enable continue operating refer item 1a part ii “risk factorswe rely relatively customers significant share revenues loss could adversely affect business results operations” additional information also sponsor search rescue service us gulf mexico subscription basis currently four aw139 helicopters configured service several subscribers contractleasing beginning 2005 began deploy helicopters international markets frequently contractlease arrangements third parties majority helicopters supporting oil gas activities regions rapidly expanding activity brazil india indonesia also equipment working north sea mexico spain december 31 2012 49 helicopters located foreign jurisdictions compared 15 helicopters december 31 2006 many cases helicopters contracted local helicopter operators often prefer lease helicopters rather purchase contractleasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk december 31 2012 three eurocopter ec225 heavy helicopters eight aw139 medium helicopters contractleased aeróleo provides helicopter transportation services petrobras brazil ogx petroleo e gas participacoes multiyear contracts aeróleo also markets services international companies acquiring acreage brazil number aw139 helicopters contractlease aeróleo idle august 2011 late november 2012 november 2012 aeróleo executed contracts petrobras brazil result emergency tender issued petrobras brazil due suspension use ec225 helicopters began utilize aw139 helicopters internationally hold 51 interest lake palma sl “lake palma” joint venture contractleases helicopters fumigación aérea andaluza sa firefighting operator based spain “faasa” addition three light single helicopters eight medium helicopters contractleased directly faasa also focused developing presence australia india indonesia helicopter markets believe represent growth opportunities primarily civil aviation sector activities services consistent strategy selectively diverisfy sources earnings cash flow deploy number helicopters support industries activities years ended december 31 2012 2011 approximately 14 17 operating revenues generated activities services 2007 entered air medical services market acquisition flight operations keystone helicopter corporation supply helicopters pilots mechanics hospitals manage helicopters behalf also operate fixed based operation “fbo” ted stevens anchorage international airport provide alaska summer flightseeing tours support inland firefighting mining operations alaska northwest also developed services helicopter industry believe complement core activities hold 50 interest dart holding company ltd “dart” international sales manufacturing organization focused aftermarket helicopter parts accessories hold 50 interest era training center llc “era training” provides classroom instruction flight simulator helicopter training employees pilots working third parties helicopter companies including competitors government agencies fleet developments capital commitments recent years continued focus modernization fleet possible standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance customers flying offshore tend prefer twinengine helicopters singleengine helicopters due additional safety afforded two engines response demand transformed fleet significantly since beginning 2005 added 122 helicopters disposed 80 helicopters reduced average age owned fleet 17 years 11 years december 31 2012 31 fleet five years old less spent 1130 million 1589 million 1308 million acquire helicopters equipment years ended december 31 2012 2011 2010 respectively primarily medium heavy helicopters december 31 2012 commitments 1348 million primarily pursuant agreements purchase helicopters consisting one aw139 medium helicopter five aw169 light twin helicopters five aw189 medium helicopters aw139 medium helicopter delivered january 2013 aw189 medium helicopters scheduled delivered 2014 2015 delivery dates aw169 light twin helicopters yet determined approximately 1283 million commitments may terminated without liability aggregate liquidated damages 33 million addition outstanding options purchase additional nine aw139 medium helicopters five aw189 medium helicopters options exercised helicopters would delivered beginning 2013 2016 subsequent december 31 2012 exercised option purchase one aw139 helicopter components revenues expenses derive revenues primarily operating contractleasing equipment profits depend cost capital acquisition costs assets operating costs contract policy reputation operating revenues recorded us gulf mexico primarily generated offshore oil gas related activities also include subscriptions search rescue services similarly operating revenues recorded alaska primarily generated offshore oil gas related activities also include revenues operations supporting firefighting mining activities us gulf mexico alaska operating revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown operating revenues recorded contractleasing generated contractleases thirdparty operators joint venture partners responsible operation helicopters majority contractleases also provide crew training management expertise logistical maintenance support contractleases typically call fixed monthly fee may also include additional charge based flight hours flown majority contractleasing revenues generated helicopters deployed internationally operating revenues recorded air medical services include revenues management services hospitals operating revenues earned fixed monthly fee plus incremental charge flight hours flown operating revenues recorded flightseeing generated per passenger basis aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities well helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments powerbyhour provider case record reduction operating expense receive refund also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty powerbyhour programs helicopters contractlease third parties arrangements whereby customer assumes operational responsibility often provide maintenance parts support generally incur material operating costs instances contractleases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide crews services support contractlease customers prior entry revolving credit facility december 22 2011 participated cash management program whereby certain operating capital expenditures funded advances seacor certain cash collections forwarded seacor incurred interest outstanding advances reported interest expense advances seacor consolidated statements operations interest calculated settled quarterly basis using interest rates set discretion seacor following entry revolving credit facility longer participate cash management program seacor provided certain support services us shared services arrangement including payroll processing information systems support benefit plan management cash disbursement support cash receipt processing treasury management historically charged share actual costs incurred generally based volume processed units supported december 30 2011 entered transition services agreement providing services described pursuant seacor continued provide support services connection spinoff entered amended restated transition services agreement seacor pursuant services continue provided period time spinoff exceed two years seacor incurred costs providing operating segments certain corporate services including executive oversight risk management legal accounting tax charges quarterly management fees operating segments order cover costs total management fees charged seacor operating segments include actual corporate costs incurred plus markup generally allocated within consolidated group using incomebased performance metrics reported operating segment relation seacor’s operating segments costs incurred management fees seacor reported seacor management fees consolidated statements operations effective january 1 2012 seacor provided corporate services transition services agreement fixed quarterly charge 500000 subject terms conditions transition services agreement upon completion spinoff longer charged management fee seacor incur costs amended restated transition services agreement results operations operating revenues service line following tables set forth years indicated amount operating revenues service line year ended december 31 2012 compared year ended december 31 2011 operating revenues operating revenues 148 million higher year ended december 31 2012 compared year ended december 31 2011 operating revenues us gulf mexico 324 million higher primarily due newly delivered helicopters placed service expansion government services support increase charter revenues primarily support hurricane evacuations operating revenues alaska primarily oil gas activities increased 24 million primarily due increase charter activity hours flown support firefighting contracts fullyear impact contracts commenced 2011 operating revenues contractleasing activities decreased 134 million contractleasing revenues helicopters chartered brazilian joint venture 112 million lower primarily due deferral reduction contractleasing revenues result difficulties experienced joint venture connection canceled contract award four aw139 helicopters contractlease us addition contractleasing revenues brazilian joint venture lower due decreased flight hours helicopters undergoing major maintenance contractleasing revenues another customer also lower due net deferral 19 million due customers shortterm liquidity issues operating revenues air medical services 61 million lower primarily due conclusion longterm hospital contract partially offset fullyear impact hospital contract awarded 2011 operating expenses operating expenses 45 million higher year ended december 31 2012 compared year ended december 31 2011 personnel costs 37 million higher primarily due implementation pilot pay scale adjustment addition personnel support increased activity us gulf mexico repairs maintenance expenses 58 million lower 2012 primarily due recognition 77 million vendor credits 14 million maintenance credits received connection end two customer contractleases addition repairs maintenance expenses decreased 36 million due reduction ec225 hours flown decreases partially offset 53 million increase additional helicopters placed powerbyhour programs 16 million increase repairs maintenance costs primarily due timing repairs helicopters covered powerbyhour arrangements insurance loss reserves 23 million higher due increase overall fleet value recognition good experience credit hull liability underwriters year ended december 31 2011 fuel costs 19 million higher primarily due increased flight hours us gulf mexico line increased activity discussed operating expenses 30 million higher primarily due receipt year ended december 31 2011 19 million insurance proceeds related hurricane damages sustained 2005 administrative general administrative general expenses 29 million higher year ended december 31 2012 compared year ended december 31 2011 allowance doubtful accounts 28 million higher 25 million provided year ended december 31 2012 connection customer bankruptcy year ended december 31 2012 also includes legal professional expenses 29 million associated contemplated initial public offering common stock increases partially offset 35 million decrease severance costs associated changes executive management depreciation expenses 01 million lower year ended december 31 2012 compared year ended december 31 2011 primarily due change estimate useful life salvage value helicopters reduced depreciation expense year ended december 31 2012 partially offset addition higher cost equipment effective july 1 2011 company changed estimated useful life salvage value helicopters 12 15 years 30 40 respectively due improvements new helicopter models continue increase longterm value make viable operation longer period time gains asset dispositions impairments net year ended december 31 2012 sold otherwise disposed eight helicopters helicopter components equipment proceeds 55 million gains 29 million addition recognized previously deferred gains 07 million year ended december 31 2011 sold ten helicopters equipment received insurance proceeds related loss helicopter received net proceeds 292 million disposition assets including insurance proceeds gains 165 million 145 million recognized currently 20 million deferred addition recognized previously deferred gains 07 million operating income excluding gains asset dispositions operating income percentage revenues 10 year ended december 31 2012 compared 8 year ended december 31 2011 increase primarily due recognition vendor credits maintenance credits year ended december 31 2012 interest expense interest expense advances seacor december 22 2011 entered revolving credit facility used 2423 million borrowings facility settle outstanding advances seacor december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes net proceeds used repay 1900 million borrowings outstanding revolving credit facility result interest expense 106 million year ended december 31 2012 compared 14 million year ended december 31 2011 interest expense advances seacor 234 million lower year ended december 31 2012 compared year ended december 31 2011 seacor management fees seacor management fees represent various corporate costs incurred seacor turn charged operating segments fees previously allocated using incomebased performance metrics us relation seacor’s operating segments december 30 2011 entered transition services agreement seacor provide services fixed rate 20 million per annum beginning january 1 2012 result seacor management fees year ended december 31 2012 20 million compared 88 million year ended december 31 2011 connection spinoff entered amended restated transition services agreement seacor expect incur approximately 34 million annually services provided agreement transition functions covered amended restated transition services agreement us two year term agreement amount paid seacor reduced fee related respective support function equity losses 50 less owned companies year ended december 31 2012 recognized impairment charge 59 million net tax investment brazilian joint venture derivative gains losses net derivative losses 2012 primarily result losses interest rate swap agreements foreign currency gains losses net foreign currency gains net 2012 2011 primarily due weakening us dollar euro underlying certain cash balances income tax expense benefit year ended december 31 2012 effective income tax rate 355 year ended december 31 2011 effective income tax rate 176 primarily due recognition income tax benefit 07 million adjustments deferred tax liabilities resulting changes state tax apportionment factors expense 04 million result allocated nondeductible seacor management fees year ended december 31 2011 compared year ended december 31 2010 operating revenues operating revenues 228 million higher year ended december 31 2011 compared year ended december 31 2010 operating revenues us gulf mexico 67 million higher primarily due 73 million increase search rescue activities began late 2010 99 million increase higher oil gas related activities including fuel billings result higher prices increases partially offset 105 million decrease operating revenues activity support oil spill response activities relating bp macondo well incident us gulf mexico following sinking semisubmersible drilling rig deepwater horizon april 2010 “oil spill response” operating revenues alaska 46 million lower primarily due temporary suspension contract major oil gas customer whose operations expected resume 2012 operating revenues contractleasing activities increased 152 million additional medium heavy helicopters placed international contractleases december 31 2011 41 helicopters dedicated contractleasing market compared 39 december 31 2010 operating revenues air medical services increased 36 million primarily due 11 million additional revenues generated new hospital contract 27 million increase activity support existing patientpay customer operating revenues fbo 15 million higher primarily due increase fuel sales prices operating expenses operating expenses 155 million higher year ended december 31 2011 compared year ended december 31 2010 personnel costs 27 million higher additional personnel added support increased activity discussed repair maintenance costs increased 56 million primarily due enrolling additional helicopters powerbyhour maintenance programs fuel costs increased 50 million primarily due increase price fuel operating expenses 29 million higher primarily due 19 million increase support search rescue activities began late 2010 04 million increase higher air medical activities 23 million increase result providing parts repair services contractleasing customers increases partially offset receipt 19 million insurance reimbursements relating 2005 hurricanes katrina rita following final settlement insurance carriers addition insurance loss reserves 06 million lower primarily due receipt good experience credit hull machinery underwriters administrative general administrative general expenses 61 million higher year ended december 31 2011 compared year ended december 31 2010 primarily due 42 million severance costs associated change executive management 11 million increase wage benefit costs 06 million increase information technology costs 05 million increase costs related international business development joint venture activities depreciation expenses 07 million lower year ended december 31 2011 compared year ended december 31 2010 primarily due change estimate useful life salvage value helicopters reduced depreciation expense 76 million partially offset addition new higher cost equipment effective july 1 2011 changed estimated useful life salvage value helicopters 12 15 years 30 40 respectively due improvements new helicopter models continue increase longterm value make viable operation longer period time gains asset dispositions impairments net 2011 sold ten helicopters equipment received insurance proceeds related loss helicopter received net proceeds 292 million disposition assets including insurance proceeds gains 165 million 145 million recognized currently 20 million deferred addition recognized previously deferred gains 07 million 2010 sold two helicopters equipment net proceeds 09 million gains 05 million addition recognized previously deferred gains 06 million recognized loss 03 million relating impairment four ec120 helicopters operating income excluding gains asset dispositions impairments operating income percentage operating revenues consistent periods 8 interest expense advances seacor interest expense advances seacor 20 million higher 2011 primarily due higher advances seacor management fees seacor management fees represent various corporate costs incurred seacor turn charged operating segments fees allocated using incomebased performance metrics us relation seacor’s operating segments seacor management fees year ended december 31 2011 88 million compared 46 million year ended december 31 2010 increase primarily due higher proportion seacor’s corporate costs charged us based results comparison seacor’s operating segments december 30 2011 entered transition services agreement seacor provide services fixed rate 20 million per annum beginning january 1 2012 see “certain relationships related party transactionsrelated party transactionstransition services agreement” derivative gains losses net derivative losses 2011 primarily result losses interest rate swap agreements foreign currency gains losses net foreign currency gains net 2011 primarily due weakening us dollar euro underlying certain cash balances foreign currency losses net 2010 primarily due strengthening us dollar euro underlying certain cash balances income tax expense benefit year ended december 31 2011 effective income tax rate 176 primarily due recognition income tax benefit 07 million adjustments deferred tax liabilities resulting changes state tax apportionment factors expense 04 million result allocated nondeductible seacor management fees year ended december 31 2010 effective income tax rate 551 primarily due recognition income tax benefit 11 million adjustments deferred tax liabilities resulting changes state tax apportionment factors benefit 03 million relating participation share award programs sponsored seacor liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments sources liquidity cash balances cash flows operations time may secure additional liquidity issuance equity debt borrowings revolving credit facility historically seacor advanced substantial amounts capital us fund expenditures prior entering revolving credit facility december 22 2011 participated cash management program whereby certain operating capital expenditures funded advances seacor certain cash collections forwarded seacor consequence arrangement historically maintained minor cash balances december 22 2011 entered 3500 million revolving credit facility december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes used net proceeds offering repay 1900 million borrowings outstanding revolving credit facility connection senior notes offering permanently reduced borrowing capacity facility 3500 million 2000 million december 20 2012 borrowed 500 million revolving credit facility fund repurchase 500000 shares series b preferred stock series b exchange balance outstanding december 31 2012 revolving credit facility requires maintain maximum rc leverage ratio 50 10 increased 40 10 result issuance senior notes also requires comply certain financial ratios failure meet ratios event default facility therefore ability borrow revolving credit facility dependent limited compliance rc leverage ratio requirement ability comply financial ratios see “senior secured revolving credit facility” december 31 2012 amount additional borrowings could borrow revolving credit facility based rc leverage ratio date 923 million february 20 2013 company drew additional 150 million senior secured revolving credit facility capital expenditures working capital requirements december 23 2011 issued 1400000 shares series preferred stock seacor exchange 1400 million aggregate advances previously provided us seacor also contributed additional 1800 million capital us respect additional prior advances holders series preferred stock entitled receive quarterly cash dividends rate 6 per annum date issuance year ended december 31 2012 drew 880 million revolving credit facility primarily repurchase 500000 shares series b preferred stock held seacor fund purchase ec225 helicopter certain assets year ended december 31 2012 experienced decrease operating income primarily due reduction gains asset dispositions significant impact last 12months ebitda defined revolving credit facility result seacor purchased one million shares series b preferred stock including 300000 shares series b preferred stock 300 million june 8 2012 700000 shares series b preferred stock 700 million september 25 2012 used portion proceeds issuances repay borrowings revolving credit facility would able maintain compliance financial ratios facility see “year ended december 31 2012 compared year ended december 31 2011operating income” result series b exchange shares series b preferred stock remain outstanding continue experience reduced operating income certain contractleasing activities reason ability utilize revolving credit facility may limited may require additional investments capital stock maintain financial ratios within applicable limits furthermore failure maintain financial ratios pursuant revolving credit facility would constitute event default allowing lenders revolving credit facility declare entire balance sums payable revolving credit facility immediately due payable december 31 2012 unfunded capital commitments 1348 million primarily pursuant agreements purchase helicopters approximately 138 million payable 2013 remaining commitments payable 2014 2016 approximately 1283 million commitments may terminated without liability us aggregate liquidated damages 33 million addition outstanding options purchase additional nine aw139 medium helicopters five aw189 medium helicopters options exercised helicopters would delivered beginning 2013 2016 subsequent december 31 2012 company committed purchase additional equipment 166 million expect finance remaining acquisition costs combination cash hand cash provided operating activities borrowings revolving credit facility summary cash flows operating activities cash flows provided operating activities decreased 270 million year ended december 31 2012 compared year ended december 31 2011 cash flows provided operating activities decreased 428 million year ended december 31 2011 compared year ended december 31 2010 components cash flows provided operating activities years ended december 31 follows operating income depreciation gains asset dispositions impairments net 74 million higher year ended december 31 2012 compared year ended december 31 2011 primarily due 324 million increase revenues gulf mexico decrease 58 million repairs maintenance expenses increases offset 134 million decrease contractleasing revenues 61 million reduction operating revenues air medical services 38 million increase personnel cost 23 million increase insurance loss reserves 30 million increase operating expenses primarily due 19 million receipt insurance proceeds period ended december 31 2011 29 million increase administrative general expenses operating income depreciation gains asset dispositions impairments net 12 million higher year ended december 31 2011 compared year ended december 31 2010 primarily due 152 million increase revenues contractleasing activities 67 million increase revenues us gulf mexico activity related search rescue fuel billings offset 105 million decline revenues due decreased activity support oil spill response increase repair maintenance costs 56 million higher fuel costs 50 million year ended december 31 2012 changes operating assets liabilities interest income taxes used cash flows 1023 million due repurchase series b preferred stock held seacor settlements intercompany transactions seacor year ended december 31 2011 changes operating assets liabilities interest income taxes used cash flows 90 million primarily due increases working capital due settlement derivative positions addition helicopters placed powerbyhour maintenance programs investing activities year ended december 31 2012 net cash used investing activities 1148 million primarily follows • capital expenditures 1130 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 52 million • net principal payments thirdparty notes receivable 36 million • investments advances 50 less owned companies 106 million year ended december 31 2011 net cash used investing activities 1491 million primarily follows • capital expenditures 1589 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 260 million • cash settlements derivative transactions net 61 million • investments advances 50 less owned companies 218 million year ended december 31 2010 net cash used investing activities 1325 million primarily follows • capital expenditures 1308 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 09 million • investments advances 50 less owned companies 32 million • returns investments advances 50 less owned companies 10 million financing activities prior entering revolving credit facility december 22 2011 participated cash management program whereby certain operating capital expenditures funded advances seacor certain cash collections forwarded seacor cash flows financing activities therefore primarily result net cash advances received seacor vary primarily based timing capital expenditures year ended december 31 2012 net cash provided financing activities 326 million included proceeds 1919 million net issuance costs senior notes borrowings revolving credit facility 880 million 1000 million proceeds issuance series b preferred stock repayments revolving credit facility 2900 million 500 million connection series b exchange dividends paid seacor 44 million scheduled payments longterm debt 28 million year ended december 31 2011 net cash provided financing activities 1831 million included repayments seacor 632 million proceeds borrowings revolving credit facility 2490 million net 30 million transaction costs scheduled payments longterm debt 27 million year ended december 31 2010 net cash provided financing activities 470 million 84 million result advances seacor 387 million issuance secured bank debt finance acquisition two helicopters senior secured revolving credit facility december 22 2011 entered 3500 million senior secured revolving credit facility “revolving credit facility” matures december 2016 giving effect issuance senior notes use proceeds therefrom revolving credit facility provides us ability borrow 2000 million sublimits 500 million letters credit 250 million swingline advances subject terms conditions specified revolving credit facility certain circumstances borrowing capacity revolving credit facility may increased additional 1000 million actual borrowing capacity revolving credit facility limited ability comply financial ratios described “covenants” december 31 2012 giving effect issuance senior notes series b exchange based rc leverage ratio ability borrow additional 923 million facility guarantees security obligations revolving credit facility guaranteed whollyowned us subsidiaries general borrowings obligations revolving credit facility related loan documents guaranty obligations guarantors secured subject certain exceptions substantially guarantors tangible intangible assets including without limitation helicopters interest borrowings revolving credit facility bear interest rate per annum equal election either “base rate” libor defined plus applicable margin “base rate” defined highest prime rate defined b federal funds effective rate defined plus 50 basis points c daily libor onemonth interest period defined plus difference applicable margin libor advances defined applicable margin base rate advances defined applicable margin based ratio funded debt ebitda defined ranges 100 200 basis points “base rate” margin 210 335 basis points libor margin applicable margin december 31 2012 160 basis points “base rate” margin 285 basis points libor margin addition required pay quarterly commitment fee based average unfunded portion committed amount rate based ratio funded debt ebitda defined ranges 25 70 basis points december 31 2012 commitment fee 50 basis points covenants revolving credit facility contains number affirmative negative covenants including limitations incurrence additional indebtedness liens asset sales distributions mergers consolidations investments transactions affiliates negative pledges compliance certain material documents acquisitions change control erisa events perfection priority collateral solvency matters related helicopters including covenants related registration deregistration events purchase additional helicopters visitation rights maintenance repair loss destruction requisition generally dividends common stock may declared paid quarterly provided compliance various covenants revolving credit facility addition dividend amount case common stock may exceed 20 net income previous four consecutive quarters revolving credit facility requires us maintain certain financial ratios including minimum interest coverage ratio 30 10 maximum funded debt ebitda ratio 50 10 increased 40 10 result issuance senior notes maximum funded debt value owned helicopters ratio 60 minimum aggregate value mortgaged helicopters accounts receivable inventory funded debt 120 minimum aggregate value us registered helicopters 60 aggregate value mortgaged helicopters also required maintain maximum secured funded debt ebitda ratio 25 10 decreased 30 10 december 31 2012 events default revolving credit facility contains events default including nonpayment principal interest amounts due inaccuracy material respect representations warranties made us guarantors defaults performance specified covenants crossdefaults certain indebtedness certain judgments made ordered occurrence certain bankruptcy insolvency events occurrence change control material adverse change defined revolving credit agreement generally upon occurrence continuance event default revolving credit facility lenders obligations make facility available ceases lenders may notice us terminate commitments declare loans obligations facility immediately due payable bankruptcy insolvency event default causes loans facility automatically become due payable following occurrence event default administrative agent benefit lenders may take possession andor sell collateral securing borrowing obligations us guarantors facility senior notes december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes qualified institutional buyers reliance rule 144a nonus persons reliance regulation securities act net proceeds offering used repay 1900 million borrowings outstanding revolving credit facility connection senior notes offering permanently reduced borrowing capacity facility 3500 million 2000 million senior notes governed indenture dated december 7 2012 us guarantors named therein wells fargo bank national association trustee may redeem senior notes time december 15 2017 applicable redemption prices set forth indenture plus accrued unpaid interest redemption date prior december 15 2017 may also redeem senior notes whole part redemption price based “makewhole” premium plus accrued unpaid interest redemption date addition time prior december 15 2015 may redeem 35 senior notes redemption price equal 107750 principal amount plus accrued unpaid interest redemption date using proceeds certain equity offerings connection sale senior notes entered registration rights agreement “registration rights agreement” dated december 7 2012 initial purchasers registration rights agreement agreed among things use commercially reasonable efforts cause exchange offer registration statement become effective within 180 days consummation spinoff consummate exchange offer within 30 days effectiveness cause shelf registration statement covering resale senior notes declared effective within specified periods required pay additional interest senior notes fail timely comply obligations registration rights agreement time comply guarantees payment principal interest premium senior notes unconditionally guaranteed general unsecured unsubordinated basis whollyowned existing us subsidiaries guarantors revolving credit facility maturity interest senior notes mature december 15 2022 senior notes bear interest rate 7750 per annum payable semiannually arrears june 15 december 15 year beginning june 15 2013 covenants indenture governing senior notes contains covenants restrict subsidiaries ability among things • incur additional indebtedness • pay dividends make distributions repurchase redeem capital stock • prepay redeem repurchase certain debt • make loans investments • sell assets • incur liens • enter transactions affiliates • enter agreements restricting subsidiaries ability pay dividends • consolidate merge sell substantially assets addition upon specified change control trigger event specified asset sales may required offer repurchase senior notes events default indenture governing senior notes provides customary events default including without limitation payment defaults ii covenant defaults iii crossacceleration certain indebtedness excess specified amounts iv certain events bankruptcy insolvency v judgment defaults excess specified amounts short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2012 cash provided operations 139 million support capital expenditure program andor liquidity requirements may use operating cash flow cash balances proceeds sales assets issue debt equity borrow revolving credit facility combination thereof availability longterm financing dependent upon ability generate operating profits sufficient meet requirements working capital expenditures reasonable return investment believe earning operating profits permit us maintain access favorably priced financing arrangements management continue closely monitor liquidity credit markets offbalance sheet arrangements occasion partners guarantee certain obligations behalf joint ventures december 31 2012 guarantees place contractual obligations commercial commitments following table summarizes company’s contractual obligations commercial commitments aggregate maturities december 31 2012 thousands 1 maturities borrowings interest payments pursuant borrowings based contractual terms 2 capital purchase obligations represent commitments purchase property equipment december 31 2012 commitments relate orders placed december 31 2012 11 new helicopters consisting one aw139 medium helicopter five aw169 light twin helicopters five aw189 medium helicopters total unfunded capital commitments 1283 million may terminated without liability liquidated damages 33 million aggregate commitments recorded liabilities consolidated balance sheet december 31 2012 yet received goods taken title property aw139 helicopter delivered 2013 aw189 helicopters scheduled delivered 2014 2015 delivery dates aw169 helicopters yet determined 3 operating leases primarily include leases helicopters property remaining term excess one year 4 purchase obligations primarily include purchase orders helicopter inventory maintenance december 31 2012 commitments goods services acquired ordinary course business fulfilled vendors within short period time 5 primarily includes deferred compensation arrangements effects inflation company’s operations expose effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies june 12 2009 purported civil class action filed seacor era group inc era helicopters llc three defendants collectively “defendants” us district court district delaware superior offshore international inc v bristow group inc et al 09cv438 del complaint alleged defendants violated federal antitrust law conspiring raise fix maintain stabilize prices offshore helicopter services us gulf mexico period january 2001 december 2005 purported class plaintiffs included direct purchasers services relief sought included compensatory damages treble damages september 4 2009 defendants filed motion dismiss complaint september 14 2010 court entered order dismissing complaint september 28 2010 plaintiffs filed motion reconsideration amendment motion reargument “motions” november 30 2010 court granted motions amended court’s september 14 2010 order clarify dismissal without prejudice permitted filing amended complaint authorized limited discovery respect new allegations amended complaint following completion limited discovery february 11 2011 defendants filed motion summary judgment dismiss amended complaint prejudice june 23 2011 district court granted summary judgment defendants july 22 2011 plaintiffs filed notice appeal us court appeals third circuit july 27 2012 third circuit court appeals affirmed district court’s grant summary judgment favor defendants august 9 2011 defendants moved certain excessive costs expenses attorneys fees 28 usc § 1927 “fee motion” october 9 2012 district court denied fee motion normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect consolidated financial position results operations critical accounting policies estimates use estimates preparation financial statements conformity accounting principles generally accepted us requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting periods estimates include related allowance doubtful accounts useful lives property equipment impairments income tax provisions certain accrued liabilities actual results could differ estimates differences may material revenue recognition recognize revenue realized realizable earned revenue realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenue meet criteria deferred criteria met charter majority helicopters primarily master service agreements subscription agreements daytoday charter arrangements contractleases master service agreements subscription agreements require incremental payments fixed monthly fee based flight hours flown agreements fixed terms ranging one month five years generally may canceled upon 30 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate services provided contractleases include equipment include equipment logistical maintenance support insurance personnel combination thereof fixed monthly fee revenues recognized ratably contract term usage hourly based revenues recognized hours flown air medical services provided contracts hospitals typically include either fixed monthly hourly rate structure fee per completed flight fixed monthly revenues recognized ratably contract term perhour perflight based revenues recognized hours flown flights completed contracts hospitals longer term offer either party ability terminate less six month’s notice operate air medical contracts pursuant collect fee per flight respect flightseeing activities allocate block space cruise lines sell seats directly customers revenues recognized services performed fbo sells fuel adhoc basis sales recognized time fuel delivery trade receivables customers primarily major integrated independent exploration production companies hospitals international helicopter operators us government customers typically granted credit shortterm basis related credit risks considered minimal routinely review trade receivables make provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted derivative instruments account derivatives use fair value concept whereby derivative positions stated fair value accompanying consolidated balance sheets realized unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative gains losses net realized unrealized gains losses derivatives designated fair value hedges recognized corresponding increase decrease fair value underlying hedged item extent effective ineffective portion reported accompanying consolidated statements operations derivative gains losses net inventories consist primarily spare parts fuel stated lower cost using average cost method market record writedowns needed adjust carrying amount inventories lower cost market property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable us continue operate asset similar manner time may acquire older assets already exceeded useful life policy case depreciate assets based best estimate remaining useful life review estimated useful lives salvage values fixed assets ongoing basis effective july 1 2011 changed estimated useful life salvage value helicopters 12 15 years 30 40 respectively due improvements new helicopter models continue increase longterm value make viable operation longer period time year ended december 31 2011 change estimate increased operating income 76 million net income 49 million basic diluted earnings per share 048 year ended december 31 2012 change estimate increased operating income 180 million net income 117 million basic diluted earnings per share 048 equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major renewals improvements properties capitalized engage number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed period flight hours flown event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments powerbyhour provider case record reduction operating expense receive refund also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process arrangements record repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered powerbyhour arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives impairment longlived assets perform impairment analysis longlived assets used operations indicators impairment present carrying value assets recoverable determined estimated undiscounted cash flows carrying value assets reduced fair value generally fair value determined using valuation techniques expected discounted cash flows appraisals appropriate impairment 50 less owned companies perform regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations expect decline otherthantemporary investment written fair value actual results may vary estimates due uncertainties regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees investments income taxes results included consolidated us federal income tax return seacor’s policy allocation us federal income taxes requires subsidiaries compute provision us federal income taxes separate company basis settle seacor net operating loss benefits settled seacor current basis used consolidated us federal income tax return offset taxable profits affiliates periods presented total provision income taxes included consolidated statements operations would remain currently reported eligible included consolidated us federal income tax return seacor deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general respectively accompanying consolidated statements operations record valuation allowance reduce deferred tax assets likely portion deferred tax assets realized item 7aitem 7 management’s discussion analysis financial condition results operations overview one largest helicopter operators world longest serving helicopter transport operator us primary area operations helicopters primarily used transport personnel offshore installations drilling rigs platforms year ended december 31 2013 approximately 60 18 total operating revenues earned us gulf mexico alaska respectively year ended december 31 2012 56 15 total operating revenues earned regions respectively also provide helicopters related services thirdparty helicopter operators countries addition us customers currently customers brazil canada india mexico norway spain sweden united kingdom uruguay primary users transport services major integrated independent oil gas companies us government agencies years ended december 31 2013 2012 approximately 75 65 operating revenues respectively derived helicopter services including emergency search rescue services provided clients primarily involved oil gas activities addition serving oil gas industry provide helicopters drylease air medical services firefighting support alaska flightseeing tours among activities december 31 2013 owned operated total 165 helicopters consisting nine heavy helicopters 61 medium helicopters 36 light twin engine helicopters 59 light single engine helicopters addition two aw139 medium helicopters fully paid 2013 delivered operational 2014 december 31 2013 commitments purchase additional 21 new helicopters consisting ten aw189 heavy helicopters four s92 heavy helicopters two aw139 medium helicopters five aw169 light twin helicopters aw139 helicopters scheduled delivered 2014 aw189 helicopters scheduled delivered beginning 2014 2017 s92 helicopters scheduled delivered 2016 2017 delivery dates aw169 helicopters yet determined addition outstanding options purchase additional ten aw189 helicopters five s92 helicopters four aw139 helicopters options exercised helicopters would delivered beginning 2014 2018 demand new sophisticated equipment continues grow particularly response requirements offshore oil gas industry become focused deepwater activities service new areas exploration helicopters must greater payloads range helicopters supporting air medical search rescue operations public uses also require new technology safety improvements according pfc energy september 2013 oil gas helicopter fleet analysis presentation approximately 28 global helicopter fleet 20 years old replacement hampered following factors four major helicopter original equipment manufacturers “oems” full range service models ii lead times delivery new equipment long three years iii many smaller operators still unable raise capital believe revolving credit facility extent borrowing capacity thereunder strong relationships oems help position us add new helicopters fleet upgrade existing helicopters thereby maintaining asset base suitable use within operations dryleasing operators also leverage strong relationships oems support growth services selling specialty equipment accessories helicopters training january 31 2013 seacor completed spinoff company means dividend seacor’s stockholders company’s issued outstanding common stock prior spinoff seacor company entered distribution agreement several agreements govern postspinoff relationship era group independent company common stock listed new york stock exchange symbol “era” offshore oil gas support offshore oil gas market highly cyclical demand linked price oil gas tends fluctuate depending many factors including global economic activity levels inventory addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior last seven years provided transportation services government inspectors offshore installations drilling rigs platforms contract renewed 2011 expected run 2016 december 31 2013 25 helicopters operating contract customer options increase number 30 helicopters brazil among important markets offshore oil gas activity worldwide believe brazilian market require significant additions heavy medium helicopter fleet currently operation country expands production efforts time us energy information administration stated recent discoveries large offshore presalt oil deposits could transform brazil one larger oil producers world petroelo brasileiro sa “petrobras brazil” estimated achieve oil production target approximately four million barrels per day 2020 committed participate market acquiring ownership interest aeróleo taxi aereo sa “aeróleo” brazilian helicopter operator july 2011 detailed discussion financial difficulties experienced aeróleo thereafter described also provide search rescue services us gulf mexico subscription basis currently three aw139 helicopters configured service several subscribers dryleasing beginning 2005 began deploy helicopters international markets frequently drylease arrangements third parties majority helicopters supporting oil gas activities regions rapidly expanding activity brazil india also equipment working north sea mexico spain december 31 2013 41 helicopters located foreign jurisdictions compared 15 helicopters december 31 2006 many cases helicopters contracted local helicopter operators often prefer lease helicopters rather purchase dryleasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk december 31 2013 three ec225 heavy helicopters nine aw139 helicopters dryleased aeróleo provides helicopter transportation services ogx petroleo e gas participacoes sa petrobras brazil queiroz galvão sa repsol brazil sa saipem brasil lda multiyear contracts number aw139 helicopters drylease aeróleo idle august 2011 late november 2012 november 2012 aeróleo executed contracts petrobras brazil result emergency tender issued petrobras brazil due suspension use ec225 helicopters began utilize four aw139 helicopters termination contract november 30 2013 aw139 helicopters expected deployed multiyear contracts petrobras brazil commencing october 2014 currently contract following termination emergency tender contract noted petrobras brazil alleged ec225 helicopters could meet terms contract attempted unilaterally suspend ec225 helicopter contracts aeróleo operators brazil commencing april 2013 duration suspension petrobras brazil commenced paying monthly rate september october 2013 hourly rates upon resumption ec225 helicopter flight operations november december 2013 hold 51 interest lake palma sl “lake palma” joint venture dryleases helicopters fumigación aérea andaluza sa firefighting operator based spain “faasa” addition three light single helicopters nine medium helicopters dryleased directly faasa also focused developing presence australia india southeast asia helicopter markets believe represent growth opportunities activities services consistent strategy selectively diversify sources earnings cash flow deploy number helicopters support industries activities years ended december 31 2013 2012 approximately 9 13 operating revenues generated activities services 2007 entered air medical services market acquisition flight operations keystone helicopter corporation supply helicopters pilots mechanics hospitals manage helicopters behalf also operate fixed based operation “fbo” ted stevens anchorage international airport provide alaska summer flightseeing tours support inland firefighting mining operations alaska also developed services helicopter industry believe complement core activities hold 50 interest dart holding company ltd “dart” international sales manufacturing organization focused aftermarket helicopter parts accessories hold 50 interest era training center llc “era training” provides classroom instruction flight simulator helicopter training employees pilots working third parties helicopter companies including competitors government agencies aeroleo recent developments aeróleo brazilian joint venture experienced financial difficulties since investment july 2011 august 2011 petrobras brazil canceled award aw139 helicopters response accident involving aw139 helicopter contract petrobras brazil one aeróleo’s competitors result four aw139 helicopters drylease aeróleo mobilized response notification aeróleo successful bid place contract petrobras brazil remained idle august 2011 late november 2012 november 2012 response suspension use ec225 helicopters described petrobras brazil contracted aeróleo utilize four aw139 helicopters termination contract november 30 2013 aw139 helicopters scheduled begin multiyear contracts petrobras brazil commencing october 2014 currently contract following termination emergency tender contract addition petrobras brazil attempted unilaterally suspend ec225 helicopter contracts aeróleo operators brazil commencing april 1 2013 following suspension use ec225 helicopters alleging ec225 helicopters could meet terms contract aeróleo receive monthly payments ec225 helicopters contract petrobras brazil april late september october 2013 commenced generating hourly flight revenues thereafter upon resumption aeróleo’s ec225 helicopters flight operations petrobras brazil another aeróleo customer ogx petroleo gas participacoes sa “ogx” recently experienced financial difficulties filed bankruptcy protection financial difficulties could impair ogxs ability pay receivables aeróleo could turn impair aeróleos ability make drylease payments owed us impact revenue currently recognize revenues aeróleo cash received addition financial difficulties dispute partner aeróleo respect contractual shareholder rights connection attempted sale transfer partners interests resolved arbitration february 15 2014 definitive agreements executed respect transfer third party 50 economic 80 voting interest held partner aeróleo consideration transfer interests terms conditions transaction aeróleo required make payments affiliates transferring partner form severance partial repayment shareholder loans likely require capital infusion us approximately 2 million transaction remains subject satisfaction customary closing conditions including receipt required local regulatory approval expected close second half 2014 february 19 2014 connection execution definitive agreements filed joint motion dismiss ongoing arbitration partner result transaction may required consolidate financial results aeróleo upon consummation thereof please see note 20 “subsequent event” notes consolidated financial statements included item 8 annual report form 10k information regarding agreement entered partner aeróleo continuation combination financial difficulties taken separately together may impede aeróleo’s ability pay equipment leased us necessitate infusion capital us allow aeróleo continue operate result adversely impact results operations due liquidity issues experienced aeróleo december 31 2013 deferred recognition 210 million revenues aeróleo refer item 1a part i“risk factorswe rely relatively customers significant share revenues loss could adversely affect business results operations” additional information fleet developments capital commitments recent years continued focus modernization fleet possible standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance customers flying offshore tend prefer twinengine helicopters singleengine helicopters due additional safety afforded two engines response demand transformed fleet significantly since beginning 2005 added 125 helicopters disposed 93 helicopters reduced average age owned fleet 17 years 12 years december 31 2013 25 fleet five years old less spent 1101 million 1130 million 1589 million acquire helicopters equipment years ended december 31 2013 2012 2011 respectively primarily heavy medium helicopters december 31 2013 commitments 3417 million primarily pursuant agreements purchase helicopters consisting ten aw189 helicopters four s92 helicopters two aw139 helicopters five aw169 helicopters aw139 helicopters scheduled delivered 2014 aw189 helicopters scheduled delivered beginning 2014 2017 s92 helicopters scheduled delivered 2016 2017 delivery dates aw169 helicopters yet determined approximately 1644 million commitments inclusive deposits paid options yet exercised may terminated without liability aggregate liquidated damages 111 million addition outstanding options purchase additional ten aw189 helicopters five s92 helicopters four aw139 helicopters options exercised helicopters would delivered beginning 2014 2018 components revenues expenses derive revenues primarily operating dryleasing equipment profits depend cost capital acquisition costs assets operating costs contract policy reputation operating revenues recorded us gulf mexico primarily generated offshore oil gas related activities similarly operating revenues recorded alaska primarily generated offshore oil gas related activities also include revenues operations supporting firefighting mining activities us gulf mexico alaska operating revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded dryleasing generated dryleases thirdparty operators joint venture partners responsible operation helicopters certain dryleases also provide crew training management expertise logistical maintenance support dryleases typically call fixed monthly fee may also include additional charge based flight hours flown majority dryleasing revenues generated helicopters deployed internationally operating revenues search rescue services earned fixed monthly fee plus incremental charge flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded air medical services include revenues management services hospitals operating revenues earned fixed monthly fee plus incremental charge flight hours flown operating revenues recorded flightseeing generated per passenger basis aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities well helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments powerbyhour provider case record reduction operating expense receive refund also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty powerbyhour programs helicopters drylease third parties arrangements whereby customer assumes operational responsibility often provide maintenance parts support generally incur material operating costs instances dryleases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide training services support drylease customers prior entry revolving credit facility december 22 2011 participated cash management program whereby certain operating capital expenditures funded advances seacor certain cash collections forwarded seacor incurred interest outstanding advances reported interest expense advances seacor consolidated statements operations interest calculated settled quarterly basis using interest rates set discretion seacor following entry revolving credit facility longer participate cash management program seacor provided certain support services us shared services arrangement including payroll processing information systems support cash disbursement support cash receipt processing treasury management historically charged share actual costs incurred generally based volume processed units supported december 30 2011 entered transition services agreement providing services described pursuant seacor continued provide support services connection spinoff entered amended restated transition services agreement seacor pursuant services continue provided period time spinoff exceed two years time spinoff seacor incurred costs providing operating segments certain corporate services including executive oversight risk management legal accounting tax charged quarterly management fees operating segments order cover costs total management fees charged seacor operating segments include actual corporate costs incurred plus markup generally allocated within consolidated group using incomebased performance metrics reported operating segment relation seacor’s operating segments costs incurred management fees seacor reported seacor management fees consolidated statements operations effective january 1 2012 seacor provided corporate services transition services agreement fixed quarterly charge 500000 subject terms conditions transition services agreement upon completion spinoff longer charged management fee seacor incur costs amended restated transition services agreement results operations operating revenues service line following tables set forth years indicated amount operating revenues service line 1 primarily oil gas services also includes revenues activities firefighting utility support year ended december 31 2013 compared year ended december 31 2012 operating revenues operating revenues 260 million higher year ended december 31 2013 “current year” compared year ended december 31 2012 “prior year” operating revenues oil gas operations us gulf mexico 197 million higher current year operating revenues medium helicopters increased 207 million primarily due increased utilization current year support increase deepwater drilling completion production activity due medium helicopters used fill ec225 heavy helicopters temporarily suspended october 2012 july 2013 addition operating revenues single engine helicopters increased 45 million due higher rates increases partially offset 30 million decrease heavy helicopters due temporary suspension ec225 helicopters decrease 13 million light twin helicopters due lower utilization addition revenues decreased 12 million primarily due reduction parts sales operating revenues oil gas activities alaska 123 million higher current year resumption services major oil gas customer temporarily suspended portion prior year contributed 91 million increase shortterm work related drillship running aground contributed 28 million increase operating revenues international oil gas operations 48 million higher due new contract uruguay awarded late 2012 commenced january 2013 revenues dryleasing activities 103 million lower current year primarily due 115 million decrease related contracts ended current year 48 million related helicopters subsequently sold decreases partially offset increase 09 million result rate escalations operating revenues search rescue activities increased 61 million current year primarily due new search rescue customers increased activity existing customers operating revenues air medical services 70 million lower primarily due conclusion three longterm hospital contracts partially offset new contract began 2013 increases rates existing contracts change contracts primarily due shift management philosophy designed enhance profitability services one customer bringing services inhouse upon conclusion contract us operating revenues flightseeing fbo activities increased 01 million 04 million respectively current year primarily result better weather conditions resulting flying activity operating expenses operating expenses 194 million higher current year repairs maintenance expenses increased 129 million primarily due 81 million increase result timing repairs net 72 million decrease vendor maintenance credits prior year increases partially offset decrease powerbyhour expense 24 million primarily due temporary suspension ec225 helicopters personnel costs increased 44 million primarily due addition personnel support increase oil gas activity discussed fuel expense increased 15 million due increased flight hours increase average price per gallon lease expense increased 15 million due onetime charge related operating leases certain air medical helicopters increases partially offset decrease operating expenses 07 million primarily due decrease part sales related air medical contracts administrative general administrative general expenses 41 million higher current year compensation employee costs increased 41 million primarily due recognition management bonus awards severance costs related changes senior management share awards compensation related equity awards granted 2013 following spinoff seacor excluding 29 million expenses associated contemplated initial public offering common stock recognized prior year legal professional expenses increased 40 million due costs associated public company legal expenditures increase shared services fees seacor amended restated transition services agreement addition travel expenses increased 04 million due business development activities increases partially offset 19 million decrease allowance doubtful accounts prior year included 25 million provision connection customer bankruptcy 04 million provided current year due collection issues related note customer purchased parts previous year depreciation expense 31 million higher current year primarily due addition new higher cost helicopters gains asset dispositions impairments net current year sold otherwise disposed helicopters equipment cash proceeds 651 million resulting gains 183 million amounts included gain 54 million sale ec225 helicopter damaged incident may 2012 drylease customer subsequently sold customer current year cash proceeds 246 million gain 12 million recognition insurance proceeds 21 million related s76a helicopter involved incident current year gain 03 million related aw139 helicopter involved incident prior year gains 113 million sale helicopters equipment normal course business addition recognized previously deferred gains 01 million 2013 prior year company sold helicopter components equipment proceeds 55 million recognized gains 29 million addition recognized previously deferred gains 07 million 2012 operating income operating income percentage revenues 16 current year compared 12 prior year excluding gains asset dispositions discussed operating income percentage revenues 9 current year compared 10 prior year repairs maintenance expenses increased result timing repairs 2013 absence benefit vendor credits prior year interest expense december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes net proceeds used repay 1900 million borrowings outstanding revolving credit facility result higher interest rate notes interest expense 74 million higher current year seacor management fees december 30 2011 entered transition services agreement seacor provide various corporate services fixed rate 20 million per annum beginning january 1 2012 costs classified seacor management fees effectively fixed previously variable allocation seacor corporate overhead expenses business units based certain financial contribution metrics costs terminated effective completion spinoff connection spinoff entered amended restated transition services agreement seacor provide various shared services costs classified administrative general expenses income tax expense income tax expense 44 million higher current year primarily due increase income tax expense equity earnings losses 50 less owned companies addition established valuation allowance certain state deferred tax assets year effective tax rate prior year lower due permanent differences related sharebased compensation awards state income tax expenses holdings noncontrolling interests equity earnings losses 50 less owned companies earnings equity investments 09 million current year increase 64 million compared prior year loss 55 million prior year recognized loss 06 million impairment charge 59 million net tax investment brazilian joint venture current year losses recognized brazilian joint venture fully written 2012 earnings equity investments consistent respective periods year ended december 31 2012 compared year ended december 31 2011 operating revenues operating revenues 148 million higher year ended december 31 2012 compared year ended december 31 2011 operating revenues us gulf mexico 324 million higher primarily due newly delivered helicopters placed service expansion government services support increase charter revenues primarily support hurricane evacuations operating revenues alaska primarily oil gas activities increased 24 million primarily due increase charter activity hours flown support firefighting contracts fullyear impact contracts commenced 2011 operating revenues dryleasing activities decreased 134 million dryleasing revenues helicopters chartered brazilian joint venture 112 million lower primarily due deferral reduction dryleasing revenues result difficulties experienced joint venture connection canceled contract award four aw139 helicopters drylease us addition dryleasing revenues brazilian joint venture lower due decreased flight hours helicopters undergoing major maintenance dryleasing revenues another customer also lower due net deferral 19 million due customers shortterm liquidity issues operating revenues air medical services 61 million lower primarily due conclusion longterm hospital contract partially offset fullyear impact hospital contract awarded 2011 operating expenses operating expenses 45 million higher year ended december 31 2012 compared year ended december 31 2011 personnel costs 37 million higher primarily due implementation pilot pay scale adjustment addition personnel support increased activity us gulf mexico repairs maintenance expenses 58 million lower 2012 primarily due recognition 77 million vendor credits 14 million maintenance credits received connection end two customer dryleases addition repairs maintenance expenses decreased 36 million due reduction ec225 hours flown decreases partially offset 53 million increase additional helicopters placed powerbyhour programs 16 million increase repairs maintenance costs primarily due timing repairs helicopters covered powerbyhour arrangements insurance loss reserves 23 million higher due increase overall fleet value recognition good experience credit hull liability underwriters year ended december 31 2011 fuel costs 19 million higher primarily due increased flight hours us gulf mexico line increased activity discussed operating expenses 30 million higher primarily due receipt year ended december 31 2011 19 million insurance proceeds related hurricane damages sustained 2005 administrative general administrative general expenses 29 million higher year ended december 31 2012 compared year ended december 31 2011 allowance doubtful accounts 28 million higher 25 million provided year ended december 31 2012 connection customer bankruptcy year ended december 31 2012 also includes legal professional expenses 29 million associated contemplated initial public offering common stock increases partially offset 35 million decrease severance costs associated changes executive management depreciation expenses 01 million lower year ended december 31 2012 compared year ended december 31 2011 primarily due change estimate useful life salvage value helicopters reduced depreciation expense year ended december 31 2012 partially offset addition higher cost equipment effective july 1 2011 company changed estimated useful life salvage value helicopters 12 15 years 30 40 respectively due improvements new helicopter models continue increase longterm value make viable operation longer period time gains asset dispositions impairments net year ended december 31 2012 sold otherwise disposed eight helicopters helicopter components equipment proceeds 55 million gains 29 million addition recognized previously deferred gains 07 million year ended december 31 2011 sold ten helicopters equipment received insurance proceeds related loss helicopter received net proceeds 292 million disposition assets including insurance proceeds gains 165 million 145 million recognized currently 20 million deferred addition recognized previously deferred gains 07 million operating income excluding gains asset dispositions operating income percentage revenues 10 year ended december 31 2012 compared 8 year ended december 31 2011 increase primarily due recognition vendor credits maintenance credits year ended december 31 2012 interest expense interest expense advances seacor december 22 2011 entered revolving credit facility used 2423 million borrowings facility settle outstanding advances seacor december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes net proceeds used repay 1900 million borrowings outstanding revolving credit facility result interest expense 106 million year ended december 31 2012 compared 14 million year ended december 31 2011 interest expense advances seacor 234 million lower year ended december 31 2012 compared year ended december 31 2011 seacor management fees seacor management fees represent various corporate costs incurred seacor turn charged operating segments fees previously allocated using incomebased performance metrics us relation seacor’s operating segments december 30 2011 entered transition services agreement seacor provide services fixed rate 20 million per annum beginning january 1 2012 result seacor management fees year ended december 31 2012 20 million compared 88 million year ended december 31 2011 equity losses 50 less owned companies year ended december 31 2012 recognized impairment charge 59 million net tax investment brazilian joint venture derivative gains losses net derivative losses 2012 primarily result losses interest rate swap agreements foreign currency gains losses net foreign currency gains net 2012 2011 primarily due weakening us dollar euro underlying certain cash balances income tax expense benefit year ended december 31 2012 effective income tax rate 355 year ended december 31 2011 effective income tax rate 176 primarily due recognition income tax benefit 07 million adjustments deferred tax liabilities resulting changes state tax apportionment factors expense 04 million result allocated nondeductible seacor management fees liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments sources liquidity cash balances cash flows operations time may secure additional liquidity issuance equity debt borrowings revolving credit facility historically seacor advanced substantial amounts capital us fund expenditures prior entering revolving credit facility december 22 2011 participated cash management program whereby certain operating capital expenditures funded advances seacor certain cash collections forwarded seacor consequence arrangement historically maintained minor cash balances december 22 2011 entered 3500 million revolving credit facility december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes used net proceeds offering repay 1900 million borrowings outstanding revolving credit facility connection senior notes offering permanently reduced borrowing capacity facility 3500 million 2000 million december 20 2012 borrowed 500 million revolving credit facility fund repurchase shares series b preferred stock seacor balance outstanding december 31 2012 revolving credit facility requires maintain maximum funded debt ebitda defined revolving credit facility ratio “rc leverage ratio” 50 10 increased 40 10 result issuance senior notes also requires comply certain financial ratios failure meet ratios event default facility therefore ability borrow revolving credit facility dependent limited compliance rc leverage ratio requirement ability comply financial ratios see “senior secured revolving credit facility” december 31 2013 amount additional borrowings could borrow revolving credit facility based rc leverage ratio date 1361 million december 23 2011 issued 1400000 shares series preferred stock seacor exchange 1400 million aggregate advances previously provided us seacor also contributed additional 1800 million capital us respect additional prior advances holders series preferred stock entitled receive quarterly cash dividends rate 6 per annum date issuance year ended december 31 2013 made payments revolving credit facility totaling 500 million cash flows provided operating activities drew 550 million revolving credit facility primarily fund purchase helicopters year ended december 31 2012 drew 880 million revolving credit facility primarily repurchase 500000 shares series b preferred stock held seacor fund purchase ec225 helicopter certain assets year ended december 31 2012 experienced decrease operating income primarily due reduction gains asset dispositions significant impact last twelvemonths ebitda defined revolving credit facility result seacor purchased one million shares series b preferred stock including 300000 shares series b preferred stock 300 million june 8 2012 700000 shares series b preferred stock 700 million september 25 2012 used portion proceeds issuances repay borrowings revolving credit facility would able maintain compliance financial ratios facility see “year ended december 31 2012 compared year ended december 31 2011operating income” repurchased series b preferred stock december 2012 shares series b preferred stock remain outstanding december 31 2013 unfunded capital commitments 3417 million primarily pursuant agreements purchase helicopters approximately 987 million payable 2014 remaining commitments payable 2015 2017 company also 23 million deposits paid options yet exercised approximately 1644 million commitments inclusive deposits paid options yet exercised may terminated without liability us aggregate liquidated damages 111 million addition outstanding options purchase additional ten aw189 helicopters five s92 helicopters four aw139 helicopters options exercised helicopters would delivered beginning 2014 2018 expect finance remaining acquisition costs combination cash hand cash provided operating activities borrowings revolving credit facility summary cash flows operating activities cash flows provided operating activities increased 505 million year ended december 31 2013 compared year ended december 31 2012 cash flows provided operating activities decreased 270 million year ended december 31 2012 compared year ended december 31 2011 components cash flows provided operating activities years ended december 31 follows operating income depreciation gains asset dispositions impairments net 25 million higher year ended december 31 2013 compared year ended december 31 2012 primarily due 368 million 61 million increase revenues oil gas search rescue activities respectively increases partially offset 103 million decrease dryleasing revenues 70 million reduction operating revenues air medical services increase 129 million repairs maintenance expenses 44 million increase personnel cost 41 million increase administrative general expenses 15 million increase lease expense primarily due onetime charge related operating leases certain air medical helicopters operating income depreciation gains asset dispositions impairments net 74 million higher year ended december 31 2012 compared year ended december 31 2011 primarily due 324 million increase revenues gulf mexico decrease 58 million repairs maintenance expenses increases offset 134 million decrease dryleasing revenues 61 million reduction operating revenues air medical services 38 million increase personnel cost 23 million increase insurance loss reserves 30 million increase operating expenses primarily due 19 million receipt insurance proceeds period ended december 31 2011 29 million increase administrative general expenses changes operating assets liabilities interest income taxes 1084 million higher year ended december 31 2013 compared year ended december 31 2012 primarily due repurchase series b preferred stock held seacor settlements intercompany transactions seacor 2012 interest paid excluding capitalized interest 100 million higher year ended december 31 2013 compared year ended december 31 2012 primarily due higher interest rate senior notes benefit net tax operating losses purchased seacor management fees 520 million 18 million lower respectively year ended december 31 2013 compared year ended december 31 2012 result spinoff seacor investing activities year ended december 31 2013 net cash used investing activities 435 million primarily follows • capital expenditures 1101 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 652 million • net principal payments notes receivable thirdparties equity investees 15 million year ended december 31 2012 net cash used investing activities 1148 million primarily follows • capital expenditures 1130 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 52 million • investments advances 50 less owned companies 106 million • net principal payments notes receivable thirdparties equity investees 36 million year ended december 31 2011 net cash used investing activities 1491 million primarily follows • capital expenditures 1589 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 260 million • cash settlements derivative transactions net 61 million • investments advances 50 less owned companies 218 million financing activities year ended december 31 2013 net cash used financing activities 15 million primarily follows • net principal payments longterm debt 528 million • proceeds revolving credit facility 550 million • dividends paid series preferred stock 50 million • proceeds seacor settlement stock options 07 million • proceeds tax benefits sharebased awards 05 million year ended december 31 2012 net cash provided financing activities 326 million primarily follows • proceeds 1919 million net issuance costs senior notes • proceeds issuance series b preferred stock 1000 million • borrowings revolving credit facility 880 million • net principal payments longterm debt 2928 million • payments connection repurchase series b preferred stock seacor 500 million • dividends paid seacor 44 million year ended december 31 2011 net cash provided financing activities 1831 million primarily follows •proceeds borrowings revolving credit facility 2490 million net 30 million transaction costs • repayments seacor 632 million • scheduled payments longterm debt 27 million senior secured revolving credit facility december 22 2011 entered 3500 million senior secured revolving credit facility “revolving credit facility” matures december 2016 revolving credit facility provides us ability borrow 2000 million sublimits 500 million letters credit 250 million swingline advances subject terms conditions specified revolving credit facility certain circumstances borrowing capacity revolving credit facility may increased additional 1000 million december 31 2013 550 million outstanding advances revolving credit facility annual rate 235 based leverage ratio facility ability borrow additional 1361 million facility net issued letters credit 89 million remaining amounts senior secured revolving credit facility available fund working capital needs additional information terms revolving credit facility see note 8 notes consolidated financial statements included item 8 annual report form 10k senior notes december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 net proceeds offering used repay 1900 million borrowings outstanding revolving credit facility connection offering permanently reduced borrowing capacity facility 3500 million 2000 million interest notes payable semiannually arrears june 15 december 15 year beginning june 15 2013 may redeem notes time specified indenture governing notes additional information terms notes see note 8 notes consolidated financial statements included item 8 annual report form 10k short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2013 cash provided operations 644 million support capital expenditure program andor liquidity requirements may use operating cash flow cash balances proceeds sales assets issue debt equity borrow revolving credit facility combination thereof availability longterm financing dependent upon ability generate operating profits sufficient meet requirements working capital expenditures reasonable return investment believe earning operating profits permit us maintain access favorably priced financing arrangements management continue closely monitor liquidity credit markets offbalance sheet arrangements occasion partners guarantee certain obligations behalf joint ventures december 31 2013 guarantees place contractual obligations commercial commitments following table summarizes company’s contractual obligations commercial commitments aggregate maturities december 31 2013 thousands 1 maturities borrowings interest payments pursuant borrowings based contractual terms interest amounts represent expected cash payments interest longterm debt based interest rates place amounts outstanding december 31 2013 2 capital purchase obligations represent commitments purchase property equipment december 31 2013 commitments relate orders placed december 31 2013 21 new helicopters consisting two aw139 medium helicopters five aw169 light twin helicopters ten aw189 heavy helicopters four s92 heavy helicopters total unfunded capital commitments 1644 million may terminated without liability liquidated damages 111 million aggregate commitments recorded liabilities consolidated balance sheet december 31 2013 yet received goods taken title property aw139 helicopters scheduled delivered 2014 aw189 helicopters scheduled delivered beginning 2014 2017 s92 helicopters scheduled delivered 2016 2017 delivery dates aw169 helicopters yet determined 3 operating leases primarily include leases helicopters property remaining term excess one year 4 purchase obligations primarily include purchase orders helicopter inventory maintenance december 31 2013 commitments goods services acquired ordinary course business fulfilled vendors within short period time 5 primarily includes deferred compensation arrangements effects inflation company’s operations expose effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect consolidated financial position results operations critical accounting policies estimates use estimates preparation financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period estimates include related allowance doubtful accounts useful lives property equipment impairments inventories income tax provisions certain accrued liabilities actual results could differ estimates differences may material revenue recognition recognize revenue realized realizable earned revenue realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenue meet criteria deferred criteria met charter majority helicopters master service agreements subscription agreements daytoday charter arrangements dryleases master service agreements subscription agreements typically require fixed monthly fee plus incremental payments based hours flown agreements fixed terms ranging one month five years generally may canceled providing 30 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily dryleases require fixed monthly fee customer’s right use helicopter applicable charge based hours flown compensation maintenance parts andor personnel support may provide customer dryleases generally run two five years early cancellation provisions air medical services provided contracts hospitals typically include fixed monthly hourly rate structure respect flightseeing operations allocate block space cruise lines seats sold directly customers also operate fixed based operation “fbo” ted stevens anchorage international airport sells fuel adhoc basis leases storage space trade receivables customers primarily major integrated independent exploration production companies hospitals international helicopter operators us government customers typically granted credit shortterm basis related credit risks considered minimal routinely review trade receivables make provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted derivative instruments account derivatives use fair value concept whereby derivative positions stated fair value accompanying consolidated balance sheets realized unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative gains losses net realized unrealized gains losses derivatives designated fair value hedges recognized corresponding increase decrease fair value underlying hedged item extent effective ineffective portion reported accompanying consolidated statements operations derivative gains losses net inventories stated lower average cost market value consist primarily spare parts fuel record writedowns needed adjust carrying amount inventories lower cost market property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable us continue operate asset similar manner time may acquire older assets already exceeded useful life policy case depreciate assets based best estimate remaining useful life review estimated useful lives salvage values fixed assets ongoing basis effective july 1 2011 changed estimated useful life salvage value helicopters 12 15 years 30 40 respectively due improvements new helicopter models continue increase longterm value make viable operation longer period time year ended december 31 2011 change estimate increased operating income 76 million net income 49 million basic diluted earnings per share 048 equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major renewals improvements properties capitalized engage number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed period flight hours flown event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments powerbyhour provider case record reduction operating expense receive refund also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process arrangements record repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered powerbyhour arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives impairment longlived assets perform impairment analysis longlived assets used operations indicators impairment present carrying value assets recoverable determined estimated undiscounted cash flows carrying value assets reduced fair value generally fair value determined using valuation techniques expected discounted cash flows appraisals appropriate impairment 50 less owned companies perform regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations expect decline otherthantemporary investment written fair value actual results may vary estimates due uncertainties regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees investments income taxes commencing february 1 2013 file standalone consolidated us federal tax return deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general respectively accompanying consolidated statements operations record valuation allowance reduce deferred tax assets likely portion deferred tax assets realized prior spinoff company included consolidated us federal income tax return seacor’s policy allocation us federal income taxes requires subsidiaries compute provision us federal income taxes separate company basis settle seacor net operating loss benefits settled seacor current basis used consolidated us federal income tax return offset taxable profits affiliates periods prior spinoff total provision income taxes included consolidated statements operations would remain currently reported company eligible included consolidated us federal income tax return seacor item 7aitem 7 management’s discussion analysis financial condition results operations overview one largest helicopter operators world longest operating helicopter transport operator us primary area operations helicopters primarily used transport personnel offshore installations drilling rigs platforms years ended december 31 2014 2013 2012 approximately 67 60 56 respectively total operating revenues earned us gulf mexico periods approximately 15 18 15 respectively operating revenues earned alaska also provide helicopters related services thirdparty helicopter operators foreign affiliates currently customers brazil india norway spain united kingdom primary users helicopter services international major integrated independent oil gas exploration development production companies bsee years ended december 31 2014 2013 2012 approximately 76 75 65 respectively operating revenues derived helicopter services including emergency search rescue services provided customers primarily engaged offshore oil gas exploration development production activities addition serving oil gas industry provide air medical services utility services alaska flightseeing tours among activities december 31 2014 owned operated total 160 helicopters consisting nine heavy helicopters 62 medium helicopters 37 light twin engine helicopters 52 light single engine helicopters december 31 2014 commitments purchase additional 19 new helicopters consisting ten aw189 heavy helicopters four s92 heavy helicopters five aw169 light twin helicopters aw189 helicopters s92 helicopters scheduled delivered beginning 2015 2017 delivery dates aw169 helicopters yet determined addition outstanding options purchase additional ten aw189 helicopters five s92 helicopters one aw139 medium helicopter options exercised helicopters would scheduled delivery 2015 2018 last several years saw increase ultradeepwater deepwater activity customers requiring transport services helicopters greater payloads range helicopters supporting air medical search rescue operations public uses also require new technology safety improvements believe helicopter fleet together commitments acquire new helicopters described continued efforts upgrade fleet invest new technologies enhance competitive position market helicopter replacement within industry impacted limited oems offering full range models limited access capital smaller operators believe cash flows operating activities revolving credit facility extent borrowing capacity thereunder strong relationships oems help position us add new helicopters fleet upgrade existing helicopters thereby maintaining asset base suitable use within operations dryleasing operators also leverage strong relationships oems support growth services selling specialty equipment accessories helicopters training lines service offshore oil gas exploration development production support offshore oil gas market highly cyclical demand linked price oil gas tends fluctuate depending many factors including global economic activity levels inventory addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior last eight years provided transportation services government inspectors offshore installations drilling rigs platforms contract renewed 2011 expected run 2016 december 31 2014 24 helicopters operating contract customer options increase number 29 helicopters brazil among important markets offshore oil gas exploration production activity worldwide example petrobras brazil issued tenders multiyear commitments contract medium heavy helicopters january 2015 us energy information administration stated recent discoveries large offshore presalt oil deposits could transform brazil one larger oil producers world committed participate market acquiring ownership interest aeróleo brazilian helicopter operator july 2011 see note 5 notes consolidated financial statements item 8 annual report form 10k detailed discussion certain financial difficulties experienced aeróleo thereafter also provide search rescue services us gulf mexico subscription basis currently three aw139 helicopters configured service several subscribers dryleasing enter drylease arrangements helicopters operators primarily located international markets majority helicopters supporting oil gas exploration production activities regions rapidly expanding activity brazil india also equipment working north sea spain december 31 2014 34 helicopters located foreign jurisdictions compared 15 helicopters december 31 2006 many cases helicopters contracted local helicopter operators often prefer lease helicopters rather purchase dryleasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk december 31 2014 three ec225 heavy helicopters 11 aw139 helicopters dryleased aeróleo provides helicopter transportation services primarily ogx petrobras brazil queiroz galvão sa repsol brazil sa saipem brasil lda multiyear contracts since acquisition interest aeróleo faced several challenges respect generating revenues helicopters dryleased us see note 5 notes consolidated financial statements item 8 annual report form 10k detailed discussion certain financial difficulties experienced aeróleo addition three light single helicopters six medium helicopters dryleased directly fumigación aérea andaluza sa “faasa” spain activities services order diversify sources earnings cash flow deploy number helicopters support industries activities air medical services flightseeing years ended december 31 2014 2013 2012 approximately 9 13 operating revenues generated activities services 2007 entered air medical services market acquisition flight operations keystone helicopter corporation supply helicopters pilots mechanics hospitals manage helicopters behalf also operate fbo ted stevens anchorage international airport provide alaska summer flightseeing tours support inland utility operations alaska including support firefighting mining power line pipeline survey activities also developed services helicopter industry believe complement core activities hold 50 interest dart international sales manufacturing organization focused aftermarket helicopter parts accessories hold 50 interest era training provides classroom instruction flight simulator helicopter training employees third parties market outlook primary users transport services international major integrated independent oil gas exploration development production companies bsee years ended december 31 2014 2013 2012 approximately 76 75 65 respectively operating revenues derived helicopter services including emergency search rescue services provided customers primarily engaged offshore oil gas exploration development production activities offshore oil gas market highly cyclical demand linked price oil gas prices oil gas critical factors customers’ investment spending decisions oil gas business environment experienced downturn second half 2014 price crude oil declined significantly last twelve months primarily due less optimistic forecast worldwide economic growth increased global supply crude oil believe oil price decline negatively impact cash flow customers lead reduce capital operational expenditures prior levels although customers typically base capital expenditure budgets longterm commodity price expectations many customers already reduced capital spending plans taken measures reduce costs subject enhanced customer contract cancellation risk decreased fleet utilization current environment customer contracts united states may cancelled upon limited notice permit customers decrease number helicopters contract moreover even contractual cancellation right may exist customers may seek cancel renegotiate terms conditions contracts address current challenges addition current adverse economic conditions may increase ongoing credit risk exposure respect accounts receivable balances customers dryleasing customers example petrobras brazil ogx experiencing financial difficulties could impair ability pay receivables aeróleo could turn impair aeróleo’s ability make drylease payments owed us impact revenue based recent experience discussions customers helicopter transport needs anticipate continued demand services despite nearterm challenges deepwater activity continues significant segment global offshore oil gas markets typically involves significant capital investment multiyear development plans projects generally underwritten oil gas companies using relatively conservative assumptions relating oil gas prices projects therefore considered less susceptible shortterm fluctuations price oil gas though possible recent pullback declines crude oil price may cause companies reevaluate future capital expenditures regards deepwater projects could result rescaling delay cancellation planned offshore projects could impact operations future periods generate vast majority operating revenue contracts supporting oil gas customers’ offshore production operations longterm transportation requirements substantial portion remaining oil gas revenue comes transporting personnel offshore drilling rigs believe capability allows us take advantage expansion global deepwater rig fleet production business typically less cyclical exploration development business production platforms remain place longterm relatively unaffected economic cycles marginal cost lifting barrel oil platform position low declines price oil gas could delay cancellation planned offshore projects impacting operations future periods last several months us dollar strengthened versus world’s major currencies including significant appreciation value relative euro two large helicopter oems headquartered europe price many helicopters euros majority unfunded capital commitments new helicopters eurodenominated commitments recent strengthening us dollar euro lowers amount unfunded commitments us dollar terms eurodenominated helicopter models become less expensive competitors potential competitors acquire could lead excess helicopter capacity increased competition turn jeopardizing pricing utilization equipment relative devaluation euro could also destabilize residual values certain eurodenominated helicopters addition strengthening us dollar may impact credit risk ability make payments us dollars drylease customers set rates receive payments currencies believe well positioned address near term challenges balance sheet management liquidity levels provide stable foundation current market environment permit us together operational efficiency improvements benefitting us customer maintain improve customer relationships competitive position recent developments current excess capacity medium helicopters continues higher recent periods fleet’s excess helicopters include otherwise customer contracts undergoing maintenance dedicated charter activity although take actions minimize excess capacity expect certain level excess capacity given time aviation logistics business result evolving nature customers’ needs result higher excess capacity middle fourth quarter 2014 operating revenues negatively impacted fleet management initiatives participation competitive bids pursuit additional opportunities us gulf mexico abroad focused maximizing utilization fleet mitigating excess capacity medium helicopters successful securing sufficient new projects may experience decline nearterm utilization medium helicopters may impact nearterm financial results including full period impact next quarters recently awarded number new contracts us gulf mexico brazil contracts already begun scheduled begin second half 2015 early 2016 dispute partner aeróleo respect contractual shareholder rights connection attempted sale transfer partner’s interests resolved arbitration february 15 2014 consent definitive agreements executed respect transfer third party 50 economic 80 voting interest held partner aeróleo consideration transfer interests terms conditions transaction aeróleo required make payments affiliates transferring partner form severance partial repayment shareholder loans likely require 20 million capital infusion us transaction remains subject customary closing conditions including approval court administering estate beneficial owner partner aeróleo due delays obtaining judicial approval transaction expected close first half 2015 result transaction expect required consolidate financial results aeróleo upon consummation since acquisition interest aeróleo faced several challenges respect generating revenues helicopters dryleased us see note 5 notes consolidated financial statements item 8 annual report form 10k information continuation combination financial difficulties taken separately together may impede aeróleo’s ability pay equipment lease obligations us necessitate infusion capital us allow aeróleo continue operate result adversely impact results operations due liquidity issues experienced aeróleo december 31 2014 deferred recognition 310 million revenues aeróleo fleet developments capital commitments recent years continued focus modernization fleet standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance customers flying offshore tend prefer twinengine helicopters singleengine helicopters due additional safety afforded two engines response demand transformed fleet significantly since beginning 2005 added 129 helicopters disposed 96 helicopters reduced average age owned fleet 17 years 12 years december 31 2014 22 fleet five years old less spent 1067 million 1101 million 1130 million acquire helicopters equipment years ended december 31 2014 2013 2012 respectively primarily heavy medium helicopters december 31 2014 unfunded commitments 2323 million primarily pursuant agreements purchase helicopters consisting ten aw189 helicopters four s92 helicopters five aw169 helicopters aw189 helicopters s92 helicopters scheduled delivered beginning 2015 2017 delivery dates aw169 helicopters yet determined approximately 1313 million commitments inclusive deposits paid options yet exercised may terminated without liability aggregate liquidated damages 87 million addition outstanding options purchase additional ten aw189 helicopters five s92 helicopters one aw139 helicopter options exercised helicopters would delivered beginning 2015 2018 components revenues expenses derive revenues primarily operating dryleasing equipment profits depend cost capital acquisition costs assets operating costs reputation operating revenues recorded us gulf mexico primarily generated offshore oil gas exploration production activities similarly operating revenues recorded alaska primarily generated offshore oil gas exploration production activities reported revenues utility services us gulf mexico alaska operating revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded dryleasing generated dryleases thirdparty operators joint venture partners responsible operation helicopters certain dryleases also provide crew training management expertise logistical maintenance support dryleases typically call fixed monthly fee may also include additional charge based flight hours flown majority dryleasing revenues generated helicopters deployed internationally operating revenues search rescue services earned fixed monthly fee plus incremental charge flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded air medical services include revenues management services hospitals operating revenues earned fixed monthly fee plus incremental charge flight hours flown operating revenues recorded flightseeing generated per passenger basis aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities well helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments powerbyhour provider case record reduction operating expense receive refund also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty powerbyhour programs helicopters drylease third parties arrangements whereby customer assumes operational responsibility often provide maintenance parts support generally incur material operating costs instances dryleases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide training services support drylease customers seacor provided certain support services us shared services arrangement including payroll processing information systems support cash disbursement support cash receipt processing treasury management historically charged share actual costs incurred generally based volume processed units supported december 30 2011 entered transition services agreement providing services described pursuant seacor continued provide support services connection spinoff entered amended restated transition services agreement seacor pursuant services continue provided period time spinoff exceed two years time spinoff january 20 2015 extended amended restated transition services agreement continue provide limited number support services including general ledger treasury network infrastructure support order facilitate final transition spinoff seacor agreement expires july 31 2015 may terminated earlier us 30 days’ notice seacor incurred costs providing operating segments certain corporate services including executive oversight risk management legal accounting tax charged quarterly management fees operating segments order cover costs total management fees charged seacor operating segments include actual corporate costs incurred plus markup generally allocated within consolidated group using incomebased performance metrics reported operating segment relation seacor’s operating segments costs incurred management fees seacor reported seacor management fees consolidated statements operations effective january 1 2012 seacor provided corporate services transition services agreement fixed quarterly charge 500000 subject terms conditions transition services agreement upon completion spinoff longer charged management fee seacor incur costs amended restated transition services agreement results operations operating revenues service line following table sets forth operating revenues service line years ended december 31 2014 2013 2012 1 primarily oil gas exploration production activities also includes revenues utility services including support firefighting mining power line pipeline survey activities year ended december 31 2014 compared year ended december 31 2013 operating revenues operating revenues 323 million higher year ended december 31 2014 “current year” compared year ended december 31 2013 “prior year” operating revenues oil gas operations us gulf mexico 390 million higher current year operating revenues heavy helicopters 267 million higher primarily due ec225 helicopters operating full year 2014 compared partial year 2013 operating revenues medium helicopters 102 million higher primarily due increased charter activity higher rates operating revenues single engine helicopters 11 million higher due increased fleet count miscellaneous revenues 18 million higher due increased rebillable expenses operating revenues light twin helicopters 10 million lower due smaller fleet count operating revenues oil gas operations alaska 83 million lower current year operating revenues medium helicopters 78 million lower due smaller fleet count reduced utilization revenues 18 million lower due reduced rebillable expenses operating revenues single engine helicopters 12 million lower due reduced utilization operating revenues light twin helicopters 26 million higher primarily due larger fleet count higher rates operating revenues international oil gas operations 17 million lower primarily due reduced utilization revenues dryleasing activities 23 million lower primarily due 59 million decrease related leases ended subsequent prior year 13 million related helicopters subsequently sold addition revenues lower due recognition prior year 11 million early termination fee decreases partially offset increased revenues 45 million customer india 17 million related change accrual basis accounting recognizing revenue customer aeróleo cash collections also increased 04 million revenues aeróleo recognized cash received operating revenues sar activities 58 million higher due increase number subscription customers higher rates operating revenues air medical services 16 million lower primarily due contracts ended subsequent prior year operating revenues flightseeing activities 01 million lower due reduced activity primarily driven adverse weather conditions operating revenues fbo activities 15 million higher primarily due increased fuel sales operating expenses operating expenses 178 million higher current year repairs maintenance expenses 72 million higher primarily due 75 million increase powerbyhour expense related ec225 helicopters returning service 30 million increase due timing repairs 09 million increase due absence helicopter maintenance return credit drylease customer prior year increases partially offset 42 million credit related settlement agreement airbus helicopters respect suspension operations ec225 helicopters expenses 61 million higher primarily due increase rebillable expenses parts cost sales freight expenses due increased activity personnel expenses 51 million higher primarily due pay scale benefit adjustments partially offset workers compensation adjustments fuel expenses 20 million higher primarily due ec225 helicopters returning service increased fuel sales fbo increases partially offset lower leasedin equipment expenses 18 million primarily due onetime charge prior year related operating leases certain helicopters configured air medical service lower insurance loss reserves 10 million primarily due changes insured helicopter values administrative general administrative general expenses 51 million higher current year compensation costs 35 million higher due severance related expenses associated changes senior management 23 million higher due annual stock compensation grants salary adjustments additionally information technology expenses increased 06 million related transition services seacor increases partially offset recovery 11 million previously reserved accounts receivable related customer bankruptcy 03 million reduction fees charged amended restated transition services agreement seacor depreciation amortization depreciation expense 08 million higher primarily due depreciation new helicopters placed service gains asset dispositions current year sold otherwise disposed helicopters equipment proceeds 71 million resulting gains 61 million prior year sold helicopters equipment proceeds 652 million recognized gains 183 million operating income operating income percentage revenues 13 current year compared 16 prior year excluding gains asset dispositions discussed operating income percentage revenues 11 current year compared 9 prior year improvement operating income margin primarily due lower depreciation percentage revenues current year interest expense interest expense 33 million lower primarily due increased capitalized interest related additional deposits progress payments helicopter orders base improvement project note receivable impairment note receivable impairments 25 million current year related probable loss note receivable derivative gains losses net unrealized derivative losses 08 million higher due revaluation market forward currency contracts foreign exchange gains losses net foreign exchange losses 24 million current year compared gains 07 million prior year primarily due strengthening us dollar resulting losses euro denominated balances realized losses settled forward currency contracts income tax expense income tax expense 34 million lower due lower income taxes lower effective tax rate current year equity earnings net tax equity earnings net tax 18 million higher primarily due sale 51 interest lake palma gain 15 million net tax increased earnings dart joint venture 04 million year ended december 31 2013 compared year ended december 31 2012 operating revenues operating revenues 260 million higher year ended december 31 2013 compared year ended december 31 2012 operating revenues oil gas operations us gulf mexico 197 million higher year ended december 31 2013 operating revenues medium helicopters increased 207 million primarily due increased utilization year ended december 31 2013 support increase deepwater drilling completion production activity due medium helicopters used fill ec225 heavy helicopters temporarily suspended october 2012 july 2013 addition operating revenues single engine helicopters increased 45 million due higher rates increases partially offset 30 million decrease heavy helicopters due temporary suspension ec225 helicopters decrease 13 million light twin helicopters due lower utilization addition revenues decreased 12 million primarily due reduction parts sales operating revenues oil gas operations alaska 123 million higher year ended december 31 2013 resumption services major oil gas customer temporarily suspended portion year ended december 31 2012 contributed 91 million increase shortterm work related drillship running aground contributed 28 million increase operating revenues international oil gas operations 48 million higher year ended december 31 2013 due new contract uruguay awarded late 2012 commenced january 2013 revenues dryleasing activities 103 million lower year ended december 31 2013 primarily due 115 million decrease related contracts ended year ended december 31 2013 48 million related helicopters subsequently sold decreases partially offset increase 09 million result rate escalations operating revenues search rescue activities increased 61 million year ended december 31 2013 primarily due new search rescue customers increased activity existing customers operating revenues air medical services 70 million lower year ended december 31 2013 primarily due conclusion three longterm hospital contracts partially offset new contract began 2013 increases rates existing contracts change contracts primarily due shift management philosophy designed enhance profitability services one customer bringing services inhouse upon conclusion contract us operating revenues flightseeing fbo activities increased 01 million 04 million respectively year ended december 31 2013 primarily result better weather conditions resulting flying activity operating expenses operating expenses 194 million higher year ended december 31 2013 repairs maintenance expenses increased 129 million primarily due 81 million increase result timing repairs net 72 million decrease vendor maintenance credits year ended december 31 2012 increases partially offset decrease powerbyhour expense 24 million primarily due temporary suspension ec225 helicopters personnel costs increased 44 million primarily due addition personnel support increase oil gas activity discussed fuel expense increased 15 million due increased flight hours increase average price per gallon lease expense increased 15 million due onetime charge related operating leases certain air medical helicopters increases partially offset decrease operating expenses 07 million primarily due decrease part sales related air medical contracts administrative general administrative general expenses 41 million higher year ended december 31 2013 compensation employee costs increased 41 million primarily due recognition management bonus awards severance costs related changes senior management share awards compensation related equity awards granted 2013 following spinoff seacor excluding 29 million expenses associated contemplated initial public offering common stock recognized year ended december 31 2012 legal professional expenses increased 40 million due costs associated public company legal expenditures increase shared services fees seacor amended restated transition services agreement addition travel expenses increased 04 million due business development activities increases partially offset 19 million decrease allowance doubtful accounts year ended december 31 2012 included 25 million provision connection customer bankruptcy 04 million provided year ended december 31 2013 due collection issues related note customer purchased parts previous year depreciation amortization depreciation expense 31 million higher year ended december 31 2013 primarily due addition new higher cost helicopters gains asset dispositions year ended december 31 2013 sold otherwise disposed helicopters equipment cash proceeds 652 million resulting gains 183 million amounts included gain 54 million sale ec225 helicopter damaged incident may 2012 drylease customer subsequently sold customer year ended december 31 2013 cash proceeds 246 million gain 12 million recognition insurance proceeds 21 million related s76a helicopter involved incident year ended december 31 2013 gain 03 million related aw139 helicopter involved incident year ended december 31 2012 gains 113 million sale helicopters equipment normal course business addition recognized previously deferred gains 01 million year ended december 31 2013 year ended december 31 2012 company sold helicopter components equipment proceeds 55 million recognized gains 29 million addition recognized previously deferred gains 07 million 2012 operating income operating income percentage revenues 16 year ended december 31 2013 compared 12 year ended december 31 2012 excluding gains asset dispositions discussed operating income percentage revenues 9 year ended december 31 2013 compared 10 year ended december 31 2012 repairs maintenance expenses increased result timing repairs year ended december 31 2013 absence benefit vendor credits year ended december 31 2012 interest expense december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes net proceeds used repay 1900 million borrowings outstanding prior 2000 million senior secured revolving credit facility “prior credit facility” result higher interest rate notes interest expense 74 million higher year ended december 31 2013 seacor management fees december 30 2011 entered transition services agreement seacor provide various corporate services fixed rate 20 million per annum beginning january 1 2012 costs classified seacor management fees consolidated statements operations effectively fixed previously variable allocation seacor corporate overhead expenses business units based certain financial contribution metrics costs terminated effective completion spinoff connection spinoff entered amended restated transition services agreement seacor provide various shared services costs classified administrative general expenses consolidated statements operations income tax expense income tax expense 44 million higher year ended december 31 2013 primarily due increase income tax expense equity earnings losses 50 less owned companies addition established valuation allowance certain state deferred tax assets year ended december 31 2013 effective tax rate year ended december 31 2012 lower due permanent differences related sharebased compensation awards state income tax expenses holdings noncontrolling interests equity earnings losses net tax earnings equity investments 09 million year ended december 31 2013 increase 64 million compared prior year loss 55 million year ended december 31 2012 recognized loss 06 million impairment charge 59 million net tax investment brazilian joint venture year ended december 31 2013 losses recognized brazilian joint venture fully written year ended december 31 2012 earnings equity investments consistent respective periods liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments sources liquidity cash balances cash flows operations time may secure additional liquidity issuance equity debt borrowings revolving credit facility december 7 2012 completed offering 7750 senior notes used net proceeds offering repay 1900 million borrowings outstanding prior credit facility march 31 2014 entered revolving credit facility amendment prior credit facility revolving credit facility allows us borrow 3000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million revolving credit facility requires maintain maximum ratio funded debt ebitda defined 50 10 minimum interest coverage ratio 30 10 minimum ratio sum fair market value mortgaged helicopters defined ii accounts receivable iii inventory funded debt 12 10 failure meet ratios event default facility therefore ability borrow revolving credit facility dependent limited ability comply see “amended restated senior secured revolving credit facility” year ended december 31 2014 borrowed 300 million revolving credit facility make progress payments s92 helicopters december 31 2014 amount additional borrowings available us revolving credit facility 2143 million year ended december 31 2013 made payments prior credit facility totaling 500 million cash flows provided operating activities drew 550 million prior credit facility primarily fund purchase helicopters year ended december 31 2012 drew 880 million prior credit facility primarily repurchase 500000 shares series b preferred stock held seacor fund purchase ec225 helicopter certain assets also year ended december 31 2012 experienced decrease operating income primarily due reduction gains asset dispositions negative impact financial ratios defined prior credit facility result seacor purchased 300000 shares series b preferred stock 300 million june 8 2012 700000 shares series b preferred stock 700 million september 25 2012 used portion proceeds issuances repay borrowings maintain compliance prior credit facility december 31 2014 unfunded capital commitments 2323 million primarily pursuant agreements purchase helicopters approximately 1149 million payable 2015 remaining commitments payable 2017 company also 19 million deposits paid options yet exercised approximately 1313 million commitments inclusive deposits paid options yet exercised may terminated without liability us aggregate liquidated damages 87 million addition outstanding options purchase additional ten aw189 helicopters five s92 helicopters one aw139 helicopter options exercised helicopters would delivered beginning 2015 2018 expect finance remaining acquisition costs combination cash hand cash provided operating activities borrowings revolving credit facility summary cash flows operating activities cash flows provided operating activities increased 139 million year ended december 31 2014 compared year ended december 31 2013 cash flows provided operating activities increased 505 million year ended december 31 2013 compared year ended december 31 2012 components cash flows provided operating activities years ended december 31 2014 2013 2012 follows operating income depreciation gains asset dispositions impairments net 94 million higher year ended december 31 2014 compared year ended december 31 2013 primarily due 290 million 58 million increase revenues oil gas search rescue activities respectively increases partially offset 23 million decrease dryleasing revenues 178 million 51 million increase operating expenses administrative general expenses respectively operating income depreciation gains asset dispositions impairments net 25 million higher year ended december 31 2013 compared year ended december 31 2012 primarily due 368 million 61 million increase revenues oil gas search rescue activities respectively increases partially offset 103 million decrease dryleasing revenues 70 million reduction operating revenues air medical services increase 129 million repairs maintenance expenses 44 million increase personnel cost 41 million increase administrative general expenses 15 million increase lease expense primarily due onetime charge related operating leases certain air medical helicopters changes operating assets liabilities interest income taxes 40 million lower year ended december 31 2014 compared year ended december 31 2013 primarily due impairment charge related probable loss note receivable shown separately table changes operating assets liabilities interest income taxes 1084 million higher year ended december 31 2013 compared year ended december 31 2012 primarily due repurchase series b preferred stock held seacor settlements intercompany transactions seacor 2012 interest paid excluding capitalized interest 44 million lower year ended december 31 2014 compared year ended december 31 2013 primarily due additional deposits progress payments helicopter orders base expansion project interest payments funds capitalized included cash used investing activities consolidated statements cash flows interest paid excluding capitalized interest 100 million higher year ended december 31 2013 compared year ended december 31 2012 primarily due higher interest rate 7750 senior notes benefit net tax operating losses purchased seacor management fees 520 million 18 million lower respectively year ended december 31 2013 compared year ended december 31 2012 result spinoff seacor income taxes paid 18 million higher year ended december 31 2014 compared year ended december 31 2013 primarily due tax payments foreign jurisdictions cash flows provided operating activities 32 million higher year ended december 31 2014 compared year ended december 31 2013 primarily due 40 million increase equity award amortization investing activities year ended december 31 2014 net cash used investing activities 939 million primarily follows • capital expenditures 1067 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 71 million • proceeds sale interest equity investees 64 million • net principal payments notes due thirdparties equity investees 11 million year ended december 31 2013 net cash used investing activities 435 million primarily follows • capital expenditures 1101 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 652 million • net principal payments notes receivable thirdparties equity investees 15 million year ended december 31 2012 net cash used investing activities 1148 million primarily follows • capital expenditures 1130 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 52 million • investments advances 50 less owned companies 106 million • net principal payments notes receivable thirdparties equity investees 36 million financing activities year ended december 31 2014 net cash provided financing activities 261 million primarily follows • borrowings revolving credit facility 300 million • net principal payments longterm debt 29 million • issuance costs related revolving credit facility 24 million • proceeds sharebased award plans 15 million year ended december 31 2013 net cash used financing activities 15 million primarily follows • net principal payments longterm debt 528 million • borrowings prior credit facility 550 million • dividends paid series preferred stock 50 million • proceeds seacor settlement stock options 07 million • proceeds tax benefits sharebased awards 05 million year ended december 31 2012 net cash provided financing activities 326 million primarily follows • proceeds 1919 million net issuance costs 7750 senior notes • proceeds issuance series b preferred stock 1000 million • borrowings prior credit facility 880 million • net principal payments longterm debt 2928 million • payments connection repurchase series b preferred stock seacor 500 million • dividends paid seacor 44 million amended restated senior secured revolving credit facility march 31 2014 entered revolving credit facility amendment prior credit facility revolving credit facility provides us ability borrow 3000 million sublimit 500 million letters credit includes accordion feature exercised subject agreement lenders satisfaction certain conditions increase total commitments 1000 million availability revolving credit facility may limited terms 7750 senior notes advances revolving credit facility closing used refinance indebtedness incurred prior credit facility revolving credit facility matures march 2019 december 31 2014 850 million outstanding revolving credit facility bears interest london interbank offered rate “libor” plus margin 200 basis points addition required pay quarterly commitment fee based ratio funded debt ebitda defined december 31 2014 commitment fee 375 basis points additional information terms revolving credit facility see note 8 notes consolidated financial statements included item 8 annual report form 10k 7750 senior notes december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 net proceeds offering used repay 1900 million borrowings outstanding prior credit facility connection offering permanently reduced borrowing capacity facility 3500 million 2000 million interest notes payable semiannually arrears june 15 december 15 year may redeem notes time premium specified indenture governing notes february 2015 redeemed 79 million 7750 senior notes price 93250 using proceeds revolving credit facility additional information terms notes see note 8 notes consolidated financial statements included item 8 annual report form 10k short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2014 cash provided operations 783 million support capital expenditure program andor liquidity requirements may use combination operating cash flow cash balances proceeds sales assets issue debt equity borrow revolving credit facility december 31 2014 ability borrow additional 2143 million revolving credit facility availability longterm financing dependent upon ability generate operating profits sufficient meet requirements working capital expenditures reasonable return investment believe earning operating profits permit us maintain access favorably priced financing arrangements management continue closely monitor liquidity credit markets offbalance sheet arrangements occasion partners guarantee certain obligations behalf joint ventures december 31 2014 guarantees place contractual obligations commercial commitments following table summarizes company’s contractual obligations commercial commitments aggregate maturities december 31 2014 thousands 1 maturities borrowings interest payments pursuant borrowings capital commitment fee revolving credit facility based contractual terms interest amounts represent expected cash payments interest longterm debt based interest rates place amounts outstanding december 31 2014 2 capital purchase obligations represent commitments purchase 19 new helicopters consisting five aw169 light twin helicopters ten aw189 heavy helicopters four s92 heavy helicopters base expansion project total unfunded capital commitments 1313 million may terminated without liability liquidated damages 87 million aggregate commitments recorded liabilities consolidated balance sheet yet received goods taken title property aw189 helicopters scheduled delivered beginning 2015 2017 s92 helicopters scheduled delivered 2015 2016 delivery dates aw169 helicopters yet determined 3 operating leases primarily include leases helicopters property remaining term excess one year 4 purchase obligations primarily include purchase orders helicopter inventory maintenance commitments goods services acquired ordinary course business fulfilled vendors within short period time effects inflation company’s operations expose effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect consolidated financial position results operations critical accounting policies estimates preparation financial statements conformity accounting principles generally accepted us “gaap” many cases accounting treatment particular transaction specifically dictated gaap whereas circumstances gaap requires us make estimates judgments assumptions believe reasonable based upon information available base estimates judgments historical experience professional advice various sources believe reasonable circumstances actual results may differ estimates different assumptions conditions believe significant accounting policies discussed note 1 “notes consolidated financial statements” following involve higher degree judgment complexity property equipment net property equipment represents 849 total assets december 31 2014 determine carrying value assets based property equipment accounting policies incorporate estimates assumptions judgments relative capitalized costs useful lives salvage values assets property equipment accounting policies also designed depreciate assets estimated useful lives assumptions judgments use determining estimated useful lives residual values helicopters reflect historical experience expectations regarding future operations utilization performance assets use different estimates assumptions judgments establishment property equipment accounting policies especially involving useful lives residual values helicopters would likely result materially different net book values assets results operations useful lives helicopters residual values difficult estimate due variety factors including changes operating conditions environment introduction technological advances aviation equipment changes market economic conditions including changes demand certain types helicopters changes laws regulations affecting aviation offshore oil gas industry evaluate remaining useful lives helicopters certain events occur directly impact assessment remaining useful lives helicopters consideration ultimate residual value takes account current expectations fair market value expected time ultimate disposal determination ultimate value received upon sale depends largely upon condition helicopters flight time left helicopters major components next major maintenance check required future value also depends secondary market exists date differ substantially time review property equipment impairment events changes circumstances indicate carrying value assets asset groups may recoverable impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset would required recognize impairment loss determining fair value utilize various assumptions including projections future cash flows change underlying assumptions cause change results tests could cause fair value less carrying amounts event would required record corresponding charge would reduce earnings continue evaluate estimates assumptions believe assumptions include estimate future cash flows based upon anticipated performance underlying assets appropriate supply demand key drivers helicopter idle time ability contract helicopters economical rates periods oversupply uncommon us helicopters idled extended periods time could indication asset group may impaired instances helicopters could used interchangeably due mobility helicopters may move weak geographic market stronger geographic market adequate opportunity arises helicopters considered interchangeable within classes asset groups accordingly impairment evaluation made asset group allowance doubtful accounts establish allowances doubtful accounts casebycase basis believe payment amounts owed us unlikely occur establishing allowances consider number factors including historical experience changes client’s financial position derive significant portion revenue services international independent major integrated oil gas companies government agencies receivables concentrated primarily gulf mexico generally require collateral security support client receivables inventory reserve maintain inventory primarily consists spare parts service helicopters establish allowance distribute cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts also periodically review condition continuing usefulness parts determine whether realizable value inventory lower book value parts related helicopter types management determined longer included fleet substantially reduced fleet future periods specifically reviewed valuation parts significantly lower book value parts additional provision may required taxes annual tax provision based expected taxable income statutory rates tax planning opportunities available various jurisdictions operate determination evaluation annual tax provision tax positions involves interpretation tax laws requires significant judgment use estimates assumptions regarding significant future events amount timing character income deductions tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability area impacts tax liability number years may elapse ultimate tax liabilities various jurisdictions determined recognize foreign tax credits available us offset us income taxes due income earned foreign sources credits limited total income tax us income tax return well ratio foreign source income statutory category total income estimating amount foreign tax credits realizable estimate future taxable income statutory category estimates subject change based changes market conditions statutory category timing certain deductions available us statutory category periodically reassess estimates record changes amount realizable foreign tax credits based revised estimates maintain reserves estimated tax exposures tax exposure items include potential challenges intercompany pricing disposition transactions applicability rates various withholding taxes exposures resolved primarily settlement audits judicial means also affected changes applicable tax law statute limitation expirations etc may result revision past estimates review liabilities quarterly determination whether liability shall accrued whether existing liabilities shall reversed due expiration related statutes limitation settlement respective items tax authorities issuance rules regulations legislation court rulings resolve uncertainty recent accounting pronouncements may 2014 financial accounting standards board issued accounting standards update “asu” 201409 revenue contracts customers base revenue recognition contract vendor customer require reporting entities allocate transaction price various performance obligations contract recognize revenues performance obligations satisfied asu 201409 effective annual periods beginning december 15 2016 interim periods within period early adoption permitted currently evaluating potential impact method adoption asu 201409 consolidated financial statements item 7aitem 7 management’s discussion analysis financial condition results operations overview one largest helicopter operators world longest serving helicopter transport operator us primary area operations helicopters primarily used transport personnel offshore oil gas production platforms drilling rigs installations years ended december 31 2015 2014 2013 approximately 66 67 60 respectively total operating revenues earned us gulf mexico periods approximately 10 15 18 respectively operating revenues earned alaska also provide helicopters related services foreign thirdparty helicopter operators year ended december 31 2015 approximately 21 total operating revenues earned international locations currently customers brazil colombia dominican republic india norway spain united kingdom primary users helicopter services international major integrated independent oil gas exploration development production companies bsee years ended december 31 2015 2014 2013 approximately 78 76 75 respectively operating revenues derived helicopter services including emergency search rescue services provided customers primarily engaged offshore oil gas exploration development production activities results tied level uncertainty offshore oil gas exploration development production activities addition serving oil gas industry provide air medical services utility services alaska flightseeing tours among activities december 31 2015 owned operated total 146 helicopters consisting 13 heavy helicopters 55 medium helicopters 35 light twin engine helicopters 43 light single engine helicopters december 31 2015 commitments purchase additional 14 new helicopters consisting nine heavy helicopters scheduled delivered beginning 2016 2018 five light twin helicopters delivery dates determined addition outstanding options purchase additional 12 heavy helicopters options exercised helicopters would scheduled delivery 2017 2018 believe cash flows operating activities revolving credit facility extent borrowing capacity thereunder strong relationships oems help position us add new helicopters fleet upgrade existing helicopters thereby maintaining asset base suitable use within operations dryleasing operators also leverage strong relationships oems support growth services selling specialty equipment accessories helicopters training lines service offshore oil gas exploration development production support offshore oil gas market highly cyclical demand linked price oil gas tends fluctuate depending many factors including global economic activity levels inventory overall demand addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior last nine years provided transportation services government inspectors offshore installations drilling rigs platforms contract renewed 2011 expected run september 2016 put bid every five years intend submit bid continue providing services beyond current expiration date december 31 2015 25 helicopters operating contract customer options increase number 29 helicopters brazil among important markets offshore oil gas exploration production activity worldwide us energy information administration stated recent discoveries large offshore presalt oil deposits could transform brazil one larger oil producers world participate market consolidated joint venture aeróleo december 31 2015 16 helicopters brazil dedicated serving market also provide search rescue services us gulf mexico subscription basis currently three aw139 helicopters configured service several subscribers dryleasing enter drylease arrangements helicopters operators primarily located international markets north sea spain india many cases helicopters contracted local helicopter operators often prefer lease helicopters rather purchase dryleasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk activities services order diversify sources earnings cash flow deploy number helicopters support industries activities air medical services flightseeing years ended december 31 2015 2014 2013 approximately 7 9 13 operating revenues generated activities services 2007 entered air medical services market acquisition flight operations keystone helicopter corporation supply helicopters pilots mechanics hospitals manage helicopters behalf also provide alaska summer flightseeing tours support inland utility operations alaska firefighting mining power line pipeline survey activities also developed services helicopter industry believe complement core activities hold 50 interest dart international sales manufacturing organization focused aftermarket helicopter parts accessories also hold 50 interest era training provides classroom instruction flight simulator helicopter training employees third parties market outlook offshore oil gas market highly cyclical demand linked price oil gas prices oil gas critical factors customers’ investment spending decisions price crude oil declined significantly last 18 months primarily due increased global supply crude oil less optimistic forecast worldwide economic growth decline price oil negatively impacted cash flow customers led reduce capital operational expenditures prior levels including saving offshore exploration development production activities although customers typically base capital expenditure budgets longterm commodity price expectations many customers significantly reduced capital spending plans taken measures reduce costs experienced customer contract cancellations decreased fleet utilization current environment customers united states decreased number helicopters contract canceled contract upon limited notice moreover even contractual cancellation rights may exist customers sought cancel renegotiate terms conditions contracts address current challenges addition current adverse economic conditions may increase ongoing credit risk exposure respect accounts receivable balances owed us customers based recent experience discussions customers helicopter transport needs anticipate continued demand services despite nearterm challenges generate vast majority operating revenue contracts supporting oil gas customers’ offshore production operations longterm transportation requirements production business typically less cyclical exploration development business production platforms remain place longterm relatively unaffected economic cycles marginal cost lifting barrel oil platform position low declines price oil gas current price levels maintained extended period could delay cancellation planned offshore projects impacting operations future periods substantial portion remaining oil gas revenue comes transporting personnel offshore drilling rigs deepwater activity continues significant segment global offshore oil gas markets typically involves significant capital investment multiyear development plans projects generally underwritten oil gas companies using relatively conservative assumptions relating oil gas prices although projects considered less susceptible shortterm fluctuations price oil gas recent pullback declines crude oil price caused companies reevaluate future capital expenditures regards deepwater projects could result rescaling delay cancellation planned offshore projects could impact operations future periods exposed foreign currency exchange risk primarily eurodenominated capital commitments brazilian operations receive portion revenues incur expenses brazilian real two large helicopter oems headquartered europe price many helicopters euros fluctuations value us dollar euro affects amount unfunded commitments us dollar terms although strength us dollar made acquisition eurodenominated helicopter models less expensive us recent years weakness euro also makes acquisitions less expensive competitors potential competitors could lead excess helicopter capacity increased competition jeopardize pricing utilization equipment fluctuations value euro could also destabilize residual values certain eurodenominated helicopters additionally strengthening us dollar may impact credit risk ability make payments us dollars foreign customers set rates receive revenues currencies believe well positioned address near term challenges liquidity levels provide stable foundation current market environment permit us together operational efficiency improvements benefitting us customers maintain improve customer relationships competitive position recent developments current excess capacity medium heavy helicopters higher recent years fleet’s excess helicopters include otherwise customer contracts undergoing maintenance dedicated charter activity although take actions minimize excess capacity expect certain level excess capacity given time aviation logistics business result evolving nature customers’ needs operating revenues negatively impacted result higher excess capacity began middle fourth quarter 2014 increased 2015 fleet management initiatives participation competitive bids pursuit additional opportunities us gulf mexico abroad focused maximizing utilization fleet mitigating excess capacity medium heavy helicopters successful securing sufficient new projects may experience decline nearterm utilization medium heavy helicopters may impact financial results 2016 beyond october 1 2015 partner aeróleo completed transfer economic voting interest third party connection transfer entered shareholders agreement new partner requires supermajority shareholder andor board approval respect specified significant actions putcall option arrangement gives us right purchase time new partner right put us two years new partner’s interest aeróleo result partnership provisions primary beneficiary aeróleo’s financial position results operations consolidated financial statements beginning fourth quarter 2015 part transaction obtained remaining 50 ownership interest era brazil llc “era brazil” single purpose entity owns one aw139 medium helicopter leased aeróleo resulting 100 ownership prior transaction era brazil variable interest entity primary beneficiary consolidating financial statements since september 2012 fleet developments capital commitments recent years continued focus modernization fleet standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance response demand transformed fleet significantly since beginning 2005 added 137 helicopters disposed 116 helicopters reduced average age owned fleet 17 years 12 years december 31 2015 25 fleet five years old less spent 601 million 1067 million 1101 million acquire helicopters equipment years ended december 31 2015 2014 2013 respectively primarily heavy medium helicopters december 31 2015 unfunded commitments 1503 million primarily pursuant agreements purchase helicopters consisting seven aw189 heavy helicopters two s92 heavy helicopters five aw169 light twin helicopters aw189 helicopters s92 helicopters scheduled delivered beginning 2016 2018 delivery dates aw169 helicopters determined approximately 1236 million commitments inclusive deposits paid options yet exercised may terminated without liability aggregate liquidated damages 32 million addition outstanding options purchase additional ten aw189 helicopters two s92 helicopters options exercised helicopters would delivered beginning 2017 2018 components revenues expenses derive revenues primarily operating dryleasing equipment profits depend cost capital acquisition costs assets operating costs reputation operating revenues recorded us gulf mexico alaska international primarily generated offshore oil gas exploration production activities alaska include revenues utility services revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded dryleasing generated dryleases thirdparty operators responsible operation helicopters certain dryleases also provide crew training management expertise logistical maintenance support dryleases typically call fixed monthly fee may also include additional charge based flight hours flown majority dryleasing revenues generated helicopters deployed internationally operating revenues search rescue services earned fixed monthly fee plus incremental charge flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded air medical services include revenues management services hospitals operating revenues earned fixed monthly fee plus incremental charge flight hours flown operating revenues recorded flightseeing generated per passenger basis aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities well helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments powerbyhour provider case record reduction operating expense receive refund also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty powerbyhour programs helicopters drylease third parties arrangements whereby customer assumes operational responsibility often provide maintenance parts support generally incur material operating costs instances dryleases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide training services support drylease customers prior spinoff era group seacor january 31 2013 seacor charged us management fees certain support services shared services arrangement including payroll processing information systems support cash disbursement support cash receipt processing treasury management historically charged share actual costs incurred generally based volume processed units supported pursuant transition services agreement connection spinoff entered amended restated transition services agreement seacor “tsa” provide services period two years time spinoff january 20 2015 extended tsa continue provide limited number support services including general ledger treasury network infrastructure support order facilitate final transition spinoff seacor june 30 2015 terminated tsa upon completion final transition spinoff results operations operating revenues service line following table sets forth operating revenues service line years ended december 31 2015 2014 2013 1 primarily oil gas exploration production activities also includes revenues utility services including support firefighting mining power line pipeline survey activities 2 sold fbo may 1 2015 year ended december 31 2015 compared year ended december 31 2014 operating revenues operating revenues 494 million lower year ended december 31 2015 “current year” compared year ended december 31 2014 “prior year” operating revenues oil gas operations us gulf mexico 333 million lower current year due overall decline demand helicopter services operating revenues medium helicopters 265 million lower primarily due lower utilization lower average rates operating revenues heavy helicopters 37 million lower primarily due lower utilization operating revenues single engine helicopters light twin engine helicopters 20 million 14 million lower respectively primarily due reduced fleet count operating revenues oil gas operations alaska 114 million lower current year operating revenues medium single engine helicopters 95 million 02 million lower respectively primarily due lower utilization lower average rates operating revenues light twin helicopters 14 million lower primarily due lower utilization miscellaneous revenues 04 million lower primarily due reduced rebillable expenses operating revenues international oil gas operations 159 million higher due consolidation aeróleo fourth quarter current year revenues dryleasing activities 59 million lower current year primarily due decreases 74 million related contracts ended 17 million related change accrual basis accounting recognizing revenue customer india prior year 07 million related foreign currency fluctuations 07 million due combination fewer flight hours lower rates decreases partially offset increased cash collections 46 million aeróleo prior consolidation operating revenues search rescue “sar” activities 30 million lower current year primarily due end subscriber contract reduced flight activity operating revenues air medical services 32 million lower current year primarily due contracts ended subsequent prior year operating revenues flightseeing activities consistent prior year operating revenues fbo activities 89 million lower due sale fbo may 1 2015 operating expenses operating expenses 329 million lower current year fuel expenses 125 million lower primarily due 137 million decrease related reduced flight hours lower average fuel prices sale fbo partially offset increase 12 million due consolidation aeróleo repairs maintenance expenses 105 million lower primarily due decreases 56 million related timing repairs 35 million pbh expenses related reduced flight hours 21 million related vendor credits partially offset increase 07 million due consolidation aeróleo personnel expenses 60 million lower primarily due decrease 99 million related reduced headcount travel costs temporary staffing partially offset increase 39 million due consolidation aeróleo insurance loss reserves 35 million lower primarily due decrease 40 million related lower premiums good experience credits reduced activity partially offset increase 05 million due consolidation aeróleo operating expenses 03 million lower primarily due reduced rebillable expenses partially offset increases related consolidation aeróleo maintenance projects base locations administrative general administrative general expenses 12 million lower current year compensation employee costs 43 million lower primarily due decrease 52 million related severance expenses changes senior management prior year reduced headcount current year partially offset increase 09 million related consolidation aeróleo shared service expenses 25 million lower due reduction fees termination tsa seacor june 2015 professional service expenses 24 million higher primarily due consolidation aeróleo increased audit legal fees bad debt expense 18 million higher primarily due unpaid amounts customer brazil absence benefit recovery reserved account receivable prior year information technology communication expenses 14 million higher due transition services seacor depreciation amortization depreciation expense 10 million higher primarily due completion base expansion project additional helicopters placed service gains asset dispositions gains asset dispositions 01 million lower current year current year sold otherwise disposed 18 helicopters equipment total consideration 365 million including cash proceeds 253 million resulting gains 52 million addition entered salestype lease two helicopters resulting gains 07 million prior year sold three helicopters equipment proceeds 71 million recognized gains 61 million goodwill impairment recorded goodwill impairment 19 million current year resulting decline price crude oil stock price prolonged downturn oil gas markets operating income operating income percentage revenues 8 current year compared 13 prior year excluding gains asset dispositions discussed operating income percentage revenues 7 current year compared 11 prior year decrease operating income percentage revenues driven primarily decrease operating revenues impairment goodwill interest income interest income 07 million higher primarily due consolidation aeróleo interest earned salestype leases interest expense interest expense 13 million lower primarily due increased capitalized interest savings related repurchase 502 million 7750 senior notes derivative losses net derivative losses net less 01 million current year unrealized derivative losses 09 million prior year primarily due revaluation market forward currency contracts foreign currency gains losses net foreign currency losses 26 million current year 24 million prior year primarily due strengthening us dollar resulting losses euro denominated balances realized losses settled forward currency contracts gain debt extinguishment gain debt extinguishment 16 million current year related repurchase 502 million 7750 senior notes gain sale fbo net cash proceeds sale fbo 143 million current year resulting pretax gain 129 million note receivable impairment note receivable impairments 25 million prior year related probable loss note receivable income tax expense income tax expense 58 million higher current year primarily due writeoff deferred tax asset related consolidation aeróleo nonrecurring charge deferred taxes related acquisition transfer helicopter hauser equity earnings losses net tax equity losses net tax 19 million current year compared equity earnings 27 million prior year difference primarily due sale prior year 51 interest lake palma gain 15 million net tax absence earnings lake palma 05 million addition recorded losses dart 16 million current year compared earnings 09 million prior year ended december 31 2014 compared year ended december 31 2013 operating revenues operating revenues 323 million higher year ended december 31 2014 compared year ended december 31 2013 operating revenues oil gas operations us gulf mexico 390 million higher 2014 operating revenues heavy helicopters 267 million higher primarily due h225 helicopters operating full year 2014 compared partial year 2013 operating revenues medium helicopters 102 million higher primarily due increased charter activity higher rates operating revenues single engine helicopters 11 million higher due increased fleet count miscellaneous revenues 18 million higher due increased rebillable expenses operating revenues light twin helicopters 10 million lower due smaller fleet count operating revenues oil gas operations alaska 83 million lower 2014 operating revenues medium helicopters 78 million lower due smaller fleet count reduced utilization revenues 18 million lower due reduced rebillable expenses operating revenues single engine helicopters 12 million lower due reduced utilization operating revenues light twin helicopters 26 million higher primarily due larger fleet count higher rates operating revenues international oil gas operations 17 million lower primarily due reduced utilization revenues dryleasing activities 23 million lower primarily due 59 million decrease related leases ended subsequent 2013 13 million related helicopters subsequently sold addition revenues lower due recognition 2013 11 million early termination fee decreases partially offset increased revenues 45 million customer india 17 million related change accrual basis accounting recognizing revenue customer aeróleo cash collections also increased 04 million 2014 revenues aeróleo recognized cash received operating revenues sar activities 58 million higher due increase number subscription customers higher rates operating revenues air medical services 16 million lower primarily due contracts ended subsequent 2013 operating revenues flightseeing activities 01 million lower due reduced activity primarily driven adverse weather conditions operating revenues fbo activities 15 million higher primarily due increased fuel sales operating expenses operating expenses 178 million higher 2014 repairs maintenance expenses 72 million higher primarily due 75 million increase powerbyhour expense related h225 helicopters returning service 30 million increase due timing repairs 09 million increase due absence helicopter maintenance return credit drylease customer 2013 increases partially offset 42 million credit related settlement agreement airbus helicopters respect suspension operations h225 helicopters expenses 61 million higher primarily due increase rebillable expenses parts cost sales freight expenses due increased activity personnel expenses 51 million higher primarily due pay scale benefit adjustments partially offset workers compensation adjustments fuel expenses 20 million higher primarily due h225 helicopters returning service increased fuel sales fbo increases partially offset lower leasedin equipment expenses 18 million primarily due onetime charge 2013 related operating leases certain helicopters configured air medical service lower insurance loss reserves 10 million primarily due changes insured helicopter values administrative general administrative general expenses 51 million higher 2014 compensation costs 35 million higher due severance related expenses associated changes senior management 23 million higher due annual stock compensation grants salary adjustments additionally information technology expenses increased 06 million related transition services seacor increases partially offset recovery 11 million previously reserved accounts receivable related customer bankruptcy 03 million reduction fees charged amended restated transition services agreement seacor depreciation amortization depreciation expense 08 million higher primarily due depreciation new helicopters placed service gains asset dispositions 2014 sold otherwise disposed helicopters equipment proceeds 71 million resulting gains 61 million 2013 sold helicopters equipment proceeds 652 million recognized gains 183 million operating income operating income percentage revenues 13 2014 compared 16 2013 excluding gains asset dispositions discussed operating income percentage revenues 11 2014 compared 9 2013 improvement operating income margin primarily due lower depreciation percentage revenues 2014 interest expense interest expense 33 million lower primarily due increased capitalized interest related additional deposits progress payments helicopter orders base improvement project note receivable impairment note receivable impairments 25 million 2014 related probable loss note receivable derivative gains losses net unrealized derivative losses 08 million higher due revaluation market forward currency contracts foreign exchange gains losses net foreign exchange losses 24 million 2014 compared gains 07 million 2013 primarily due strengthening us dollar resulting losses euro denominated balances realized losses settled forward currency contracts income tax expense income tax expense 34 million lower due lower income taxes lower effective tax rate 2014 equity earnings net tax equity earnings net tax 18 million higher primarily due sale 51 interest lake palma gain 15 million net tax increased earnings dart joint venture 04 million liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments sources liquidity cash balances cash flows operations borrowings revolving credit facility time may secure additional liquidity issuance equity debt december 7 2012 completed offering 7750 senior notes used net proceeds offering repay 1900 million borrowings outstanding prior 2000 million senior secured revolving credit facility “prior credit facility” march 31 2014 entered revolving credit facility amendment prior credit facility revolving credit facility allows us borrow 3000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million revolving credit facility requires maintain maximum ratio funded debt ebitda defined operating income depreciation amortization gains losses asset dispositions plus interest income cash proceeds asset dispositions 50 10 minimum interest coverage ratio 30 10 minimum ratio sum fair market value mortgaged helicopters defined accounts receivable inventory ii funded debt 12 10 failure meet ratios event default facility therefore ability borrow revolving credit facility dependent limited ability comply see “amended restated senior secured revolving credit facility” year ended december 31 2015 borrowed 600 million revolving credit facility order make progress payments s92 aw189 helicopters repurchase portion 7750 senior notes also repaid 550 million previously borrowed revolving credit facility using cash flows operations proceeds helicopter sales sale fbo december 31 2015 amount additional borrowings available us revolving credit facility 2071 million depending value collateral pledged agreement time revolving credit facility permitted add collateral existing pool increase fair market value ratio discussed year ended december 31 2014 borrowed 300 million revolving credit facility order make progress payments s92 helicopters year ended december 31 2013 made payments prior credit facility totaling 500 million cash flows provided operating activities drew 550 million prior credit facility primarily fund purchase helicopters december 31 2015 unfunded capital commitments 1503 million primarily pursuant agreements purchase 14 helicopters approximately 389 million payable 2016 remaining commitments payable 2018 noncancellable portion helicopter commitments payable 2016 134 million also 15 million deposits paid options yet exercised may terminate 1236 million commitments inclusive deposits paid options yet exercised without liability us aggregate liquidated damages 32 million addition outstanding options purchase additional ten aw189 helicopters two s92 helicopters options exercised helicopters would delivered beginning 2017 2018 expect finance remaining acquisition costs combination cash hand cash provided operating activities borrowings revolving credit facility summary cash flows operating activities cash flows provided operating activities decreased 338 million year ended december 31 2015 compared year ended december 31 2014 cash flows provided operating activities increased 139 million year ended december 31 2014 compared year ended december 31 2013 components cash flows provided operating activities years ended december 31 2015 2014 2013 follows operating income depreciation gains asset dispositions impairments net 153 million lower year ended december 31 2015 compared year ended december 31 2014 due 494 million decrease revenues resulting reduced utilization medium helicopters dryleasing air medical contracts ended subsequent prior year sale fbo may 2015 decrease revenues partially offset 329 million decrease operating expenses 12 million decrease administrative general expenses primarily due reduction activity costcutting measures operating income depreciation gains asset dispositions impairments net 94 million higher year ended december 31 2014 compared year ended december 31 2013 primarily due 290 million 58 million increase revenues oil gas search rescue activities respectively increases partially offset 23 million decrease dryleasing revenues 178 million 51 million increase operating expenses administrative general expenses respectively changes operating assets liabilities interest income taxes resulted cash outflows 107 million year ended december 31 2015 compared inflows 21 million year ended december 31 2014 primarily due increases trade receivables decreases trade payables changes operating assets liabilities interest income taxes 40 million lower year ended december 31 2014 compared year ended december 31 2013 primarily due larger increases trade payables 2013 interest paid excluding capitalized interest 08 million lower year ended december 31 2015 compared year ended december 31 2014 primarily due repurchase 502 million 7750 senior notes interest paid excluding capitalized interest 44 million lower year ended december 31 2014 compared year ended december 31 2013 primarily due additional deposits progress payments helicopter orders base expansion project interest payments funds capitalized included cash used investing activities consolidated statements cash flows income taxes paid 41 million higher year ended december 31 2015 compared year ended december 31 2014 primarily due estimated tax payments 2015 result sale fbo reduction tax depreciation take delivery new helicopters late year income taxes paid 18 million higher year ended december 31 2014 compared year ended december 31 2013 primarily due tax payments foreign jurisdictions cash flows provided operating activities 32 million higher year ended december 31 2014 compared year ended december 31 2013 primarily due 40 million increase equity award amortization investing activities year ended december 31 2015 net cash used investing activities 228 million primarily follows • capital expenditures 601 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 253 million • proceeds sale fbo 143 million • cash paid business acquisitions net cash acquired 17 million • cash settlements forward contracts 11 million • net principal payments notes due thirdparties equity investees 07 million year ended december 31 2014 net cash used investing activities 939 million primarily follows • capital expenditures 1067 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 71 million • proceeds sale interest equity investees 64 million • cash settlements forward contracts 15 million • net principal payments notes due thirdparties equity investees 11 million year ended december 31 2013 net cash used investing activities 435 million primarily follows • capital expenditures 1101 million consisted primarily helicopter acquisitions • proceeds disposition property equipment 652 million • net principal payments notes receivable thirdparties equity investees 15 million financing activities year ended december 31 2015 net cash used financing activities 460 million primarily follows • borrowings revolving credit facility 600 million • net principal payments short longterm debt 579 million • cash used repurchase portion 7750 senior notes 469 million • cash used repurchase treasury shares 21 million • proceeds sharebased award plans 11 million year ended december 31 2014 net cash provided financing activities 261 million primarily follows • borrowings revolving credit facility 300 million • net principal payments longterm debt 29 million • issuance costs related revolving credit facility 24 million • proceeds sharebased award plans 15 million year ended december 31 2013 net cash used financing activities 15 million primarily follows • borrowing prior credit facility 550 million • net principal payments longterm debt 528 million • dividends paid series preferred stock 50 million • proceeds seacor settlement stock options 07 million • proceeds tax benefits sharebased award plans 05 million amended restated senior secured revolving credit facility march 31 2014 entered revolving credit facility amendment prior credit facility revolving credit facility provides us ability borrow 3000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million availability revolving credit facility may limited terms 7750 senior notes advances revolving credit facility closing used refinance indebtedness incurred prior credit facility revolving credit facility matures march 2019 december 31 2015 900 million outstanding revolving credit facility bears interest london interbank offered rate “libor” plus margin 225 basis points addition required pay quarterly commitment fee based ratio funded debt ebitda defined december 31 2015 commitment fee 500 basis points additional information terms revolving credit facility see note 8 consolidated financial statements included item 8 annual report form 10k 7750 senior notes december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 net proceeds offering used repay 1900 million borrowings outstanding prior credit facility interest notes payable semiannually arrears june 15 december 15 year may redeem notes time premium specified indenture governing notes 2015 repurchased 502 million 7750 senior notes total cash 479 million including accrued interest 10 million additional information terms 7750 senior notes see note 8 consolidated financial statements included item 8 annual report form 10k promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2015 221 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2015 206 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 aeróleo debt discussed recent developments former partner aeróleo transferred interests aeróleo new partner october 1 2015 connection transfer former partner assigned two existing notes receivable aeróleo new partner one note balance 55 million october 1 2015 payable us dollars note balance 27 million october 1 2015 payable brazilian reals notes bear interest 60 per annum call 60 equal monthly payments principal accrued interest less 01 million r02 million beginning october 1 2016 addition october 1 2015 aeróleo existing loan third party balance 14 million note payable brazilian reals bears interest rate 190 per annum calls equal monthly payments principal interest r05 million last payment due september 2016 short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2015 cash provided operations 445 million support capital expenditure program andor liquidity requirements may use combination operating cash flow cash balances proceeds sales assets issue debt equity borrow revolving credit facility december 31 2015 ability borrow additional 2071 million revolving credit facility subject agreement pledge additional assets collateral maintain compliance financial ratios discussed availability longterm liquidity dependent upon ability generate operating profits sufficient meet requirements working capital debt service capital expenditures reasonable return investment management continue closely monitor liquidity credit markets offbalance sheet arrangements occasion partners guarantee certain obligations behalf joint ventures december 31 2015 guarantees place december 31 2015 standby letters credit totaling 29 million 18 million scheduled expire october 2016 contractual obligations commercial commitments following table summarizes contractual obligations commercial commitments aggregate maturities december 31 2015 thousands 1 maturities borrowings interest payments pursuant borrowings capital commitment fee revolving credit facility based contractual terms interest amounts represent expected cash payments interest longterm debt based interest rates place amounts outstanding december 31 2015 2 capital purchase obligations represent commitments purchase 14 new helicopters consisting five aw169 light twin helicopters seven aw189 heavy helicopters two s92 heavy helicopters total unfunded capital commitments 1236 million may terminated without liability liquidated damages 32 million aggregate commitments recorded liabilities consolidated balance sheet yet received goods taken title property aw189 s92 helicopters scheduled delivered beginning 2016 2018 delivery dates aw169 helicopters determined 3 operating leases primarily include leases helicopters property remaining term excess one year 4 purchase obligations primarily include purchase orders helicopter inventory maintenance commitments goods services acquired ordinary course business fulfilled vendors within short period time 5 includes installment payments settled tax disputes brazil effects inflation operations expose us effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies brazilian tax disputes aeróleo brazilian joint venture subsidiary disputing assessments approximately 57 million taxes penalties interest levied municipal authorities rio de janeiro period 2000 2005 macae period 2001 2006 collectively “municipal assessments” aeróleo believes based interpretation tax legislation supported clarifying guidance provided supreme court respect issue 2006 ruling compliance applicable tax legislation plans defend claim vigorously administrative levels jurisdiction event municipal assessments upheld last administrative level may necessary aeróleo deposit amounts issue security pursue appeals aeróleo received final unfavorable ruling respect similar assessment levied rio de janeiro state treasury periods 1994 1998 “1998 assessments” 1998 assessments upheld without taking consideration benefit clarifying guidance issued supreme court following assertion claims currently anticipate final resolution 1998 assessments including administrative fine penalty would within established accruals would material effect financial position results operations december 31 2015 possible determine outcome municipal assessments expect would material effect business financial position results operations addition possible reasonably estimate likelihood potential amount assessments may issued subsequent periods aeróleo also disputing challenges raised brazilian tax authorities respect certain tax credits applied aeróleo 1995 2009 tax authorities seeking 17 million additional taxes interest penalties aeróleo believes based interpretation tax legislation compliance applicable tax legislation plans defend claim vigorously december 31 2015 possible determine outcome matter expect would material effect business financial position results operations aeróleo disputing responsibility 31 million employer social security contributions required remitted one customers relating period 1995 1998 although aeróleo may deemed coresponsible remittances local regulatory regime customer’s payments aeróleo presented invoices made net specific remittances required made customer issue claim plan defend claim vigorously december 31 2015 possible determine outcome matter expect would material effect business financial position results operations october 2015 aeróleo received written notices assessment 16 million penalties state rio de janeiro respect aeróleo’s alleged failure submit accurate documentation fully comply filing requirements respect certain valueadded taxes although aeróleo’s review allegations remains ongoing determined proposed penalties calculated based amounts containing typographical error upon correction typographical error aeróleo expects significant reduction amount proposed penalties december 31 2015 possible determine outcome matter aeróleo also disputing claims brazilian tax authorities respect federal customs taxes levied upon helicopters leased aeróleo imported brazil temporary regime subject reexport order dispute assessments pursue available legal remedies within judicial system aeróleo deposited amounts issue escrow account serves security presiding judge matter controlling release funds aeróleo believes based interpretation tax legislation well established aviation industry practice required pay taxes plans defend claim vigorously december 31 2015 possible determine outcome matter expect would material effect business financial position results operations normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time involved tax disputes various government agencies management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect business consolidated financial position results operations relates specific cases referred currently anticipate administrative fine penalty ultimately assessed would within established accruals would material effect financial position results operations aeróleo deposited 51 million escrow accounts controlled court respect certain cases described fully reserved amounts subject final determination judicial release escrow deposits estimated liabilities based company’s assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intention experience critical accounting policies estimates preparation financial statements conformity us generally accepted accounting principles “gaap” many cases accounting treatment particular transaction specifically dictated gaap whereas circumstances gaap requires us make estimates judgments assumptions believe reasonable based upon information available base estimates judgments historical experience professional advice various sources believe reasonable circumstances actual results may differ estimates different assumptions conditions believe significant accounting policies discussed note 1 consolidated financial statements included item 8 annual report form 10k following involve higher degree judgment complexity property equipment net property equipment represented 853 total assets december 31 2015 determine carrying value assets based property equipment accounting policies incorporate estimates assumptions judgments relative capitalized costs useful lives salvage values assets property equipment accounting policies also designed depreciate assets estimated useful lives assumptions judgments use determining estimated useful lives residual values helicopters reflect historical experience expectations regarding future operations utilization performance assets use different estimates assumptions judgments establishment property equipment accounting policies especially involving useful lives residual values helicopters would likely result materially different net book values assets results operations useful lives helicopters residual values difficult estimate due variety factors including changes operating conditions environment introduction technological advances aviation equipment changes market economic conditions including changes demand certain types helicopters changes laws regulations affecting aviation offshore oil gas industry evaluate remaining useful lives helicopters certain events occur directly impact assessment remaining useful lives helicopters consideration ultimate residual value takes account current expectations fair market value expected time ultimate disposal determination ultimate value received upon sale depends largely upon condition helicopters flight time left helicopters major components next major maintenance check required future value also depends secondary helicopter market exists date differ substantially time review property equipment impairment events changes circumstances indicate carrying value assets may recoverable impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset would required recognize impairment loss determining fair value utilize various assumptions including projections future cash flows change underlying assumptions cause change results tests could cause fair value less carrying amounts event would required record corresponding charge would reduce earnings continue evaluate estimates assumptions believe assumptions include estimate future cash flows based upon anticipated performance underlying assets appropriate supply demand key drivers helicopter idle time ability contract helicopters economical rates periods oversupply uncommon us helicopters idled extended periods time could indication asset group may impaired instances helicopters could used interchangeably due mobility helicopters may move weak geographic market stronger geographic market adequate opportunity arises helicopters considered interchangeable within classes asset groups accordingly impairment evaluation made asset group business combinations recognize certain exceptions 100 acquisitiondate fair value assets acquired liabilities assumed noncontrolling interests business combination acquisition constitutes change control acquired entity noncash consideration including contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value goodwill resulting acquisition measured difference consideration given recognized bases identifiable net assets acquired subsequent changes fair value contingent consideration arrangements generally reflected earnings acquisitionrelated transaction costs expensed incurred changes acquiring entity’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements income date acquisition allowance doubtful accounts establish allowances doubtful accounts casebycase basis believe payment amounts owed us unlikely occur establishing allowances consider number factors including historical experience changes client’s financial position derive significant portion revenue services international independent major integrated oil gas companies government agencies receivables concentrated primarily gulf mexico generally require collateral security support client receivables inventory reserve maintain inventory primarily consists spare parts service helicopters establish allowance distribute cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts also periodically review condition continuing usefulness parts determine whether realizable value inventory lower book value parts related helicopter types management determined longer included fleet substantially reduced fleet future periods specifically reviewed valuation parts significantly lower book value parts additional provision may required taxes annual tax provision based expected taxable income statutory rates tax planning opportunities available various jurisdictions operate determination evaluation annual tax provision tax positions involves interpretation tax laws requires significant judgment use estimates assumptions regarding significant future events amount timing character income deductions tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability area impacts tax liability number years may elapse ultimate tax liabilities various jurisdictions determined recognize foreign tax credits available us offset us income taxes due income earned foreign sources credits limited total income tax us income tax return well ratio foreign source income statutory category total income estimating amount foreign tax credits realizable estimate future taxable income statutory category estimates subject change based changes market conditions statutory category timing certain deductions available us statutory category periodically reassess estimates record changes amount realizable foreign tax credits based revised estimates maintain reserves estimated tax exposures tax exposure items include potential challenges intercompany pricing disposition transactions applicability rates various withholding taxes exposures resolved primarily settlement audits judicial means also affected changes applicable tax law statute limitation expirations etc may result revision past estimates review liabilities quarterly determination whether liability shall accrued whether existing liabilities shall reversed due expiration related statutes limitation settlement respective items tax authorities issuance rules regulations legislation court rulings resolve uncertainty goodwill record goodwill upon acquisition business purchase price paid exceeds fair value identifiable tangible intangible assets liabilities perform annual impairment test goodwill interim tests extent indicators impairment develop annual impairment tests test goodwill reporting unit level defined operating segment one level operating segment constitutes business financial information available regularly reviewed management impairment review process compares fair value reporting unit carrying value including goodwill use discounted future cash flow approach determine fair value uses estimates including among others projected utilization fleet future oil prices contract rates estimates reviewed time test goodwill impairment typically developed part routine business planning forecasting process believe estimates assumptions reasonable variations estimates could produce materially different results see note 1 consolidated financial statements included item 8 annual report form 10k description impairment goodwill balance recent accounting pronouncements description recent accounting pronouncements could possibly effect financial condition results operations see note 1 consolidated financial statements included item 8 annual report form 10k item 7aitem 7 management’s discussion analysis financial condition results operations overview one largest helicopter operators world longest serving helicopter transport operator us primary area operations helicopters primarily used transport personnel offshore oil gas production platforms drilling rigs installations years ended december 31 2016 2015 2014 approximately 62 66 67 respectively total operating revenues earned us gulf mexico year ended december 31 2016 approximately 31 total operating revenues earned international locations currently customers argentina brazil colombia dominican republic india suriname united kingdom primary users helicopter services international independent major integrated oil gas exploration development production companies national oil companies bsee years ended december 31 2016 2015 2014 approximately 88 78 76 respectively operating revenues derived helicopter services including emergency response sar services provided customers primarily engaged offshore oil gas exploration development production activities additionally leasing customers typically provide services oil gas companies respective local markets results tied level activity offshore oil gas industry addition serving oil gas industry provide air medical services utility services alaska flightseeing tours among activities december 31 2016 owned operated total 136 helicopters consisting 13 heavy helicopters 49 medium helicopters 33 light twin engine helicopters 41 light single engine helicopters also owned two aw189 heavy helicopters delivered fourth quarter 2016 placed service december 31 2016 december 31 2016 commitments purchase additional 12 new helicopters consisting seven heavy helicopters five light twin helicopters heavy helicopters scheduled delivered 2017 2019 delivery dates light twin helicopters determined addition outstanding options purchase additional 10 heavy helicopters options exercised helicopters would scheduled delivery 2019 2020 lines service offshore oil gas offshore oil gas market highly cyclical demand linked price oil gas tends fluctuate depending many factors including global economic activity levels inventory overall demand addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior last ten years provided transportation services government inspectors offshore installations drilling rigs platforms contract renewed october 2016 expected run september 2021 brazil among important markets offshore oil gas exploration development production activity worldwide participate market consolidated joint venture aeróleo also provide emergency response sar services us gulf mexico dryleasing enter lease arrangements helicopters operators primarily located international markets argentina united kingdom india helicopters contracted local helicopter operators often prefer lease helicopters rather purchase leasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk activities services order diversify sources earnings cash flow deploy number helicopters support industries activities air medical services flightseeing years ended december 31 2016 2015 2014 approximately 6 7 9 operating revenues generated activities services supply helicopters pilots mechanics hospitals manage helicopters behalf also provide alaska summer flightseeing tours support inland utility operations alaska firefighting mining power line pipeline survey activities 2016 launched uas services entered alliance provide uas services total safety worlds premier provider industrial inspection integrated safety solutions also developed services helicopter industry believe complement core activities hold 50 interest dart international sales manufacturing organization focused aftermarket helicopter parts accessories also hold 50 interest era training provides classroom instruction flight simulator helicopter training employees third parties market outlook offshore oil gas market highly cyclical demand linked price oil gas prices oil gas critical factors customers’ investment spending decisions price crude oil declined significantly since mid2014 remains depressed compared recent historical averages primarily due increased global supply crude oil less optimistic forecast worldwide economic growth decline price oil negatively impacted cash flow customers led reduce capital operational expenditures prior levels including reductions related offshore exploration development production activities although customers typically base capital expenditure budgets longterm commodity price expectations many customers significantly reduced capital spending plans taken measures reduce costs experienced customer contract cancellations decreased fleet utilization current environment customers decreased number helicopters contract canceled contract upon limited notice moreover even contractual cancellation rights may exist customers sought cancel renegotiate terms conditions contracts address current challenges addition current adverse economic conditions may increase ongoing credit risk exposure respect accounts receivable balances owed us customers based recent experience discussions customers helicopter transport needs anticipate continued demand services recently experienced levels oil gas markets recover generate vast majority operating revenue contracts supporting oil gas customers’ offshore production operations longterm transportation requirements production activities typically less cyclical exploration development activities production platforms remain place longterm relatively unaffected economic cycles marginal cost lifting barrel oil platform operation low declines price oil gas current price levels maintained extended period could delay cancellation planned offshore projects impacting operations future periods remainder oil gas revenue primarily comes transporting personnel offshore drilling rigs deepwater activity continues significant segment global offshore oil gas markets typically involves significant capital investment multiyear development plans projects generally underwritten oil gas companies using relatively conservative assumptions relating oil gas prices although projects considered less susceptible shortterm fluctuations price oil gas compared shorter cycle projects persistently low crude oil prices caused companies reevaluate future capital expenditures regards deepwater projects resulted rescaling delay cancellation planned offshore projects could impact operations future periods exposed foreign currency exchange risk primarily eurodenominated capital commitments brazilian operations receive portion revenues incur expenses brazilian real two large helicopter oems headquartered europe price many helicopters euros fluctuations value us dollar euro affects amount unfunded commitments us dollar terms although strength us dollar made acquisition eurodenominated helicopter models less expensive us recent years weakness euro also makes acquisitions less expensive competitors potential competitors could lead excess helicopter capacity increased competition jeopardize pricing utilization equipment fluctuations value euro could also destabilize residual values certain eurodenominated helicopters additionally strengthening us dollar may impact credit risk ability make payments us dollars foreign customers set rates receive revenues currencies believe well positioned address near term challenges liquidity levels provide stable foundation current market environment permit us together operational efficiency improvements benefitting us customers maintain improve customer relationships competitive position recent developments amendment revolving credit facility october 27 2016 entered third amendment revolving credit facility among things revised maintenance covenants provide additional flexibility reduced aggregate principal amount revolving loan commitments 2000 million added condition borrowing repayment mechanism connection excess cash amounts see “liquidity capital resources” competitor bankruptcy global competitor filed chapter 11 bankruptcy protection may 2016 disclosed date obtained court approval reject leases resulting return lessors 78 helicopters abandon five owned helicopters lenders restructure finance lease terms respect numerous helicopters competitor disclosed intends emerge bankruptcy 100 fewer helicopters fleet prior filing bankruptcy protection including elimination two owned h225 helicopters significant fleet reduction competitor could potentially increase available supply helicopters changes supply could impact helicopter rates pricing helicopters secondary market cannot predict extent impact us suspension h225 as332 l2 operations april 2016 airbus helicopters h225 also known ec225lp model helicopter operated global competitor referenced involved accident norway helicopter carrying eleven passengers two crew members accident resulted thirteen fatalities accident investigation board norway “aibn” published preliminary reports contained findings investigation accident may june 2016 february 2017 pursuant safety recommendation published aibn number regulatory authorities issued safety directives suspending operations limited exceptions airbus h225 as332 l2 model helicopters registered jurisdictions number customers operators voluntarily suspended operations two helicopter models october 7 2016 european aviation safety agency issued airworthiness directive provides additional maintenance inspection requirements allow helicopters return service december 9 2016 federal aviation administration united states issued alternative means compliance “amoc” also provides additional maintenance inspection requirements allow helicopters return service united states however civil aviation authorities norway united kingdom major european markets h225 allowed helicopters return service since accident believe h225 helicopters returned service oil gas missions countries asia nine h225 helicopters including five currently located us three currently located brazil one operating norway lease rejected chapter 11 bankruptcy case referenced december 31 2016 net book value h225 helicopters related inventory parts equipment 1607 million suspension h225 helicopter operations expect utilize heavy medium helicopters service operations although expect nearterm impact suspension material financial condition results operations time cannot predict long suspension h225 helicopter operations last market receptivity h225 helicopter future oil gas operations potential impact residual values helicopters impact longterm suspension could operating results financial condition excess capacity current excess capacity heavy helicopters higher recent years fleet’s excess helicopters include otherwise customer contracts undergoing maintenance dedicated charter activity subject operational suspension although take actions minimize excess capacity expect certain level excess capacity given time aviation logistics business result evolving nature customers’ needs operating revenues negatively impacted result higher excess capacity continued end 2016 fleet management initiatives participation competitive bids pursuit additional opportunities focused maximizing utilization fleet mitigating excess capacity heavy helicopters successful securing sufficient new projects may experience decline nearterm utilization helicopters may impact financial results 2017 beyond fleet developments capital commitments recent years continued focus modernization fleet standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance response demand transformed fleet significantly since beginning 2005 added 139 helicopters disposed 125 helicopters reduced average age owned fleet 17 years 12 years spent 392 million 601 million 1067 million acquire helicopters equipment years ended december 31 2016 2015 2014 respectively primarily heavy medium helicopters spare helicopter parts building improvements march 1 2017 unfunded commitments 1156 million primarily pursuant agreements purchase helicopters consisting five aw189 heavy helicopters two s92 heavy helicopters five aw169 light twin helicopters aw189 helicopters s92 helicopters scheduled delivered 2017 2019 delivery dates aw169 helicopters determined approximately 1021 million commitments inclusive deposits paid options yet exercised may terminated without liability aggregate liquidated damages 25 million addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered 2019 2020 components revenues expenses derive revenues primarily operating leasing equipment profits depend cost capital acquisition costs assets operating costs reputation operating revenues recorded us gulf mexico alaska international primarily generated offshore oil gas exploration development production activities alaska include revenues utility services revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded dryleasing generated leases thirdparty operators responsible operation helicopters certain leases also provide crew training management expertise logistical maintenance support leases typically call fixed monthly fee may also include additional charge based flight hours flown andor level personnel support majority dryleasing revenues generated helicopters deployed internationally operating revenues emergency response sar services earned fixed monthly fee plus incremental charge flight hours flown charter revenues typically earned hourly rate minimum number hours charged daily operating revenues recorded air medical services include revenues management services hospitals operating revenues earned fixed monthly fee plus incremental charge flight hours flown operating revenues recorded flightseeing generated per passenger basis aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities hourly charges powerbythehour “pbh” maintenance contracts cover helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance including cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models pbh maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments pbh provider case record reduction operating expense also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty pbh programs timing vendor credits helicopters lease third parties arrangements whereby customer assumes operational responsibility often provide maintenance parts support generally incur material operating costs instances leases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide training services support lease customers results operations operating revenues service line following table sets forth operating revenues service line years ended december 31 2016 2015 2014 1 primarily oil gas activities also includes revenues utility services firefighting 2 sold fbo may 1 2015 year ended december 31 2016 compared year ended december 31 2015 operating revenues operating revenues 346 million lower twelve months ended december 31 2016 “current year” compared twelve months ended december 31 2015 “prior year” operating revenues oil gas operations us gulf mexico 308 million lower current year operating revenues medium helicopters 168 million lower primarily due lower utilization lower average rates operating revenues heavy helicopters 81 million lower primarily due fewer helicopters contract lower average rates operating revenues light twin single engine helicopters 38 million 16 million lower respectively primarily due lower utilization miscellaneous revenues 05 million lower primarily due reduced part sales operating revenues oil gas operations alaska 140 million lower current year primarily due lower utilization operating revenues international oil gas operations 441 million higher current year international revenues increased 442 million due consolidation aeróleo effective october 1 2015 49 million due new contracts suriname 09 million due higher utilization colombia increases partially offset decrease 59 million brazil primarily due lower utilization period aeroleo’s revenues consolidated years revenues dryleasing activities 276 million lower current year dryleasing revenues decreased 214 million due consolidation aeróleo 64 million due contracts ended 15 million due bankruptcy customer decreases partially offset increases 10 million due new leases 05 million due lease return charges operating revenues sar activities 23 million lower current year primarily due fewer subscribers reduced charter activity operating revenues air medical services consistent prior year revenues decreased 07 million primarily due contract ended march 2015 partially offset increases 05 million due increased part sales 02 million due increased flight hours operating revenues flightseeing activities 13 million lower current year primarily due unfavorable weather conditions resulted shorter flightseeing season increased flight cancellations operating revenues fixed base operations “fbo” 28 million lower current year due sale fbo may 1 2015 operating expenses operating expenses 16 million lower current year repairs maintenance expenses 77 million lower due decrease 47 million related timing repairs net increase 45 million pbh buyout credits 32 million decrease pbh expense resulting reduced flight hours decreases partially offset 18 million increase related correction immaterial accounting errors 23 million reduction vendor credits increase 07 million due consolidation aeróleo fuel expense 02 million lower due reduction 46 million resulting fewer flight hours us sale fbo may 1 2015 partially offset increase 43 million due consolidation aeróleo operating expenses 50 million higher primarily due consolidation aeróleo personnel costs 11 million higher primarily due increase 88 million resulting consolidation aeróleo partially offset decrease 77 million resulting reduced headcount costcontrol initiatives us administrative general administrative general expenses 66 million lower current year compensation expenses 23 million lower primarily due 42 million decrease resulting reduced headcount incentive compensation us partially offset increase 18 million resulting consolidation aeróleo bad debt expenses 14 million lower primarily due 08 million bad debt reserve recorded prior year 08 million bad debt recovery current year shared service expenses 06 million lower due end amended restated transition services agreement “tsa” seacor june 2015 administrative general expenses 24 million lower due decreases 32 million us resulting cost cutting measures lower professional services fees partially offset increases 08 million resulting consolidation aeróleo depreciation amortization depreciation amortization expense 20 million higher current year due increase 24 million resulting addition new heavy helicopters base expansion project additional information technology infrastructure required result transition related services previously provided seacor partially offset decrease 02 million resulting correction immaterial accounting errors gains losses asset dispositions net gains asset dispositions 12 million lower current year current year sold otherwise disposed two hangars alaska nine helicopters total proceeds 280 million resulting net gains 50 million disposed spare parts equipment total proceeds 06 million resulting net losses 02 million prior year sold otherwise disposed 18 helicopters equipment total consideration 365 million including cash proceeds 253 million resulting net gains 60 million including 07 million related early buyout two helicopter leases customer goodwill impairment recorded goodwill impairment 19 million prior year resulting decline price crude oil stock price prolonged downturn oil gas market operating income loss operating loss percentage revenues 2 current year compared operating income percentage revenues 8 prior year excluding gains asset sales operating loss percentage revenues 3 current year compared operating income percentage revenues 7 prior year decrease operating income percentage revenues primarily due reduced revenues consolidation aeróleo increased depreciation expense interest income interest income 05 million lower current year primarily due early buyout helicopter leases customer prior year interest expense interest expense 38 million higher current year primarily due decreased capitalized interest 56 million 05 million write previously capitalized financing costs due reduction total commitment amount revolving credit facility partially offset savings 23 million due cumulative repurchases 7750 senior notes foreign currency gains losses net foreign currency losses 26 million prior year primarily due weakening euro resulting losses eurodenominated balances realized losses settled forward currency contracts gain debt extinguishment gains debt extinguishment 05 million current year due repurchase 50 million 7750 senior notes gains debt extinguishment 16 million prior year due repurchase 502 million 7750 senior notes gain sale fbo sale fbo prior year resulted cash proceeds 143 million pretax gain 129 million income tax expense benefit income tax benefit 34 million current year compared expense 141 million prior year decrease expense primarily due taxable net loss 05 million benefit resulting correction errors prior year tax provision current year well writeoff deferred tax asset related consolidation aeróleo nonrecurring charge deferred taxes related transfer helicopter hauser investments limited “hauser” prior year equity earnings losses net tax equity earnings net tax 11 million current year compared losses 19 million prior year increase equity earnings primarily due increased earnings dart joint venture current year ended december 31 2015 compared year ended december 31 2014 operating revenues operating revenues 494 million lower year ended december 31 2015 compared year ended december 31 2014 operating revenues oil gas operations us gulf mexico 333 million lower 2015 due overall decline demand helicopter services operating revenues medium helicopters 265 million lower primarily due lower utilization lower average rates operating revenues heavy helicopters 37 million lower primarily due lower utilization operating revenues single engine helicopters light twin engine helicopters 20 million 14 million lower respectively primarily due reduced fleet count operating revenues oil gas operations alaska 114 million lower 2015 operating revenues medium single engine helicopters 95 million 02 million lower respectively primarily due lower utilization lower average rates operating revenues light twin helicopters 14 million lower primarily due lower utilization miscellaneous revenues 04 million lower primarily due reduced rebillable expenses operating revenues international oil gas operations 159 million higher due consolidation aeróleo fourth quarter 2015 revenues dryleasing activities 59 million lower 2015 primarily due decreases 74 million related contracts ended 17 million related change accrual basis accounting recognizing revenue customer india 2014 07 million related foreign currency fluctuations 07 million due combination fewer flight hours lower rates decreases partially offset increased cash collections 46 million aeróleo prior consolidation operating revenues sar activities 30 million lower 2015 primarily due end subscriber contract reduced flight activity operating revenues air medical services 32 million lower 2015 primarily due contracts ended subsequent 2014 operating revenues flightseeing activities 2015 consistent 2014 operating revenues fbo activities 89 million lower due sale fbo may 1 2015 operating expenses operating expenses 329 million lower 2015 fuel expenses 125 million lower primarily due 137 million decrease related reduced flight hours lower average fuel prices sale fbo partially offset increase 12 million due consolidation aeróleo repairs maintenance expenses 105 million lower primarily due decreases 56 million related timing repairs 35 million pbh expenses related reduced flight hours 21 million related vendor credits partially offset increase 07 million due consolidation aeróleo personnel expenses 60 million lower primarily due decrease 99 million related reduced headcount travel costs temporary staffing partially offset increase 39 million due consolidation aeróleo insurance loss reserves 35 million lower primarily due decrease 40 million related lower premiums good experience credits reduced activity partially offset increase 05 million due consolidation aeróleo operating expenses 03 million lower primarily due reduced rebillable expenses partially offset increases related consolidation aeróleo maintenance projects base locations administrative general administrative general expenses 12 million lower 2015 compensation employee costs 43 million lower primarily due decrease 52 million related severance expenses changes senior management 2014 reduced headcount 2015 partially offset increase 09 million related consolidation aeróleo shared service expenses 25 million lower due reduction fees termination tsa seacor june 2015 professional service expenses 24 million higher primarily due consolidation aeróleo increased audit legal fees bad debt expense 18 million higher primarily due unpaid amounts customer brazil absence benefit recovery reserved account receivable 2014 information technology communication expenses 14 million higher due transition services seacor depreciation amortization depreciation expense 10 million higher primarily due completion base expansion project additional helicopters placed service gains asset dispositions gains asset dispositions 01 million lower 2015 sold otherwise disposed 18 helicopters equipment total consideration 365 million including cash proceeds 253 million resulting gains 52 million addition entered salestype lease two helicopters resulting gains 07 million 2014 sold three helicopters equipment proceeds 71 million recognized gains 61 million goodwill impairment recorded goodwill impairment 19 million 2015 resulting decline price crude oil stock price prolonged downturn oil gas markets operating income operating income percentage revenues 8 2015 compared 13 2014 excluding gains asset dispositions discussed operating income percentage revenues 7 2015 compared 11 2014 decrease operating income percentage revenues driven primarily decrease operating revenues impairment goodwill interest income interest income 07 million higher primarily due consolidation aeróleo interest earned salestype leases interest expense interest expense 13 million lower primarily due increased capitalized interest savings related repurchase 502 million 7750 senior notes derivative losses net derivative losses net less 01 million 2015 unrealized derivative losses 09 million 2014 primarily due revaluation market forward currency contracts foreign currency gains losses net foreign currency losses 26 million 2015 24 million 2014 primarily due strengthening us dollar resulting losses euro denominated balances realized losses settled forward currency contracts gain debt extinguishment gain debt extinguishment 16 million 2015 related repurchase 502 million 7750 senior notes gain sale fbo net cash proceeds sale fbo 143 million 2015 resulting pretax gain 129 million note receivable impairment note receivable impairments 25 million 2014 related probable loss note receivable income tax expense income tax expense 58 million higher 2015 primarily due writeoff deferred tax asset related consolidation aeróleo nonrecurring charge deferred taxes related acquisition transfer helicopter hauser equity earnings losses net tax equity losses net tax 19 million 2015 compared equity earnings 27 million 2014 difference primarily due sale 2014 51 interest lake palma sl “lake palma” gain 15 million net tax absence earnings lake palma 05 million addition recorded losses dart 16 million 2015 compared earnings 09 million 2014 liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments sources liquidity cash balances cash flows operations borrowings revolving credit facility time may secure additional liquidity issuance equity debt december 7 2012 completed offering 7750 senior notes used net proceeds offering repay 1900 million borrowings outstanding prior 2000 million senior secured revolving credit facility “prior credit facility” march 31 2014 entered revolving credit facility amendment prior credit facility october 27 2016 entered third amendment revolving credit facility among things revised maintenance covenants provide additional flexibility reduced aggregate principal amount revolving loan commitments 3000 million 2000 million added condition borrowing repayment mechanism connection excess cash amounts revolving credit facility allows us borrow 2000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million amended revolving credit facility requires maintain senior secured leverage ratio may greater 300100 fiscal quarter ending period september 30 2016 march 31 2017 325100 fiscal quarter ending june 30 2017 350100 fiscal quarter ending thereafter maintain minimum interest coverage ratio covenant 175100 fiscal quarter ending period september 30 2016 september 30 2017 150100 fiscal quarter ending thereafter maintain asset coverage ratio respect fair market value mortgaged helicopters secured accounts receivable inventory funded committed secured debt certain carveouts 200100 among items december 31 2016 compliance covenants year ended december 31 2016 repaid 370 million previously borrowed revolving credit facility using cash flows operations proceeds helicopter equipment dispositions also borrowed 120 million make progress payments s92 helicopters final payments aw189 helicopters december 31 2016 amount additional borrowings available us revolving credit facility 1202 million year ended december 31 2015 borrowed 600 million revolving credit facility order make progress payments s92 aw189 helicopters repurchase portion 7750 senior notes also repaid 550 million previously borrowed revolving credit facility using cash flows operations proceeds helicopter sales sale fbo year ended december 31 2014 borrowed 300 million revolving credit facility order make progress payments s92 helicopters march 1 2017 unfunded capital commitments 1156 million primarily pursuant agreements purchase 12 helicopters approximately 161 million payable 2017 remaining commitments payable 2019 noncancellable portion helicopter commitments payable 2017 120 million also 13 million deposits paid options yet exercised may terminate 1021 million commitments inclusive deposits paid options yet exercised without liability us aggregate liquidated damages 25 million addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered beginning 2019 2020 expect finance remaining acquisition costs combination cash hand cash provided operating activities borrowings revolving credit facility summary cash flows operating activities cash flows provided operating activities increased 140 million year ended december 31 2016 compared year ended december 31 2015 cash flows provided operating activities decreased 338 million year ended december 31 2015 compared year ended december 31 2014 components cash flows provided operating activities years ended december 31 2016 2015 2014 follows operating income depreciation gains asset dispositions impairments net 264 million lower year ended december 31 2016 compared year ended december 31 2015 due 346 million decrease revenues resulting reduced utilization helicopter fleet dryleasing contracts ended subsequent prior year sale fbo may 2015 decrease revenues partially offset 66 million decrease administrative general expenses 16 million decrease operating expenses primarily due reduction activity costcutting measures operating income depreciation gains asset dispositions impairments net 153 million lower year ended december 31 2015 compared year ended december 31 2014 primarily due 494 million decrease revenues resulting reduced utilization medium helicopters dryleasing air medical contracts ended subsequent 2014 sale fbo may 2015 decrease revenues partially offset 329 million decrease operating expenses 12 million decrease administrative general expenses primarily due reduction activity costcutting measures changes operating assets liabilities interest income taxes resulted cash inflows 210 million year ended december 31 2016 compared outflows 107 million year ended december 31 2015 primarily due decrease trade receivables increase accounts payable liabilities changes operating assets liabilities interest income taxes resulted cash outflows 107 million year ended december 31 2015 compared inflows 21 million year ended december 31 2014 primarily due increases trade receivables decreases trade payables interest paid excluding capitalized interest 26 million higher year ended december 31 2016 compared year ended december 31 2015 primarily due suspension capitalized interest november 2015 december 2016 interest paid excluding capitalized interest 08 million lower year ended december 31 2015 compared year ended december 31 2014 primarily due repurchase 502 million 7750 senior notes income taxes refunded 60 million year ended december 31 2016 compared income taxes paid 60 million year ended december 31 2015 made estimated tax payments 2015 result sale fbo reduction tax depreciation refunded 2016 income taxes paid 41 million higher year ended december 31 2015 compared year ended december 31 2014 primarily due estimated tax payments 2015 result sale fbo reduction tax depreciation take delivery new helicopters late year investing activities year ended december 31 2016 net cash used investing activities 128 million primarily follows • capital expenditures 392 million consisted primarily helicopter acquisitions deposits future helicopter deliveries • proceeds disposition property equipment 286 million • net deposits escrow accounts primarily likekind exchange transactions 37 million • net principal payments notes due thirdparties equity investees 09 million • returns helicopter deposits 05 million year ended december 31 2015 net cash used investing activities 228 million primarily follows • capital expenditures 601 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 253 million • proceeds sale fbo 143 million • cash paid business acquisitions net cash acquired 17 million • cash settlements forward contracts 11 million • net principal payments notes due thirdparties equity investees 07 million year ended december 31 2014 net cash used investing activities 939 million primarily follows • capital expenditures 1067 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 71 million • proceeds sale interest equity investees 64 million • cash settlements forward contracts 15 million • net principal payments notes due thirdparties equity investees 11 million financing activities year ended december 31 2016 net cash used financing activities 330 million primarily follows • net principal payments longterm debt 404 million • borrowings revolving credit facility 120 million • cash used repurchase portion 7750 senior notes 43 million • issuance costs related amendment revolving credit facility 09 million • proceeds sharebased award plans 08 million • cash used repurchase treasury shares 02 million year ended december 31 2015 net cash used financing activities 460 million primarily follows • borrowings revolving credit facility 600 million • net principal payments short longterm debt 579 million • cash used repurchase portion 7750 senior notes 469 million • cash used repurchase treasury shares 21 million • proceeds sharebased award plans 11 million year ended december 31 2014 net cash provided financing activities 261 million primarily follows • borrowings revolving credit facility 300 million • net principal payments longterm debt 29 million • issuance costs related revolving credit facility 24 million • proceeds sharebased award plans 15 million amended restated senior secured revolving credit facility march 31 2014 entered revolving credit facility amendment prior credit facility october 27 2016 entered third amendment revolving credit facility among things revised maintenance covenants provide additional flexibility reduced aggregate principal amount revolving loan commitments 2000 million added condition borrowing repayment mechanism connection excess cash amounts amended revolving credit facility provides us ability borrow 2000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million availability revolving credit facility may limited terms 7750 senior notes advances revolving credit facility closing used refinance indebtedness incurred prior credit facility revolving credit facility matures march 2019 december 31 2016 650 million outstanding revolving credit facility bears interest london interbank offered rate “libor” plus margin 225 basis points addition required pay quarterly commitment fee based ratio funded debt ebitda defined december 31 2016 commitment fee 500 basis points additional information terms revolving credit facility see note 8 consolidated financial statements included item 8 annual report form 10k 7750 senior notes december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 net proceeds offering used repay 1900 million borrowings outstanding prior credit facility interest notes payable semiannually arrears june 15 december 15 year may redeem notes time premium specified indenture governing notes 2015 repurchased 502 million 7750 senior notes total cash consideration 479 million including accrued interest 10 million 2016 purchased additional 50 million 7750 senior notes total cash 45 million including accrued interest 02 million additional information terms 7750 senior notes see note 8 consolidated financial statements included item 8 annual report form 10k promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2016 247 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2016 243 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 2016 notes amended among things provide crosscollateralization helicopter secures promissory notes aeróleo debt former partner aeróleo transferred interests aeróleo new partner october 1 2015 connection transfer former partner assigned two existing notes receivable aeróleo new partner one note balance 55 million october 1 2015 payable us dollars note balance 27 million october 1 2015 payable brazilian reals notes bore interest 60 per annum called 60 equal monthly payments principal accrued interest begin october 1 2016 june 2016 partner aeróleo contributed notes payable us aeróleo including two notes contribution additional capital result 63 million debt due company’s partner aeróleo recorded net loss attributable noncontrolling interest subsidiaries accompanying consolidated statements operations addition october 1 2015 aeróleo existing loan third party balance 14 million note payable brazilian reals bore interest rate 190 per annum called equal monthly payments principal interest final payment due september 2016 june 2016 company prepaid principal interest 15 million settle note full also settled certain tax disputes brazil totaling 34 million agreed make installment payments amounts due applicable taxing authorities installments payable brazilian reals bear interest rate equal overnight rate published central bank brazil amounts paid next 36 84 months short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2016 cash provided operations 585 million support capital expenditure program andor liquidity requirements may use combination operating cash flow cash balances proceeds sales assets issue debt equity borrow revolving credit facility december 31 2016 ability borrow additional 1202 million revolving credit facility subject compliance financial ratios discussed availability longterm liquidity dependent upon ability generate operating profits sufficient meet requirements working capital debt service capital expenditures reasonable return investment management continue closely monitor liquidity credit markets offbalance sheet arrangements occasion partners guarantee certain obligations behalf joint ventures december 31 2016 guarantees place december 31 2016 standby letters credit totaling 12 million contractual obligations commercial commitments following table summarizes contractual obligations commercial commitments aggregate maturities december 31 2016 thousands 1 maturities borrowings interest payments pursuant borrowings capital commitment fee revolving credit facility based contractual terms interest amounts represent expected cash payments interest longterm debt based interest rates place amounts outstanding december 31 2016 installment payments settled tax disputes brazil include interest calculated using rates effect december 31 2016 2 capital purchase obligations december 31 2016 represent commitments purchase 12 new helicopters consisting five aw169 light twin helicopters five aw189 heavy helicopters two s92 heavy helicopters total unfunded capital commitments 1010 million may terminated without liability liquidated damages 25 million aggregate commitments recorded liabilities consolidated balance sheet yet received goods taken title property 3 operating leases primarily include leases facilities helicopters remaining term excess one year 4 purchase obligations primarily include purchase orders helicopter inventory maintenance commitments goods services acquired ordinary course business fulfilled vendors within short period time effects inflation operations expose us effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies brazilian tax disputes disputing assessments approximately 72 million taxes penalties interest levied municipal authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal assessments” believe based interpretation tax legislation supported clarifying guidance provided supreme court brazil respect issue 2006 ruling compliance applicable tax legislation paid applicable taxes penalties interest plan defend claims vigorously administrative levels jurisdiction event municipal assessments upheld last administrative level may necessary us deposit amounts issue security pursue appeals 2015 received final unfavorable ruling respect similar assessment levied rio de janeiro state treasury periods 1994 1998 “1998 assessments” 1998 assessments upheld without taking consideration benefit clarifying guidance issued supreme court following assertion claims final adjudication 1998 assessments requires payment amounts within established accruals paid multiple installments time expected material effect financial position results operations december 31 2016 possible determine outcome municipal assessments expect outcome would material effect business financial position results operations addition possible reasonably estimate likelihood potential amount assessments may issued subsequent periods also disputing challenges raised brazilian tax authorities respect certain tax credits applied aeróleo 1995 2009 tax authorities seeking 22 million additional taxes interest penalties believe based interpretation tax legislation compliance applicable tax legislation plan defend claim vigorously december 31 2016 possible determine outcome matter expect outcome would material adverse effect business financial position results operations disputing responsibility 27 million employer social security contributions required remitted one customers relating period 1995 1998 although may deemed coresponsible remittances local regulatory regime customer’s payments us presented invoices made net specific remittances required made customer issue claim plan defend claim vigorously december 31 2016 possible determine outcome matter expect outcome would material adverse effect business financial position results operations disputing certain penalties assessed state rio de janeiro respect alleged failure submit accurate documentation fully comply filing requirements respect certain valueadded taxes elected make payment 02 million installments time satisfy portion penalties upon confirming asserting authority originally proposed penalties 16 million respect balance assessments calculated based amounts containing typographical error aggregate penalties remain dispute total 04 million december 31 2016 possible determine outcome matter expect outcome would material adverse effect business financial position results operations disputing imposition 08 million fines levied brazilian customs authorities fines relate alleged failure comply certain deadlines temporary regime pursuant import helicopters brazil order dispute fines pursue legal remedies within judicial system deposited certain amounts issue security escrow account presiding judge matters controls release funds pending outcome believe documentation evidences timely compliance relevant deadlines plan defend case vigorously december 31 2016 possible determine outcome matters expect outcome would material adverse effect business financial position results operations disputing fines 03 million sought taxing authorities brazil following final adjudication disallow certain tax credits applied offset certain social tax liabilities fine calculated 50 incremental tax liability resulting disallowance tax credits applied without taking account circumstances relating disallowance tax credits constitutionality fines review supreme court brazil number cases taxpayers received favorable rulings due lack constitutionality law plan defend claim vigorously december 31 2016 possible determine outcome expect would material adverse impact business financial position results operations disputing contingent fees 05 million sought former tax consultant calculated based unrealized tax savings attributed consultant’s suggested tax strategies contention fees due upon realized tax savings december 31 2016 possible determine outcome matters expect outcome would material adverse effect business financial position results operations normal course business become involved various employmentrelated litigation matters december 31 2016 possible determine outcome several claims wherein aggregate 01 million established accrual sought us expect outcome respect claims would material adverse effect business financial position results operations also disputing claims brazilian tax authorities respect federal customs taxes levied upon helicopters imported brazil temporary regime subject reexport order dispute assessments pursue available legal remedies within judicial system deposited amounts issue security escrow account presiding judge matter controlling release funds believe based interpretation tax legislation well established aviation industry practice required pay taxes plan defend claim vigorously december 31 2016 possible determine outcome matter expect outcome would material adverse effect business financial position results operations november 21 2016 filed lawsuit district court dallas county texas airbus helicopters inc airbus helicopters sas collectively “airbus” alleging breaches various contracts us fraudulent inducement unjust enrichment connection sale airbus h225 model helicopters us seek compensation monetary damages amount determined cannot predict ultimate outcome litigation may spend significant resources pursuing legal remedies airbus normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time involved tax disputes various government agencies management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect business consolidated financial position results operations relates specific cases referred currently anticipate administrative fine penalty ultimately would material effect financial position results operations deposited 83 million escrow accounts controlled court respect certain cases described fully reserved amounts subject final determination judicial release escrow deposits estimates based assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience critical accounting policies estimates preparation financial statements conformity us generally accepted accounting principles “gaap” many cases accounting treatment particular transaction specifically dictated gaap whereas circumstances gaap requires us make estimates judgments assumptions believe reasonable based upon information available base estimates judgments historical experience professional advice various sources believe reasonable circumstances actual results may differ estimates different assumptions conditions believe significant accounting policies discussed note 1 consolidated financial statements included item 8 annual report form 10k following involve higher degree judgment complexity property equipment net property equipment represented 860 total assets december 31 2016 determine carrying value assets based property equipment accounting policies incorporate estimates assumptions judgments relative capitalized costs useful lives salvage values assets property equipment accounting policies also designed depreciate assets estimated useful lives assumptions judgments use determining estimated useful lives residual values helicopters equipment reflect historical experience expectations regarding future operations utilization performance assets use different estimates assumptions judgments establishment property equipment accounting policies especially involving useful lives residual values helicopters would likely result materially different net book values assets results operations useful lives helicopters residual values difficult estimate due variety factors including changes operating conditions environment introduction technological advances aviation equipment changes market economic conditions including changes demand certain types helicopters changes laws regulations affecting aviation offshore oil gas industry evaluate remaining useful lives helicopters certain events occur directly impact assessment remaining useful lives helicopters consideration ultimate residual value takes account current expectations fair market value expected time ultimate disposal determination ultimate value received upon sale depends largely upon condition helicopters flight time left helicopters major components next major maintenance check required future value also depends secondary helicopter market exists date differ substantially time review property equipment impairment events changes circumstances indicate carrying value assets may recoverable impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset group would required recognize impairment loss determining fair value utilize various assumptions including projections future cash flows change underlying assumptions could cause change results tests could cause fair value less carrying amounts event would required record corresponding charge would reduce earnings continue evaluate estimates assumptions believe assumptions include estimate future cash flows based upon anticipated performance underlying assets appropriate supply demand key drivers helicopter idle time ability contract helicopters economical rates periods oversupply uncommon us helicopters idled extended periods time could indication asset group may impaired instances useful lives helicopters could used interchangeably due mobility helicopters may move weak geographic market stronger geographic market adequate opportunity arises helicopters considered interchangeable within classes asset groups accordingly impairment evaluation made asset group allowance doubtful accounts establish allowances doubtful accounts casebycase basis believe payment amounts owed us unlikely occur establishing allowances consider number factors including historical experience changes client’s financial position estimates involve significant judgment management derive significant portion revenue services international independent major integrated oil gas companies government agencies receivables concentrated primarily gulf mexico generally require collateral security support client receivables inventory reserve maintain inventory primarily consists spare parts service helicopters establish allowance distribute cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts also periodically review condition continuing usefulness parts determine whether realizable value inventory lower book value parts related helicopter types management determined longer included fleet substantially reduced fleet future periods specifically reviewed valuation parts significantly lower book value parts additional provision may required taxes annual tax provision based expected taxable income statutory rates tax planning opportunities available various jurisdictions operate determination evaluation annual tax provision tax positions involves interpretation tax laws requires significant judgment use estimates assumptions regarding significant future events amount timing character income deductions tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability area impacts tax liability number years may elapse ultimate tax liabilities various jurisdictions determined recognize foreign tax credits available us offset us income taxes due income earned foreign sources credits limited total income tax us income tax return well ratio foreign source income statutory category total income estimating amount foreign tax credits realizable estimate future taxable income statutory category estimates subject change based changes market conditions statutory category timing certain deductions available us statutory category periodically reassess estimates record changes amount realizable foreign tax credits based revised estimates maintain reserves estimated tax exposures tax exposure items include potential challenges intercompany pricing disposition transactions applicability rates various withholding taxes exposures resolved primarily settlement audits judicial means also affected changes applicable tax law statute limitation expirations etc may result revision past estimates review liabilities quarterly determination whether liability shall accrued whether existing liabilities shall reversed due expiration related statutes limitation settlement respective items tax authorities issuance rules regulations legislation court rulings resolve uncertainty intangible assets record purchased intangible assets respective fair values date acquired intangible assets finite lives amortized straightline basis estimated useful lives intangible assets indefinite lives tested impairment annual basis frequently indicators impairment present annual impairment tests impairment analysis uses discounted future cash flow approach determine fair value incorporates among things projected utilization fleet future oil prices contract rates estimates reviewed time test indefinite lived intangible assets impairment typically developed part routine business planning forecasting process believe estimates assumptions reasonable variations estimates could produce materially different results recent accounting pronouncements description recent accounting pronouncements could possibly effect financial condition results operations see note 1 consolidated financial statements included item 8 annual report form 10k march 2016 financial accounting standards board issued accounting standards update “asu” 201609 compensation stock compensation simplifies several aspects accounting sharebased payment transactions including income tax consequences classification statement cash flows treatment forfeitures main differences current gaap asu 201609 tax consequences changes fair value equity awards grant date vesting date charged income tax expense reported operating section statement cash flows period award vests ii entities option estimate award forfeitures prescribed current gaap record forfeitures adjustment expense occur adopted asu 201609 january 1 2017 elected record forfeitures equity awards adjustment expense occur period occur believe adoption election material impact consolidated financial statements item 7aitem 7 management’s discussion analysis financial condition results operations following discussion analysis financial condition results operations fiscal years ended december 31 2017 2016 2015 read discussion analysis together consolidated financial statements related notes financial information included elsewhere annual report discussion contains forwardlooking statements involve significant risks uncertainties result many factors set forth “item 1a risk factors” elsewhere annual report actual results may differ materially anticipated forwardlooking statements overview one largest helicopter operators world longest serving helicopter transport operator us primary area operations helicopters primarily used transport personnel offshore oil gas production platforms drilling rigs installations years ended december 31 2017 2016 2015 approximately 62 66 respectively total operating revenues earned us gulf mexico years ended december 31 2017 2016 2015 approximately 34 31 21 total operating revenues earned international locations currently customers argentina brazil colombia dominican republic india suriname primary users helicopter services international independent major integrated oil gas exploration development production companies national oil companies bsee years ended december 31 2017 2016 2015 approximately 91 88 78 respectively operating revenues derived helicopter services including emergency response services provided customers primarily engaged offshore oil gas exploration development production activities additionally leasing customers typically provide services oil gas companies respective local markets results tied level activity offshore oil gas industry addition serving oil gas industry provide emergency response services utility services recently alaska flightseeing tours among activities december 31 2017 owned operated total 132 helicopters consisting 16 heavy helicopters 47 medium helicopters 29 light twin engine helicopters 40 light single engine helicopters december 31 2017 commitments purchase additional 11 new helicopters consisting six heavy helicopters five light twin helicopters heavy helicopters scheduled delivered 2018 2019 delivery dates light twin helicopters determined addition outstanding options purchase additional 10 heavy helicopters options exercised helicopters would scheduled delivery 2019 2020 lines service offshore oil gas offshore oil gas market highly cyclical demand linked price oil gas tends fluctuate depending many factors including global economic activity levels inventory overall demand addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior last 11 years provided transportation services government inspectors offshore installations drilling rigs platforms contract renewed october 2016 term one year four oneyear options extend expected run september 2021 brazil among important markets offshore oil gas exploration development production activity worldwide participate market consolidated joint venture aeróleo also provide emergency response services us gulf mexico dryleasing enter lease arrangements helicopters operators primarily located international markets argentina india helicopters contracted local helicopter operators often prefer lease helicopters rather purchase leasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk activities services order diversify sources earnings cash flow deploy number helicopters support industries activities emergency response services recently flightseeing tours years ended december 31 2017 2016 2015 approximately 3 6 7 operating revenues generated activities services also provide inland utility alaska firefighting mining power line pipeline survey activities also developed services helicopter industry believe complement core activities hold 50 interest dart international sales manufacturing organization focused aftermarket helicopter parts accessories also hold 50 interest era training provides classroom instruction flight simulator helicopter training employees third parties market outlook offshore oil gas market highly cyclical demand linked price oil gas prices oil gas critical factors customers’ investment spending decisions price crude oil declined significantly beginning mid 2014 negatively impacted cash flow customers led reduce capital operational expenditures prior levels including reductions related offshore exploration development production activities experienced customer contract cancellations decreased fleet utilization customers decreased number helicopters contract canceled contract upon limited notice price crude oil recovered favorable levels customers’ spending offshore exploration development production activities remains depressed though experienced increase customer activity since mid2017 based recent experience discussions customers helicopter transport needs anticipate demand services continue improve oil gas markets recover although assurance given case generate vast majority operating revenue contracts supporting oil gas customers’ offshore production operations longterm transportation requirements production activities typically less cyclical exploration development activities production platforms remain place longterm relatively unaffected economic cycles marginal cost lifting barrel oil platform operation low additional declines price oil gas could delay cancellation planned offshore projects impacting operations future periods remainder oil gas revenues primarily comes transporting personnel offshore drilling rigs deepwater activity continues significant segment global offshore oil gas markets typically involves significant capital investment multiyear development plans projects generally underwritten oil gas companies using relatively conservative assumptions relating oil gas prices although projects considered less susceptible shortterm fluctuations price oil gas compared shorter cycle projects persistently low crude oil prices last three years caused companies reevaluate future capital expenditures regards deepwater projects resulted rescaling delay cancellation planned offshore projects could continue impact operations future periods exposed foreign currency exchange risk primarily eurodenominated capital commitments brazilian operations receive portion revenues incur expenses brazilian real two large helicopter oems headquartered europe price many helicopters euros fluctuations value us dollar euro affects amount unfunded commitments us dollar terms although strength us dollar made acquisition eurodenominated helicopter models less expensive us recent years weakness euro also makes acquisitions less expensive competitors potential competitors could lead excess helicopter capacity increased competition jeopardize pricing utilization equipment fluctuations value euro could also destabilize residual values certain eurodenominated helicopters recently euro begun strengthen relative us dollar believe well positioned address near term challenges liquidity levels provide stable foundation current market environment permit us together operational efficiency improvements benefitting us customers maintain improve customer relationships competitive position recent developments amendment revolving credit facility march 7 2018 era group entered consent amendment 4 amended restated senior secured revolving credit facility agreement among things reduced aggregate principal amount revolving loan commitments 2000 million 1250 million b extended agreement’s maturity march 31 2021 c revised definition ebitda permit addback ongoing litigation expenses related h225 helicopters adjusted covenant requirement maintain interest coverage ratio less 175100 senior secured leverage ratio 325100 see “liquidity capital resources” sale alaska flightseeing assets february 23 2018 company sold flightseeing assets alaska consisted eight as350 single engine helicopters two operating facilities related property equipment 100 million result company conduct flightseeing operations 2018 us tax reform us government recently enacted comprehensive tax legislation commonly referred tax act tax act makes broad complex changes us tax code resulted significant reduction company’s us net deferred tax liabilities december 31 2017 tax act also establishes new regulations affect 2018 including reduction us federal corporate income tax rate 35 21 refer note 7 notes consolidated financial statements item 8 annual report form 10k additional information cessation h225 operations april 2016 airbus helicopters h225 also known ec225lp model helicopter operated global competitor involved accident norway helicopter carrying eleven passengers two crew members killed accident root cause accident still investigation preliminary reports published aibn contain findings linking accident design flaw following crash number regulatory authorities issued safety directives grounding limited exceptions airbus h225 as332 l2 model helicopters registered jurisdictions number customers operators voluntarily suspended operations two helicopter models october 7 2016 easa issued airworthiness directive allowed h225 as332l2 helicopters return service subject significant additional maintenance inspection requirements december 9 2016 federal aviation administration united states issued amoc allowed helicopters return service subject significant additional maintenance inspection requirements allow helicopters return service united states july 20 2017 civil aviation authorities norway united kingdom major european markets h225 helicopters published directives set forth requirements respect return service helicopter models subject significant additional maintenance inspection requirements prior return service operator must develop return service plan applicable helicopter model must approved relevant regulatory authority plan would need include detailed safety case outlining specific maintenance processes tooling training requirements addition directives mandate operator must comply easa directive issued june 23 2017 requires replacement prescribes reduced service limits inspections respect certain identified parts easa also requires installation new easaapproved full flow magnetic plug device imposes maintenance protocols support inspection main gearbox oil system particle detection even though h225 helicopters longer suspended regulatory authorities confidence amongst customers employees unions customers’ employees belong detailed safety case would justify return service h225 model helicopters result believe full return service h225 helicopters offshore oil gas operations unlikely operate h225 helicopters fleet unless develop detailed safety case demonstrates h225 model helicopter operated safely third quarter 2017 determined cannot develop case broadbased return service improbable therefore cannot operate h225 helicopters operations planned time helicopters purchased nine h225 helicopters including five currently located us three currently located brazil one currently located norway since accident utilized heavy medium helicopters service operations developments led us conclude cash flows associated h225 helicopters largely independent cash flows associated remainder fleet evaluated separately impairment performed impairment analysis h225 helicopters capital parts related inventory determined projected undiscounted cash flows remaining useful life less carrying amount determined book value exceeded fair value recorded 117 million impairment charge three months ended september 30 2017 december 31 2017 net book value h225 helicopters related inventory parts equipment 378 million airbus lawsuit november 21 2016 filed lawsuit district court dallas county texas airbus alleging breaches various contracts us fraudulent inducement unjust enrichment connection sale airbus h225 model helicopters us seek compensation monetary damages amount determined cannot predict ultimate outcome litigation may spend significant resources pursuing legal remedies airbus tax special regularization program fourth quarter 2017 brazil subsidiary elected enter certain settled open tax claims tax special regularization program “pert program” pursuant brazil provisional measure 783 issued may 31 2017 pert program allows partial settement debts income tax debts nonincomebased tax debts due april 30 2017 brazil’s federal revenue service use tax credits including income tax loss carryforwards 35 million income tax benefit recorded fourth quarter attributable utilization income tax loss carryforwards pert program offset accrual additional operating expense associated certain indirect tax claims enrolled pert program fleet developments capital commitments focus modernization fleet standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance response demand transformed fleet significantly since beginning 2005 added 147 helicopters disposed 128 helicopters reduced average age owned fleet 17 years 13 years spent 168 million 392 million 601 million acquire helicopters equipment years ended december 31 2017 2016 2015 respectively primarily heavy medium helicopters spare helicopter parts facility improvements march 5 2018 unfunded commitments 859 million primarily pursuant agreements purchase eight helicopters consisting three aw189 heavy helicopters five aw169 light twin helicopters aw189 helicopters scheduled delivered 2018 2019 delivery dates aw169 helicopters determined addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered 2019 2020 approximately 872 million commitments inclusive deposits paid options yet exercised may terminated without liability aggregate liquidated damages 22 million components revenues expenses derive revenues primarily operating leasing equipment profits depend cost capital acquisition costs assets operating costs reputation operating revenues recorded us gulf mexico alaska international primarily generated offshore oil gas exploration development production activities alaska include revenues utility services revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded dryleasing generated leases thirdparty operators responsible operation helicopters certain leases also provide crew training management expertise logistical maintenance support leases typically call fixed monthly fee may also include additional charge based flight hours flown andor level personnel support majority dryleasing revenues generated helicopters deployed internationally operating revenues emergency response services earned fixed monthly fee plus incremental charge flight hours flown charter revenues typically earned hourly rate minimum number hours charged daily operating revenues recorded flightseeing generated per passenger basis aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities hourly charges powerbythehour “pbh” maintenance contracts cover helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance including cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models pbh maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments pbh provider case record reduction operating expense also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty pbh programs timing vendor credits helicopters lease third parties arrangements whereby customer assumes operational responsibility often provide maintenance parts support generally incur material operating costs instances leases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide training services support lease customers results operations operating revenues service line following table sets forth operating revenues service line years ended december 31 2017 2016 2015 1 primarily oil gas activities also includes revenues utility services firefighting 2 sold fbo may 1 2015 year ended december 31 2017 compared year ended december 31 2016 operating revenues operating revenues 159 million lower twelve months ended december 31 2017 “current year” compared twelve months ended december 31 2016 “prior year” operating revenues oil gas operations us 59 million lower current year operating revenues light twin single engine helicopters 87 million 62 million lower respectively primarily due lower utilization operating revenues medium heavy helicopters 72 million 27 million higher respectively primarily due higher utilization miscellaneous revenues 08 million lower primarily due recognition contract termination fee prior year operating revenues international oil gas operations 13 million higher operating revenues colombia increased 17 million primarily due shortterm contract higher utilization operating revenues brazil increased 06 million primarily due strengthening brazilian real relative us dollar partially offset lower utilization increases partially offset 10 million decrease suriname primarily due lower utilization operating revenues emergency response services 135 million lower current year primarily due 56 million decrease result fewer sar subscribers fewer sar flight hours 79 million decrease result end air medical contracts current year revenues dryleasing activities 28 million higher current year primarily due 40 million lease return charges helicopters returned company upon conclusion lease contracts partially offset leases ended subsequent prior year operating revenues flightseeing activities 06 million lower current year primarily due lower utilization operating expenses operating expenses 24 million lower current year personnel costs 75 million lower primarily due reduction headcount insurance loss reserves 17 million lower primarily due reduction premiums fuel expense 05 million lower primarily due reduced flight hours operating expenses 12 million lower primarily due reduced activity partially offset indirect tax expense 20 million related pert program brazil current year decreases partially offset increase repairs maintenance expense 85 million primarily due 23 million increase powerbythehour “pbh” expense net reduction vendor credits 24 million 38 million increase related timing repairs increased pbh expense primarily due recognition 71 million credits prior year related removal helicopters pbh programs partially offset recognition credits fewer flight hours current year administrative general administrative general expenses 59 million higher current year primarily due increases 63 million professional services fees 07 million due recognition bad debt recovery brazil prior year increases partially offset decrease 08 million compensation employee costs result lower headcount decrease 03 million administrative general costs depreciation amortization depreciation amortization expense 36 million lower current year primarily due certain assets becoming fully depreciated asset dispositions subsequent prior year decrease depreciation company’s h225 helicopters following impairment current year partially offset new heavy helicopters placed service gains asset dispositions net current year sold otherwise disposed hangar alaska three helicopters capital parts assets gains 45 million prior year sold otherwise disposed two hangars alaska nine helicopters related equipment gains 48 million loss impairment recorded loss impairment 1170 million current year related decline value h225 helicopters operating income loss operating loss percentage revenues 58 current year compared 2 prior year excluding gains asset dispositions operating loss percentage revenues 61 current year compared 3 prior year increase operating loss percentage revenues current year primarily due loss impairment increased professional services fees repairs maintenance expenses described interest expense interest expense 06 million lower current year primarily due lower outstanding debt balances resumption capitalization interest certain helicopter deposits current year compared expensing interest deposits prior year due refund helicopter deposits partially offset 08 million additional accrued interest resulting correction immaterial accounting errors gain debt extinguishment gain debt extinguishment 05 million prior year due repurchase 50 million 7750 senior notes income tax benefit income tax benefit 1193 million higher current year primarily due approximately 700 million related impact tax act well tax impact impairment h225 helicopters capital parts inventory current year equity earnings equity earnings net tax 03 million higher current year primarily due higher earnings dart holding company ltd “dart” joint venture year ended december 31 2016 compared year ended december 31 2015 operating revenues operating revenues 346 million lower twelve months ended december 31 2016 compared twelve months ended december 31 2015 operating revenues oil gas operations us gulf mexico 308 million lower 2016 operating revenues medium helicopters 168 million lower primarily due lower utilization lower average rates operating revenues heavy helicopters 81 million lower primarily due fewer helicopters contract lower average rates operating revenues light twin single engine helicopters 38 million 16 million lower respectively primarily due lower utilization miscellaneous revenues 05 million lower primarily due reduced part sales operating revenues oil gas operations alaska 140 million lower 2016 primarily due lower utilization operating revenues international oil gas operations 441 million higher 2016 international revenues increased 442 million due consolidation aeróleo effective october 1 2015 49 million due new contracts suriname 09 million due higher utilization colombia increases partially offset decrease 59 million brazil primarily due lower utilization period aeroleo’s revenues consolidated years revenues dryleasing activities 276 million lower 2016 dryleasing revenues decreased 214 million due consolidation aeróleo 64 million due contracts ended 15 million due bankruptcy customer decreases partially offset increases 10 million due new leases 05 million due lease return charges operating revenues sar activities 23 million lower 2016 primarily due fewer subscribers reduced charter activity operating revenues air medical services consistent 2015 revenues decreased 07 million primarily due contract ended march 2015 partially offset increases 05 million due increased part sales 02 million due increased flight hours operating revenues flightseeing activities 13 million lower 2016 primarily due unfavorable weather conditions resulted shorter flightseeing season increased flight cancellations operating revenues fixed base operations “fbo” 28 million lower 2016 due sale fbo may 1 2015 operating expenses operating expenses 16 million lower 2016 repairs maintenance expenses 77 million lower due decrease 47 million related timing repairs net increase 45 million pbh buyout credits 32 million decrease pbh expense resulting reduced flight hours decreases partially offset 18 million increase related correction immaterial accounting errors 23 million reduction vendor credits increase 07 million due consolidation aeróleo fuel expense 02 million lower due reduction 46 million resulting fewer flight hours us sale fbo may 1 2015 partially offset increase 43 million due consolidation aeróleo operating expenses 50 million higher primarily due consolidation aeróleo personnel costs 11 million higher primarily due increase 88 million resulting consolidation aeróleo partially offset decrease 77 million resulting reduced headcount costcontrol initiatives us administrative general administrative general expenses 66 million lower 2016 compensation expenses 23 million lower primarily due 42 million decrease resulting reduced headcount incentive compensation us partially offset increase 18 million resulting consolidation aeróleo bad debt expenses 14 million lower primarily due 08 million bad debt reserve recorded 2015 08 million bad debt recovery 2016 shared service expenses 06 million lower due end amended restated transition services agreement “tsa” seacor june 2015 administrative general expenses 24 million lower due decreases 32 million us resulting cost cutting measures lower professional services fees partially offset increases 08 million resulting consolidation aeróleo depreciation amortization depreciation amortization expense 20 million higher 2016 due increase 24 million resulting addition new heavy helicopters base expansion project additional information technology infrastructure required result transition related services previously provided seacor partially offset decrease 02 million resulting correction immaterial accounting errors gains losses asset dispositions net gains asset dispositions 12 million lower 2016 current year sold otherwise disposed two hangars alaska nine helicopters total proceeds 280 million resulting net gains 50 million disposed spare parts equipment total proceeds 06 million resulting net losses 02 million 2015 sold otherwise disposed 18 helicopters equipment total consideration 365 million including cash proceeds 253 million resulting net gains 60 million including 07 million related early buyout two helicopter leases customer goodwill impairment recorded goodwill impairment 19 million 2015 resulting decline price crude oil stock price prolonged downturn oil gas market operating income loss operating loss percentage revenues 2 2016 compared operating income percentage revenues 8 2015 excluding gains asset sales operating loss percentage revenues 3 2016 compared operating income percentage revenues 7 2015 decrease operating income percentage revenues primarily due reduced revenues consolidation aeróleo increased depreciation expense interest income interest income 05 million lower 2016 primarily due early buyout helicopter leases customer 2015 interest expense interest expense 38 million higher 2016 primarily due decreased capitalized interest 56 million 05 million write previously capitalized financing costs due reduction total commitment amount revolving credit facility partially offset savings 23 million due cumulative repurchases 7750 senior notes foreign currency gains losses net foreign currency losses 26 million 2015 primarily due weakening euro resulting losses eurodenominated balances realized losses settled forward currency contracts gain debt extinguishment gains debt extinguishment 05 million 2016 due repurchase 50 million 7750 senior notes gains debt extinguishment 16 million 2015 due repurchase 502 million 7750 senior notes gain sale fbo sale fbo 2015 resulted cash proceeds 143 million pretax gain 129 million income tax expense benefit income tax benefit 34 million 2016 compared expense 141 million 2015 decrease expense primarily due taxable net loss 05 million benefit resulting correction errors prior year tax provision 2016 well writeoff deferred tax asset related consolidation aeróleo nonrecurring charge deferred taxes related transfer helicopter hauser investments limited “hauser” prior year equity earnings losses net tax equity earnings net tax 11 million 2016 compared losses 19 million 2015 increase equity earnings primarily due increased earnings dart joint venture 2016 liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments sources liquidity cash balances cash flows operations borrowings revolving credit facility time may secure additional liquidity issuance equity debt december 7 2012 completed offering 7750 senior notes used net proceeds offering repay 1900 million borrowings outstanding prior 2000 million senior secured revolving credit facility “prior credit facility” march 31 2014 entered current revolving credit facility amendment prior credit facility march 7 2018 entered consent amendment 4 amended restated senior secured revolving credit facility agreement among things reduced aggregate principal amount revolving loan commitments 2000 million 1250 million b extended agreement’s maturity march 31 2021 c revised definition ebitda permit addback ongoing litigation expenses related h225 helicopters adjusted covenant requirement maintain interest coverage ratio less 175100 senior secured leverage ratio 325100 revolving credit facility entered march 7 2018 requires maintain senior secured leverage ratio may greater 325100 end fiscal quarter maintain minimum interest coverage ratio covenant 175100 end fiscal quarter maintain asset coverage ratio respect fair market value mortgaged helicopters secured accounts receivable inventory funded committed secured debt certain carveouts 200100 among items year ended december 31 2017 repaid 430 million previously borrowed revolving credit facility using cash flows operations proceeds helicopter equipment dispositions also borrowed 170 million make final payments s92 helicopters december 31 2017 amount additional borrowings available us revolving credit facility 758 million year ended december 31 2016 repaid 370 million previously borrowed revolving credit facility using cash flows operations proceeds helicopter equipment dispositions also borrowed 120 million make progress payments s92 helicopters final payments aw189 helicopters year ended december 31 2015 borrowed 600 million revolving credit facility order make progress payments s92 aw189 helicopters repurchase portion 7750 senior notes also repaid 550 million previously borrowed revolving credit facility using cash flows operations proceeds helicopter sales sale fbo march 5 2018 unfunded capital commitments 859 million primarily pursuant agreements purchase eight helicopters approximately 359 million payable 2018 remaining commitments payable 2019 also 13 million deposits paid options yet exercised may terminate 872 million commitments inclusive deposits paid options yet exercised without liability us aggregate liquidated damages 22 million addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered beginning 2019 2020 expect finance remaining acquisition costs combination cash hand cash provided operating activities borrowings revolving credit facility summary cash flows operating activities cash flows provided operating activities decreased 384 million year ended december 31 2017 compared year ended december 31 2016 cash flows provided operating activities increased 140 million year ended december 31 2016 compared year ended december 31 2015 components cash flows provided operating activities years ended december 31 2017 2016 2015 follows operating income depreciation gains asset dispositions impairments net 197 million lower year ended december 31 2017 compared year ended december 31 2016 due 159 million decrease revenues resulting reduced utilization helicopter fleet dryleasing contracts ended subsequent 2016 59 million increase administrative general expenses decrease revenues increase ga partially offset 24 million decrease operating expenses primarily due reduction activity costcutting measures operating income depreciation gains asset dispositions impairments net 264 million lower year ended december 31 2016 compared year ended december 31 2015 primarily due 346 million decrease revenues resulting reduced utilization medium helicopters dryleasing contracts ended subsequent 2015 sale fbo may 2015 decrease revenues partially offset 66 million decrease administrative general expenses 16 million decrease operating expenses primarily due reduction activity costcutting measures changes operating assets liabilities interest income taxes resulted cash inflows 88 million year ended december 31 2017 compared inflows 210 million year ended december 31 2016 primarily due decrease trade receivables assets changes operating assets liabilities interest income taxes resulted cash outflows 210 million year ended december 31 2016 compared outflows 107 million year ended december 31 2015 primarily due decrease trade receivables increase trade payables liabilities interest paid excluding capitalized interest 26 million higher year ended december 31 2016 compared year ended december 31 2015 primarily due suspension capitalized interest november 2015 december 2016 income taxes paid 04 million result operations suriname year ended december 31 2017 compared income taxes refunded 60 million year ended december 31 2016 income taxes refunded 60 million year ended december 31 2016 compared income taxes paid 60 million year ended december 31 2015 made estimated tax payments 2015 result sale fbo reduction tax depreciation refunded 2016 investing activities year ended december 31 2017 net cash used investing activities 60 million primarily follows • capital expenditures 168 million consisted primarily helicopter acquisitions deposits future helicopter deliveries • proceeds disposition property equipment 94 million • net deposits escrow accounts primarily likekind exchange transactions 05 million • net principal payments notes due thirdparties equity investees 09 million year ended december 31 2016 net cash used investing activities 128 million primarily follows • capital expenditures 392 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 286 million • net deposits escrow accounts primarily likekind exchange transactions 37 million • net principal payments notes due thirdparties equity investees 09 million • returns helicopter deposits 05 million year ended december 31 2015 net cash used investing activities 228 million primarily follows • capital expenditures 601 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 253 million • proceeds sale fbo 143 million • cash paid business acquisitions net cash acquired 17 million • cash settlements forward contracts 11 million • net principal payments notes due thirdparties equity investees 07 million financing activities year ended december 31 2017 net cash used financing activities 275 million primarily follows • net principal payments longterm debt 453 million • borrowings revolving credit facility 170 million • proceeds sharebased award plans 08 million year ended december 31 2016 net cash used financing activities 330 million primarily follows • net principal payments short longterm debt 404 million • borrowings revolving credit facility 120 million • cash used repurchase portion 7750 senior notes 43 million • issuance costs related amendment revolving credit facility 09 million • proceeds sharebased award plans 08 million • cash used repurchase treasury shares 02 million year ended december 31 2015 net cash used financing activities 460 million primarily follows • borrowings revolving credit facility 600 million • net principal payments longterm debt 579 million • cash used repurchase portion 7750 senior notes 469 million • cash used repurchase treasury shares 21 million • proceeds sharebased award plans 11 million amended restated senior secured revolving credit facility march 31 2014 entered revolving credit facility amendment prior credit facility march 7 2018 era group entered consent amendment 4 amended restated senior secured revolving credit facility agreement among things reduced aggregate principal amount revolving loan commitments 2000 million 1250 million b extended agreement’s maturity march 31 2021 c revised definition ebitda permit addback ongoing litigation expenses related h225 helicopters adjusted covenant requirement maintain interest coverage ratio less 175100 senior secured leverage ratio 325100 advances revolving credit facility closing used refinance indebtedness incurred prior credit facility revolving credit facility matures march 2021 december 31 2017 390 million outstanding revolving credit facility bears interest london interbank offered rate “libor” plus margin 300 basis points addition required pay quarterly commitment fee based ratio funded debt ebitda defined december 31 2017 commitment fee 500 basis points additional information terms revolving credit facility see note 8 consolidated financial statements included item 8 annual report form 10k 7750 senior notes december 7 2012 completed offering 2000 million aggregate principal amount 7750 senior notes interest notes payable semiannually arrears june 15 december 15 year may redeem notes time premium specified indenture governing notes 2015 repurchased 502 million 7750 senior notes total cash consideration 479 million including accrued interest 10 million 2016 purchased additional 50 million 7750 senior notes total cash 45 million including accrued interest 02 million make additional purchases 2017 december 31 2017 1448 million aggregate principal amount 7750 senior notes remained outstanding additional information terms 7750 senior notes see note 8 consolidated financial statements included item 8 annual report form 10k promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2017 247 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2017 243 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 2016 notes amended among things provide crosscollateralization helicopter secures promissory notes aeróleo debt former partner aeróleo transferred interests aeróleo new partner october 1 2015 connection transfer former partner assigned two existing notes receivable aeróleo new partner one note balance 55 million october 1 2015 payable us dollars note balance 27 million october 1 2015 payable brazilian reals notes bore interest 60 per annum called 60 equal monthly payments principal accrued interest begin october 1 2016 june 2016 partner aeróleo contributed notes payable us aeróleo including two notes contribution additional capital result 63 million debt due company’s partner aeróleo recorded net loss attributable noncontrolling interest subsidiaries accompanying consolidated statements operations addition october 1 2015 aeróleo existing loan third party balance 14 million note payable brazilian reals bore interest rate 190 per annum called equal monthly payments principal interest final payment due september 2016 june 2016 company prepaid principal interest 15 million settle note full also settled certain tax disputes brazil totaling 30 million agreed make installment payments amounts due applicable taxing authorities installments payable brazilian reals bear interest rate equal overnight rate published central bank brazil amounts paid next 19 63 months december 31 2017 fourth quarter 2017 brazil subsidiary elected enter certain settled open tax claims tax special regularization program “pert program” pursuant brazil provisional measure 783 issued may 31 2017 pert program allows partial settling debts income tax debts nonincomebased tax debts due april 30 2017 brazil’s federal revenue service use tax credits including income tax loss carryforwards 35 million income tax benefit recorded fourth quarter attributable utilization income tax loss carryforwards pert program offset accrual additional operating expense associated certain indirect tax claims enrolled pert program short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2017 cash provided operations 201 million support capital expenditure program andor liquidity requirements may use combination operating cash flow cash balances proceeds sales assets issue debt equity borrowings revolving credit facility december 31 2017 ability borrow additional 758 million revolving credit facility subject compliance financial ratios discussed availability longterm liquidity dependent upon ability generate operating profits sufficient meet requirements working capital debt service capital expenditures reasonable return investment management continue closely monitor liquidity credit markets offbalance sheet arrangements occasion partners guarantee certain obligations behalf joint ventures december 31 2017 guarantees place december 31 2017 standby letters credit totaling 13 million contractual obligations commercial commitments following table summarizes contractual obligations commercial commitments aggregate maturities december 31 2017 thousands 1 maturities borrowings interest payments pursuant borrowings capital commitment fee revolving credit facility based contractual terms interest amounts represent expected cash payments interest longterm debt based interest rates place amounts outstanding december 31 2017 installment payments settled tax disputes brazil include interest calculated using rates effect december 31 2017 2 capital purchase obligations december 31 2017 represent commitments purchase 11 new helicopters consisting five aw169 light twin helicopters five aw189 heavy helicopters one s92 heavy helicopters total unfunded capital commitments 1162 million may terminated without liability liquidated damages 26 million aggregate commitments recorded liabilities consolidated balance sheet yet received goods taken title property 3 operating leases primarily include leases facilities helicopters remaining term excess one year 4 purchase obligations primarily include purchase orders helicopter inventory maintenance commitments goods services acquired ordinary course business fulfilled vendors within short period time effects inflation operations expose us effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies brazilian tax disputes disputing assessments approximately 71 million taxes penalties interest levied municipal authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal assessments” believe based interpretation tax legislation supported clarifying guidance provided supreme court brazil respect issue 2006 ruling compliance applicable tax legislation paid applicable taxes penalties interest plan defend claims vigorously administrative levels jurisdiction event municipal assessments upheld last administrative level may necessary us deposit amounts issue security pursue appeals 2015 received final unfavorable ruling respect similar assessment levied rio de janeiro state treasury periods 1994 1998 “1998 assessments” 1998 assessments upheld without taking consideration benefit clarifying guidance issued supreme court following assertion claims final adjudication 1998 assessments requires payment amounts within established accruals paid multiple installments time expected material effect financial position results operations december 31 2017 possible determine outcome municipal assessments expect outcome would material effect business financial position results operations addition possible reasonably estimate likelihood potential amount assessments may issued subsequent periods disputing responsibility 30 million employer social security contributions required remitted one customers relating period 1995 1998 although may deemed coresponsible remittances local regulatory regime customer’s payments us presented invoices made net specific remittances required made customer issue claim plan defend claim vigorously december 31 2017 possible determine outcome matter expect outcome would material adverse effect business financial position results operations disputing certain penalties assessed state rio de janeiro respect alleged failure submit accurate documentation fully comply filing requirements respect certain valueadded taxes elected make payment 02 million installments time satisfy portion penalties upon confirming asserting authority originally proposed penalties 16 million respect balance assessments calculated based amounts containing typographical error aggregate penalties remain dispute total 04 million december 31 2017 possible determine outcome matter expect outcome would material adverse effect business financial position results operations disputing imposition 10 million fines levied brazilian customs authorities fines relate alleged failure comply certain deadlines temporary regime pursuant import helicopters brazil order dispute fines pursue legal remedies within judicial system deposited certain amounts issue security escrow account presiding judge matters controls release funds pending outcome believe documentation evidences timely compliance relevant deadlines plan defend case vigorously december 31 2017 possible determine outcome matters expect outcome would material adverse effect business financial position results operations disputing fines 03 million sought taxing authorities brazil following final adjudication disallow certain tax credits applied offset certain social tax liabilities fine calculated 50 incremental tax liability resulting disallowance tax credits applied without taking account circumstances relating disallowance tax credits constitutionality fines review supreme court brazil number cases taxpayers received favorable rulings due lack constitutionality law plan defend claim vigorously december 31 2017 possible determine outcome expect would material adverse impact business financial position results operations disputing contingent fees 06 million sought former tax consultant calculated based unrealized tax savings attributed consultant’s suggested tax strategies contention fees due upon realized tax savings december 31 2017 possible determine outcome matters expect outcome would material adverse effect business financial position results operations normal course business become involved various employmentrelated litigation matters december 31 2017 possible determine outcome several claims wherein aggregate 01 million established accrual sought us expect outcome respect claims would material adverse effect business financial position results operations also disputing claims brazilian tax authorities respect federal customs taxes levied upon helicopters imported brazil temporary regime subject reexport order dispute assessments pursue available legal remedies within judicial system deposited amounts issue security escrow account presiding judge matter controlling release funds believe based interpretation tax legislation well established aviation industry practice required pay taxes plan defend claim vigorously december 31 2017 possible determine outcome matter expect outcome would material adverse effect business financial position results operations normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time involved tax disputes various government agencies management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect business consolidated financial position results operations relates specific cases referred currently anticipate administrative fine penalty ultimately would material effect business financial position results operations deposited 103 million escrow accounts controlled court respect certain cases described fully reserved amounts subject final determination judicial release escrow deposits estimates based assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience airbus lawsuit november 21 2016 filed lawsuit district court dallas county texas airbus alleging breaches various contracts us fraudulent inducement unjust enrichment connection airbus’ marketing sale h225 model helicopters us october 26 2017 added claims airbus fraud negligent misrepresentation december 28 2017 amended complaint seek damages attributable impact airbus’ unlawful acts value h225 purchased another helicopter operator seek compensation monetary damages amount determined cannot predict ultimate outcome litigation may spend significant resources pursuing legal remedies airbus critical accounting policies estimates preparation financial statements conformity us generally accepted accounting principles “gaap” many cases accounting treatment particular transaction specifically dictated gaap whereas circumstances gaap requires us make estimates judgments assumptions believe reasonable based upon information available base estimates judgments historical experience professional advice various sources believe reasonable circumstances actual results may differ estimates different assumptions conditions believe significant accounting policies discussed note 1 consolidated financial statements included item 8 annual report form 10k following involve higher degree judgment complexity property equipment net property equipment represented 851 total assets december 31 2017 determine carrying value assets based property equipment accounting policies incorporate estimates assumptions judgments relative capitalized costs useful lives salvage values assets property equipment accounting policies also designed depreciate assets estimated useful lives assumptions judgments use determining estimated useful lives residual values helicopters equipment reflect historical experience expectations regarding future operations utilization performance assets use different estimates assumptions judgments establishment property equipment accounting policies especially involving useful lives residual values helicopters would likely result materially different net book values assets results operations useful lives helicopters residual values difficult estimate due variety factors including changes operating conditions environment introduction technological advances aviation equipment changes market economic conditions including changes demand certain types helicopters changes laws regulations affecting aviation offshore oil gas industry evaluate remaining useful lives helicopters certain events occur directly impact assessment remaining useful lives helicopters consideration ultimate residual value takes account current expectations fair market value expected time ultimate disposal determination ultimate value received upon sale depends largely upon condition helicopters flight time left helicopters major components next major maintenance check required future value also depends secondary helicopter market exists date differ substantially time allowance doubtful accounts establish allowances doubtful accounts casebycase basis believe payment amounts owed us unlikely occur establishing allowances consider number factors including historical experience changes client’s financial position estimates involve significant judgment management derive significant portion revenue services international independent major integrated oil gas companies government agencies receivables concentrated primarily gulf mexico generally require collateral security support client receivables inventory reserve maintain inventory primarily consists spare parts service helicopters establish allowance distribute cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts also periodically review condition continuing usefulness parts determine whether realizable value inventory lower book value parts related helicopter types management determined longer included fleet substantially reduced fleet future periods specifically reviewed valuation parts significantly lower book value parts additional provision may required taxes annual tax provision based expected taxable income statutory rates tax planning opportunities available various jurisdictions operate determination evaluation annual tax provision tax positions involves interpretation tax laws requires significant judgment use estimates assumptions regarding significant future events amount timing character income deductions tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability area impacts tax liability number years may elapse ultimate tax liabilities various jurisdictions determined recognize foreign tax credits available us offset us income taxes due income earned foreign sources credits limited total income tax us income tax return well ratio foreign source income statutory category total income estimating amount foreign tax credits realizable estimate future taxable income statutory category estimates subject change based changes market conditions statutory category timing certain deductions available us statutory category periodically reassess estimates record changes amount realizable foreign tax credits based revised estimates maintain reserves estimated tax exposures tax exposure items include potential challenges intercompany pricing disposition transactions applicability rates various withholding taxes exposures resolved primarily settlement audits judicial means also affected changes applicable tax law statute limitation expirations etc may result revision past estimates review liabilities quarterly determination whether liability shall accrued whether existing liabilities shall reversed due expiration related statutes limitation settlement respective items tax authorities issuance rules regulations legislation court rulings resolve uncertainty intangible assets record purchased intangible assets respective fair values date acquired intangible assets finite lives amortized straightline basis estimated useful lives intangible assets indefinite lives tested impairment annual basis frequently indicators impairment present annual impairment tests impairment analysis uses discounted future cash flow approach determine fair value incorporates among things projected utilization fleet future oil prices contract rates estimates reviewed time test indefinite lived intangible assets impairment typically developed part routine business planning forecasting process believe estimates assumptions reasonable variations estimates could produce materially different results impairment longlived assets review property equipment impairment events changes circumstances indicate carrying value assets may recoverable longlived assets grouped lowest level identifiable cash flows largely independent cash flows groups assets us generally fleet group level third quarter 2017 determined utilize h225 helicopters operations concluded cash flows associated h225 heavy helicopters largely independent cash flows associated remainder fleet determined h225 heavy helicopters evaluated separate asset group impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset group would required recognize impairment loss determining fair value utilize various assumptions including projections future cash flows change underlying assumptions could cause change results tests could cause fair value less carrying amounts event would required record corresponding charge would reduce earnings continue evaluate estimates assumptions believe assumptions include estimate future cash flows based upon anticipated performance underlying assets appropriate supply demand key drivers helicopter idle time ability contract helicopters economical rates periods oversupply uncommon us helicopters idled extended periods time could indication asset group may impaired instances useful lives helicopters could used interchangeably due mobility helicopters may move weak geographic market stronger geographic market adequate opportunity arises recent accounting pronouncements description recent accounting pronouncements could possibly effect financial condition results operations see note 1 consolidated financial statements included item 8 annual report form 10k item 7aitem 7 management’s discussion analysis financial condition results operations following discussion analysis financial condition results operations fiscal years ended december 31 2018 2017 2016 read discussion analysis together consolidated financial statements related notes financial information included elsewhere annual report discussion contains forwardlooking statements involve significant risks uncertainties result many factors set forth “item 1a risk factors” elsewhere annual report actual results may differ materially anticipated forwardlooking statements overview one largest helicopter operators world longest serving helicopter transport operator us primary area operations helicopters primarily used transport personnel offshore oil gas production platforms drilling rigs installations years ended december 31 2018 2017 2016 approximately 71 66 69 respectively total operating revenues earned us years ended december 31 2018 2017 2016 approximately 29 34 31 respectively total operating revenues earned international locations addition us currently customers brazil colombia india mexico spain suriname primary users helicopter services international independent major integrated oil gas exploration development production companies national oil companies bsee years ended december 31 2018 2017 2016 approximately 95 91 88 respectively operating revenues derived helicopter services including emergency response services provided customers primarily engaged offshore oil gas exploration development production activities regulatory agencies monitor activities additionally leasing customers typically provide services oil gas companies respective local markets results tied level activity offshore oil gas industry addition serving oil gas industry provide emergency response services utility services among activities december 31 2018 owned total 108 helicopters consisting nine heavy helicopters 46 medium helicopters 23 light twin engine helicopters 30 light single engine helicopters december 31 2018 commitments purchase additional eight new helicopters consisting three heavy helicopters five light twin helicopters heavy helicopters scheduled delivered 2019 2020 delivery dates light twin helicopters determined addition outstanding options purchase additional 10 heavy helicopters options exercised helicopters would scheduled delivery 2020 2021 lines service offshore oil gas offshore oil gas market highly cyclical demand highly correlated price oil gas tends fluctuate depending many factors including global economic activity levels inventory overall demand addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior last 12 years provided transportation services government inspectors offshore installations drilling rigs platforms contract renewed october 2016 term one year four oneyear options extend expected run september 2021 brazil among important markets offshore oil gas exploration development production activity worldwide participate market consolidated joint venture aeróleo dryleasing enter lease arrangements helicopters operators primarily located international markets mexico india spain helicopters contracted local helicopter operators often prefer lease helicopters rather purchase leasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk activities services order diversify sources earnings cash flow deploy number helicopters support industries activities emergency response services recently flightseeing tours years ended december 31 2018 2017 2016 4 7 12 operating revenues generated activities services also provided inland utility services alaska firefighting mining power line pipeline survey activities addition hold 50 interest dart international sales manufacturing organization focused aftermarket helicopter parts accessories market outlook offshore oil gas market highly cyclical demand linked price oil gas prices oil gas critical factors customers’ investment spending decisions price crude oil declined significantly beginning mid 2014 negatively impacted cash flow customers led reduce capital operational expenditures prior levels including reductions related offshore exploration development production activities experienced customer contract cancellations decreased fleet utilization customers decreased number helicopters contract canceled contract upon limited notice price crude oil recovered favorable levels customers’ spending offshore exploration development production activities remains depressed generate vast majority operating revenue contracts supporting oil gas customers’ offshore production operations longterm transportation requirements production activities typically less cyclical exploration development activities production platforms remain place longterm relatively unaffected economic cycles marginal cost lifting barrel oil platform operation low additional declines price oil gas could delay cancellation planned offshore projects impacting operations future periods remainder oil gas revenues primarily comes transporting personnel offshore drilling rigs deepwater activity continues significant segment global offshore oil gas markets typically involves significant capital investment multiyear development plans projects generally underwritten oil gas companies using relatively conservative assumptions relating oil gas prices although projects considered less susceptible shortterm fluctuations price oil gas compared shorter cycle projects persistently low crude oil prices last four years caused companies reevaluate future capital expenditures regards deepwater projects resulted rescaling delay cancellation planned offshore projects could continue impact operations future periods exposed foreign currency exchange risk primarily eurodenominated capital commitments brazilian operations receive portion revenues incur expenses brazilian real two large helicopter oems headquartered europe price many helicopters euros fluctuations value us dollar euro affects amount unfunded commitments us dollar terms although strength us dollar made acquisition eurodenominated helicopter models less expensive us recent years weakness euro also makes acquisitions less expensive competitors potential competitors could lead excess helicopter capacity increased competition jeopardize pricing utilization equipment fluctuations value euro could also destabilize residual values certain eurodenominated helicopters believe well positioned address nearterm market industry challenges liquidity levels provide stable foundation current market environment together operational efficiency improvements permit us maintain improve customer relationships competitive position recent developments sale dart joint venture march 7 2019 company conjunction 50 joint venture partner entered agreement sell dart 75 million transaction expected close second quarter 2019 subject satisfaction waiver customary closing conditions closing company expects receive cash proceeds including repayment related party note receivable approximately 40 million company’s tax basis dart 236 million december 31 2018 fleet developments capital commitments focus modernization fleet standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance response demand transformed fleet significantly since beginning 2005 added 141 helicopters disposed 149 helicopters reduced average age owned fleet 17 years 13 years spent 92 million 168 million 392 million acquire helicopters equipment years ended december 31 2018 2017 2016 respectively primarily heavy medium helicopters spare helicopter parts facility improvements december 31 2018 unfunded commitments 811 million primarily stemming agreements purchase eight helicopters consisting three aw189 heavy helicopters five aw169 light twin helicopters also 13 million deposits paid options yet exercised aw189 helicopters scheduled delivered 2019 2020 delivery dates aw169 helicopters determined addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered 2020 2021 approximately 824 million commitments inclusive deposits paid options yet exercised may terminated without liability aggregate liquidated damages 21 million components revenues expenses derive revenues primarily operating leasing equipment profits depend cost capital acquisition costs assets operating costs reputation operating revenues recorded us gulf mexico international primarily generated offshore oil gas exploration development production activities revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded dryleasing generated leases thirdparty operators responsible operation helicopters certain leases also provide crew training management expertise logistical maintenance support leases typically call fixed monthly fee may also include additional charge based flight hours flown andor level personnel support majority dryleasing revenues generated helicopters deployed internationally operating revenues emergency response services earned fixed monthly fee plus incremental charge flight hours flown charter revenues typically earned hourly rate minimum number hours charged daily aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities hourly charges powerbythehour “pbh” maintenance contracts cover helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance including cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models pbh maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments pbh provider case record reduction operating expense also incur repairs maintenance expense vendor arrangements whereby obtain repair quotes authorize service repair order process policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty pbh programs timing vendor credits helicopters lease third parties arrangements whereby customer assumes operational responsibility often provide maintenance parts support generally incur material operating costs instances leases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide training services support lease customers results operations operating revenues service line following table sets forth operating revenues service line years ended december 31 2018 2017 2016 1 primarily oil gas activities also includes revenues utility services firefighting 2 includes property rental income years ended december 31 2017 2016 approximately 03 million 05 million respectively previously included emergency response services oil gas service lines 3 includes search rescue air medical services year ended december 31 2018 compared year ended december 31 2017 operating revenues operating revenues 96 million lower twelve months ended december 31 2018 “current year” compared twelve months ended december 31 2017 “prior year” operating revenues oil gas operations us 96 million higher current year operating revenues heavy medium helicopters 130 million 35 million higher respectively primarily due higher utilization operating revenues single engine light twin helicopters 37 million 29 million lower respectively primarily due lower utilization miscellaneous revenues 03 million lower current year operating revenues international oil gas operations 75 million lower current year operating revenues brazil 41 million lower primarily due weakening brazilian real relative us dollar lower utilization operating revenues suriname 28 million lower due end contracts operating revenues colombia 07 million lower primarily due shortterm offshore contract prior year revenues dryleasing activities 49 million lower current year primarily due 40 million lease return charges helicopters returned company upon conclusion lease contracts prior year contracts ended decreases partially offset recognition bankruptcy settlement current year operating revenues emergency response services 18 million lower primarily due 14 million reduction related end air medical contracts prior year 04 million reduction related fewer search rescue “sar” subscribers current year operating revenues flightseeing activities 51 million lower due sale company’s flightseeing assets current year operating expenses operating expenses 159 million lower current year personnel costs 71 million lower primarily due reduction headcount repairs maintenance expenses 57 million lower primarily due 51 million decrease related timing repairs 09 million net increase vendor credits 04 million credit related return leasedin helicopters current year partially offset 06 million increase powerbythehour “pbh” expense operating expenses 54 million lower primarily due accounting tax special regularization program “pert” brazil prior year absence costs related flightseeing activities reversal previously reserved deposits following favorable decision brazilian customs tax disputes current year decreases partially offset increase fuel expense 23 million primarily due higher average fuel price administrative general administrative general expenses 30 million higher current year primarily due increase 45 million professional services fees related litigation settled increase partially offset decrease 07 million taxes related correction immaterial accounting errors prior year 03 million decrease personnel costs primarily due lower headcount 05 million decrease administrative general costs depreciation amortization depreciation amortization expense 62 million lower current year primarily due decrease depreciation company’s h225 helicopters following impairment prior year subsequent sale helicopters current year certain assets becoming fully depreciated subsequent prior year gains asset dispositions net current year company sold otherwise disposed flightseeing assets alaska consisted eight single engine helicopters two operating facilities related property equipment thirteen helicopters including six salestype leases equipment net gains 16 million prior year company sold otherwise disposed hangar alaska three helicopters capital parts nonaircraft assets gains 45 million litigation settlement proceeds litigation settlement proceeds 420 million related settlement current year loss impairment company recorded losses impairment 10 million current year 1170 million prior year related h225 helicopters operating income loss operating income percentage revenues 13 current year compared operating loss percentage revenues 58 prior year excluding gains asset dispositions operating income percentage revenues 12 current year compared operating loss percentage revenues 61 prior year increase operating income percentage revenues primarily due recognition litigation settlement proceeds current year decrease losses recognized impairment interest income interest income 13 million higher current year primarily due interest earned salestype leases h225 helicopters interest expense interest expense 16 million lower current year primarily due accounting pert prior year lower outstanding debt balances current year foreign currency gains losses net foreign currency losses 10 million current year primarily due weakening brazilian real relative us dollar income tax benefit expense income tax expense 29 million current year primarily due recognition litigation settlement proceeds income tax benefit 1227 million prior year primarily due impact changes us income tax legislation impairment company’s h225 helicopters capital parts inventory prior year equity earnings equity earnings net tax 08 million higher current year primarily due higher earnings dart holding company ltd “dart” joint venture year ended december 31 2017 compared year ended december 31 2016 operating revenues operating revenues 159 million lower twelve months ended december 31 2017 compared twelve months ended december 31 2016 operating revenues oil gas operations us 59 million lower 2017 operating revenues light twin single engine helicopters 87 million 62 million lower respectively primarily due lower utilization operating revenues medium heavy helicopters 72 million 27 million higher respectively primarily due higher utilization miscellaneous revenues 08 million lower primarily due recognition contract termination fee 2016 operating revenues international oil gas operations 13 million higher operating revenues colombia increased 17 million primarily due shortterm contract higher utilization operating revenues brazil increased 06 million primarily due strengthening brazilian real relative us dollar partially offset lower utilization increases partially offset 10 million decrease suriname primarily due lower utilization operating revenues emergency response services 135 million lower 2017 primarily due 56 million decrease result fewer sar subscribers fewer sar flight hours 79 million decrease result end air medical contracts 2017 revenues dryleasing activities 28 million higher 2017 primarily due 40 million lease return charges helicopters returned company upon conclusion lease contracts partially offset leases ended subsequent 2016 operating revenues flightseeing activities 06 million lower 2017 primarily due lower utilization operating expenses operating expenses 24 million lower 2017 personnel costs 75 million lower primarily due reduction headcount insurance loss reserves 17 million lower primarily due reduction premiums fuel expense 05 million lower primarily due reduced flight hours operating expenses 12 million lower primarily due reduced activity partially offset indirect tax expense 20 million related pert program brazil 2017 decreases partially offset increase repairs maintenance expense 85 million primarily due 23 million increase powerbythehour “pbh” expense net reduction vendor credits 24 million 38 million increase related timing repairs increased pbh expense primarily due recognition 71 million credits 2016 related removal helicopters pbh programs partially offset recognition credits fewer flight hours 2017 administrative general administrative general expenses 59 million higher 2017 primarily due increases 63 million professional services fees 07 million due recognition bad debt recovery brazil 2016 increases partially offset decrease 08 million compensation employee costs result lower headcount decrease 03 million administrative general costs depreciation amortization depreciation amortization expense 36 million lower 2017 primarily due certain assets becoming fully depreciated asset dispositions subsequent 2016 decrease depreciation company’s h225 helicopters following impairment 2017 partially offset new heavy helicopters placed service gains asset dispositions net 2017 sold otherwise disposed hangar alaska three helicopters capital parts assets gains 45 million 2016 sold otherwise disposed two hangars alaska nine helicopters related equipment gains 48 million loss impairment recorded loss impairment 1170 million 2017 related decline value h225 helicopters operating income loss operating loss percentage revenues 58 2017 compared 2 2016 excluding gains asset dispositions operating loss percentage revenues 61 2017 compared 3 2016 increase operating loss percentage revenues 2017 primarily due loss impairment increased professional services fees repairs maintenance expenses described interest expense interest expense 06 million lower 2017 primarily due lower outstanding debt balances resumption capitalization interest certain helicopter deposits 2017 compared expensing interest deposits 2016 due refund helicopter deposits partially offset 08 million additional accrued interest resulting correction immaterial accounting errors gain debt extinguishment gain debt extinguishment 05 million 2016 due repurchase 50 million 7750 senior notes income tax benefit income tax benefit 1193 million higher 2017 primarily due approximately 700 million related impact tax act well tax impact impairment h225 helicopters capital parts inventory 2017 equity earnings equity earnings net tax 03 million higher 2017 primarily due higher earnings dart holding company ltd “dart” joint venture liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments sources liquidity cash balances cash flows operations borrowings revolving credit facility time may secure additional liquidity issuance equity debt well sale assets summary cash flows operating activities components cash flows provided operating activities years ended december 31 2018 2017 2016 follows operating income depreciation gains asset dispositions impairments net 455 million higher year ended december 31 2018 compared year ended december 31 2017 primarily due recognition 420 million litigation settlement proceeds current year 159 million decrease operating expenses related personnel reductions decreased repairs maintenance expenses absence certain operating expenses incurred prior year litigation settlement proceeds decrease operating expenses partially offset 96 million decrease revenues 30 million increase administrative general expenses operating income depreciation gains asset dispositions impairments net 197 million lower year ended december 31 2017 compared year ended december 31 2016 due 159 million decrease revenues resulting reduced utilization helicopter fleet dryleasing contracts ended subsequent 2016 59 million increase administrative general expenses decrease revenues increase ga partially offset 24 million decrease operating expenses primarily due reduction activity costcutting measures changes operating assets liabilities interest income taxes resulted cash outflows 36 million year ended december 31 2018 compared inflows 88 million year ended december 31 2017 primarily due decrease payables changes operating assets liabilities interest income taxes resulted cash inflows 88 million year ended december 31 2017 compared inflows 210 million year ended december 31 2016 primarily due decrease trade receivables assets interest paid excluding capitalized interest 17 million lower year ended december 31 2018 compared year ended december 31 2017 primarily due lower debt balances current year income taxes paid consistent year ended december 31 2018 year ended december 31 2017 income taxes paid 04 million result operations suriname year ended december 31 2017 compared income taxes refunded 60 million year ended december 31 2016 investing activities year ended december 31 2018 net cash provided investing activities 228 million primarily follows • proceeds disposition property equipment 296 million • net principal payments notes due thirdparties equity investees 15 million • dividends received equity investees 10 million • capital expenditures 92 million consisted primarily helicopter acquisitions spare helicopter parts leasehold improvements year ended december 31 2017 net cash used investing activities 66 million primarily follows • capital expenditures 168 million consisted primarily helicopter acquisitions deposits future helicopter deliveries • proceeds disposition property equipment 94 million • net principal payments notes due thirdparties equity investees 09 million • investments advances equity investees 01 million year ended december 31 2016 net cash used investing activities 91 million primarily follows • capital expenditures 392 million consisted primarily helicopter acquisitions deposits future helicopter deliveries base expansion project • proceeds disposition property equipment 286 million • net principal payments notes due thirdparties equity investees 09 million • return helicopter deposits 05 million financing activities year ended december 31 2018 net cash used financing activities 435 million primarily follows • principal payments longterm debt including revolving credit facility 419 million • issuance costs related amendment revolving credit facility 13 million • extinguishment longterm debt 12 million • proceeds sharebased award plans 09 million year ended december 31 2017 net cash used financing activities 275 million primarily follows • net principal payments short longterm debt 453 million • borrowings revolving credit facility 170 million • proceeds sharebased award plans 08 million year ended december 31 2016 net cash used financing activities 330 million primarily follows • net principal payments longterm debt 404 million • borrowings revolving credit facility 120 million • cash used repurchase portion 7750 senior notes 43 million • issuance costs related amendment revolving credit facility 09 million • proceeds sharebased award plans 08 million • cash used repurchase treasury shares 02 million future cash requirements debt obligations total debt excluding unamortized discounts debt issuance costs december 31 2018 1652 million 21 million classified current following table summarizes maturity dates significant debt december 31 2018 march 31 2014 era group entered amended restated senior secured revolving credit facility “amended restated revolving credit facility” march 7 2018 era group entered consent amendment 4 amended restated senior secured revolving credit facility agreement “amendment 4” amended restated revolving credit facility amended amendment 4 referred herein “revolving credit facility” among things reduced aggregate principal amount revolving loan commitments 2000 million 1250 million b extended agreement’s maturity march 31 2021 c revised definition ebitda permit addback certain litigation expenses related h225 helicopters adjusted maintenance covenant requirements maintain interest coverage ratio less 175100 senior secured leverage ratio 325100 december 31 2018 compliance maintenance covenants discussion outstanding debt december 31 2018 including discussion market terms debt obligations debt issuance costs details see note 7 “notes consolidated financial statements” included annual report unfunded capital commitments december 31 2018 unfunded capital commitments 811 million primarily pursuant agreements purchase eight helicopters approximately 702 million payable 2019 remaining commitments payable 2020 also 13 million deposits paid options yet exercised may terminate 824 million commitments inclusive deposits paid options yet exercised without liability us aggregate liquidated damages 21 million addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered 2020 2021 expect finance remaining acquisition costs combination cash hand cash provided operating activities borrowings revolving credit facility short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2018 cash provided operations 544 million support capital expenditure program andor liquidity requirements may use combination operating cash flow cash balances proceeds sales assets issue debt equity borrowings revolving credit facility december 31 2018 ability borrow additional 1241 million revolving credit facility subject compliance financial ratios discussed availability longterm liquidity dependent upon ability generate operating profits sufficient meet requirements working capital debt service capital expenditures reasonable return investment management continue closely monitor liquidity credit markets offbalance sheet arrangements occasion partners guarantee certain obligations behalf joint ventures december 31 2018 guarantees place december 31 2018 standby letters credit totaling 09 million contractual obligations commercial commitments following table summarizes contractual obligations commercial commitments aggregate maturities december 31 2018 thousands 1 maturities borrowings interest payments pursuant borrowings capital commitment fee revolving credit facility based contractual terms interest amounts represent expected cash payments interest longterm debt based interest rates place amounts outstanding december 31 2018 installment payments settled tax disputes brazil include interest calculated using rates effect december 31 2018 2 capital purchase obligations december 31 2018 represent commitments purchase eight new helicopters consisting five aw169 light twin helicopters three aw189 heavy helicopters total unfunded capital commitments may terminated without liability liquidated damages 21 million aggregate commitments recorded liabilities consolidated balance sheet yet received goods taken title property 3 operating leases primarily include leases facilities remaining term excess one year 4 purchase obligations primarily include purchase orders helicopter inventory maintenance commitments goods services acquired ordinary course business fulfilled vendors within short period time effects inflation operations expose us effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies brazilian tax disputes connection ownership aeróleo operations brazil several ongoing legal disputes related local municipal federal taxation requirements brazil including assessments associated import reexport helicopters brazil legal disputes related municipal tax assessments arising authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal tax disputes” ii social security contributions one customers required remit 1995 1998 iii penalties assessed due alleged failure comply certain deadlines related helicopters import export brazil iv fines sought taxing authorities brazil related use certain tax credits used offset certain social tax liabilities collectively “tax disputes” aggregate amount issue tax disputes 145 million municipal tax disputes largest contributor total amount sought aeróleo approximately 101 million issue addition foregoing tax disputes unrelated thereto aeróleo engaged two additional civil litigation matters relating dispute former tax consultant alleged 05 million due payable contingency fee related execution certain tax strategies ii fatal accident occurred 1983 previously settled plaintiffs’ us “civil disputes” respect fatal accident plaintiffs seeking collect additional amounts brazil despite previous settlement agreed upon parties us continue evaluate assess various legal strategies tax disputes civil disputes customary certain legal matters brazil aeróleo already deposited amounts security escrow account pursue legal appeals several tax disputes civil disputes december 31 2018 deposited 54 million escrow accounts controlled court respect tax disputes civil disputes fully reserved amounts subject final determination judicial release escrow deposits estimates based assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience aeróleo plans defend cases vigorously december 31 2018 possible determine outcome tax disputes civil disputes expect outcome would material adverse effect business financial position results operations airbus lawsuit november 21 2016 filed lawsuit district court dallas county texas airbus helicopters inc airbus helicopters sas collectively “airbus” alleging breaches various contracts us fraudulent inducement unjust enrichment connection airbus marketing sale h225 model helicopters us october 26 2017 added claims airbus fraud negligent misrepresentation december 28 2017 amended complaint seek damages attributable impact airbus’ unlawful acts value h225 purchased another helicopter operator july 3 2018 company entered litigation settlement agreement “settlement agreement” airbus settle claims made company airbus related airbus marketing sale companys purchase eleven h225 model helicopters pursuant settlement agreement airbus agreed pay company 420 million cash provide certain trade account credits company may use five years company agreed release airbus liabilities claims counterclaims demands complaints costs losses expenses relating action dismiss action prejudice without party admitting fault general litigation disputes normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time involved tax disputes various government agencies management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect business consolidated financial position results operations critical accounting policies estimates preparation financial statements conformity us generally accepted accounting principles “gaap” many cases accounting treatment particular transaction specifically dictated gaap whereas circumstances gaap requires us make estimates judgments assumptions believe reasonable based upon information available base estimates judgments historical experience professional advice various sources believe reasonable circumstances actual results may differ estimates different assumptions conditions believe significant accounting policies discussed note 1 consolidated financial statements included item 8 annual report form 10k following involve higher degree judgment complexity allowance doubtful accounts establish allowances doubtful accounts casebycase basis believe payment amounts owed us unlikely occur establishing allowances consider number factors including historical experience changes client’s financial position estimates involve significant judgment management derive significant portion revenue services international independent major integrated oil gas companies government agencies receivables concentrated primarily gulf mexico generally require collateral security support client receivables inventory reserve maintain inventory primarily consists spare parts service helicopters establish allowance distribute cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts also periodically review condition continuing usefulness parts determine whether realizable value inventory lower book value parts related helicopter types management determined longer included fleet substantially reduced fleet future periods specifically reviewed valuation parts significantly lower book value parts additional provision may required impairment longlived assets review property equipment impairment events changes circumstances indicate carrying value assets may recoverable longlived assets grouped lowest level identifiable cash flows largely independent cash flows groups assets us generally fleet group level third quarter 2017 determined utilize h225 helicopters operations concluded cash flows associated h225 heavy helicopters largely independent cash flows associated remainder fleet determined h225 heavy helicopters evaluated separate asset group impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset group would required recognize impairment loss determining fair value utilize various assumptions including projections future cash flows change underlying assumptions could cause change results tests could cause fair value less carrying amounts event would required record corresponding charge would reduce earnings continue evaluate estimates assumptions believe assumptions include estimate future cash flows based upon anticipated performance underlying assets appropriate supply demand key drivers helicopter idle time ability contract helicopters economical rates periods oversupply uncommon us helicopters idled extended periods time could indication asset group may impaired instances useful lives helicopters could used interchangeably due mobility helicopters may move weak geographic market stronger geographic market adequate opportunity arises intangible assets record purchased intangible assets respective fair values date acquired intangible assets finite lives amortized straightline basis estimated useful lives intangible assets indefinite lives tested impairment annual basis frequently indicators impairment present annual impairment tests impairment analysis uses discounted future cash flow approach determine fair value incorporates among things projected utilization fleet future oil prices contract rates estimates reviewed time test indefinite lived intangible assets impairment typically developed part routine business planning forecasting process believe estimates assumptions reasonable variations estimates could produce materially different results contingent liabilities establish reserves estimated loss contingencies believe loss probable amount loss reasonably estimated contingent liability reserves relate primarily potential tax assessments aeroleo contingencies litigation personal injury claims income reporting period includes revisions contingent liability reserves resulting different facts information becomes known circumstances change affect previous assumptions respect likelihood amount loss revisions based information becomes known circumstances change reporting date previous period reporting date current period reserves contingent liabilities based upon assumptions estimates regarding probable outcome matter outcome differ assumptions estimates events result material adjustment accrued estimated reserves revisions estimated reserves contingent liabilities would recognized revenue recognition elected exercise right invoice practical expedient adoption asc 606 recognize revenue flight services emergency response services passing day right consideration customers amount corresponds directly value customer performance completed date right invoice represents method recognizing revenue time using output measure “value customer” objective measure entity’s performance contract typically invoice customers monthly basis revenues earned prior month payment terms 30 days customer arrangements contain significant financing component customers salestype leases engage various lease transactions qualify treatment salestype leases initial profit loss transaction determined fair value underlying assets sum present value lease receivable prepaid lease payments lessee lower less deferred initial direct costs incurred us salestype leases subsequently analyzed impairment purposes lessees involved transactions encounter credit difficulties evaluate impairment lessee’s credit risk relating ability pay cash flows pay lesseeprovided residual value guarantees exercise reasonably certain purchase options considered along mitigating impact cash flows associated guaranteed unguaranteed residual values leased asset taxes annual tax provision based expected taxable income statutory rates tax planning opportunities available various jurisdictions operate determination evaluation annual tax provision tax positions involves interpretation tax laws requires significant judgment use estimates assumptions regarding significant future events amount timing character income deductions tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability area impacts tax liability number years may elapse ultimate tax liabilities various jurisdictions determined recognize foreign tax credits available us offset us income taxes due income earned foreign sources credits limited total income tax us income tax return well ratio foreign source income statutory category total income estimating amount foreign tax credits realizable estimate future taxable income statutory category estimates subject change based changes market conditions statutory category timing certain deductions available us statutory category periodically reassess estimates record changes amount realizable foreign tax credits based revised estimates maintain reserves estimated tax exposures tax exposure items include potential challenges intercompany pricing disposition transactions applicability rates various withholding taxes exposures resolved primarily settlement audits judicial means also affected changes applicable tax law statute limitation expirations etc may result revision past estimates review liabilities quarterly determination whether liability shall accrued whether existing liabilities shall reversed due expiration related statutes limitation settlement respective items tax authorities issuance rules regulations legislation court rulings resolve uncertainty recent accounting pronouncements description recent accounting pronouncements could possibly effect financial condition results operations see note 1 consolidated financial statements included item 8 annual report form 10k item 7aitem 7 management’s discussion analysis financial condition results operations following discussion analysis financial condition results operations fiscal years ended december 31 2019 2018 2017 read discussion analysis together consolidated financial statements related notes financial information included elsewhere annual report discussion contains forwardlooking statements involve significant risks uncertainties result many factors set forth “item 1a risk factors” elsewhere annual report actual results may differ materially anticipated forwardlooking statements overview one largest helicopter operators world longest serving helicopter transport operator us primary area operations helicopters primarily used transport personnel offshore oil gas production platforms drilling rigs installations years ended december 31 2019 2018 2017 approximately 66 71 66 respectively total operating revenues earned us years ended december 31 2019 2018 2017 approximately 34 29 34 respectively total operating revenues earned international locations addition us currently customers brazil chile colombia india mexico spain suriname primary users helicopter services international independent major integrated oil gas exploration development production companies national oil companies bsee years ended december 31 2019 2018 2017 approximately 91 95 91 respectively operating revenues derived helicopter services including emergency response services provided customers primarily engaged offshore oil gas exploration development production activities regulatory agencies monitor activities additionally leasing customers typically provide services oil gas companies respective local markets results tied level activity offshore oil gas industry addition serving oil gas industry provide emergency response services utility services among activities december 31 2019 owned total 103 helicopters consisting nine heavy helicopters 44 medium helicopters 20 light twin engine helicopters 30 light single engine helicopters december 31 2019 commitments purchase additional eight new helicopters consisting three heavy helicopters five light twin helicopters heavy helicopters scheduled delivered 2020 2021 delivery dates light twin helicopters determined addition outstanding options purchase additional ten heavy helicopters options exercised helicopters would scheduled delivery 2021 2022 recent developments january 23 2020 entered definitive agreement bristow combine two companies allstock transaction structured reverse triangular merger whereby era issue shares bristow stockholders combined company continues trade new york stock exchange “nyse” following completion transaction combined company headquartered houston texas chris bradshaw president ceo era become president ceo combined company upon completion merger former bristow stockholders expected approximately 77 combined company era stockholders expected 23 combined company combined company offer broader range worldclass efficient aviation solutions enhanced fleet size diversity providing better solutions new existing oil gas customers governmental agencies merger create financially stronger company enhanced size diversification transaction expected close second half 2020 following receipt required regulatory approvals satisfaction customary closing conditions including approval bristow’s era’s stockholders relevant antitrust approvals lines service offshore oil gas offshore oil gas market highly cyclical demand highly correlated price oil gas tends fluctuate depending many factors including global economic activity levels inventory overall demand addition price oil gas availability acreage local tax incentives disincentives requirements maintaining interests leases affect activity levels oil gas industry price levels oil gas cause additional fluctuations inducing changes consumer behavior last 13 years provided transportation services us government inspectors offshore platform drilling rigs installations contract renewed october 2016 term one year four oneyear options extend expected run september 2021 brazil among important markets offshore oil gas exploration development production activity worldwide participate market whollyowned subsidiary aeróleo dryleasing enter lease arrangements helicopters operators primarily located international markets mexico india spain helicopters contracted local helicopter operators often prefer lease helicopters rather purchase leasing affords us opportunity access new markets without significant initial infrastructure investment generally without ongoing operating risk activities services order diversify sources earnings cash flow deploy number helicopters support industries activities emergency response services years ended december 31 2019 2018 2017 6 4 7 operating revenues respectively generated activities services market outlook offshore oil gas market highly cyclical demand linked price oil gas prices oil gas critical factors customers’ investment spending decisions price crude oil depressed number years negatively impacted cash flow customers led reduce capital operational expenditures prior levels including reductions related offshore exploration development production activities experienced customer contract cancellations decreased fleet utilization customers decreased number helicopters contract canceled contract upon limited notice price crude oil recovered favorable levels customers’ spending offshore exploration development production activities remains depressed generate vast majority operating revenue contracts supporting oil gas customers’ offshore production operations longterm transportation requirements production activities typically less cyclical exploration development activities production platforms remain place longterm relatively unaffected economic cycles marginal cost lifting barrel oil platform operation low additional declines price oil gas could delay cancellation planned offshore projects impacting operations future periods remainder oil gas revenues primarily comes transporting personnel offshore drilling rigs deepwater activity continues significant segment global offshore oil gas markets typically involves significant capital investment multiyear development plans projects generally underwritten oil gas companies using relatively conservative assumptions relating oil gas prices although projects considered less susceptible shortterm fluctuations price oil gas compared shorter cycle projects persistently low crude oil prices last several years caused companies reevaluate future capital expenditures respect deepwater projects resulted rescaling delay cancellation planned offshore projects could continue impact operations future periods exposed foreign currency exchange risk primarily eurodenominated capital commitments brazilian operations receive portion revenues incur expenses brazilian real two large helicopter oems headquartered europe price many helicopters euros fluctuations value us dollar euro affects amount unfunded commitments us dollar terms although strength us dollar made acquisition eurodenominated helicopter models less expensive us recent years weakness euro also makes acquisitions less expensive competitors potential competitors could lead excess helicopter capacity increased competition jeopardize pricing utilization equipment fluctuations value euro could also destabilize residual values certain eurodenominated helicopters believe well positioned address nearterm market industry challenges liquidity levels provide stable foundation current market environment together operational efficiency improvements permit us maintain improve customer relationships competitive position fleet developments capital commitments focus modernization fleet standardization equipment oil gas companies typically require modern helicopters offer enhanced safety features greater performance response demand transformed fleet significantly since beginning 2005 added 141 helicopters fleet disposed 154 helicopters reduced average age owned fleet 17 years 14 years spent 66 million 92 million 168 million acquire helicopters equipment years ended december 31 2019 2018 2017 respectively primarily heavy medium helicopters spare helicopter parts facility improvements december 31 2019 unfunded commitments 805 million primarily stemming agreements purchase eight helicopters consisting three aw189 heavy helicopters five aw169 light twin helicopters also 13 million deposits paid options yet exercised aw189 helicopters scheduled delivered 2020 2021 delivery dates aw169 helicopters determined addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered 2021 2022 approximately 818 million commitments inclusive deposits paid options yet exercised may terminated without liability aggregate liquidated damages 21 million components revenues expenses derive revenues primarily operating leasing equipment profits depend cost capital acquisition costs assets operating costs reputation operating revenues recorded us gulf mexico international oil gas primarily generated offshore oil gas exploration development production activities revenues typically earned combination fixed monthly fees plus incremental charge based flight hours flown charter revenues typically earned either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily operating revenues recorded dryleasing generated leases thirdparty operators responsible operation helicopters certain leases also provide crew training management expertise technical support leases typically call fixed monthly fee may also include additional charge based flight hours flown andor level personnel support majority dryleasing revenues generated helicopters deployed internationally operating revenues emergency response services earned fixed monthly fee plus incremental charge flight hours flown charter revenues typically earned hourly rate minimum number hours charged daily aggregate cost operations depends primarily size asset mix fleet operating costs expenses grouped following categories • personnel includes wages benefits payroll taxes savings plans subsistence travel • repairs maintenance primarily routine activities hourly charges powerbythehour “pbh” maintenance contracts cover helicopter refurbishments engine major component overhauls performed accordance planned maintenance programs • insurance including cost hull liability insurance premiums loss deductibles • fuel • leasedin equipment includes cost leasing helicopters equipment • primarily base expenses property sales use taxes communication costs freight expenses engage number thirdparty vendors maintain engines certain components helicopter models pbh maintenance contracts programs require us pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event place helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried may able recover part payments pbh provider case record reduction operating expense also incur repairs maintenance expense vendor arrangements direct purchase usage expendables obtain repair quotes authorize service repairable components policy expensing repair costs incurred may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls undertaken variation exacerbated timing entering exiting thirdparty pbh programs timing vendor credits helicopters lease third parties arrangements whereby customer assumes operational responsibility often provide technical parts support generally incur material operating costs instances leases require clients procure adequate insurance purchase contingent hull liability coverage mitigate risk client’s coverage failing respond instances provide training services support lease customers results operations following table provides results operations years ended december 31 2019 2018 2017 operating revenues service line following table sets forth operating revenues service line years ended december 31 2019 2018 2017 1 primarily oil gas activities also includes revenues utility services 2 includes property rental income year ended december 31 2017 approximately 03 million previously included emergency response services oil gas service lines 3 includes sar air medical services year ended december 31 2019 compared year ended december 31 2018 operating revenues operating revenues 44 million higher twelve months ended december 31 2019 “current year” compared twelve months ended december 31 2018 “prior year” operating revenues oil gas operations us 43 million lower current year operating revenues medium single engine light twin helicopters 39 million 21 million 02 million lower respectively primarily due lower utilization decreases partially offset increased revenues 16 million heavy helicopters primarily due higher utilization operating revenues 04 million higher operating revenues international oil gas operations 03 million lower current year operating revenues colombia 08 million lower primarily due decreased utilization operating revenues suriname 04 million higher due primarily due higher utilization revenues dryleasing activities 45 million higher current year primarily due commencement new contracts subsequent prior year operating revenues emergency response services 45 million higher primarily due commencement new contracts subsequent prior year operating expenses operating expenses 30 million higher current year repairs maintenance expenses 22 million higher primarily due 33 million increase pbh expense 05 million increase related timing repairs current year recognition lease return credit 04 million prior year partially offset 21 million net increase vendor credits personnel costs 17 million higher primarily due increase headcount leasedin equipment expenses 04 million lower due end helicopter leases prior year insurance expense 03 million lower primarily due reductions operating fleet subsequent prior year administrative general administrative general expenses 68 million lower current year primarily due decrease 99 million professional services fees primarily related litigation settled decreases partially offset increase 29 million personnel costs primarily due increase headcount depreciation amortization depreciation amortization expense 19 million lower current year primarily due disposition assets certain assets becoming fully depreciated subsequent prior year gains asset dispositions net current year sold three light twin helicopters two hangar facilities two medium helicopters resulting net gains 37 million prior year sold otherwise disposed flightseeing assets alaska consisted eight single engine helicopters two operating facilities related property equipment 13 helicopters including six salestype leases equipment net gains 16 million litigation settlement proceeds received litigation settlement proceeds 420 million prior year loss impairment recorded noncash impairment charge 26 million current year 16 million related last remaining h225 helicopter 10 million due impairment intangible asset related subsidiary colombia recorded noncash impairment charge 10 million prior year related last remaining h225 helicopter operating income loss operating loss percentage revenues 1 current year compared operating income percentage revenues 13 prior year decrease operating income percentage revenues primarily due litigation settlement proceeds received prior year interest income interest income 14 million higher current year primarily due interest earned higher cash balances salestype leases interest expense interest expense 13 million lower current year primarily due lower debt balances writeoff deferred debt issuance costs related amendment amended restated senior secured revolving credit facility prior year loss sale investment current year disposed corporate securities resulting loss 06 million foreign currency gains losses net foreign currency losses 05 million current year compared 10 million prior year primarily due strengthening us dollar relative brazilian real income tax benefit expense income tax benefit 07 million current year primarily due pretax losses income tax expense 29 million prior year primarily due recognition litigation settlement proceeds equity earnings equity earnings net tax 77 million higher due recognition gains sale dart holding company ltd “dart” joint venture current year liquidity capital resources ongoing liquidity requirements arise primarily working capital needs meeting capital commitments including purchase helicopters equipment repayment debt obligations addition may use liquidity fund acquisitions make investments primary sources liquidity cash balances cash flows operations borrowings revolving credit facility time may secure additional liquidity issuance equity debt well sale assets summary cash flows operating activities components cash flows provided operating activities years ended december 31 2019 2018 2017 follows operating income depreciation gains asset dispositions impairments net 338 million lower year ended december 31 2019 compared year ended december 31 2018 primarily due recognition 420 million litigation settlement proceeds prior year 30 million increase operating expenses related higher repairs maintenance expenses personnel costs current year partially offset 68 million decrease administrative general expenses 44 million increase revenues current year operating income depreciation gains asset dispositions impairments net 455 million higher year ended december 31 2018 compared year ended december 31 2017 primarily due recognition 420 million litigation settlement proceeds 2018 159 million decrease operating expenses related personnel reductions decreased repairs maintenance expenses absence certain operating expenses incurred 2017 litigation settlement proceeds decrease operating expenses partially offset 96 million decrease revenues 30 million increase administrative general expenses 2018 changes operating assets liabilities interest income taxes resulted cash inflows 12 million year ended december 31 2019 compared outflows 36 million year ended december 31 2018 primarily due increase accrued expenses changes operating assets liabilities interest income taxes resulted cash outflows 36 million year ended december 31 2018 compared inflows 88 million year ended december 31 2017 primarily due decrease payables interest paid excluding capitalized interest 09 million lower year ended december 31 2019 compared year ended december 31 2018 primarily due lower debt balances current year interest paid excluding capitalized interest 17 million lower year ended december 31 2018 compared year ended december 31 2017 primarily due lower debt balances year ended december 31 2018 interest received 23 million higher year ended december 31 2019 compared year ended december 31 2018 primarily due higher cash balances interest earned salestype leases interest received 03 million higher year ended december 31 2018 compared year ended december 31 2017 primarily due interest earned higher cash balances income taxes paid 10 million higher year ended december 31 2019 compared year ended december 31 2018 due higher pretax income taxes paid consistent year ended december 31 2018 year ended december 31 2017 investing activities year ended december 31 2019 net cash provided investing activities 486 million primarily consisting • net proceeds sale equity investees 347 million • proceeds disposition property equipment 133 million • net principal payments notes due thirdparties equity investees 78 million • capital expenditures 66 million consisted primarily spare helicopter parts leasehold improvements • net cash used purchase sale investment 06 million year ended december 31 2018 net cash provided investing activities 228 million primarily consisting • proceeds disposition property equipment 296 million • net principal payments notes due thirdparties equity investees 15 million • dividends received equity investees 10 million • capital expenditures 92 million consisted primarily helicopter acquisitions spare helicopter parts leasehold improvements year ended december 31 2017 net cash used investing activities 66 million primarily consisting • capital expenditures 168 million consisted primarily helicopter acquisitions deposits future helicopter deliveries • proceeds disposition property equipment 94 million • net principal payments notes due thirdparties equity investees 09 million • investments advances equity investees 01 million financing activities year ended december 31 2019 net cash used financing activities 94 million primarily consisting • purchases treasury shares 77 million • principal payments longterm debt 21 million • extinguishment longterm debt 07 million • proceeds sharebased award plans 11 million year ended december 31 2018 net cash used financing activities 435 million primarily consisting • principal payments longterm debt including revolving credit facility 419 million • issuance costs related amendment revolving credit facility 13 million • extinguishment longterm debt 12 million • proceeds sharebased award plans 09 million year ended december 31 2017 net cash used financing activities 275 million primarily consisting • net principal payments short longterm debt 453 million • borrowings revolving credit facility 170 million • proceeds sharebased award plans 08 million future cash requirements debt obligations total debt excluding unamortized discounts debt issuance costs december 31 2019 1624 million 183 million classified current following table summarizes maturity dates significant debt december 31 2019 2010 entered two promissory notes 270 million 117 million purchase heavy medium helicopter respectively december 2015 upon maturity notes refinanced outstanding balances 190 million 59 million notes require monthly principal payments 01 million less 01 million final payments 128 million 40 million respectively promissory notes due december 2020 discussion outstanding debt december 31 2019 including discussion market terms debt obligations debt issuance costs details see note 7 “notes consolidated financial statements” included annual report unfunded capital commitments december 31 2019 unfunded capital commitments 805 million primarily pursuant agreements purchase eight helicopters approximately 695 million payable 2020 remaining commitments payable 2021 also 13 million deposits paid options yet exercised may terminate 818 million commitments inclusive deposits paid options yet exercised without liability us aggregate liquidated damages 21 million addition outstanding options purchase additional ten aw189 helicopters options exercised helicopters would delivered 2021 2022 expect finance remaining acquisition costs combination cash hand cash provided operating activities short longterm liquidity requirements anticipate generate positive cash flows operations cash flows adequate meet working capital requirements year ended december 31 2019 cash provided operations 276 million support capital expenditure program andor liquidity requirements may use combination operating cash flow cash balances proceeds sales assets issue debt equity borrowings revolving credit facility december 31 2019 ability borrow additional 1243 million revolving credit facility subject compliance financial ratios discussed availability longterm liquidity dependent upon ability generate operating profits sufficient meet requirements working capital debt service capital expenditures reasonable return investment management continue closely monitor liquidity credit markets offbalance sheet arrangements december 31 2019 standby letters credit totaling 07 million contractual obligations commercial commitments following table summarizes contractual obligations commercial commitments aggregate maturities december 31 2019 thousands 1 maturities borrowings interest payments pursuant borrowings capital commitment fee revolving credit facility based contractual terms interest amounts represent expected cash payments interest longterm debt based interest rates place amounts outstanding december 31 2019 assume borrowings revolver 2 capital purchase obligations december 31 2019 represent commitments purchase eight new helicopters consisting five aw169 light twin helicopters three aw189 heavy helicopters total unfunded capital commitments may terminated without liability liquidated damages 21 million aggregate commitments recorded liabilities consolidated balance sheet yet received goods taken title property 3 operating leases primarily include leases facilities remaining term excess one year included 161 million 53 million related leases reasonably expected extend 4 purchase obligations primarily include purchase orders helicopter inventory maintenance commitments goods services acquired ordinary course business fulfilled vendors within short period time effects inflation operations expose us effects inflation event inflation becomes significant factor world economy inflationary pressures could result increased operating financing costs contingencies brazilian tax disputes connection ownership aeróleo operations brazil several ongoing legal disputes related local municipal federal taxation requirements brazil including assessments associated import reexport helicopters brazil legal disputes related municipal tax assessments arising authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal tax disputes” ii social security contributions one customers required remit 1995 1998 iii penalties assessed due alleged failure comply certain deadlines related helicopters import export brazil iv fines sought taxing authorities brazil related use certain tax credits used offset certain social tax liabilities collectively “tax disputes” aggregate amount issue tax disputes 138 million municipal tax disputes represent largest claims total amount sought aeróleo approximately 103 million issue addition tax disputes unrelated thereto aeróleo engaged two additional civil litigation matters relating dispute former tax consultant alleged 05 million due payable contingency fee related execution certain tax strategies ii fatal accident occurred 1983 previously settled plaintiffs’ us “civil disputes” respect fatal accident plaintiffs seeking collect additional amounts brazil despite previous settlement agreed upon parties us continue evaluate assess various legal strategies tax disputes civil disputes customary certain legal matters brazil aeróleo already deposited amounts security escrow account pursue legal appeals several tax disputes civil disputes december 31 2019 deposited 50 million escrow accounts controlled court respect tax disputes civil disputes fully reserved amounts subject final determination judicial release escrow deposits estimates based assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience aeróleo plans defend cases vigorously december 31 2019 possible determine outcome tax disputes civil disputes expect outcome would material adverse effect business financial position results operations general litigation disputes normal course business become involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time involved tax disputes various government agencies management used estimates determining potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur expect changes estimated costs would material effect business consolidated financial position results operations critical accounting policies estimates preparation financial statements conformity us generally accepted accounting principles “gaap” many cases accounting treatment particular transaction specifically dictated gaap whereas circumstances gaap requires us make estimates judgments assumptions believe reasonable based upon information available base estimates judgments historical experience professional advice various sources believe reasonable circumstances actual results may differ estimates different assumptions conditions believe significant accounting policies discussed note 1 consolidated financial statements included item 8 annual report form 10k following involve higher degree judgment complexity allowance doubtful accounts establish allowances doubtful accounts casebycase basis believe payment amounts owed us unlikely occur establishing allowances consider number factors including historical experience changes client’s financial position estimates involve significant judgment management derive significant portion revenue services international independent major integrated oil gas companies government agencies receivables concentrated primarily gulf mexico generally require collateral security support client receivables inventory reserve maintain inventory primarily consists spare parts service helicopters establish allowance distribute cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts also periodically review condition continuing usefulness parts determine whether realizable value inventory lower book value parts related helicopter types management determined longer included fleet substantially reduced fleet future periods specifically reviewed valuation parts significantly lower book value parts additional provision may required impairment longlived assets review property equipment impairment events changes circumstances indicate carrying value assets may recoverable longlived assets grouped lowest level identifiable cash flows largely independent cash flows groups assets us generally fleet group level impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset group would required recognize impairment loss determining fair value utilize various assumptions including projections future cash flows change underlying assumptions could cause change results tests could cause fair value less carrying amounts event would required record corresponding charge would reduce earnings continue evaluate estimates assumptions believe assumptions include estimate future cash flows based upon anticipated performance underlying assets appropriate supply demand key drivers helicopter idle time ability contract helicopters economical rates periods oversupply uncommon us helicopters idled extended periods time could indication asset group may impaired instances useful lives helicopters could used interchangeably due mobility helicopters may move weak geographic market stronger geographic market adequate opportunity arises leases maintain operating leases number fixed assets determine arrangement considered lease inception modification renewal existing lease rightofuse “rou” assets associated leases reflected longterm assets payables lease agreements recorded liabilities amounts due within one year recorded current liabilities consolidated balance sheets majority operating leases provide implicit rate incremental borrowing rate based information available commencement date determine present value future payments intangible assets record purchased intangible assets respective fair values date acquired intangible assets finite lives amortized straightline basis estimated useful lives intangible assets indefinite lives tested impairment annual basis frequently indicators impairment present annual impairment tests impairment analysis uses discounted future cash flow approach determine fair value incorporates among things projected utilization fleet future oil prices contract rates estimates reviewed time test indefinite lived intangible assets impairment typically developed part routine business planning forecasting process believe estimates assumptions reasonable variations estimates could produce materially different results contingent liabilities establish reserves estimated loss contingencies believe loss probable amount loss reasonably estimated contingent liability reserves relate primarily potential tax assessments aeróleo contingencies litigation personal injury claims income reporting period includes revisions contingent liability reserves resulting different facts information becomes known circumstances change affect previous assumptions respect likelihood amount loss revisions based information becomes known circumstances change reporting date previous period reporting date current period reserves contingent liabilities based upon assumptions estimates regarding probable outcome matter outcome differ assumptions estimates events result material adjustment accrued estimated reserves revisions estimated reserves contingent liabilities would recognized salestype leases engage various lease transactions qualify treatment salestype leases initial profit loss transaction determined fair value underlying assets sum present value lease receivable prepaid lease payments lessee lower less deferred initial direct costs incurred us salestype leases subsequently analyzed impairment purposes lessees involved transactions encounter credit difficulties evaluate impairment lessee’s credit risk relating ability pay cash flows pay lesseeprovided residual value guarantees exercise reasonably certain purchase options considered along mitigating impact cash flows associated guaranteed unguaranteed residual values leased asset taxes annual tax provision based expected taxable income statutory rates tax planning opportunities available various jurisdictions operate determination evaluation annual tax provision tax positions involves interpretation tax laws requires significant judgment use estimates assumptions regarding significant future events amount timing character income deductions tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability area impacts tax liability number years may elapse ultimate tax liabilities various jurisdictions determined recognize foreign tax credits available us offset us income taxes due income earned foreign sources credits limited total income tax us income tax return well ratio foreign source income statutory category total income estimating amount foreign tax credits realizable estimate future taxable income statutory category estimates subject change based changes market conditions statutory category timing certain deductions available us statutory category periodically reassess estimates record changes amount realizable foreign tax credits based revised estimates maintain reserves estimated tax exposures tax exposure items include potential challenges intercompany pricing disposition transactions applicability rates various withholding taxes exposures resolved primarily settlement audits judicial means also affected changes applicable tax law statute limitation expirations etc may result revision past estimates review liabilities quarterly determination whether liability shall accrued whether existing liabilities shall reversed due expiration related statutes limitation settlement respective items tax authorities issuance rules regulations legislation court rulings resolve uncertainty recent accounting pronouncements description recent accounting pronouncements could possibly effect financial condition results operations see note 1 consolidated financial statements included item 8 annual report form 10k item 7a item 7a quantitative qualitative disclosures market risk entered settled positions eurobased forward currency exchange contracts designated fair value hedges capital purchase commitments december 31 2012 forward currency exchange contracts designated fair value hedges contracts matured dedesignated settled contracts seacor december 31 2012 capital purchase commitments €1017 million 1344 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 134 million maintained cash balances €62 million december 31 2012 adverse change 10 underlying foreign currency exchange rate would reduce net income 08 million 500 million liborbased variable rate borrowings revolving credit facility december 31 2012 average borrowing rate facility december 31 2012 29 10 increase libor would result additional annual interest expense 10000 net tax december 31 2012 excluding debt outstanding revolving credit facility 331 million variable rate debt due 2015 instruments bear variable interest rate resets every three months computed threemonth libor rate date reset plus 260 basis points december 31 2012 interest rate borrowings 291 10 increase underlying libor would raise rate 294 reflecting corresponding increase gross interest expense 7000 addition december 31 2012 interest rate swap agreements notional value 318 million agreements call us pay fixed interest rate ranging 167 183 receive interest payments based libor december 31 2012 liability 10 million marked market positions interest rate swap agreements item 8item 7a quantitative qualitative disclosures market risk december 31 2013 nonus dollar denominated capital purchase commitments €1563 million 2148 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 215 million december 31 2013 maintained cash balances €22 million receivable balances €45 million payable balances €11 million adverse change 10 underlying foreign currency exchange rate would reduce net income 02 million 04 million 01 million respectively 550 million liborbased variable rate borrowings revolving credit facility december 31 2013 average borrowing rate facility december 31 2013 235 10 increase libor would result additional annual interest expense 9000 net tax december 31 2013 excluding debt outstanding revolving credit facility 303 million variable rate debt due 2015 instruments bear variable interest rate resets every three months computed threemonth libor rate date reset plus 260 basis points december 31 2013 interest rate borrowings 284 10 increase underlying libor would raise rate 287 reflecting corresponding increase gross interest expense 5000 addition december 31 2013 interest rate swap agreements notional value 318 million agreements call us pay fixed interest rate ranging 167 183 receive interest payments based libor december 31 2013 liability 06 million marked market positions interest rate swap agreements item 8item 7a quantitative qualitative disclosures market risk december 31 2014 nonus dollar denominated capital purchase commitments €1411 million 1715 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 172 million december 31 2014 maintained cash balances €162 million adverse change 10 underlying foreign currency exchange rate would reduce net income 13 million 850 million liborbased variable rate borrowings revolving credit facility december 31 2014 average borrowing rate facility december 31 2014 225 10 increase libor would result additional annual interest expense approximately 14000 net tax december 31 2014 excluding debt outstanding revolving credit facility 274 million variable rate debt due 2015 instruments bear variable interest rate resets every three months computed threemonth libor rate date reset plus 260 basis points december 31 2014 interest rate borrowings 285 10 increase underlying libor would raise rate 287 resulting additional annual interest expense approximately 4000 net tax addition december 31 2014 interest rate swap agreements notional value 275 million agreements call us pay fixed interest rate ranging 129 176 receive interest payments based libor december 31 2014 liability 03 million marked market positions interest rate swap agreements item 8item 7a quantitative qualitative disclosures market risk december 31 2015 nonus dollar denominated capital purchase commitments €1123 million 1221 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 122 million december 31 2015 nonus dollar denominated accounts payable €15 million 16 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 02 million december 31 2015 maintained cash balances €06 million 07 million adverse change 10 underlying foreign currency exchange rate would reduce net income 42000 900 million liborbased variable rate borrowings revolving credit facility december 31 2015 average borrowing rate facility december 31 2015 266 10 increase libor would result additional annual interest expense approximately 24000 net tax december 31 2015 excluding debt outstanding revolving credit facility 250 million variable rate debt due 2015 instruments bear variable interest rate resets monthly computed onemonth libor rate date reset plus 181 basis points december 31 2015 weighted average interest rate borrowings 218 10 increase underlying libor would raise rate 221 resulting additional annual interest expense 6000 net tax december 31 2015 excluding revolving credit facility variable rate debt noted nonus dollar denominated debt col2892 million 01 million r151 million 38 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent commitment 04 million item 8item 7a quantitative qualitative disclosures market risk december 31 2016 nonus dollar denominated capital purchase commitments €947 million 997 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 100 million december 31 2016 maintained cash balances €02 million 02 million adverse change 10 underlying foreign currency exchange rate would reduce net income approximately 12000 650 million liborbased variable rate borrowings revolving credit facility december 31 2016 average borrowing rate facility december 31 2016 301 10 increase libor would result additional annual interest expense approximately 32000 net tax december 31 2016 excluding debt outstanding revolving credit facility 232 million variable rate debt outstanding instruments bear variable interest rate resets monthly computed onemonth libor rate date reset plus 181 basis points december 31 2016 weighted average interest rate borrowings 246 10 increase underlying libor would raise rate 253 resulting additional annual interest expense approximately 10000 net tax december 31 2016 maintained nonus dollar denominated working capital balance r115 million 35 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance 03 million december 31 2016 maintained nonus dollar denominated working capital balance cop7187 million 02 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance less 01 million item 8item 7a quantitative qualitative disclosures market risk december 31 2017 nonus dollar denominated capital purchase commitments €957 million 1149 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 115 million 390 million liborbased variable rate borrowings revolving credit facility december 31 2017 average borrowing rate facility december 31 2017 378 10 increase libor would result additional annual interest expense approximately 57000 net tax december 31 2017 excluding debt outstanding revolving credit facility 216 million variable rate debt outstanding instruments bear variable interest rate resets monthly computed onemonth libor rate date reset plus 181 basis points december 31 2017 weighted average interest rate borrowings 226 10 increase underlying libor would raise rate 230 resulting additional annual interest expense approximately 6300 net tax december 31 2017 maintained nonus dollar denominated working capital balance r204 million 62 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance 05 million december 31 2017 maintained nonus dollar denominated working capital balance cop2751 million 09 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance less 01 million item 8item 7a quantitative qualitative disclosures market risk december 31 2018 nonus dollar denominated capital purchase commitments €709 million 811 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 81 million december 31 2018 200 million variable rate debt outstanding instruments bear variable interest rate resets monthly computed onemonth libor rate date reset plus 181 basis points december 31 2018 weighted average interest rate borrowings 433 10 increase underlying libor would raise rate 458 resulting additional annual interest expense less 01 million net tax december 31 2018 maintained nonus dollar denominated working capital balance r264 million 68 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance 06 million december 31 2018 maintained nonus dollar denominated working capital balance cop1778 million 05 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance less 01 million item 8item 7a quantitative qualitative disclosures market risk december 31 2019 nonus dollar denominated capital purchase commitments €717 million 805 million adverse change 10 underlying foreign currency exchange rate would increase us dollar equivalent nonhedged purchase commitment 80 million december 31 2019 183 million variable rate debt outstanding instruments bear variable interest rate resets monthly computed onemonth libor rate date reset plus 181 basis points december 31 2019 weighted average interest rate borrowings 350 10 increase underlying libor would raise rate 367 resulting additional annual interest expense less 01 million net tax december 31 2019 maintained nonus dollar denominated working capital balance r301 million 75 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance 07 million december 31 2019 maintained nonus dollar denominated working capital balance cop818 million 02 million adverse change 10 underlying foreign currency exchange rate would reduce working capital balance less 01 million item 8 item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 form 10k presented beginning page 54 form 10k item 9item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 form 10k presented beginning page 73 annual report form 10k item 9item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 form 10k presented beginning page 55 annual report form 10k item 9item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 annual report form 10k presented beginning page 58 annual report form 10k item 9item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 annual report form 10k presented beginning page 61 annual report form 10k item 9item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 annual report form 10k presented beginning page 62 annual report form 10k item 9item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 annual report form 10k presented beginning page 59 annual report form 10k item 9item 8 financial statements supplementary data consolidated financial statements related notes required item included part iv item 15 annual report form 10k presented beginning page 87 annual report form 10k item 9 item 15 exhibits financial statement schedules documents filed part report 1 2 financial statements financial statement schedules see index consolidated financial statements financial statement schedule form 10k 3 exhibits incorporated herein reference indicated management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused annual report form 10k fiscal year ended december 31 2012 signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements financial statement schedule except financial statement schedule set forth required schedules omitted since information either included consolidated financial statements applicable required report independent registered public accounting firm board directors stockholders era group inc audited accompanying consolidated balance sheets era group inc december 31 2012 2011 related consolidated statements operations comprehensive income loss changes equity cash flows three years period ended december 31 2012 audits also included financial statement schedule listed index item 15a financial statements schedule responsibility companys management responsibility express opinion financial statements schedule based audits audit consolidated financial statements dart holding company ltd corporation company 50 interest statements reflect total assets 61548000 december 31 2011 total revenues 18999000 five months ended december 31 2011 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement engaged perform audit companys internal control financial reporting audits included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness companys internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits report auditors provide reasonable basis opinion based audits report auditors financial statements referred present fairly material respects consolidated financial position era group inc december 31 2012 2011 consolidated results operations cash flows three years period ended december 31 2012 conformity us generally accepted accounting principles also opinion related financial statement schedules considered relation basic financial statements taken whole presents fairly material respects information set forth therein ernst young llp certified public accountants miami florida february 27 2013 era group inc consolidated balance sheets thousands except share data accompanying notes integral part consolidated financial statements read conjunction herewith era group inc consolidated statements operations thousands except share data accompanying notes integral part consolidated financial statements read conjunction herewith era group inc consolidated statements comprehensive income loss thousands accompanying notes integral part consolidated financial statements read conjunction herewith era group inc consolidated statements changes equity thousands accompanying notes integral part consolidated financial statements read conjunction herewith era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements read conjunction herewith era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers major integrated independent oil gas companies us government agencies addition serving oil gas industry company provides air medical services firefighting support flightseeing tours alaska emergency search rescue services company operates fixed base operation “fbo” ted stevens anchorage international airport federal aviation administration “faa” approved maintenance repair station lake charles louisiana company interest dart holding company ltd sales manufacturing organization based canada engineers manufactures distributes aftermarket helicopter parts accessories interest training center based lake charles louisiana provides instruction flight simulator training service prior january 31 2013 company wholly owned seacor holdings inc along majorityowned subsidiaries collectively referred “seacor” represented seacor’s aviation services business segment january 31 2013 seacor recapitalized company exchange class b common stock 1400 million series preferred stock 19883583 shares newlyissued era group common stock par value 001 per share “recapitalization” following recapitalization company one class common stock issued outstanding preferred stock outstanding january 31 2013 seacor completed spinoff means dividend seacor’s stockholders company’s issued outstanding common stock “spinoff” company filed registration statement form 10 securities exchange commission “sec” declared effective january 15 2013 prior spinoff seacor company entered distribution agreement several agreements govern postspinoff relationship era group independent company common stock listed new york stock exchange symbol “era” basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures significant influence generally deemed exist company 20 50 voting rights investee company reports investments advances equity investees accompanying consolidated balance sheets investments equity advances 50 less owned companies company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses 50 less owned companies net tax use estimates preparation financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period estimates include related allowance doubtful accounts useful lives property equipment impairments income tax provisions certain accrued liabilities actual results could differ estimates differences may material reclassifications certain amounts reported prior years consolidated financial statements reclassified conform current years presentation revenue recognition company recognizes revenue realized realizable earned revenue realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenue meet criteria deferred criteria met deferred revenues years ended december 31 follows thousands december 31 2012 deferred revenues included 70 million related contractlease revenues certain helicopters leased company aeroleo taxi aero sa “aeroleo” brazilian joint venture see note 5 deferral resulted difficulties experienced aeroleo following one customer’s cancellation certain contracts number aw139 helicopters contractlease company recognize revenues cash received earlier future collectability become reasonably assured costs expenses related contractleases recognized incurred december 31 2012 deferred revenues also included 19 million related contractlease revenues certain helicopters leased company one customers deferral resulted customer operating certificate revoked period time therefore unable operate certificate since reinstated uncertainty still remains regarding collectability contractlease revenues company recognize revenues cash received earlier future collectability become reasonably assured costs expenses related contractleases recognized incurred company charters majority helicopters primarily master service agreements subscription agreements daytoday charter arrangements contractleases master service agreements subscription agreements require incremental payments fixed monthly fee based flight hours flown agreements fixed terms ranging one month five years generally may canceled upon 30 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate services provided contractleases include equipment include equipment logistical maintenance support insurance personnel combination thereof fixed monthly fee revenues recognized ratably contract term usage hourly based revenues recognized hours flown company’s air medical services provided contracts hospitals typically include either fixed monthly hourly rate structure fee per completed flight fixed monthly revenues recognized ratably month perhour perflight based revenues recognized hours flown flights completed contracts hospitals longerterm offer either party ability terminate less six months’ notice company operates air medical contracts pursuant collects fee per flight either hospital insurance company respect flightseeing activities company allocates block space cruise lines sells seats directly customers revenues recognized services performed company’s fixed base operation sells fuel ad hoc basis sales recognized time fuel delivery training revenues charged set rate per training course include instructors training materials flight simulator time applicable training revenues recognized services provided cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments trade receivables customers primarily major integrated independent exploration production companies hospitals international helicopter operators us government customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted derivative instruments company accounts derivatives use fair value concept whereby company’s derivative positions stated fair value accompanying consolidated balance sheets realized unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative losses net realized unrealized gains losses derivatives designated fair value hedges recognized corresponding increase decrease fair value underlying hedged item extent effective ineffective portion reported accompanying consolidated statements operations derivative losses net concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations date credit losses material company also exposed concentrations credit risk associated cash equivalents derivative instruments company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company currently anticipate nonperformance significant counterparties company”s two largest customers comprised 36 23 net trade receivables december 31 2012 2011 respectively inventories consist primarily spare parts fuel stated lower cost using average cost method market company records writedowns needed adjust carrying amount inventories lower cost market year ended december 31 2012 company inventory writedowns 07 million inventory writedowns 2011 2010 property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life december 31 2012 estimated useful life years company’s categories new property equipment follows company reviews estimated useful lives salvage values fixed assets ongoing basis effective july 1 2011 company changed estimated useful life salvage value helicopters 12 15 years 30 40 respectively due improvements new helicopter models continue increase longterm value make viable operation longer period time six months ended december 31 2011 change estimate increased operating income 76 million net income 49 million basic diluted earnings per share 048 year ended december 31 2012 change estimate increased operating income 180 million net income 117 million basic diluted earnings per share 048 equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major renewals improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments powerbyhour provider case company records reduction operating expense receives refund company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered powerbyhour arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives capitalized interest totaled 15 million 27 million 23 million 2012 2011 2010 respectively impairment longlived assets company performs impairment analysis longlived assets used operations indicators impairment present company’s helicopters operation evaluated impairment aggregate fleet basis carrying value assets recoverable determined estimated undiscounted cash flows carrying value assets reduced fair value generally fair value determined using valuation techniques expected discounted cash flows appraisals appropriate years ended december 31 2012 2011 company recognized impairment charges year ended december 31 2010 company recognized impairment charges 03 million related four helicopters one owned three leasedin type company longer operates fleet impairment 50 less owned companies company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments year ended december 31 2012 company recognized impairment charge 59 million net tax investment advances aeroleo see note 5 company recognize impairment charges 2011 2010 related 50 less owned companies goodwill recorded purchase price paid acquisition exceeds fair value net identified tangible intangible assets acquired company performs annual impairment test goodwill periodic tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value acquired entity carrying value including goodwill determine fair value company uses discounted future cash flow approach uses estimates revenues costs appropriate discount rates among others estimates reviewed time company tests goodwill impairment typically developed part company’s routine business planning forecasting process company believes estimates assumptions reasonable variations estimates could produce materially different results company recognize goodwill impairments 2012 2011 2010 business combinations company recognizes certain exceptions 100 percent fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings inprocess research development assets acquired capitalized certain acquisitionrelated restructuring costs criteria related exit disposal cost obligations met acquisition date acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 17 million less 01 million 2012 2011 respectively included interest expense accompanying consolidated statements operations deferred financing costs 2010 income taxes prior spinoff company included consolidated us federal income tax return seacor’s policy allocation us federal income taxes requires subsidiaries compute provision us federal income taxes separate company basis settle seacor net operating loss benefits settled seacor current basis used consolidated us federal income tax return offset taxable profits affiliates periods presented total provision income taxes included consolidated statements operations would remain currently reported company eligible included consolidated us federal income tax return seacor commencing february 1 2013 company file standalone consolidated us federal tax return deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized deferred gains portion gains realized sales company’s helicopters 50 less owned companies immediately recognized income recorded accompanying consolidated balance sheets deferred gains liabilities effective january 1 2009 company adopted new accounting rules relating sale equipment noncontrolled 50 less owned companies transactions occurring subsequent adoption new accounting rules gains deferred extent company financed transactions occurring prior adoption new accounting rules gains deferred amortized based company’s ownership interest cash received helicopters’ depreciable lives year ended december 31 2011 company sold one helicopter era brazil addition company previously sold two helicopters finance company turn leased back lake palma sold four helicopters directly lake palma deferred gain activity related transactions years ended december 31 follows thousands foreign currency translation certain company’s investments equity advances 50 less owned companies measured using functional currency primary foreign economic environment operate investments translated us dollars currency exchange rates balance sheet dates equity earnings losses weighted average currency exchange rates applicable reporting periods translation adjustments reported comprehensive income loss accompanying consolidated statements comprehensive income loss foreign currency transactions time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method assumes common shares issued outstanding relevant periods pursuant conversion outstanding series b preferred stock year ended december 31 2012 diluted earnings per common share company excluded 7535788 weighted average common shares issuable upon conversion series b preferred stock effect inclusion computation would antidilutive year ended december 31 2011 diluted earnings per common share company excluded 151027 weighted average common shares issuable upon conversion series preferred stock effect inclusion computation would antidilutive 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs observable inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities carrying values cash equivalents company’s recently issued notes receivable business ventures approximate fair value practical estimate fair value advances seacor timing settlement certain company’s longterm debt estimated using discounted cash flow analysis based estimated current rates considerable judgment required developing certain estimates fair value accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange 1 march 1 2012 company wroteoff equity investment aeroleo joint venture see note 5 2 september 30 2012 company marked equity investment era brazil joint venture fair value primary beneficiary company consolidated era brazil financial statements effective september 30 2012 see note 5 3 year ended december 31 2011 company recorded gain 02 million decrease carrying value exit obligations three leasedin helicopters 3 derivative instruments hedging strategies seacor entered forward currency exchange contracts behalf company derivative instruments classified either assets liabilities based individual fair values december 31 2012 none derivative instruments outstanding company designated forward currency exchange contracts fair value hedges respect capital commitments denominated euros entering forward currency exchange contracts company fixed portion euro capital commitments us dollars protect currency fluctuations equipment scheduled delivered 2011 2013 year ended december 31 2011 company entered two interest rate swap agreements maturing 2014 2015 call company pay fixed interest rates 167 183 aggregate notional value 318 million receive variable interest rate based london interbank offered rate “libor” notional values general purpose interest rate swap agreements provide protection increases interest rates might lead higher interest costs company fair value derivative instruments december 31 2012 liabilities 10 million company recognized losses 05 million 13 million derivative instruments year ended december 31 2012 2011 respectively 4 acquisitions dispositions equipment additions company’s capital expenditures 1130 million 1589 million 1308 million 2012 2011 2010 respectively major equipment placed service years ended december 31 follows unaudited equipment dispositions company sold property equipment 52 million 260 million 09 million 2012 2011 2010 respectively major equipment dispositions years ended december 31 follows unaudited 1 includes three lightsingle helicopters one medium helicopter previously leasedin 2 excludes two lighttwin helicopters removed service includes one lightsingle helicopter previously removed service 3 includes one lightsingle helicopter previously removed service excludes one lighttwin helicopter removed service 2011 5 investments equity advances 50 less owned companies 1 company owns 51 financial interest joint venture however consolidate venture controls 50 venture’s voting rights combined condensed financials summarized financial information company’s investments equity years ended december 31 follows thousands dart holding company ltd combined condensed financials summarized financial information company’s investments equity years ended december 31 follows thousands investments december 31 2012 2011 cumulative undistributed net earnings losses 50 less owned companies included company’s consolidated accumulated deficit loss 58 million loss 113 million respectively dart wholly owned subsidiary company era dhs llc acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 5 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart holding company ltd “dart” exchange 50 interest dart note receivable 51 million note receivable bears interest rate 40 per annum requires quarterly principal interest payments matures july 31 2023 years ended december 31 2012 2011 2010 company purchased 17 million 23 million 11 million respectively products dart helicopters dart company received management fees year ended december 31 2012 management fees earned year ended december 31 2011 material year ended december 31 2010 company received management fees 02 million aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo taxi aereo sa “aeróleo” brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company partner also loaned aeróleo 60 million interest rate 6 per annum march 1 2012 company recorded impairment charge 59 million net tax investment advances aeroleo impairment charge resulted difficulties experienced aeroleo following one customer’s cancellation certain contracts number aw139 helicopters contractlease company leases 11 helicopters aeróleo year ended december 31 2012 period july 1 2011 december 31 2011 company recognized 176 million 140 million respectively operating revenues leases 53 million 30 million outstanding december 31 2012 2011 respectively see note 1 era brazil july 1 2011 company partner contributed 48 million cash era brazil llc “era brazil” 5050 joint venture era brazil immediately acquired helicopter subject lease aeróleo company 115 million 95 million cash 20 million note payable year ended december 31 2012 company loaned 108 million era brazil secured helicopter purchased company 2011 era brazils ownership interests upon receipt proceeds loan era brazil repaid outstanding principal amount 16 million remaining original helicopter acquisition note due company loaned 92 million aeroleo taxi aereo sa “aeroleo” form two notes equal amount era brazil distributed two notes due aeroleo members result transactions era brazil highly leveraged entity outstanding debt due company primary beneficiary company consolidated era brazil financial statements effective september 30 2012 company provides maintenance services era brazil period january 1 2012 september 30 2012 period july 1 2011 december 31 2011 company recognized 04 million 03 million respectively operating revenues services era training center era training center llc “era training center” operates flight training devices provides training services company thirdparty customers years ended december 31 2012 2011 2010 company provided helicopter management services joint venture totaling 05 million 07 million 06 million respectively paid joint venture 08 million 01 million 02 million simulator fees 2012 2011 2010 respectively december 2010 era training center signed 32 million note company purchase two flight simulators note secured two flight simulators bears interest 6 terms note require quarterly interestonly payments first year 01 million quarterly payments principal interest thereafter january 2026 2012 2011 company made additional advances 08 12 million note respectively lake palma lake palma sl “lake palma” operates seven helicopters spain company received advances 12 million 2012 receive advances 2011 received 10 million advances 2010 6 escrow deposits likekind exchanges time company enters qualified exchange accommodation agreements third party meet likekind exchange requirements section 1031 internal revenue code provisions revenue procedure 200037 accordance provisions company permitted deposit proceeds sale assets escrow accounts purpose acquiring assets qualifying temporary deferral taxable gains realized consequently company established escrow accounts financial institutions deposit funds received sale equipment designated replacement property within specified period time december 31 2012 2011 deposits likekind exchange escrow accounts 7 income taxes years ended december 31 2011 2010 company recognized income tax benefit 07 11 million respectively adjustments deferred tax liabilities resulting changes state tax apportionment factors company participates share award programs sponsored seacor receives additional income tax benefit expense based difference fair market value share awards time grant fair market value time vesting exercise 8 longterm debt 7750 senior notes december 7 2012 company issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million 7750 senior notes issued indenture dated december 7 2012 company wells fargo bank national association trustee “indenture” 7750 senior notes issued qualified institutional buyers reliance rule 144a nonus persons reliance regulation securities act 1933 amended interest 7750 senior notes payable semiannually arrears june 15 december 15 year beginning june 15 2013 7750 senior notes may redeemed time december 15 2017 applicable redemption prices set forth indenture plus accrued unpaid interest redemption date prior december 15 2017 company may also redeem 7750 senior notes whole part redemption price based “makewhole” premium plus accrued unpaid interest redemption date addition time prior december 15 2015 company may redeem 35 7750 senior notes redemption price equal 107750 principal amount plus accrued unpaid interest redemption date using proceeds certain equity offerings indenture contains covenants restrict companys ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries ability pay dividends consolidate merge sell substantially assets addition upon specified change control trigger event specified asset sales company may required offer repurchase 7750 senior notes connection sale 7750 senior notes company entered registration rights agreement “registration rights agreement” dated december 7 2012 initial purchasers registration rights agreement company agreed among things use commercially reasonable efforts cause exchange offer registration statement become effective within 180 days consummation spinoff consummate exchange offer within 30 days effectiveness cause shelf registration statement covering resale 7750 senior notes declared effective within specified periods company required pay additional interest 7750 senior notes fails timely comply obligations registration rights agreement time complies net proceeds offering used repay 1900 million borrowings outstanding revolving credit facility connection issuance 7750 senior notes borrowing capacity senior secured revolving credit facility permanently reduced 3500 million 2000 million senior secured revolving credit facility december 22 2011 company entered 3500 million senior secured revolving credit facility matures december 2016 secured substantially tangible intangible assets company advances senior secured revolving credit facility available general corporate purposes used issue 500 million letters credit interest advances option company either “base rate” libor defined plus applicable margin “base rate” defined highest prime rate defined b federal funds effective rate defined plus 50 basis points c daily libor defined plus applicable margin applicable margin based company’s funded debt earnings interest taxes depreciation amortization “ebitda” defined ranges 100 200 basis points “base rate” margin 210 335 basis points libor margin applicable margin december 31 2012 160 basis points “base rate” margin 285 basis points libor margin quarterly commitment fee payable based average unfunded portion committed amount rate based company’s funded debt ebitda defined ranges 25 70 basis points december 31 2012 commitment fee 50 basis points senior secured revolving credit facility contains various restrictive covenants including interest coverage funded debt ebitda secured funded debt ebitda funded debt fair market value owned helicopters fair market value mortgaged helicopters funded debt fair market value mortgaged helicopters registered united states fair market value mortgaged helicopters well customary covenants representations warranties funding conditions events default defined senior secured revolving credit facility addition senior secured revolving credit facility restricts payment dividends company’s common stock one year december 22 2012 certain conditions thereafter may restrict ability company distribute dividends preferred common stock generally dividends may declared paid quarterly provided company compliance various covenants senior secured revolving credit facility defined dividend amount exceed 20 net income company previous four consecutive quarters december 31 2012 company 500 million outstanding advances senior secured revolving credit facility annual rate 291 923 million available net issued letters credit 03 million remaining amounts senior secured revolving credit facility available fund working capital needs february 20 2013 company drew additional 150 million senior secured revolving credit facility capital expenditures working capital requirements promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter note secured helicopter bears variable interest rate resets every three months computed threemonth libor rate date reset plus 260 basis points december 31 2012 interest rate note 291 note requires 01 million monthly payments principal plus accrued interest final payment 190 million december 2015 november 24 2010 company entered promissory note 117 million purchase medium helicopter note secured helicopter bears variable interest rate resets every three months computed threemonth libor rate date reset plus 260 basis points december 31 2012 interest rate note 291 note requires 01 million monthly payments principal plus accrued interest final payment 59 million december 2015 9 series preferred stock july 2011 company’s board directors adopted company’s amended restated certificate incorporation authorize issuance 10000000 shares 001 par value preferred stock one series fix preferences powers relative participating optional special rights qualifications limitations restrictions thereof including dividend rate conversion rights voting rights redemption rights liquidation preference fix number shares included series without vote action stockholders preferred stock issued may rank senior company’s common stock respect payment dividends amounts upon liquidation dissolution winding addition shares preferred stock may class series voting rights december 23 2011 company’s board directors designated 1400000 shares preferred stock 6 cumulative perpetual preferred stock series “series preferred stock” issued seacor exchange 1400 million advances seacor stated value per share series preferred stock 100 “original issue price” shares series preferred stock redeemable option company whole part original purchase price plus accrued unpaid dividends series preferred stock holders series preferred stock may convert portion series preferred stock option time prior initial public offering conversion rate 4375 shares class b common stock share series preferred stock subject certain antidilution adjustments period 45 days following qualified public offering defined amended restated certificate incorporation company holders series preferred stock may convert portion series preferred stock option time number shares class b common stock equal aggregate stated value shares converted divided initial public offering price company’s class common stock following period holders series preferred stock may convert portion series preferred stock option time number shares class b common stock equal aggregate stated value shares converted divided applicable trading value class common stock event company’s liquidation dissolution winding holders series preferred stock receive priority holders company’s common stock liquidation preference equal original issue price shares plus accrued unpaid dividends shares holders series preferred stock voting rights except certain limited circumstances holders outstanding shares series preferred stock entitled receive cumulative dividends cash funds assets company legally available therefor dividend paid declared shares company’s common stock rate 6 per annum date issuance date conversion redemption payable quarterly arrears compounded quarterly basis previously paid seacor controlled redemption series preferred stock control company classified series preferred stock outside stockholder equity january 31 2013 part recapitalization seacor exchanged 1400000 shares series preferred stock represented companys series preferred stock outstanding shares newlyissued era group common stock 10 series b preferred stock june 8 2012 companys board directors designated 300000 shares series b preferred stock september 25 2012 designated additional 700000 shares series b preferred stock issued seacor exchange 1000 million proceeds used reduce outstanding borrowings company’s senior secured revolving credit facility stated value per share series b preferred stock 100 “original issue price” shares series b preferred stock redeemable option company whole part original purchase price holders series b preferred stock may convert portion series b preferred stock option time prior initial public offering company’s class common stock conversion rate 4375 shares class b common stock share series b preferred stock subject certain antidilution adjustments prior 46 calendar days following qualified public offering defined amended restated certificate incorporation company holders series b preferred stock may convert portion series b preferred stock option time number shares class b common stock equal aggregate stated value shares converted divided initial public offering price company’s class common stock following period holders series b preferred stock may convert portion series b preferred stock option time number shares class b common stock equal aggregate stated value shares converted divided applicable trading value class common stock dividends shall accumulate declared paid issued shares outstanding series b preferred stock event company’s liquidation dissolution winding holders series b preferred stock would receive priority holders company’s common stock subordinate holders company’s series preferred stock liquidation preference equal original issue price shares holders series b preferred stock voting rights except certain limited circumstances december 18 2012 company entered agreement seacor pursuant seacor transferred company 500000 shares series b preferred stock 500 million liquidation value seacor held partial satisfaction benefit seacor receive applying us federal net operation losses generated company 2012 addition agreement called settlement cash remaining 500000 shares series b preferred stock held seacor purchase price 500 million december 20 2012 company borrowed 500 million revolving credit facility fund repurchase remaining 500000 shares series b preferred stock december 31 2012 shares series b preferred stock issued outstanding 11 common stock july 2011 company’s board directors adopted company’s amended restated articles incorporation authorize issuance 60000000 shares 001 par value class common stock 60000000 shares 001 par value class b common stock effective august 1 2011 issued share company’s par value common stock exchanged 24500 shares class b common stock rights holders class b common shares substantially identical except respect voting conversion specifically holders class b common stock entitled eight votes per share holders class common stock entitled one vote per share shares class b common stock convertible class common stock holder’s option ii automatically upon transfer shares class b common stock person seacor subsidiary seacor except case taxfree spinoff stockholders seacor aggregate number shares class b common stock beneficially owned seacor affiliates fell 20 aggregate number shares common stock outstanding except case taxfree spinoff stockholders seacor addition seacor effect taxfree spinoff following taxfree spinoff outstanding shares class b common stock may converted shares class common stock consent majority holders class common stock holders class b common stock voting separate classes january 31 2013 part recapitalization outstanding shares class b common stock exchanged newly issued common stock see note 1 12 sharebased compensation july 2011 company’s board directors approved 2011 share incentive plan 2011 share incentive plan provides grant options purchase shares company’s common stock restricted stock appreciation rights stock awards performance awards restricted stock units performancebased awards company’s nonemployee directors officers employees consultants committee appointed board directors administers 2011 share incentive plan total 3000000 shares class common stock authorized grant plan shares issued pursuant grants newly issued shares class common stock accordance terms plan exercise price per share options granted cannot less 100 fair market value class common stock date grant december 31 2012 company granted share awards 2011 share incentive plan january 14 2013 company replaced 2011 share incentive plan 2012 share incentive plan 2012 share incentive plan provides grant options purchase shares company’s common stock restricted stock appreciation rights stock awards performance awards restricted stock units performancebased awards company’s nonemployee directors officers employees consultants committee appointed board directors administers 2012 share incentive plan total 4000000 shares common stock authorized grant plan shares issued pursuant grants newly issued shares common stock accordance terms plan exercise price per share options granted cannot less 100 fair market value common stock date grant february 27 2013 compensation committee board directors approved conversion 37900 options purchase seacor common stock held era group employees directors prior spinoff 169058 options purchase era group common stock 13 related party transactions prior company’s entry senior secured revolving credit facility december 22 2011 company participated cash management program whereby certain operating capital expenditures company funded advances seacor certain cash collections company forwarded seacor company incurred interest outstanding advances reported interest expense advances seacor accompanying consolidated statements operations interest calculated settled quarterly basis using interest rates set discretion seacor december 23 2011 seacor recapitalized company connection company’s entry senior secured revolving credit facility part recapitalization company issued 1400000 shares series preferred stock seacor exchange 1400 million aggregate advances previously provided seacor also contributed additional 1800 million capital company respect additional prior advances remaining outstanding advances seacor november 30 2011 settled company cash payment 1997 million seacor december 23 2011 company’s advance activity seacor december 1 2011 december 23 2011 primarily consisting capital expenditures helicopters partially offset seacor’s purchase company’s 2011 tax operating loss benefit 182 million settled company cash payment 426 million seacor february 9 2012 company provided less 01 million aviation services seacor flight charter arrangements 2011 company provided aviation services seacor flight charter arrangements 2010 company provided less 01 million aviation services seacor flight charter arrangements • actual payroll costs seacor personnel assigned company charged company • seacor maintains selfinsured health benefit plans participating employees including company charges company share total plan costs incurred based percentage participating employees • seacor provides defined contribution plan participating employees including company charges company share employer matching contributions based 50 participating employees’ first 6 wages contributed plan • certain officers employees company receive compensation participation seacor share award plans consisting grants restricted stock options purchase stock well participation employee stock purchase plan company charged fair value employees share december 31 2012 seacor 19 million unrecognized compensation costs unvested share awards expected recognized company future years follows thousands • seacor also provides certain administrative support services company shared services arrangement including payroll processing information systems support benefit plan management cash disbursement support cash receipt processing treasury management seacor incurs various corporate costs connection providing certain corporate services including limited executive oversight risk management legal accounting tax charges quarterly management fees operating segments order fund corporate overhead cover costs total management fees charged seacor operating segments include actual corporate costs incurred plus markup generally allocated within consolidated group using incomebased performance metrics reported operating segment relation seacor’s operating segments december 30 2011 company seacor entered agreement seacor provide services fixed rate 20 million per annum beginning january 1 2012 costs company incurred management fees seacor reported seacor management fees company’s consolidated statements operations company’s costs services could differ part seacor’s consolidated group 2011 seacor received insurance proceeds one insurance carriers damages related hurricanes katrina rita company’s share proceeds totaled 19 million offset company’s operating expenses march 31 2011 company distributed seacor receivable seacor asset management llc amount 698 million representing return capital seacor mr charles fabrikant chairman board company director diamond offshore drilling inc diamond customer company total amount earned company business conducted diamond exceed 10 million years ended december 31 2012 2011 2010 14 commitments contingencies company’s unfunded capital commitments december 31 2012 consisted primarily helicopters totaled 1348 million 138 million payable 2013 commitments 1283 million may terminated without liability liquidated damages 33 million aggregate subsequent december 31 2012 company committed purchase additional equipment 166 million june 12 2009 purported civil class action filed seacor era group inc era helicopters llc three defendants collectively “defendants” us district court district delaware superior offshore international inc v bristow group inc et al 09cv438 del complaint alleged defendants violated federal antitrust law conspiring raise fix maintain stabilize prices offshore helicopter services us gulf mexico period january 2001 december 2005 purported class plaintiffs included direct purchasers services relief sought included compensatory damages treble damages september 4 2009 defendants filed motion dismiss complaint september 14 2010 court entered order dismissing complaint september 28 2010 plaintiffs filed motion reconsideration amendment motion reargument “motions” november 30 2010 court granted motions amended court’s september 14 2010 order clarify dismissal without prejudice permitted filing amended complaint authorized limited discovery respect new allegations amended complaint following completion limited discovery february 11 2011 defendants filed motion summary judgment dismiss amended complaint prejudice june 23 2011 district court granted summary judgment defendants july 22 2011 plaintiffs filed notice appeal us court appeals third circuit july 27 2012 third circuit court appeals affirmed district court’s grant summary judgment favor defendants august 9 2011 defendants moved certain excessive costs expenses attorneys fees 28 usc § 1927 “fee motion” october 9 2012 district court denied fee motion normal course business company becomes involved various litigation matters including among things claims third parties alleged property damages personal injuries management used estimates determining company’s potential exposure matters recorded reserves financial statements related thereto appropriate possible change company’s estimates exposure could occur company expect changes estimated costs would material effect company’s consolidated financial position results operations cash flows december 31 2012 company leased seven helicopters certain facilities equipment leasing agreements classified operating leases financial reporting purposes related rental fees charged expense lease terms leases generally contain purchase lease renewal options rights first refusal respect sale lease equipment lease terms range duration one ten years total rental expense company’s operating leases 2012 2011 2010 40 million 43 million 42 million respectively future minimum payments years ended december 31 operating leases remaining term excess one year december 31 2012 follows thousands 15 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate 2012 anadarko petroleum corporation “anadarko” us government accounted 15 11 respectively company’s revenues 2011 anadarko aeróleo accounted 12 11 respectively company’s revenues 2010 anadarko us government agencies aeróleo accounted 11 10 respectively company’s revenues years ended december 31 2012 2011 2010 approximately 22 28 24 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived international contractleasing activities 16 supplemental information statements cash flows supplemental information years ended december 31 follows thousands 17 quarterly financial inormation unaudited selected financial information interim quarterly periods presented thousands except share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year schedule iivaluation qualifying accounts years ended december 31 2012 2011 2010 thousands 1 trade notes receivable deemed uncollectible removed accounts receivable allowance doubtful accountsitem 15 exhibits financial statement schedules documents filed part report 1 financial statements consolidated financial statements filed part report listed index consolidated financial statements annual report form 10k 2 financial statement schedules financial statement schedules omitted applicable required information shown consolidated financial statements notes thereto 3 exhibits incorporated herein reference indicated management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused report signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements report independent registered public accounting firm board directors stockholders era group inc audited accompanying consolidated balance sheets era group inc december 31 2013 2012 related consolidated statements operations comprehensive income changes equity cash flows three years period ended december 31 2013 financial statements responsibility companys management responsibility express opinion financial statements based audits audit consolidated financial statements dart holding company ltd corporation company 50 interest statements reflect total revenues 18999000 five months ended december 31 2011 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement engaged perform audit companys internal control financial reporting audits included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness companys internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits report auditors provide reasonable basis opinion based audits report auditors consolidated financial statements referred present fairly material respects consolidated financial position era group inc december 31 2013 2012 consolidated results operations cash flows three years period ended december 31 2013 conformity us generally accepted accounting principles report independent registered public accounting firm dart holding company ltd shareholders dart holding company ltd audited dart holding company ltd’s consolidated statements income comprehensive income retained earnings cash flows period august 1 2011 december 31 2011 consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audit conducted audit accordance auditing standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement company required engaged perform audit internal control financial reporting audit included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audit provides reasonable basis opinion consolidated financial statements referred present fairly material respects results dart holding company ltd’s operations cash flows period august 1 2011 december 31 2011 conformity us generally accepted accounting principles kpmg llp calgary canada march 7 2012 era group inc consolidated balance sheets thousands except share amounts accompanying notes integral part consolidated financial statements era group inc consolidated statements operations thousands except share data accompanying notes integral part consolidated financial statements era group inc consolidated statements comprehensive income thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements changes equity thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers major integrated independent oil gas companies us government agencies addition serving oil gas industry company provides air medical services firefighting support flightseeing tours alaska emergency search rescue services company operates fixed base operation “fbo” ted stevens anchorage international airport federal aviation administration “faa” approved maintenance repair station lake charles louisiana company interest dart holding company ltd sales manufacturing organization based canada engineers manufactures distributes aftermarket helicopter parts accessories interest training center based lake charles louisiana provides instruction flight simulator training service prior january 31 2013 company wholly owned seacor holdings inc along majorityowned subsidiaries collectively referred “seacor” represented seacor’s aviation services business segment january 31 2013 seacor recapitalized company exchange class b common stock 1400 million series preferred stock 19883583 shares newlyissued era group common stock par value 001 per share “recapitalization” following recapitalization company one class common stock issued outstanding preferred stock outstanding january 31 2013 seacor completed spinoff means dividend seacor’s stockholders company’s issued outstanding common stock “spinoff” company filed registration statement form 10 securities exchange commission “sec” declared effective january 15 2013 prior spinoff seacor company entered distribution agreement several agreements govern postspinoff relationship era group independent company common stock listed new york stock exchange symbol “era” basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries entities meet criteria variable interest entities vies company primary beneficiary significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures significant influence generally deemed exist company 20 50 voting rights investee company reports investments advances equity investees accompanying consolidated balance sheets investments equity advances 50 less owned companies company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses 50 less owned companies net tax use estimates preparation financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period estimates include related allowance doubtful accounts useful lives property equipment impairments inventories income tax provisions certain accrued liabilities actual results could differ estimates differences may material reclassifications certain amounts reported prior years consolidated financial statements reclassified conform current years presentation revenue recognition company recognizes revenue realized realizable earned revenue realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenue meet criteria deferred criteria met deferred revenues years ended december 31 follows thousands december 31 2013 2012 deferred revenues included 210 million 70 million respectively related drylease revenues certain helicopters leased company aeróleo taxi aero sa “aeróleo” brazilian joint venture see note 5 deferral originated difficulties experienced aeróleo following one customer’s cancellation certain contracts number aw139 helicopters drylease company deferral continues result financial difficulties aeróleo company recognize revenues cash received earlier future collectability become reasonably assured accounts receivable balances related deferred revenue netted presentation costs expenses related dryleases recognized incurred december 31 2013 2012 deferred revenues also included 32 million 19 million respectively related drylease revenues certain helicopters leased company one customers india deferral resulted customer operating certificate revoked period time therefore unable operate certificate since reinstated uncertainty still remains regarding collectability drylease revenues company recognize revenues cash received earlier future collectability become reasonably assured accounts receivable balances related deferred revenue netted presentation costs expenses related dryleases recognized incurred company charters majority helicopters master service agreements subscription agreements daytoday charter arrangements dryleases master service agreements subscription agreements typically require fixed monthly fee plus incremental payments based hours flown agreements fixed terms ranging one month five years generally may canceled providing 30 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily dryleases require fixed monthly fee customer’s right use helicopter applicable charge based hours flown compensation maintenance parts andor personnel support company may provide customer dryleases generally run two five years early cancellation provisions air medical services provided contracts hospitals typically include fixed monthly hourly rate structure respect flightseeing operations company allocates block space cruise lines seats sold directly customers company also operates fixed based operation “fbo” ted stevens anchorage international airport sells fuel adhoc basis leases storage space cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments trade receivables customers primarily major integrated independent exploration production companies hospitals international helicopter operators us government customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted allowance doubtful accounts years ended december 31 follows thousands derivative instruments company accounts derivatives use fair value concept whereby company’s derivative positions stated fair value accompanying consolidated balance sheets realized unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative losses net realized unrealized gains losses derivatives designated fair value hedges recognized corresponding increase decrease fair value underlying hedged item extent effective ineffective portion reported accompanying consolidated statements operations derivative losses net concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations date credit losses material company also exposed concentrations credit risk associated cash equivalents derivative instruments company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company currently anticipate nonperformance significant counterparties company’s two largest customers comprised 24 36 net trade receivables december 31 2013 2012 respectively inventories stated lower average cost market value consist primarily spare parts fuel following table roll forward allowance related dormant obsolete excess inventory years ended december 31 thousands 2013 company sold inventory held third party consignment loss allowance previously provided resulted 52 million reduction allowance related inventory upon removal assets property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life december 31 2013 estimated useful life years company’s categories new property equipment follows company reviews estimated useful lives salvage values fixed assets ongoing basis effective july 1 2011 company changed estimated useful life salvage value helicopters 12 15 years 30 40 respectively due improvements new helicopter models continue increase longterm value make viable operation longer period time six months ended december 31 2011 change estimate increased operating income 76 million net income 49 million basic diluted earnings per share 048 equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major renewals improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments powerbyhour provider case company records reduction operating expense receives refund company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered powerbyhour arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives capitalized interest totaled 11 million 15 million 27 million 2013 2012 2011 respectively impairment longlived assets company performs impairment analysis longlived assets used operations indicators impairment present company’s helicopters operation evaluated impairment aggregate fleet basis carrying value assets recoverable determined estimated undiscounted cash flows carrying value assets reduced fair value generally fair value determined using valuation techniques expected discounted cash flows appraisals appropriate years ended december 31 2013 2012 2011 company recognized impairment charges impairment 50 less owned companies company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments year ended december 31 2013 company recognize impairment charges year ended december 31 2012 company recognized impairment charge 59 million net tax investment advances aeróleo see note 5 company recognize impairment charges 2011 related 50 less owned companies goodwill recorded purchase price paid acquisition exceeds fair value net identified tangible intangible assets acquired company performs annual impairment test goodwill periodic tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value acquired entity carrying value including goodwill determine fair value company uses discounted future cash flow approach uses estimates revenues costs appropriate discount rates among others estimates reviewed time company tests goodwill impairment typically developed part company’s routine business planning forecasting process company believes estimates assumptions reasonable variations estimates could produce materially different results company recognize goodwill impairments 2013 2012 2011 business combinations company recognizes certain exceptions 100 percent fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings inprocess research development assets acquired capitalized certain acquisitionrelated restructuring costs criteria related exit disposal cost obligations met acquisition date acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 06 million 17 million less 01 million 2013 2012 2011 respectively included interest expense accompanying consolidated statements operations income taxes commencing february 1 2013 company file standalone consolidated us federal tax return deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized prior spinoff company included consolidated us federal income tax return seacor’s policy allocation us federal income taxes required subsidiaries compute provision us federal income taxes separate company basis settle seacor net operating loss benefits settled seacor current basis used consolidated us federal income tax return offset taxable profits affiliates periods prior spinoff total provision income taxes included consolidated statements operations would remain currently reported company eligible included consolidated us federal income tax return seacor deferred gains portion gains realized sales company’s helicopters 50 less owned companies immediately recognized income recorded accompanying consolidated balance sheets deferred gains liabilities year ended december 31 2011 company sold one helicopter era brazil addition company previously sold two helicopters finance company turn leased back lake palma sold four helicopters directly lake palma balance deferred gain account 2013 2012 2011 0 16 million 24 million respectively one helicopter related era brazil consolidated balance sheet longer deferred gain foreign currency translation certain company’s investments equity advances 50 less owned companies measured using functional currency primary foreign economic environment operate investments translated us dollars currency exchange rates balance sheet dates equity earnings losses weighted average currency exchange rates applicable reporting periods translation adjustments reported comprehensive income loss accompanying consolidated statements comprehensive income loss foreign currency transactions time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method assumes common shares issued outstanding relevant periods pursuant conversion outstanding series b preferred stock era savings plan company provides defined contribution plan “savings plan” eligible usbased employees company’s contribution savings plan limited 50 employee’s first 6 wages invested savings plan subject annual review board directors era company’s savings plan costs 11 million year ended december 31 2013 prior 2013 seacor provided defined contribution plan participating employees company’s savings plan costs 10 million 09 million years ended december 31 2012 2011 respectively effective january 1 2014 plan amended provide qualified nonelective company contributions amount equal 3 employee’s eligible plan immediate full vesting company’s contributions 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs observable inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities carrying values cash equivalents company’s recently issued notes receivable business ventures approximate fair value company’s longterm debt estimated using discounted cash flow analysis based estimated current rates considerable judgment required developing certain estimates fair value accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange 1 march 1 2012 company wroteoff equity investment aeróleo joint venture see note 5 2 september 30 2012 company marked equity investment era brazil joint venture fair value primary beneficiary company consolidated era brazil financial statements effective september 30 2012 see note 5 3 derivative instruments hedging strategies seacor entered forward currency exchange contracts behalf company derivative instruments classified either assets liabilities based individual fair values december 31 2013 none derivative instruments outstanding company designated forward currency exchange contracts fair value hedges respect capital commitments denominated euros entering forward currency exchange contracts company fixed portion euro capital commitments us dollars protect currency fluctuations equipment scheduled delivered 2011 2013 year ended december 31 2011 company entered two interest rate swap agreements maturing 2014 2015 call company pay fixed interest rates 167 183 aggregate notional value 318 million receive variable interest rate based london interbank offered rate “libor” notional values general purpose interest rate swap agreements provide protection increases interest rates might lead higher interest costs company fair value derivative instruments december 31 2013 liabilities 06 million company recognized gains 04 million losses 05 million derivative instruments year ended december 31 2013 2012 respectively 4 acquisitions dispositions company’s capital expenditures 1101 million 1130 million 1589 million 2013 2012 2011 respectively consisted primarily helicopter acquisitions deposits future helicopter deliveries company records helicopter acquisitions property equipment places helicopters service completion work finalized helicopters ready use summary changes owned helicopter fleet years ended december 31 follows equipment additions equipment dispositions company sold otherwise disposed property equipment 652 million 52 million 260 million 2013 2012 2011 respectively major equipment dispositions years ended december 31 follows 1 includes two lighttwin helicopters one medium helicopter previously leasedin 2 includes three lightsingle helicopters one medium helicopter previously leasedin 3 excludes two lighttwin helicopters removed service includes one lightsingle helicopter previously removed service 4 includes one lightsingle helicopter previously removed service excludes one lighttwin helicopter removed service 2011 5 investments equity advances 50 less owned companies 1 investment impaired march 2012 2 consolidated entity september 30 2012 3 company owns 51 financial interest joint venture however consolidate venture controls 50 venture’s voting rights combined condensed financials summarized financial information company’s investments equity years ended december 31 follows thousands dart holding company ltd combined condensed financials summarized financial information company’s investments equity years ended december 31 follows thousands investments december 31 2013 2012 cumulative undistributed net earnings losses 50 less owned companies included company’s consolidated accumulated deficit loss 46 million 58 million respectively dart wholly owned subsidiary company era dhs llc acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 5 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart holding company ltd “dart” exchange 50 interest dart note receivable 51 million note receivable bears interest rate 40 per annum requires quarterly principal interest payments matures july 31 2023 years ended december 31 2013 2012 2011 company purchased 29 million 17 million 23 million respectively products dart helicopters dart company received management fees years ended december 31 2013 2012 management fees earned year ended december 31 2011 material aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo taxi aereo sa “aeróleo” brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company partner also loaned aeróleo 60 million interest rate 6 per annum march 1 2012 company recorded impairment charge 59 million net tax investment advances aeróleo impairment charge resulted difficulties experienced aeróleo following one customer’s cancellation certain contracts number aw139 helicopters drylease company leases 11 helicopters aeróleo years ended december 31 2013 2012 period july 1 2011 december 31 2011 company recognized 162 million 176 million 140 million respectively operating revenues leases 210 million 53 million outstanding december 31 2013 2012 respectively see notes 1 20 era training center era training center llc “era training center” operates flight training devices provides training services company thirdparty customers years ended december 31 2013 2012 2011 company provided helicopter management services joint venture totaling 04 million 05 million 07 million respectively paid joint venture 07 million 08 million 01 million simulator fees 2013 2012 2011 respectively december 2010 era training center signed 32 million note company purchase two flight simulators note secured two flight simulators bears interest 6 terms note require quarterly interestonly payments first year 01 million quarterly payments principal interest thereafter january 2026 2012 2011 company made additional advances 08 12 million note respectively lake palma lake palma sl “lake palma” operates seven helicopters spain company received advances 12 million 2012 receive advances 2013 era brazil july 1 2011 company partner contributed 48 million cash era brazil llc “era brazil” 5050 joint venture era brazil immediately acquired helicopter subject lease aeróleo company 115 million 95 million cash 20 million note payable year ended december 31 2012 company loaned 108 million era brazil secured helicopter purchased company 2011 era brazils ownership interests upon receipt proceeds loan era brazil repaid outstanding principal amount 16 million remaining original helicopter acquisition note due company loaned 92 million aeróleo form two notes equal amount era brazil distributed two notes due aeróleo members result transactions era brazil highly leveraged entity outstanding debt due company primary beneficiary company consolidated era brazil financial statements effective september 30 2012 company provides maintenance services era brazil period january 1 2012 september 30 2012 period july 1 2011 december 31 2011 company recognized 04 million 03 million respectively operating revenues services 6 escrow deposits likekind exchanges time company enters qualified exchange accommodation agreements third party meet likekind exchange requirements section 1031 internal revenue code provisions revenue procedure 200037 accordance provisions company permitted deposit proceeds sale assets escrow accounts purpose acquiring assets qualifying temporary deferral taxable gains realized consequently company established escrow accounts financial institutions deposit funds received sale equipment designated replacement property within specified period time december 31 2013 2012 deposits likekind exchange escrow accounts 7 income taxes year ended december 31 2011 company recognized income tax benefit 07 million adjustments deferred tax liabilities resulting changes state tax apportionment factors prior spinoff company participated share award programs sponsored seacor received additional income tax benefit expense based difference fair market value share awards time grant fair market value time vesting exercise december 31 2013 company state income tax net operating loss nol carryforwards 1162 million various states expire 2020 2033 deferred tax asset 69 million recorded company believes likely benefit state nol carryover realized recognition risk company provided valuation allowance 08 million deferred tax assets relating nol carry forwards assumptions change company determines able realize nols tax benefits relating reversal valuation allowance deferred tax assets would recorded income tax provision adjustments identified december 31 2013 2012 company unrecognized tax benefits company incur interest penalties accrue interest years ended december 31 2013 2012 applicable company recognizes interest penalties related uncertain tax positions interest expense administrative general respectively accompanying consolidated statements operations 8 longterm debt 7750 senior notes december 7 2012 company issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million interest 7750 senior notes payable semiannually arrears june 15 december 15 year beginning june 15 2013 7750 senior notes may redeemed time december 15 2017 applicable redemption prices set forth indenture governing 7750 senior notes plus accrued unpaid interest redemption date prior december 15 2017 company may also redeem 7750 senior notes whole part redemption price based “makewhole” premium plus accrued unpaid interest redemption date addition time prior december 15 2015 company may redeem 35 7750 senior notes redemption price equal 107750 principal amount plus accrued unpaid interest redemption date using proceeds certain equity offerings indenture contains covenants restrict companys ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries ability pay dividends consolidate merge sell substantially assets addition upon specified change control trigger event specified asset sales company may required offer repurchase 7750 senior notes company’s payment obligations 7750 senior notes fully unconditionally guaranteed wholly owned existing us subsidiaries guarantors revolving credit facility net proceeds offering used repay 1900 million borrowings outstanding revolving credit facility connection issuance 7750 senior notes borrowing capacity revolving credit facility permanently reduced 3500 million 2000 million senior secured revolving credit facility december 22 2011 company entered 3500 million senior secured revolving credit facility matures december 2016 secured substantially tangible intangible assets company guaranteed company’s wholly owned us subsidiaries advances senior secured revolving credit facility available general corporate purposes used issue 500 million letters credit interest advances option company either “base rate” libor defined plus applicable margin “base rate” defined highest prime rate defined b federal funds effective rate defined plus 50 basis points c daily libor defined plus applicable margin applicable margin based company’s funded debt earnings interest taxes depreciation amortization “ebitda” defined ranges 100 200 basis points “base rate” margin 210 335 basis points libor margin applicable margin december 31 2013 100 basis points “base rate” margin 210 basis points libor margin quarterly commitment fee payable based average unfunded portion committed amount rate based company’s funded debt ebitda defined ranges 25 70 basis points december 31 2013 commitment fee 25 basis points senior secured revolving credit facility contains various restrictive covenants including interest coverage funded debt ebitda secured funded debt ebitda funded debt fair market value owned helicopters fair market value mortgaged helicopters funded debt fair market value mortgaged helicopters registered united states fair market value mortgaged helicopters well customary covenants representations warranties funding conditions events default defined senior secured revolving credit facility addition certain conditions senior secured revolving credit facility may restrict ability company distribute dividends preferred common stock generally dividends may declared paid quarterly provided company compliance various covenants senior secured revolving credit facility defined dividend amount exceed 20 net income company previous four consecutive quarters december 31 2013 company 550 million outstanding advances senior secured revolving credit facility annual rate 235 1361 million available net issued letters credit 89 million remaining amounts senior secured revolving credit facility available fund working capital needs promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter note secured helicopter bears variable interest rate resets every three months computed threemonth libor rate date reset plus 260 basis points december 31 2013 interest rate note 285 note requires 01 million monthly payments principal plus accrued interest final payment 190 million december 2015 november 24 2010 company entered promissory note 117 million purchase medium helicopter note secured helicopter bears variable interest rate resets every three months computed threemonth libor rate date reset plus 260 basis points december 31 2013 interest rate note 284 note requires 01 million monthly payments principal plus accrued interest final payment 59 million december 2015 9 series preferred stock july 2011 company’s board directors adopted company’s amended restated certificate incorporation authorize issuance 10000000 shares 001 par value preferred stock one series fix preferences powers relative participating optional special rights qualifications limitations restrictions thereof including dividend rate conversion rights voting rights redemption rights liquidation preference fix number shares included series without vote action stockholders preferred stock issued may rank senior company’s common stock respect payment dividends amounts upon liquidation dissolution winding addition shares preferred stock may class series voting rights december 23 2011 company’s board directors designated 1400000 shares preferred stock 6 cumulative perpetual preferred stock series “series preferred stock” issued seacor exchange 1400 million advances seacor stated value per share series preferred stock 100 “original issue price” shares series preferred stock redeemable option company whole part original purchase price plus accrued unpaid dividends series preferred stock seacor controlled redemption series preferred stock control company classified series preferred stock outside stockholders equity january 31 2013 part recapitalization seacor exchanged 1400000 shares series preferred stock represented companys series preferred stock outstanding shares newlyissued era group common stock 10 series b preferred stock june 8 2012 companys board directors designated 300000 shares series b preferred stock september 25 2012 designated additional 700000 shares series b preferred stock issued seacor exchange 1000 million proceeds used reduce outstanding borrowings company’s senior secured revolving credit facility stated value per share series b preferred stock 100 “original issue price” shares series b preferred stock redeemable option company whole part original purchase price december 18 2012 company entered agreement seacor pursuant seacor transferred company 500000 shares series b preferred stock 500 million liquidation value seacor held partial satisfaction benefit seacor receive applying us federal net operation losses generated company 2012 addition agreement called settlement cash remaining 500000 shares series b preferred stock held seacor purchase price 500 million december 20 2012 company borrowed 500 million revolving credit facility fund repurchase remaining 500000 shares series b preferred stock december 31 2012 shares series b preferred stock issued outstanding 11 common stock july 2011 company’s board directors adopted company’s amended restated certificate incorporation authorize issuance 60000000 shares 001 par value class common stock 60000000 shares 001 par value class b common stock effective august 1 2011 issued share company’s par value common stock exchanged 24500 shares class b common stock rights holders class b common shares substantially identical except respect voting conversion specifically holders class b common stock entitled eight votes per share holders class common stock entitled one vote per share shares class b common stock convertible class common stock holder’s option ii automatically upon transfer shares class b common stock person seacor subsidiary seacor except case taxfree spinoff stockholders seacor aggregate number shares class b common stock beneficially owned seacor affiliates fell 20 aggregate number shares common stock outstanding except case taxfree spinoff stockholders seacor addition seacor effect taxfree spinoff following taxfree spinoff outstanding shares class b common stock may converted shares class common stock consent majority holders class common stock holders class b common stock voting separate classes january 31 2013 part recapitalization outstanding shares class b common stock exchanged newly issued common stock see note 1 12 earnings per share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant conversion outstanding series preferred stock restricted stock grants vested common shares issued pursuant exercise outstanding stock options computations basic diluted earnings per common share years ended december 31 follows thousands except share data 1 excludes 753535 7679623 years ending december 31 2013 2012 respectively weighted average common shares conversion series preferred stock effect inclusion would antidilutive 2 excludes 250110 year ending december 31 2013 weighted average common shares certain share awards effect inclusion would antidilutive share awards existed 2012 13 sharebased compensation share incentive plans 2013 company adopted era group inc 2013 employee stock purchase plan “espp” company may offer maximum 300000 shares company’s common stock purchase eligible employees price equal 85 lesser fair market value common stock first day offering period ii fair market value common stock last day offering period common stock made available purchase espp sixmonth offering periods espp intended comply section 423 internal revenue code 1986 amended “code” intended subject section 401a code employee retirement income security act 1974 board directors company may amend terminate espp time however increase number shares common stock reserved issuance espp may made without stockholder approval espp term ten years 2013 company adopted era group inc 2012 incentive plan “2012 plan” maximum 4000000 shares company’s common stock reserved issuance awards granted 2012 plan may form stock options stock appreciation rights shares restricted stock sharebased awards payable cash common stock performance awards combination thereof may made outside directors employees consultants december 31 2013 3364998 shares remained available grant 2012 plan share award transactions connection company’s sharebased compensation plans year ended december 31 2013 follows total sharebased compensation expense includes stock options restricted stock espp purchases totaled 20 million year ended december 31 2013 portion restricted stock awards performancebased company assessed probability meeting criteria recorded appropriate expense december 31 2013 company approximately 58 million total unrecognized compensation costs year ended december 31 2013 company awarded 264760 net shares restricted stock average grant date fair value 2128 per share granted 200000 stock options converted 37900 options purchase seacor common stock held company employees directors prior spinoff 169058 options purchase era group common stock fair value used converted stock options evaluated spinoff change following table shows assumptions used compute sharebased compensation expense stock options granted year ended december 31 2013 year ended december 31 2013 number shares weighted average grant price restricted stock restricted stock unit transactions follows year ended december 31 2013 number shares weighted average grant date fair value weighted average exercise price stock option transactions follows year ended december 31 2013 aggregate intrinsic value exercised stock options 04 million december 31 2013 weighted average remaining contractual term total outstanding stock options vestedexercisable stock options 792 years december 31 2013 aggregate intrinsic value options outstanding vestedexercisable options outstanding 62 million 14 related party transactions 2013 2012 company provided 01 million less 01 million respectively aviation services seacor flight charter arrangements 2011 company provided aviation services seacor flight charter arrangements • actual payroll costs seacor personnel assigned company charged company • prior 2013 seacor maintained selfinsured health benefit plans participating employees including company charged company share total plan costs incurred based percentage participating employees • prior 2013 seacor provided defined contribution plan participating employees including company charged company share employer matching contributions based 50 participating employees’ first 6 wages contributed plan • seacor also provides certain administrative support services company shared services arrangement including payroll processing information systems support cash disbursement support cash receipt processing treasury management seacor incurred various corporate costs connection providing certain corporate services including limited executive oversight risk management legal accounting tax charges quarterly management fees operating segments order fund corporate overhead cover costs total management fees charged seacor operating segments include actual corporate costs incurred plus markup generally allocated within consolidated group using incomebased performance metrics reported operating segment relation seacor’s operating segments december 30 2011 company seacor entered agreement seacor provide services fixed rate 20 million per annum beginning january 1 2012 costs company incurred management fees seacor reported seacor management fees company’s consolidated statements operations prior company’s entry senior secured revolving credit facility december 22 2011 company participated cash management program whereby certain operating capital expenditures company funded advances seacor certain cash collections company forwarded seacor company incurred interest outstanding advances reported interest expense advances seacor accompanying consolidated statements operations interest calculated settled quarterly basis using interest rates set discretion seacor december 23 2011 seacor recapitalized company connection company’s entry senior secured revolving credit facility part recapitalization company issued 1400000 shares series preferred stock seacor exchange 1400 million aggregate advances previously provided seacor also contributed additional 1800 million capital company respect additional prior advances remaining outstanding advances seacor november 30 2011 settled company cash payment 1997 million seacor december 23 2011 company’s advance activity seacor december 1 2011 december 23 2011 primarily consisting capital expenditures helicopters partially offset seacor’s purchase company’s 2011 tax operating loss benefit 182 million settled company cash payment 426 million seacor february 9 2012 2011 seacor received insurance proceeds one insurance carriers damages related hurricanes katrina rita company’s share proceeds totaled 19 million offset company’s operating expenses march 31 2011 company distributed seacor receivable seacor asset management llc amount 698 million representing return capital seacor 15 commitments contingencies company’s unfunded capital commitments december 31 2013 consisted primarily agreements purchase helicopters totaled 3417 million 987 million payable 2014 balance payable 2017 company also 23 million deposits paid options yet exercised company may terminate 1644 million total commitments inclusive deposits paid options yet exercised without liability liquidated damages 111 million aggregate normal course business company becomes involved various litigation matters including among things claims third parties alleged property damages personal injuries management used estimates determining company’s potential exposure matters recorded reserves financial statements related thereto appropriate possible change company’s estimates exposure could occur company expect changes estimated costs would material effect company’s consolidated financial position results operations cash flows december 31 2013 company leased five helicopters certain facilities equipment leasing agreements classified operating leases financial reporting purposes related rental fees charged expense lease terms leases generally contain purchase lease renewal options rights first refusal respect sale lease equipment lease terms range duration one ten years total rental expense company’s operating leases 2013 2012 2011 60 million 40 million 43 million respectively future minimum payments years ended december 31 operating leases remaining term excess one year december 31 2013 follows thousands 16 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate 2013 anadarko petroleum corporation “anadarko” us government accounted 19 11 respectively company’s operating revenues 2012 anadarko us government accounted 15 11 respectively company’s operating revenues 2011 anadarko aeróleo accounted 12 11 respectively company’s operating revenues years ended december 31 2013 2012 2011 approximately 18 22 28 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived international dryleasing activities 17 supplemental information statements cash flows supplemental information years ended december 31 follows thousands 18 quarterly financial information unaudited selected financial information interim quarterly periods presented thousands except share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year 19 guarantors securities december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior notes era group’s payment obligations 7750 senior notes jointly severally guaranteed era groups existing 100 owned us subsidiaries guarantee revolving credit facility future us subsidiaries guarantee revolving credit facility material indebtedness era group may incur future “guarantors” guarantors currently guarantee revolving credit facility guarantees guarantors full unconditional joint several era group independent assets operations subsidiaries era group guarantors minor addition significant restrictions ability era group guarantor obtain funds subsidiaries dividend loan result era group exempt providing full financial statements guarantors subsidiaries 20 subsequent events february 15 2014 company’s partner aeróleo signed purchase agreements transfer 50 economic interest 80 voting interest aeróleo third party become company’s new local partner aeróleo addition company’s current partner aeróleo transfer outstanding shareholder loans equity interests company’s affiliates company new partner upon consummation transaction upon consummation transaction consideration transfer interests terms conditions transaction affiliates company’s local partner receive certain payments aeróleo severance partial repayment shareholder loans payments likely require capital infusion company aeróleo approximately 20 million transaction remains subject customary closing conditions including receipt required local regulatory approval expected close second half 2014 february 19 2014 connection execution purchase agreements company filed partner joint motion dismiss ongoing arbitration connection consummation transactions contemplated purchase agreements company intends enter shareholders agreement new partner providing certain protective provisions requiring unanimous shareholder approval specified significant actions putcall arrangement would give company right purchase permit purchaser designee purchase aeróleo interests held company’s new partner aeróleo give new partner aeróleo right put interests company time reason putcall price greater book value shares original purchase price therefor result transaction contemplated arrangements company new partner aeróleo company may required consolidate financial results aeróleo financial statements following consummation transactionsitem 15 exhibits financial statement schedules documents filed part report 1 financial statements consolidated financial statements filed part report listed index consolidated financial statements annual report form 10k 2 financial statement schedules financial statement schedules omitted applicable required information shown consolidated financial statements notes thereto 3 exhibits incorporated herein reference indicated management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused report signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements report independent registered public accounting firm board directors stockholders era group inc audited accompanying consolidated balance sheets era group inc december 31 2014 2013 related consolidated statements operations comprehensive income changes equity cash flows three years period ended december 31 2014 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement engaged perform audit companys internal control financial reporting audits included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness companys internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position era group inc december 31 2014 2013 consolidated results operations cash flows three years period ended december 31 2014 conformity us generally accepted accounting principles era group inc consolidated balance sheets thousands except share amounts accompanying notes integral part consolidated financial statements era group inc consolidated statements operations thousands except share data accompanying notes integral part consolidated financial statements era group inc consolidated statements comprehensive income thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements changes equity thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers international independent major integrated oil gas companies us government agencies addition serving oil gas industry company provides air medical services utility services including support firefighting mining power line pipeline survey activities flightseeing tours alaska emergency search rescue services company operates fixed base operation “fbo” ted stevens anchorage international airport federal aviation administration “faa” approved maintenance repair station lake charles louisiana company interest dart holding company ltd “dart” sales manufacturing organization based canada engineers manufactures distributes aftermarket helicopter parts accessories interest training center based lake charles louisiana provides instruction flight simulator training service prior january 31 2013 company wholly owned seacor holdings inc along majorityowned subsidiaries collectively referred “seacor” represented seacor’s aviation services business segment january 31 2013 seacor recapitalized company exchange class b common stock 1400 million 6 cumulative perpetual preferred stock series “series preferred stock” 19883583 shares newlyissued era group common stock par value 001 per share “recapitalization” following recapitalization company one class common stock issued outstanding preferred stock outstanding january 31 2013 seacor completed spinoff means dividend seacor’s stockholders company’s issued outstanding common stock “spinoff” company filed registration statement form 10 securities exchange commission “sec” declared effective january 15 2013 prior spinoff seacor company entered distribution agreement several agreements govern postspinoff relationship era group independent company common stock listed new york stock exchange symbol “era” basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries entities meet criteria variable interest entities “vies” company primary beneficiary significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures company reports investments accompanying consolidated balance sheets equity investments advances company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses net tax use estimates preparation financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period estimates include among items related allowance doubtful accounts useful lives property equipment impairments inventories income tax provisions certain accrued liabilities actual results could differ estimates differences may material revenue recognition company recognizes revenue realized realizable earned revenue realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenue meet criteria deferred criteria met deferred revenues balance offset receivables related activity years ended december 31 2014 2013 2012 follows thousands december 31 2014 2013 deferred revenues included 310 million 210 million respectively related drylease revenues certain helicopters leased company aeróleo taxi aero sa “aeróleo” brazilian joint venture see note 5 deferral originated difficulties experienced aeróleo following one customer’s cancellation certain contracts number aw139 medium helicopters drylease company deferral continues result financial difficulties aeróleo company recognize revenues cash received earlier future collectability become reasonably assured costs expenses related dryleases recognized incurred december 31 2014 2013 deferred revenues also included 0 32 million respectively related drylease revenues certain helicopters leased company one customers india deferral resulted customer operating certificate revoked period time therefore unable operate certificate since reinstated customer settled previously past due accounts receivable 2014 result 17 million previously deferred revenue related customer recognized 2014 future revenues recognized accordance company’s general revenue recognition policy company charters majority helicopters master service agreements subscription agreements daytoday charter arrangements dryleases master service agreements subscription agreements typically require fixed monthly fee plus incremental payments based hours flown agreements fixed terms ranging one month five years generally may canceled providing 30 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily dryleases require fixed monthly fee customer’s right use helicopter applicable charge based hours flown compensation maintenance parts andor personnel support company may provide customer dryleases generally run two five years early cancellation provisions air medical services provided contracts hospitals typically include fixed monthly hourly rate structure respect flightseeing operations company allocates block space cruise lines seats sold directly customers company also operates fbo ted stevens anchorage international airport sells fuel adhoc basis leases storage space cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments trade receivables customers primarily major integrated independent exploration production companies hospitals international helicopter operators us government customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted allowance doubtful accounts years ended december 31 2014 2013 2012 follows thousands derivative instruments company accounts derivative positions fair value accompanying consolidated balance sheets unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative losses net concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations date credit losses material company also exposed concentrations credit risk associated cash equivalents derivative instruments company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company currently anticipate nonperformance significant counterparties company’s two largest customers comprised 31 24 net trade receivables december 31 2014 2013 respectively inventories stated lower average cost market value consist primarily spare parts fuel following table roll forward allowance related dormant obsolete excess inventory years ended december 31 2014 2013 2012 thousands 2013 company sold inventory held third party consignment loss allowance previously provided resulted 52 million reduction allowance related inventory upon removal assets property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life company reviews estimated useful lives salvage values property equipment ongoing basis december 31 2014 estimated useful life years company’s categories new property equipment follows equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major renewals improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments powerbyhour provider case company records reduction operating expense receives refund company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered powerbyhour arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives company capitalized interest 47 million 11 million 15 million years ended december 31 2014 2013 2012 respectively december 31 2014 2013 construction progress component property equipment included capitalized interest 50 million 14 million respectively impairment longlived assets company performs impairment analysis longlived assets used operations indicators impairment present company’s helicopters operation evaluated impairment aggregate fleet basis carrying value assets recoverable determined estimated undiscounted cash flows carrying value assets reduced fair value generally fair value determined using valuation techniques expected discounted cash flows appraisals appropriate years ended december 31 2014 2013 2012 company recognized impairment charges impairment equity investees company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments years ended december 31 2014 2013 company recognize impairment charges year ended december 31 2012 company recognized impairment charge 59 million net tax equity investments advances aeróleo see note 5 goodwill recorded purchase price paid acquisition exceeds fair value net identified tangible intangible assets acquired company performs annual impairment test goodwill periodic tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value reporting unit carrying value including goodwill determine fair value company uses discounted future cash flow approach uses estimates revenues costs discount rates among estimates reviewed time company tests goodwill impairment typically developed part company’s routine business planning forecasting process company believes estimates assumptions reasonable variations estimates could produce materially different results company recognize goodwill impairments years ended december 31 2014 2013 2012 business combinations company recognizes certain exceptions 100 percent fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings inprocess research development assets acquired capitalized certain acquisitionrelated restructuring costs criteria related exit disposal cost obligations met acquisition date acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 09 million 06 million 17 million years ended december 31 2014 2013 2012 respectively included interest expense accompanying consolidated statements operations income taxes company files standalone consolidated us federal tax return beginning year ended december 31 2013 deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized prior spinoff company included consolidated us federal income tax return seacor’s policy allocation us federal income taxes required subsidiaries compute provision us federal income taxes separate company basis settle seacor net operating loss benefits settled seacor current basis used consolidated us federal income tax return offset taxable profits affiliates foreign currency translation certain company’s equity investments advances measured using functional currency primary foreign economic environment operate investments translated us dollars currency exchange rates balance sheet dates equity earnings losses weighted average currency exchange rates applicable reporting periods translation adjustments reported comprehensive income accompanying consolidated statements comprehensive income foreign currency transactions time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant conversion outstanding series preferred stock common shares issued pursuant exercise outstanding stock options savings plan company provides defined contribution plan “savings plan” eligible usbased employees savings plan provides qualified nonelective company contributions amount equal 3 employee’s eligible pay plus amount equal 100 employee’s first 3 wages invested savings plan immediate full vesting company’s contributions savings plan subject annual review board directors era group company’s savings plan costs 36 million year ended december 31 2014 prior amendment effective january 1 2014 company’s contribution savings plan limited 50 employee’s first 6 wages invested savings plan company’s savings plan costs 11 million year ended december 31 2013 prior 2013 seacor provided defined contribution plan participating employees company’s savings plan costs 10 million year ended december 31 2012 recent accounting pronouncements may 2014 financial accounting standards board issued accounting standards update “asu” 201409 revenue contracts customers base revenue recognition contract vendor customer require reporting entities allocate transaction price various performance obligations contract recognize revenues performance obligations satisfied asu 201409 effective annual periods beginning december 15 2016 interim periods within period early adoption permitted company currently evaluating potential impact method adoption asu 201409 consolidated financial statements 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs observable inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities company’s financial assets liabilities december 31 2014 2013 measured fair value recurring basis follows thousands 1 fair value company’s derivative instruments estimated using market data gathered third party financial institution adjusted market credit risks applicable company estimated fair value company’s financial assets liabilities december 31 2014 2013 follows thousands carrying values cash equivalents receivables accounts payable approximate fair value fair value company’s longterm debt estimated using discounted cash flow analysis based estimated current rates similar types arrangements considerable judgment required developing certain fair value estimates accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange 3 derivative instruments 2011 company entered two interest rate swap agreements maturing 2015 call company pay fixed interest rates 129 176 aggregate notional value 275 million receive variable interest rate based london interbank offered rate “libor” notional values general purpose interest rate swap agreements provide protection increases interest rates might lead higher interest costs company fair value derivative instruments december 31 2014 2013 liabilities 03 million 06 million respectively company recognized gains 03 million 04 million losses 05 million derivative instruments year ended december 31 2014 2013 2012 respectively included derivative losses net consolidated statements operations time company enters forward exchange option contracts hedge foreign currency payment commitments anticipated transaction exposures derivatives recognized assets liabilities marked fair value period company use financial instruments trading speculative purposes none company’s derivative instruments contain creditriskrelated contingent features counterparties derivative contracts high credit quality financial institutions company entered forward contracts 2014 mitigate exposure exchange rate fluctuations eurodenominated helicopter purchase commitments company designated contracts hedges accounting purposes company recorded unrealized loss 08 million derivative instruments year ended december 31 2014 losses included derivative losses net consolidated statements operations time settlement forward contract realized gains losses recorded foreign currency gains losses net consolidated statements operations 4 acquisitions dispositions company’s capital expenditures 1067 million 1101 million 1130 million 2014 2013 2012 respectively consisted primarily helicopter acquisitions deposits future helicopter deliveries company records helicopter acquisitions property equipment places helicopters service completion work finalized helicopters ready use company sold otherwise disposed property equipment 71 million 652 million 52 million 2014 2013 2012 respectively summary changes owned helicopter fleet years ended december 31 2014 2013 2012 follows 1 includes two lighttwin helicopters one medium helicopter previously leasedin 2 includes three lightsingle helicopters one medium helicopter previously leasedin 3 excludes two lighttwin helicopters removed service includes one lightsingle helicopter previously removed service 5 variable interest entities equity investments advances equity investments advances december 31 2014 2013 follows thousands 1 investment impaired 2012 2 consolidated entity september 30 2012 vie company primary beneficiary 3 company owned 51 financial interest lake palma however consolidate controlled 50 venture’s voting rights effective july 24 2014 company sold interest lake palma joint venture partner see discussion combined condensed financial statements summarized financial information company’s equity investments advances dart december 31 2014 2013 years ended december 31 2014 2013 2012 follows thousands summarized financial information company’s equity investments advances investees december 31 2014 2013 years ended december 31 2014 2013 2012 follows thousands december 31 2014 2013 cumulative unfunded net losses equity investees included company’s consolidated retained earnings 29 million 46 million respectively vies aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company partner also loaned aeróleo 60 million interest rate 60 per annum response accident involving aw139 helicopter contract petroleo brasileiro sa “petrobras brazil” one aeróleos competitors petrobras brazil canceled award aeróleo contract four aw139 helicopters dryleased mobilized company notification award august 2011 result four aw139 helicopters idle august 2011 late november 2012 resulting liquidity issues required company partner make additional capital contributions aeróleo enable continue operations petrobras brazil also contracts aeróleo three ec225 helicopters aeróleo dryleases company following suspension use ec225 helicopters late october 2012 petrobras brazil attempted unilaterally suspend ec225 helicopter contracts aeróleo duration global suspension ec225 helicopter alleging helicopter could meet terms contract aeróleo receive monthly payments ec225 helicopters contract petrobras brazil april late september october 2013 commenced generating hourly flight revenues thereafter upon resumption aeróleo’s ec225 helicopters flight operations petrobras brazil result events aeróleo experienced liquidity issues sufficient equity finance activities without additional financial support making vie company determined primary beneficiary 20 voting interest allow direct activities significantly affect aeróleo’s economic performance march 1 2012 response liquidity issues company recorded impairment charge 59 million net tax equity investments advances aeróleo company leases 11 helicopters aeróleo years ended december 31 2014 2013 2012 company recognized 167 million 162 million 176 million respectively operating revenues leases 310 million 210 million outstanding december 31 2014 2013 respectively see note 1 era brazil july 1 2011 company partner contributed 48 million cash era brazil 5050 joint venture era brazil immediately acquired helicopter subject lease aeróleo company 115 million 95 million cash 20 million note payable year ended december 31 2012 company loaned 108 million era brazil secured helicopter purchased company 2011 era brazil’s ownership interests upon receipt proceeds loan era brazil repaid outstanding principal amount 16 million remaining original helicopter acquisition note due company loaned 92 million aeróleo form two notes equal amount era brazil distributed two notes due aeróleo members result transactions era brazil highly leveraged entity outstanding debt due company making vie primary beneficiary company consolidated era brazil financial statements effective september 30 2012 joint ventures dart era dhs llc wholly owned subsidiary company acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 50 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart exchange 50 economic voting interest dart note receivable 51 million note receivable bears interest rate 40 per annum requires quarterly principal interest payments matures july 31 2023 years ended december 31 2014 2013 2012 company purchased 36 million 29 million 17 million respectively products dart helicopters dart era training center era training center llc “era training center” operates flight training devices provides training services company thirdparty customers years ended december 31 2014 2013 2012 company provided helicopter management services joint venture totaling 04 million 04 million 05 million respectively incurred 07 million 07 million 08 million simulator fees joint venture 2014 2013 2012 respectively era training center 47 million note company secured two flight simulators bears interest 60 per annum requires quarterly payments 01 million january 2026 lake palma lake palma operated seven helicopters spain company received advances 12 million 2012 receive advances 2013 2014 effective july 24 2014 company sold 51 interest lake palma joint venture partner fumigacion aerea andaluza sa “faasa” purchase price 93 million recognized gain 15 million equity earnings net taxes connection transaction company assigned debt obligations 29 million due lake palma faasa balance purchase price funded cash 6 escrow deposits time company enters qualified exchange accommodation agreements third party meet likekind exchange requirements section 1031 internal revenue code 1986 amended “code” provisions revenue procedure 200037 accordance provisions company permitted deposit proceeds sale assets escrow accounts purpose acquiring assets qualifying temporary deferral taxable gains realized consequently company establishes escrow accounts financial institutions deposit funds received sale equipment designated replacement property within specified period time december 31 2014 2013 deposits likekind exchange escrow accounts march 2014 may 2014 company sold two b212 medium helicopters cash proceeds totaling 64 million net fees sales transactions treated taxfree likekind exchanges tax purposes section 1031 code whereby proceeds held qualified intermediary qualified assets delivered qualifying property identified march 2014 sale prior expiration required 45day period subsequent closing date result proceeds 30 million returned company sale treated taxable event company identified qualifying property may 2014 sale within required 45day period subsequent closing date likekind exchange completed prior expiration required 180day period subsequent closing date 7 income taxes components income tax expense benefit years ended december 31 2014 2013 2012 follows thousands following table reconciles difference statutory federal income tax rate company effective income tax rate years ended december 31 2014 2013 2012 components net deferred income tax liabilities december 31 2014 2013 follows thousands december 31 2014 2013 company state income tax net operating loss nol carryforwards 1170 million 1162 million respectively various states expire 2020 2033 december 31 2014 2013 company deferred tax assets 69 million related state nol carryforwards company believes likely benefit state nol carryover realized recognition risk company provided valuation allowance 08 million december 31 2014 deferred tax assets relating nol carry forwards assumptions change company determines able realize nols tax benefits relating reversal valuation allowance deferred tax assets would recorded income tax provision period adjustments identified december 31 2014 2013 company unrecognized tax benefits company incur interest penalties accrue interest years ended december 31 2014 2013 2012 8 longterm debt company’s borrowings december 31 2014 2013 follows thousands company’s scheduled longterm debt maturities december 31 2014 follows thousands 7750 senior notes december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million interest 7750 senior notes payable semiannually arrears june 15 december 15 year 7750 senior notes may redeemed time december 15 2017 applicable redemption prices set forth indenture governing 7750 senior notes plus accrued unpaid interest redemption date prior december 15 2017 era group may also redeem 7750 senior notes whole part redemption price based “makewhole” premium plus accrued unpaid interest redemption date addition time prior december 15 2015 era group may redeem 35 7750 senior notes redemption price equal 107750 principal amount plus accrued unpaid interest redemption date using proceeds certain equity offerings indenture contains covenants restrict era group’s ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries’ ability pay dividends consolidate merge sell substantially assets addition upon specified change control trigger event specified asset sales era group may required offer repurchase 7750 senior notes era group’s payment obligations 7750 senior notes fully unconditionally guaranteed wholly owned existing us subsidiaries guarantors amended restated senior secured revolving credit facility “revolving credit facility” net proceeds offering used repay 1900 million borrowings outstanding company’s prior 2000 million senior secured revolving credit facility “prior credit facility” revolving credit facility march 31 2014 era group entered revolving credit facility amendment prior credit facility revolving credit facility provides company ability borrow 3000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions increase total commitments 1000 million availability revolving credit facility may limited terms 7750 senior notes advances revolving credit facility closing used refinance indebtedness incurred prior credit facility revolving credit facility matures march 2019 borrowings revolving credit facility bear interest rate per annum equal era group’s election either base rate libor defined plus applicable margin applicable margin based company’s ratio funded debt ebitda defined ranges 75 200 basis points base rate margin 175 300 basis points libor margin applicable margin december 31 2014 100 basis points “base rate” margin 200 basis points libor margin addition era group required pay quarterly commitment fee based average unfunded portion committed amount rate based company’s ratio funded debt ebitda defined ranges 375 50 basis points december 31 2014 commitment fee 375 basis points obligations revolving credit facility secured portion company’s helicopter fleet tangible intangible assets guaranteed era group’s wholly owned us subsidiaries revolving credit facility contains various restrictive covenants including interest coverage funded debt ebitda fair market value mortgaged helicopters plus accounts receivable inventory funded debt well customary covenants including certain restrictions company’s ability enter certain transactions including could result incurrence additional indebtedness liens making loans guarantees investments sales assets payments dividends repurchases capital stock entering transactions affiliates december 31 2014 era group 850 million outstanding borrowings revolving credit facility remaining availability 2143 million net issued letters credit 07 million connection amendment revolving credit facility era group incurred debt issuance costs 24 million costs included assets consolidated balance sheets amortized interest expense consolidated statements operations life revolving credit facility promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter note secured helicopter bears interest rate threemonth libor rate plus 260 basis points interest rate resets quarterly december 31 2014 285 note requires monthly principal interest payments 02 million final payment 190 million due december 2015 november 24 2010 company entered promissory note 117 million purchase medium helicopter note secured helicopter bears interest threemonth libor rate plus 260 basis points interest rate resets quarterly december 31 2014 283 note requires monthly principal interest payments 01 million final payment 59 million due december 2015 9 series preferred stock july 2011 company’s board directors adopted company’s amended restated certificate incorporation authorize issuance 10000000 shares 001 par value preferred stock one series fix preferences powers relative participating optional special rights qualifications limitations restrictions thereof including dividend rate conversion rights voting rights redemption rights liquidation preference fix number shares included series without vote action stockholders preferred stock issued may rank senior company’s common stock respect payment dividends amounts upon liquidation dissolution winding addition shares preferred stock may class series voting rights december 23 2011 company’s board directors designated 1400000 shares preferred stock series preferred stock issued seacor exchange 1400 million advances seacor stated value per share series preferred stock 100 “series original issue price” shares series preferred stock redeemable option company whole part series original issue price plus accrued unpaid dividends series preferred stock seacor controlled redemption series preferred stock control company classified series preferred stock outside stockholders equity january 31 2013 part recapitalization seacor exchanged 1400000 shares series preferred stock represented company’s series preferred stock outstanding shares newlyissued era group common stock 10 series b preferred stock june 8 2012 companys board directors designated 300000 shares series b preferred stock september 25 2012 designated additional 700000 shares series b preferred stock issued seacor exchange 1000 million proceeds used reduce outstanding borrowings prior credit facility stated value per share series b preferred stock 100 “series b original issue price” shares series b preferred stock redeemable option company whole part series b original issue price december 18 2012 company entered agreement seacor pursuant seacor transferred company 500000 shares series b preferred stock 500 million liquidation value seacor held partial satisfaction benefit seacor receive applying us federal net operation losses generated company 2012 addition agreement called settlement cash remaining 500000 shares series b preferred stock held seacor purchase price 500 million december 20 2012 company borrowed 500 million prior credit facility fund repurchase remaining 500000 shares series b preferred stock 11 common stock july 2011 company’s board directors adopted company’s amended restated certificate incorporation authorize issuance 60000000 shares 001 par value class common stock 60000000 shares 001 par value class b common stock effective august 1 2011 issued share company’s par value common stock exchanged 24500 shares class b common stock rights holders class b common shares substantially identical except respect voting conversion specifically holders class b common stock entitled eight votes per share holders class common stock entitled one vote per share shares class b common stock convertible class common stock holder’s option ii automatically upon transfer shares class b common stock person seacor subsidiary seacor except case taxfree spinoff stockholders seacor aggregate number shares class b common stock beneficially owned seacor affiliates fell 20 aggregate number shares common stock outstanding except case taxfree spinoff stockholders seacor addition seacor effect taxfree spinoff following taxfree spinoff outstanding shares class b common stock may converted shares class common stock consent majority holders class common stock holders class b common stock voting separate classes january 31 2013 part recapitalization outstanding shares class b common stock exchanged newly issued common stock see note 1 12 earnings per share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant conversion outstanding series preferred stock common shares issued pursuant exercise outstanding stock options computations basic diluted earnings per common share years ended december 31 2014 2013 2012 follows thousands except share per share data 1 excludes net income attributable participating unvested restricted common shares 207 175 years ended december 31 2014 2013 respectively share awards existed 2012 2 excludes weighted average common shares 0 753535 7679623 years ended december 31 2014 2013 2012 respectively issuable upon conversion series preferred stock effect inclusion computation would antidilutive see note 9 3 excludes weighted average common shares 35260 7973 years ended december 31 2014 2013 respectively certain share awards effect inclusion would antidilutive share awards existed 2012 13 sharebased compensation share incentive plans 2013 company adopted era group inc 2012 incentive plan “2012 plan” maximum 4000000 shares company’s common stock reserved issuance awards granted 2012 plan may form stock options stock appreciation rights shares restricted stock sharebased awards payable cash common stock performance awards combination thereof may made outside directors employees consultants era group’s board directors determines award whether issue new shares company’s treasury account december 31 2014 2013 3216798 3364998 shares respectively remained available grant 2012 plan 2013 company adopted era group inc 2013 employee stock purchase plan “espp” company may offer maximum 300000 shares company’s common stock purchase eligible employees price equal 85 lesser fair market value common stock first day offering period ii fair market value common stock last day offering period common stock made available purchase espp sixmonth offering periods espp intended comply section 423 code intended subject section 401a code employee retirement income security act 1974 board directors company may amend terminate espp time however increase number shares common stock reserved issuance espp may made without stockholder approval espp term ten years december 31 2014 2013 246914 300000 shares respectively remained available issuance espp total sharebased compensation expense includes stock options restricted stock espp purchases 58 million 20 million years ended december 31 2014 2013 respectively portion restricted stock awards performancebased company assessed probability meeting criteria recorded appropriate expense december 31 2014 company approximately 42 million total unrecognized compensation costs restricted stock awards year ended december 31 2014 number shares weighted average grant price restricted stock award transactions follows years ended december 31 2014 2013 company awarded 127050 270360 shares respectively restricted stock weighted average grant date fair value 2923 2128 respectively total fair value shares vested years ended december 31 2014 2013 determined using closing price grant date 41 million 01 million respectively including 16 million related accelerated vesting shares 2014 company’s former chief executive officer stock option grants year ended december 31 2014 number shares weighted average grant date fair value weighted average exercise price stock option transactions follows years ended december 31 2014 2013 weighted average grant date fair value stock options granted 1086 959 respectively aggregate intrinsic value exercised stock options 02 million 04 million respectively december 31 2014 weighted average remaining contractual term total outstanding stock options vestedexercisable stock options 448 years 329 years respectively december 31 2014 aggregate intrinsic value total outstanding stock options vestedexercisable stock options outstanding 07 million company uses blackscholes option pricing model estimate fair value stock options following table shows assumptions used compute sharebased compensation expense stock options granted years ended december 31 2014 2013 14 related party transactions years ended december 31 2014 2013 2012 company provided less 01 million 01 million less 01 million respectively aviation services seacor flight charter arrangements years ended december 31 2014 2013 2012 company provided 03 million 01 million 01 million respectively services diamond offshore drilling inc contract oil gas driller era group’s chairman board director prior spinoff part consolidated group certain costs expenses company borne seacor charged company costs expenses included operating expenses administrative general expenses consolidated statements operations january 31 2013 conjunction spinoff company entered amended restated transition services agreement seacor subsequent january 31 2013 costs classified administrative general expenses consolidated statements operations summarized follows years ended december 31 2014 2013 2012 thousands • actual payroll costs seacor personnel assigned company charged company • prior 2013 seacor maintained selfinsured health benefit plans participating employees including company charged company share total plan costs incurred based percentage participating employees • prior 2013 seacor provided defined contribution plan participating employees including company charged company share employer matching contributions based 50 participating employees’ first 6 wages contributed plan • seacor also provides certain administrative support services company shared services arrangement including payroll processing information systems support cash disbursement support cash receipt processing treasury management seacor incurred various corporate costs connection providing certain corporate services including limited executive oversight risk management legal accounting tax charges quarterly management fees operating segments order fund corporate overhead cover costs total management fees charged seacor operating segments include actual corporate costs incurred plus markup generally allocated within consolidated group using incomebased performance metrics reported operating segment relation seacor’s operating segments december 30 2011 company seacor entered agreement seacor provide services fixed rate 20 million per annum beginning january 1 2012 costs company incurred management fees seacor reported seacor management fees company’s consolidated statements operations 15 commitments contingencies company’s unfunded capital commitments december 31 2014 consisted primarily agreements purchase helicopters totaled 2323 million 1149 million payable 2015 balance payable 2017 company also 19 million deposits paid options yet exercised company may terminate 1313 million total commitments inclusive deposits paid options yet exercised without liability liquidated damages 87 million aggregate normal course business company becomes involved various litigation matters including among things claims third parties alleged property damages personal injuries management used estimates determining company’s potential exposure matters recorded reserves financial statements related thereto appropriate possible change company’s estimates exposure could occur company expect changes estimated costs would material effect consolidated financial position results operations cash flows april 2014 company entered settlement agreement airbus helicopters formerly eurocopter division airbus group formerly european aeronautic defense space company respect extended suspension operations ec225 heavy helicopters 2012 2013 settlement agreement provides certain service product credit discounts including credits available company period four years date agreement applied support services available airbus helicopters covering spare parts repair overhaul service bulletins technical assistance services available airbus helicopters company expects able apply service credits following one two years credits recognized company’s statements operations reduction operating expenses periods utilized year ended december 31 2014 company utilized credits amount 44 million december 31 2014 company leased four helicopters certain facilities equipment leasing agreements classified operating leases financial reporting purposes related rental fees charged expense lease terms leases generally contain purchase lease renewal options rights first refusal respect sale lease equipment lease terms range duration one ten years total rental expense company’s operating leases years ended december 31 2014 2013 2012 44 million 60 million 40 million respectively company’s scheduled minimum lease payments operating leases remaining term excess one year december 31 2014 follows thousands 16 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate year ended december 31 2014 anadarko petroleum corporation “anadarko” us government accounted 26 10 respectively company’s operating revenues year ended december 31 2013 anadarko us government accounted 19 11 respectively company’s operating revenues year ended december 31 2012 anadarko us government accounted 15 11 respectively company’s operating revenues years ended december 31 2014 2013 2012 approximately 15 18 22 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived dryleasing activities following represents company’s operating revenues geographical region services provided years ended december 31 2014 2013 2012 thousands company’s longlived assets primarily property equipment employed various geographical regions world following represents company’s property equipment net accumulated depreciation based upon assets’ physical location december 31 2014 2013 thousands 17 supplemental information statements cash flows supplemental cash flow information years ended december 31 2014 2013 2012 follows thousands 18 quarterly financial information unaudited selected financial information interim quarterly periods presented thousands except per share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year 19 guarantors securities december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior notes era group’s payment obligations 7750 senior notes jointly severally guaranteed era group’s existing 100 owned us subsidiaries guarantee revolving credit facility future us subsidiaries guarantee revolving credit facility material indebtedness era group may incur future “guarantors” guarantors currently guarantee revolving credit facility guarantees guarantors full unconditional joint several era group independent assets operations subsidiaries era group guarantors minor addition significant restrictions ability era group guarantor obtain funds subsidiaries dividend loanitem 15 exhibits financial statement schedules documents filed part report 1 financial statements consolidated financial statements filed part report listed index consolidated financial statements annual report form 10k 2 financial statement schedules financial statement schedules omitted applicable required information shown consolidated financial statements notes thereto 3 exhibits incorporated herein reference indicated management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused report signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements report independent registered public accounting firm board directors stockholders era group inc audited accompanying consolidated balance sheets era group inc december 31 2015 2014 related consolidated statements operations comprehensive income changes equity cash flows three years period ended december 31 2015 financial statements responsibility companys management responsibility express opinion financial statements based audits audit 2015 consolidated financial statements dart holding company ltd corporation company 50 interest consolidated financial statements company’s investment advances dart holding company ltd stated 239 million december 31 2015 company’s equity net loss dart holding company ltd stated 16 million year ended december 31 2015 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement engaged perform audit companys internal control financial reporting audits included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness companys internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits report auditors provide reasonable basis opinion based audits report auditors financial statements referred present fairly material respects consolidated financial position era group inc december 31 2015 2014 consolidated results operations cash flows three years period ended december 31 2015 conformity us generally accepted accounting principles era group inc consolidated balance sheets thousands except share amounts accompanying notes integral part consolidated financial statements era group inc consolidated statements operations thousands except share per share data accompanying notes integral part consolidated financial statements era group inc consolidated statements comprehensive income thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements changes equity thousands 1 excludes net loss 430 attributable redeemable noncontrolling interests subsidiary accompanying notes integral part consolidated financial statements era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” consolidated subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states “us” primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers international independent major integrated oil gas companies us government agencies addition serving oil gas industry company provides air medical services utility services including support firefighting mining power line pipeline survey activities flightseeing tours alaska emergency search rescue services company operates federal aviation administration “faa” approved maintenance repair station lake charles louisiana company interest dart holding company ltd “dart” sales manufacturing organization based canada engineers manufactures distributes aftermarket helicopter parts accessories interest training center based lake charles louisiana provides instruction flight simulator training service prior january 31 2013 company wholly owned seacor holdings inc along majorityowned subsidiaries collectively referred “seacor” represented seacor’s aviation services business segment january 31 2013 seacor recapitalized company exchange class b common stock 1400 million 6 cumulative perpetual preferred stock series “series preferred stock” 19883583 shares newlyissued era group common stock par value 001 per share “recapitalization” following recapitalization company one class common stock issued outstanding preferred stock outstanding january 31 2013 seacor completed spinoff means dividend seacor’s stockholders company’s issued outstanding common stock “spinoff” company filed registration statement form 10 securities exchange commission “sec” declared effective january 15 2013 prior spinoff seacor company entered distribution agreement several agreements govern postspinoff relationship era group independent company common stock listed new york stock exchange symbol “era” basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries entities meet criteria variable interest entities “vies” company primary beneficiary significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures company reports investments accompanying consolidated balance sheets equity investments advances company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses net tax use estimates preparation financial statements conformity accounting principles generally accepted us “gaap” requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period estimates include among items related allowance doubtful accounts useful lives property equipment inventories income tax provisions impairments fair values used purchase price allocations certain accrued liabilities actual results could differ estimates differences may material reclassifications certain amounts reported prior years consolidated financial statements reclassified conform current years presentation revenue recognition company recognizes revenue realized realizable earned revenue realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenue meet criteria deferred criteria met september 30 2015 december 31 2014 deferred revenues included 421 million 310 million respectively related drylease revenues certain helicopters leased company aeróleo taxi aero sa “aeróleo” brazilian joint venture see note 5 deferral originated difficulties experienced aeróleo following one customer’s cancellation certain contract awards number aw139 medium helicopters drylease company deferral continues result financial difficulties aeróleo october 1 2015 company’s former partner aeróleo transfered 50 economic 80 voting interest third party result new shareholders’ agreement company began consolidating results aeróleo consolidated financial statements due aeróleo’s status vie company’s status primary beneficiary see explanation note 5 result future collections deferred revenues recorded revenue instead recorded settlement intercompany receivable eliminated consolidation deferred revenues related activity years ended december 31 2015 2014 2013 follows thousands company charters majority helicopters master service agreements subscription agreements daytoday charter arrangements fixedterm noncancelable contracts dryleases master service agreements subscription agreements typically require fixed monthly fee plus incremental payments based hours flown agreements fixed terms ranging one month five years generally may canceled providing 3090 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily dryleases require fixed monthly fee customer’s right use helicopter applicable charge based hours flown compensation maintenance parts andor personnel support company may provide customer dryleases generally run two five years early cancellation provisions air medical services provided contracts hospitals typically include fixed monthly hourly rate structure respect flightseeing operations company allocates block space cruise lines seats sold directly customers company also operated fixed base operation “fbo” ted stevens anchorage international airport sold fuel adhoc basis leased storage space fbo sold may 1 2015 see note 4 cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments trade receivables customers primarily major integrated independent exploration production companies hospitals international helicopter operators us government agencies customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted allowance doubtful accounts years ended december 31 2015 2014 2013 follows thousands derivative instruments company accounts derivative positions fair value accompanying consolidated balance sheets unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative losses net concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations date credit losses material company also exposed concentrations credit risk associated cash equivalents derivative instruments company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company’s two largest customers comprised 43 31 net trade receivables december 31 2015 2014 respectively inventories stated lower average cost market value consist primarily spare parts fuel following table roll forward allowance related dormant obsolete excess inventory years ended december 31 2015 2014 2013 thousands 2013 company sold inventory held third party consignment loss allowance previously provided resulted 52 million reduction allowance related inventory upon removal assets property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life company reviews estimated useful lives salvage values property equipment ongoing basis december 31 2015 estimated useful life years company’s categories new property equipment follows equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known “powerbyhour” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours powerbyhour providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining powerbyhour contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments powerbyhour provider case company records reduction operating expense receives refund company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered powerbyhour arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives company capitalized interest 61 million 47 million 11 million years ended december 31 2015 2014 2013 respectively december 31 2015 2014 construction progress component property equipment included capitalized interest 47 million 50 million respectively impairment longlived assets company performs impairment analysis longlived assets used operations indicators impairment present company’s helicopters operation evaluated impairment aggregate fleet basis carrying value assets recoverable determined estimated undiscounted cash flows carrying value assets reduced fair value generally fair value determined using valuation techniques expected discounted cash flows appraisals appropriate years ended december 31 2015 2014 2013 company recognized impairment charges impairment equity investees company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments years ended december 31 2015 2014 2013 company recognize impairment charges goodwill recorded purchase price paid acquisition exceeds fair value net identified tangible intangible assets acquired company performs annual impairment test goodwill interim tests extent indicators impairment develop annual impairment tests company tests goodwill reporting unit level company’s impairment review process compares fair value reporting unit carrying value including goodwill determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests goodwill impairment typically developed part company’s routine business planning forecasting process company believes estimates assumptions reasonable variations estimates could produce materially different results december 31 2015 company performed interim impairment test noting several events circumstances led determination likely fair value company’s reporting unit less carrying value including decline price crude oil company’s stock price prolonged downturn oil gas market company recorded goodwill impairment 19 million year ended december 31 2015 company’s estimate included use significant unobservable inputs representative level 3 measurements including assumptions related future performance described preceding paragraph company recognize goodwill impairments years ended december 31 2014 2013 intangible assets intangible assets indefinite lives recorded purchase price accounting business combination company performs annual impairment test indefinite lived intangible asses interim tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value book value determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests indefinite lived assets impairment company believes estimates assumptions reasonable variations estimates could produce materially different results intangible assets finite useful lives amortized respective estimated useful lives december 31 2015 company indefinite lived intangible assets 10 million intangible assets finite lives 02 million business combinations company recognizes certain exceptions 100 percent fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 10 million 09 million 06 million years ended december 31 2015 2014 2013 respectively included interest expense accompanying consolidated statements operations income taxes era group majorityowned us subsidiaries files standalone consolidated us federal tax return era group’s foreign consolidated subsidiaries file tax returns applicable jurisdictions deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general expense respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized foreign currency translation certain company’s equity investments advances measured using functional currency primary foreign economic environment operate investments translated us dollars currency exchange rates balance sheet dates equity earnings losses weighted average currency exchange rates applicable reporting periods translation adjustments reported comprehensive income accompanying consolidated statements comprehensive income foreign currency transactions time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant conversion outstanding series preferred stock common shares issued pursuant exercise outstanding stock options savings plan company provides defined contribution plan “savings plan” eligible usbased employees savings plan provides qualified nonelective company contributions amount equal 3 employee’s eligible pay plus amount equal 100 employee’s first 3 wages invested savings plan immediate full vesting company’s contributions savings plan subject annual review board directors era group company’s savings plan costs 32 million 36 million year ended december 31 2015 2014 respectively prior amendment effective january 1 2014 company’s contribution savings plan limited 50 employee’s first 6 wages invested savings plan company’s savings plan costs 11 million year ended december 31 2013 recent accounting pronouncements may 2014 financial accounting standards board “fasb” issued accounting standards update “asu” 201409 revenue contracts customers base revenue recognition contract vendor customer require reporting entities allocate transaction price various performance obligations contract recognize revenues performance obligations satisfied asu 201409 effective annual periods beginning december 15 2017 interim periods within period early adoption permitted annual reporting periods beginning december 15 2016 interim periods within period company currently evaluating potential impact method adoption asu 201409 consolidated financial statements august 2014 fasb issued asu201415 presentation financial statements going concern determining disclose goingconcern uncertainties financial statements new standard requires management perform interim annual assessments entity’s ability continue going concern within year date financial statements issued standard applies entities effective annual interim periods beginning december 15 2016 early adoption permitted evaluating effect standard financial statements related disclosures february 2015 fasb issued asu 201502 consolidation amends guidance evaluating whether certain entities consolidated particularly general partner limited partner relationships vies fee arrangements related party relationships reporting entity asu 201502 effective annual reporting periods beginning december 15 2015 interim periods within period early adoption permitted beginning interim annual reporting period company adopted asu 201502 believes adoption material impact consolidated financial statements april 2015 fasb issued asu 201503 interest imputation interest requires debt issuance costs related recognized debt liability presented balance sheet direct reduction carrying amount liability recognition measurement guidance debt issuance costs affected asu 201503 effective annual reporting periods beginning december 15 2015 interim periods within period early adoption permitted beginning interim annual reporting period august 2015 fasb issued asu 201515 interest imputation interest amends asu 201503 allow issuers continue recognize debt issuance costs related lineofcredit arrangements asset amortize asset term credit agreement company adopted asu 201503 asu 201515 december 31 2015 december 31 2014 company debt issuance costs 27 million 40 million respectively exclusive debt issuance costs associated revolving credit facility costs included assets consolidated balance sheets company believes adoption asu 201503 would reduce assets longterm debt amounts july 2015 fasb issued asu 201511 inventory intended simplify way reporting entities account inventory requiring valued lower cost net realizable value unless entity uses lastin firstout retail inventory valuation method asu 201511 effective annual reporting periods beginning december 15 2016 interim periods within period early adoption permitted beginning interim annual reporting period company adopted asu 201511 believes adoption material impact consolidated financial statements september 2015 fasb issued asu 201516 business combinations requires adjustments provisional amounts recorded business combinations recognized reporting period identified either separately face income statement notes financial statements asu 201516 effective annual reporting periods beginning december 15 2015 interim periods within period early adoption permitted beginning interim annual reporting period company adopted asu 201516 effective july 1 2015 adoption material impact consolidated financial statements november 2015 fasb issued asu 201517 income taxes requires deferred tax assets liabilities classified noncurrent classified statement financial position asu 201517 effective annual reporting periods beginning december 15 2016 interim periods within period early adoption permitted beginning interim annual reporting period company adopted asu 201517 effective october 1 2015 using prospective method december 31 2014 company deferred tax assets 20 million classified current assets consolidated balance sheets february 2016 fasb issued asu 201602 leases amends existing accounting standards lease accounting including requiring lessees recognize leases balance sheets making targeted changes lessor accounting asu 201602 effective annual reporting periods beginning december 15 2018 early adoption permitted standard’s issuance date asu201602 requires modified retrospective transition approach leases existing entered date initial application option use certain transition relief company adopted asu 201602 believes adoption material impact consolidated financial statements 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs observable inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities company’s financial assets liabilities december 31 2015 2014 measured fair value recurring basis follows thousands 1 fair value company’s derivative instruments estimated using market data gathered third party financial institution adjusted market credit risks applicable company estimated fair value company’s financial assets liabilities december 31 2015 2014 follows thousands carrying values cash equivalents receivables accounts payable approximate fair value fair value company’s longterm debt estimated using discounted cash flow analysis based estimated current rates similar types arrangements considerable judgment required developing certain fair value estimates accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange 3 derivative instruments 2011 company entered two interest rate swap agreements calling company pay fixed interest rates 129 176 aggregate notional value equal balance promissory notes see note 8 receive variable interest rate based london interbank offered rate “libor” notional values interest rate swaps matured december 2015 renewed fair value derivative instruments december 31 2014 liability 03 million company recognized gains less 01 million 03 million 04 million derivative instruments year ended december 31 2015 2014 2013 respectively included derivative losses net consolidated statements operations time company enters forward exchange option contracts hedge foreign currency payment commitments anticipated transaction exposures derivatives recognized assets liabilities marked fair value period company use financial instruments trading speculative purposes none company’s derivative instruments contain creditriskrelated contingent features counterparties derivative contracts high credit quality financial institutions company entered forward contracts 2014 mitigate exposure exchange rate fluctuations eurodenominated helicopter purchase commitments company designate contracts hedges accounting purposes company recorded loss 03 million derivative instruments year ended december 31 2015 losses recorded foreign currency gains losses net consolidated statements operations company recorded unrealized loss 08 million derivative instruments year ended december 31 2014 losses recorded derivative losses net consolidated statements operations company open forward contracts december 31 2015 4 acquisitions dispositions sicher helicopters sas “sicher” april 9 2015 company contributed 32 million cash 75 interest hauser investments limited “hauser” owns 100 sicher colombian entity connection acquisition company also transferred title aw139 helicopter hauser used sicher’s operations company recorded identifiable assets acquired liabilities assumed estimated acquisition date fair value accordance accounting standards codification “asc” 805 business combinations acquisition represent material business combination asc 805 acquisition 75 interest hauser resulted recognition goodwill 15 million intangible assets comprised primarily colombian air operator certificate 10 million fair value noncontrolling interest determined using discounted cash flow analysis initial accounting acquisition complete company still evaluating certain information used estimate fair values recorded including valuations tangible assets intangible assets deferred income taxes noncontrolling interest noncontrolling interest partner right put interest company right call partner’s 25 ownership interest upon occurrence certain events fair value time exercise determined independent accounting firm result put right noncontrolling interest related hauser recorded mezzanine section consolidated balance sheets meet definition liability equity us gaap aeróleo october 1 2015 company’s partner aeróleo transfered 50 economic 80 voting interest aeróleo third party see note 5 resulting consolidation aeróleo accounted business acquisition accordance asc 805 connection transfer company entered shareholders agreement new partner includes among things putcall option arrangement gives company right purchase time new partner right put company two years new partner’s interest aeróleo company recorded identifiable assets acquired liabilities assumed estimated acquisition date fair value accordance asc 805 business combinations consolidation resulted immaterial gain consolidation initial accounting acquisition complete company still evaluating certain information used estimate fair values recorded including valuations tangible assets liabilities related taxes table presents fair value aeróleo’s identifiable assets acquired liabilities assumed october 1 2015 unaudited thousands consolidated balance sheet december 312015 includes assets aeróleo totaling 179 million may restrictions used settle obligations era group whollyowned subsidiaries addition consolidated balance sheets include liabilities 159 million creditors may recourse era group whollyowned subsidiaries consolidated statements operations year ended december 31 2015 include operating revenues 134 million net loss 15 million result consolidation aeróleo including effects intercompany eliminations beginning date consolidation table represents company’s pro forma results operations assuming consolidation aeróleo took place january 1 2014 unaudited thousands part transaction company acquired remaining 50 ownership interest era brazil single purpose entity owns one aw139 helicopter leased aeróleo era brazil whollyowned subsidiary fixed base operations “fbo” may 1 2015 company sold fbo business ted stevens anchorage international airport piedmont hawthorne aviation llc pursuant membership interests purchase agreement piedmont hawthorne aviation llc acquired 100 era group’s whollyowned subsidiary era fbo llc cash proceeds 143 million company recognized pretax gain 129 million sale capital expenditures company’s capital expenditures 601 million 1067 million 1101 million 2015 2014 2013 respectively consisted primarily helicopter acquisitions deposits future helicopter deliveries company records helicopter acquisitions property equipment places helicopters service completion work finalized helicopters ready use company sold otherwise disposed property equipment cash proceeds 253 million 71 million 652 million 2015 2014 2013 respectively summary changes owned helicopter fleet years ended december 31 2015 2014 2013 follows 1 includes three lighttwin helicopters one single engine helicopter acquired connection acquisition hauser 2 includes two lighttwin helicopters one medium helicopter previously leasedin 1 includes two single engine helicopters disposed salestype leases 5 variable interest entities equity investments advances equity investments advances december 31 2015 2014 follows thousands company owns 50 interest aeróleo vie company impaired investment aeróleo 2012 carrying amount december 31 2015 2014 0 pursuant new shareholders’ agreement entered october 1 2015 see note 4 company primary beneficiary aeróleo consolidated entity company also owned 50 interest era brazil vie prior october 1 2015 primary beneficiary company consolidating entity since september 30 2012 october 1 2015 company acquired remaining 50 interest era brazil whollyowned subsidiary combined condensed financial statements summarized financial information company’s equity investments advances dart december 31 2015 2014 years ended december 31 2015 2014 2013 follows thousands summarized financial information company’s equity investments advances investees december 31 2015 2014 years ended december 31 2015 2014 2013 follows thousands december 31 2015 2014 cumulative undistributed net earnings equity investees included company’s consolidated retained earnings 01 million 22 million respectively vies aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company partner also loaned aeróleo 60 million interest rate 60 per annum october 1 2015 company’s partner completed transfer 50 economic 80 voting interest aeróleo third party connection transfer company entered shareholders agreement new partner requires supermajority shareholder andor board approval respect specified significant actions putcall option arrangement gives company right purchase time new partner right put company two years new partner’s interest aeróleo response accident involving aw139 helicopter contract petroleo brasileiro sa “petrobras brazil” one aeróleos competitors petrobras brazil canceled award aeróleo contract four aw139 helicopters mobilized company notification award august 2011 result four aw139 helicopters idle august 2011 late november 2012 resulting liquidity issues required company partner make additional capital contributions aeróleo enable continue operations following suspension use h225 helicopters late october 2012 petrobras brazil attempted unilaterally suspend h225 helicopter contracts aeróleo duration global suspension h225 helicopter alleging helicopter could meet terms contract aeróleo receive monthly payments h225 helicopters contract petrobras brazil april late september october 2013 commenced generating hourly flight revenues thereafter upon resumption aeróleo’s h225 helicopters flight operations petrobras brazil aeróleo’s liquidity issues resulting contract suspensions make unable adequately finance activities without additional financial support making aeróleo vie prior october 1 2015 company determined primary beneficiary 20 voting interest allow direct activities significantly affect aeróleo’s economic performance result new shareholders agreement following partner’s transfer interests company determined control activities significantly affect aeróleo’s economic performance vie’s primary beneficiary accordingly aeróleo’s results consolidated company’s financial statements beginning october 1 2015 years ended december 31 2015 2014 2013 company recognized 214 million 167 million 162 million respectively operating revenues aeróleo 421 million 310 million outstanding september 30 2015 december 31 2014 respectively see note 1 era brazil july 1 2011 company partner contributed 48 million cash era brazil 5050 joint venture era brazil immediately acquired helicopter subject lease aeróleo company 115 million 95 million cash 20 million note payable 2012 company loaned 108 million era brazil secured helicopter purchased company 2011 era brazil’s ownership interests upon receipt proceeds loan era brazil repaid outstanding principal amount 16 million remaining original helicopter acquisition note due company loaned 92 million aeróleo form two notes equal amount era brazil distributed two notes due aeróleo members result transactions era brazil highly leveraged entity outstanding debt due company making vie primary beneficiary company consolidated era brazil financial statements effective september 30 2012 connection aeróleo transaction october 1 2015 company acquired nominal consideration remaining 50 ownership interest era brazil making whollyowned subsidiary joint ventures dart era dhs llc wholly owned subsidiary company acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 50 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart holding company ltd “dart” exchange 50 economic voting interest dart note receivable 51 million note receivable balance 36 million december 31 2015 bears interest rate 40 per annum requires quarterly principal interest payments matures july 31 2023 years ended december 31 2015 2014 2013 company purchased 21 million 36 million 29 million respectively products dart helicopters dart era training center era training center llc “era training center” operates flight training devices provides training services company thirdparty customers years ended december 31 2015 2014 2013 company provided helicopter management services joint venture totaling 04 million 04 million 04 million respectively incurred 05 million 07 million 07 million respectively simulator fees era training center 44 million note company secured two flight simulators bears interest 60 per annum requires quarterly payments 01 million january 2026 lake palma lake palma operated seven helicopters spain effective july 24 2014 company sold 51 interest lake palma joint venture partner fumigacion aerea andaluza sa “faasa” purchase price 93 million recognized gain 15 million equity earnings net taxes connection transaction company assigned debt obligations 29 million due lake palma faasa balance purchase price funded cash 6 escrow deposits time company enters qualified exchange accommodation agreements third party meet likekind exchange requirements section 1031 internal revenue code 1986 amended “code” provisions revenue procedure 200037 accordance provisions company permitted deposit proceeds sale assets escrow accounts purpose acquiring assets qualifying temporary deferral taxable gains realized consequently company establishes escrow accounts financial institutions deposit funds received sale equipment designated replacement property within specified period time december 31 2015 2014 deposits likekind exchange escrow accounts year ended december 31 2015 company sold one ec135 light twin helicopter cash proceeds 28 million net fees sale transaction treated taxfree likekind exchange proceeds deposited qualified intermediary held qualifying asset delivered company unable purchase qualifying asset prior expiration 180day period subsequent closing date sale result proceeds 28 million returned company sale treated taxable event also 2015 company transferred title one aw139 helicopter hauser connection acquisition hauser see note 4 transfer also treated tax free likekind exchange whereby hauser deposited 118 million escrow account qualified intermediary benefit company used proceeds purchase s92 heavy helicopter december 2015 year ended december 31 2014 company sold two b212 medium helicopters cash proceeds totaling 64 million net fees deposited proceeds qualified intermediary qualifying property identified first sale prior expiration required 45day period subsequent closing date result proceeds 30 million returned company sale treated taxable event company identified qualifying property second sale within required 45day period subsequent closing date likekind exchange completed prior expiration required 180day period subsequent closing date 7 income taxes financial reporting purposes income loss income taxes equity earnings years ended december 31 2015 2014 2013 follows thousands components income tax expense benefit years ended december 31 2015 2014 2013 follows thousands following table reconciles difference statutory federal income tax rate company effective income tax rate years ended december 31 2015 2014 2013 components net deferred income tax liabilities december 31 2015 2014 follows thousands december 31 2015 2014 company state income tax net operating loss nol carryforwards 1252 million 1170 million respectively various states 343 million 176 million foreign jurisdictions state nol carryforwards expire 2019 2035 foreign nol carryforwards unlimited carryforward periods considering available evidence assessing need valuation allowance company believes likely benefit foreign state deferred tax assets realized december 312015 company provided valuation allowance 12 million state deferred tax assets company provided valuation allowance 114 million respect foreign deferred tax assets 112 million relates aeróleo included company’s deferred rollforward table assumptions change company determines able realize deferred tax assets tax benefits relating reversal valuation allowance deferred tax assets would recorded income tax provision period adjustments identified company’s operations subject jurisdiction multiple tax authorities impose various types taxes including income taxes determining taxes owed jurisdiction requires interpretation relevant tax laws regulations judicial decisions administrative interpretation local tax authority result company subject tax assessments jurisdictions including redetermination taxable amounts tax authorities may agree company’s interpretations positions taken effects tax position recognized period determined likely tax position sustained upon examination including resolution related appeals litigation processes based technical merits position remain subject examination us federal major state tax jurisdictions tax years 2013 brazil 2011 subsequent years pursuant new shareholders’ agreement entered october 1 2015 company’s new partner aeróleo see note 4 company primary beneficiary aeróleo consolidated entity company analyzed filing positions aeróleo brazil required file income tax returns open tax years 2011 2015 reconcilication beginning ending amount gross unrecognized tax benefits excluding interest penalties follows thousands amounts accrued interest penalties associated unrecognzied income tax benefits included expense consolidated statements operations december 31 2015 gross amount liability accrued interest penalties related unrecognized tax benefits 06 million company currently aware material amounts included unrecognized tax benefits december 31 2015 recognized would impact company’s future effective income tax rate amounts could change next twelve months anticipate material impact financial statements 8 longterm debt company’s borrowings december 31 2015 2014 follows thousands company’s scheduled longterm debt maturities december 31 2015 follows thousands 7750 senior notes december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million interest 7750 senior notes payable semiannually arrears june 15 december 15 year 7750 senior notes may redeemed time december 15 2017 applicable redemption prices set forth indenture governing 7750 senior notes plus accrued unpaid interest redemption date prior december 15 2017 era group may also redeem 7750 senior notes whole part redemption price based “makewhole” premium plus accrued unpaid interest redemption date indenture contains covenants restrict era group’s ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries’ ability pay dividends consolidate merge sell substantially assets addition upon specified change control trigger event specified asset sale era group may required offer repurchase 7750 senior notes era group’s payment obligations 7750 senior notes fully unconditionally guaranteed wholly owned existing us subsidiaries guarantors amended restated senior secured revolving credit facility “revolving credit facility” net proceeds offering used repay 1900 million borrowings outstanding company’s prior 2000 million senior secured revolving credit facility “prior credit facility” year ended december 31 2015 company repurchased total 502 million 7750 senior notes prices ranging 7900 9750 total cash 479 million including accrued interest 10 million company recognized net gains 16 million repurchases revolving credit facility march 31 2014 era group entered revolving credit facility amendment prior credit facility revolving credit facility provides company ability borrow 3000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million availability revolving credit facility may limited terms 7750 senior notes advances revolving credit facility closing used refinance indebtedness incurred prior credit facility revolving credit facility matures march 2019 borrowings revolving credit facility bear interest rate per annum equal era group’s election either base rate libor defined plus applicable margin applicable margin based company’s ratio funded debt ebitda defined ranges 75 200 basis points base rate margin 175 300 basis points libor margin applicable margin december 31 2015 125 basis points “base rate” margin 225 basis points libor margin addition era group required pay quarterly commitment fee based average unfunded portion committed amount rate based company’s ratio funded debt ebitda defined ranges 375 50 basis points december 31 2015 commitment fee 50 basis points obligations revolving credit facility secured portion company’s helicopter fleet tangible assets guaranteed era group’s wholly owned us subsidiaries revolving credit facility contains various restrictive covenants including interest coverage funded debt ebitda fair market value mortgaged helicopters plus accounts receivable inventory funded debt well customary covenants including certain restrictions company’s ability enter certain transactions including could result incurrence additional indebtedness liens making loans guarantees investments sales assets payments dividends repurchases capital stock entering transactions affiliates december 31 2015 era group 900 million outstanding borrowings revolving credit facility remaining availability 2071 million net issued letters credit 29 million availability revolving credit facility subject company’s agreement pledge assets collateral order maintain compliance financial ratios discussed connection amendment revolving credit facility era group incurred debt issuance costs 24 million costs included assets consolidated balance sheets amortized interest expense consolidated statements operations life revolving credit facility promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2015 221 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2015 206 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 connection refinancing company paid total 01 million debt issuance costs aeróleo debt connection transfer partnership interests discussed note 5 company’s former partner assigned two existing notes receivable aeróleo totaling 83 million company’s new partner notes bear interest 6 per annum call 60 equal monthly payments principal accrued interest totaling 02 million beginning october 1 2016 addition october 1 2015 aeróleo existing loan third party balance 14 million note payable brazilian reals bears interest rate 190 per annum calls equal monthly payments principal interest last payment due september 2016 9 series preferred stock july 2011 company’s board directors adopted company’s amended restated certificate incorporation authorize issuance 10000000 shares 001 par value preferred stock one series fix preferences powers relative participating optional special rights qualifications limitations restrictions thereof including dividend rate conversion rights voting rights redemption rights liquidation preference fix number shares included series without vote action stockholders preferred stock issued may rank senior company’s common stock respect payment dividends amounts upon liquidation dissolution winding addition shares preferred stock may class series voting rights december 23 2011 company’s board directors designated 1400000 shares preferred stock series preferred stock issued seacor exchange 1400 million advances seacor stated value per share series preferred stock 100 “series original issue price” shares series preferred stock redeemable option company whole part series original issue price plus accrued unpaid dividends series preferred stock seacor controlled redemption series preferred stock control company classified series preferred stock outside stockholders equity january 31 2013 part recapitalization seacor exchanged 1400000 shares series preferred stock represented company’s series preferred stock outstanding shares newlyissued era group common stock 10 common stock july 2011 company’s board directors adopted company’s amended restated certificate incorporation authorize issuance 60000000 shares 001 par value class common stock 60000000 shares 001 par value class b common stock effective august 1 2011 issued share company’s par value common stock exchanged 24500 shares class b common stock rights holders class b common shares substantially identical except respect voting conversion specifically holders class b common stock entitled eight votes per share holders class common stock entitled one vote per share shares class b common stock convertible class common stock holder’s option ii automatically upon transfer shares class b common stock person seacor subsidiary seacor except case taxfree spinoff stockholders seacor aggregate number shares class b common stock beneficially owned seacor affiliates fell 20 aggregate number shares common stock outstanding except case taxfree spinoff stockholders seacor addition seacor effect taxfree spinoff following taxfree spinoff outstanding shares class b common stock may converted shares class common stock consent majority holders class common stock holders class b common stock voting separate classes january 31 2013 part recapitalization outstanding shares class b common stock exchanged newly issued common stock see note 1 11 earnings per share basic earnings per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant conversion outstanding series preferred stock common shares issued pursuant exercise outstanding stock options computations basic diluted earnings per common share years ended december 31 2015 2014 2013 follows thousands except share per share data 1 excludes net income 121 207 175 attributable unvested common shares years ended december 31 2015 2014 2013 respectively 2 excludes weighted average common shares 0 753535 years ended december 31 2015 2014 2013 respectively issuable upon conversion series preferred stock effect inclusion computation would antidilutive see note 9 3 excludes weighted average common shares 209446 35260 7973 years ended december 31 2015 2014 2013 respectively certain share awards effect inclusion would antidilutive 12 sharebased compensation share incentive plans 2013 company adopted era group inc 2012 incentive plan “2012 plan” maximum 4000000 shares company’s common stock reserved issuance awards granted 2012 plan may form stock options stock appreciation rights shares restricted stock sharebased awards payable cash common stock performance awards combination thereof may made outside directors employees consultants era group’s board directors determines award whether issue new shares company’s treasury account december 31 2015 2014 3071335 3216798 shares respectively remained available grant 2012 plan 2013 company adopted era group inc 2013 employee stock purchase plan “espp” company may offer maximum 300000 shares company’s common stock purchase eligible employees price equal 85 lesser fair market value common stock first day offering period ii fair market value common stock last day offering period common stock made available purchase espp sixmonth offering periods espp intended comply section 423 code intended subject section 401a code employee retirement income security act 1974 board directors company may amend terminate espp time however increase number shares common stock reserved issuance espp may made without stockholder approval espp term ten years december 31 2015 2014 180641 246914 shares respectively remained available issuance espp total sharebased compensation expense includes stock options restricted stock espp purchases 37 million 58 million 20 million years ended december 31 2015 2014 2013 respectively portion restricted stock awards performancebased december 31 2015 company approximately 51 million total unrecognized compensation costs expected recognized next two years restricted stock awards year ended december 31 2015 number shares weighted average grant price restricted stock award transactions follows years ended december 31 2015 2014 2013 company awarded 193688 127050 270360 shares respectively restricted stock weighted average grant date fair value 2082 2923 2128 respectively total fair value shares vested years ended december 31 2015 2014 2013 determined using closing price grant date 19 million 41 million 01 million respectively including 16 million related accelerated vesting shares 2014 company’s former chief executive officer stock option grants year ended december 31 2015 number shares weighted average grant date fair value weighted average exercise price stock option transactions follows years ended december 31 2015 2014 2013 weighted average grant date fair value stock options granted 669 1086 959 respectively aggregate intrinsic value exercised stock options 0 02 million 04 million respectively december 31 2015 weighted average remaining contractual term total outstanding stock options vestedexercisable stock options 64 years 47 years respectively december 31 2015 aggregate intrinsic value total outstanding stock options vestedexercisable stock options outstanding 0 company uses blackscholes option pricing model estimate fair value stock options following table shows assumptions used compute sharebased compensation expense stock options granted years ended december 31 2015 2014 13 related party transactions years ended december 31 2015 2014 2013 company provided less 01 million less 01 million 01 million respectively aviation services seacor flight charter arrangements amounts recorded operating revenues consolidated statements operations years ended december 31 2015 2014 2013 company purchased products dart totaling 21 million 36 million 29 million respectively note receivable dart balance 36 million 40 million december 31 2015 2014 respectively purchases dart included operating expenses consolidated statements income note receivable included equity investments advances consolidated balance sheets years ended december 31 2015 2014 2013 company provided helicopter management services era training center totaling 04 million 04 million 04 million respectively incurred 05 million 07 million 07 million respectively simulator fees revenues era training center recorded operating revenues expenses incurred recorded operating expenses consolidated statements operations december 31 2015 2014 company note receivable era training center balance 44 million 47 million respectively recorded equity investments advances consolidated balance sheets prior spinoff part consolidated group certain costs expenses company borne seacor charged company costs expenses included operating expenses administrative general expenses consolidated statements operations january 31 2013 conjunction spinoff company entered amended restated transition services agreement seacor subsequent january 31 2013 termination amended restated transition services agreement june 30 2015 costs classified administrative general expenses consolidated statements operations summarized follows years ended december 31 2015 2014 2013 thousands • actual payroll costs seacor personnel assigned company charged company • seacor also provided certain administrative support services company shared services arrangement including payroll processing information systems support cash disbursement support cash receipt processing treasury management seacor incurred various corporate costs connection providing certain corporate services including limited executive oversight risk management legal accounting tax charges quarterly management fees operating segments order fund corporate overhead cover costs total management fees charged seacor operating segments include actual corporate costs incurred plus markup generally allocated within consolidated group using incomebased performance metrics reported operating segment relation seacor’s operating segments december 30 2011 company seacor entered agreement seacor provide services fixed rate 20 million per annum beginning january 1 2012 costs company incurred management fees seacor reported seacor management fees company’s consolidated statements operations 14 commitments contingencies company’s unfunded capital commitments december 31 2015 consisted primarily agreements purchase helicopters totaled 1503 million 389 million payable 2016 balance payable 2018 noncancellable portion helicopter commitments payable 2016 134 million company also 15 million deposits paid options yet exercised company may terminate 1236 million total commitments inclusive deposits paid options yet exercised without liability liquidated damages 32 million aggregate brazilian tax disputes aeróleo company’s brazilian joint venture subsidiary disputing assessments approximately 57 million taxes penalties interest levied municipal authorities rio de janeiro period 2000 2005 macae period 2001 2006 collectively “municipal assessments” aeróleo believes based interpretation tax legislation supported clarifying guidance provided supreme court respect issue 2006 ruling compliance applicable tax legislation plans defend claim vigorously administrative levels jurisdiction event municipal assessments upheld last administrative level may necessary aeróleo deposit amounts issue security pursue appeals aeróleo received final unfavorable ruling respect similar assessment levied rio de janeiro state treasury periods 1994 1998 “1998 assessments” 1998 assessments upheld without taking consideration benefit clarifying guidance issued supreme court following assertion claims company currently anticipates final resolution 1998 assessments including administrative fine penalty would material effect financial position results operations december 31 2015 possible determine outcome municipal assessments company expect would material effect business financial position results operations addition possible reasonably estimate likelihood potential amount assessments may issued subsequent periods aeróleo also disputing challenges raised brazilian tax authorities respect certain tax credits applied aeróleo 1995 2009 tax authorities seeking 17 million additional taxes interest penalties aeróleo believes based interpretation tax legislation compliance applicable tax legislation plans defend claim vigorously december 31 2015 possible determine outcome matter company expect would material effect business financial position results operations aeróleo disputing responsibility 31 million employer social security contributions required remitted one customers relating period 1995 1998 although aeróleo may deemed coresponsible remittances local regulatory regime customer’s payments aeróleo presented invoices made net specific remittances required made customer issue claim plan defend claim vigorously december 31 2015 possible determine outcome matter company expect would material effect business financial position results operations october 2015 aeróleo received written notices assessment 16 million penalties state rio de janeiro respect aeróleo’s alleged failure submit accurate documentation fully comply filing requirements respect certain valueadded taxes although aeróleo’s review allegations remains ongoing determined proposed penalties calculated based amounts containing typographical error upon correction typographical error aeróleo expects significant reduction amount proposed penalties december 31 2015 possible determine outcome matter aeróleo also disputing claims brazilian tax authorities respect federal customs taxes levied upon helicopters leased aeróleo imported brazil temporary regime subject reexport order dispute assessments pursue available legal remedies within judicial system aeróleo deposited amounts issue escrow account serves security presiding judge matter controlling release funds aeróleo believes based interpretation tax legislation well established aviation industry practice required pay taxes plans defend claim vigorously december 31 2015 possible determine outcome matter company expect would material effect business financial position results operations normal course business company becomes involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time company involved tax disputes various government agencies management used estimates determining company’s potential exposure matters recorded reserves financial statements related thereto appropriate possible change management’s estimates related exposures could occur company expect changes estimated costs would material effect business consolidated financial position results operations relates specific cases referred company currently anticipates administrative fine penalty ultimately would material effect financial position results operations aeróleo deposited 51 million escrow accounts controlled court respect certain cases described fully reserved amounts subject final determination judicial release escrow deposits estimated liabilities based company’s assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intention experience settlements april 2014 company entered settlement agreement airbus helicopters formerly eurocopter division airbus group formerly european aeronautic defense space company respect extended suspension operations h225 heavy helicopters 2012 2013 settlement agreement provides certain service product credit discounts including credits available company period four years date agreement applied support services available airbus helicopters covering spare parts repair overhaul service bulletins technical assistance services available airbus helicopters years ended december 31 2015 2014 company utilized credits amount 50 million 44 million respectively company expects able apply remaining service credits first three six months 2016 credits recognized company’s statements operations reduction operating expenses periods utilized minimum lease payments december 31 2015 company leased four helicopters certain facilities equipment leasing agreements classified operating leases financial reporting purposes related rental fees charged expense lease terms leases generally contain purchase lease renewal options rights first refusal respect sale lease equipment lease terms range duration one ten years total rental expense company’s operating leases years ended december 31 2015 2014 2013 45 million 44 million 60 million respectively company’s scheduled minimum lease payments operating leases remaining term excess one year december 31 2015 follows thousands 15 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate year ended december 31 2015 anadarko petroleum corporation “anadarko” us government accounted 27 13 respectively company’s operating revenues year ended december 31 2014 anadarko us government accounted 26 10 respectively company’s operating revenues year ended december 31 2013 anadarko us government accounted 19 11 respectively company’s operating revenues years ended december 31 2015 2014 2013 approximately 21 15 18 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived dryleasing activities oil gas operations brazil following represents company’s operating revenues geographical region services provided years ended december 31 2015 2014 2013 thousands company’s longlived assets primarily property equipment employed various geographical regions world following represents company’s property equipment net accumulated depreciation based upon assets’ physical locations december 31 2015 2014 thousands company’s brazilian operations include 268 employees representing approximately 29 company’s total workforce covered collective bargaining agreements none expire within next year disputes employees terms collective bargaining agreements could result strikes work stoppages higher labor costs conditions may material adverse effect company’s financial condition results operations 16 supplemental information statements cash flows supplemental cash flow information years ended december 31 2015 2014 2013 follows thousands 17 quarterly financial information unaudited selected financial information interim quarterly periods presented thousands except per share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year 18 guarantors securities december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior notes era group’s payment obligations 7750 senior notes jointly severally guaranteed existing 100 owned us subsidiaries guarantee revolving credit facility future us subsidiaries guarantee revolving credit facility material indebtedness era group may incur future “guarantors” guarantors currently guarantee revolving credit facility guarantees guarantors full unconditional joint several result agreement guarantors guarantee 7750 senior notes company presenting following condensed consolidating balance sheets statements operations comprehensive income cash flows era group “parent” guarantors company’s subsidiaries “nonguarantors” statements read conjunction consolidated financial statements company supplemental condensed consolidating financial information prepared pursuant rules regulations condensed financial information include disclosures included annual financial statements supplemental condensed consolidating balance sheet december 31 2015 supplemental condensed consolidating balance sheet december 31 2014 supplemental condensed consolidating statements operations year ended december 31 2015 supplemental condensed consolidating statements operations year ended december 31 2014 supplemental condensed consolidating statements operations year ended december 31 2013 supplemental condensed consolidating statements comprehensive income year ended december 31 2015 supplemental condensed consolidating statements comprehensive income year ended december 31 2014 supplemental condensed consolidating statements comprehensive income year ended december 31 2013 supplemental condensed consolidating statements cash flows year ended december 31 2015 supplemental condensed consolidating statements cash flows year ended december 31 2014 supplemental condensed consolidating statements cash flows year ended december 31 2013item 15 exhibits financial statement schedules documents filed part report 1 financial statements consolidated financial statements filed part report listed index consolidated financial statements annual report form 10k 2 financial statement schedules financial statement schedules omitted applicable required information shown consolidated financial statements notes thereto 3 exhibits incorporated herein reference indicated management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused report signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements report independent registered public accounting firm board directors stockholders era group inc audited accompanying consolidated balance sheets era group inc december 31 2016 2015 related consolidated statements operations comprehensive income changes equity cash flows three years period ended december 31 2016 financial statements responsibility companys management responsibility express opinion financial statements based audits audit 2016 2015 consolidated financial statements dart holding company ltd corporation company 50 interest consolidated financial statements company’s investment advances dart holding company ltd stated 248 million 239 million december 31 2016 2015 respectively company’s equity net income loss dart holding company ltd stated 13 million 16 million two years period ended december 31 2016 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement engaged perform audit companys internal control financial reporting audits included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness companys internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits report auditors provide reasonable basis opinion based audits report auditors financial statements referred present fairly material respects consolidated financial position era group inc december 31 2016 2015 consolidated results operations cash flows three years period ended december 31 2016 conformity us generally accepted accounting principles kpmg llp telephone 514 8402100 600 de maisonneuve blvd west fax 514 8402187 suite 1500 tour kpmg internet wwwkpmgca montréal québec h3a 0a3 canada independent auditors’ report registered public accounting firm directors dart holding company ltd audited accompanying consolidated balance sheets dart holding company ltd december 31 2016 2015 related consolidated statements income loss comprehensive income loss stockholders’ equity cash flows years twoyear period ended december 31 2016 consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audit auditors’ responsibility conducted audit accordance canadian generally accepted auditing standards accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement company required engaged perform audit internal control financial reporting audit included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures consolidated financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion kpmg llp canadian limited liability partnership member firm kpmg network independent member firms affiliated kpmg international cooperative kpmg international swiss entity kpmg canada provides services kpmg llp opinion consolidated financial statements referred present fairly material respects consolidated financial position dart holding company ltd december 31 2016 2015 consolidated results operations consolidated cash flows years twoyear period ended december 31 2016 conformity us generally accepted accounting principles kpmg llp chartered professional accountants licensed public accountants february 27 2017 montréal canada era group inc consolidated balance sheets thousands except share amounts accompanying notes integral part consolidated financial statements era group inc consolidated statements operations thousands except share per share data accompanying notes integral part consolidated financial statements era group inc consolidated statements comprehensive income thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements changes equity thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” consolidated subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states “us” primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers international independent major integrated oil gas companies us government agencies addition serving oil gas industry company provides air medical services utility services including support firefighting activities flightseeing tours alaska emergency response search rescue services company operates federal aviation administration “faa” approved maintenance repair station lake charles louisiana company interest dart holding company ltd “dart” sales manufacturing organization based canada engineers manufactures distributes aftermarket helicopter parts accessories interest training center based lake charles louisiana provides instruction flight simulator training services prior january 31 2013 company wholly owned seacor holdings inc along majorityowned subsidiaries collectively referred “seacor” represented seacor’s aviation services business segment january 31 2013 seacor completed spinoff means dividend seacor’s stockholders company’s issued outstanding common stock “spinoff” era group independent company common stock listed new york stock exchange symbol “era” basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries entities meet criteria variable interest entities “vies” company primary beneficiary significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures company reports investments accompanying consolidated balance sheets equity investments advances company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses net tax use estimates preparation financial statements conformity accounting principles generally accepted us “gaap” requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting periods estimates include among items related allowance doubtful accounts useful lives property equipment inventories income tax provisions impairments fair values used purchase price allocations certain accrued contingent liabilities actual results could differ estimates differences may material reclassifications certain amounts reported prior years consolidated financial statements reclassified conform current years presentation revenue recognition company recognizes revenue realized realizable earned revenue realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenue meet criteria deferred criteria met company charters majority helicopters master service agreements subscription agreements daytoday charter arrangements fixedterm noncancelable contracts dryleases master service agreements subscription agreements typically require fixed monthly fee plus incremental payments based hours flown agreements fixed terms ranging one month five years generally may canceled providing 3090 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily leases require fixed monthly fee customer’s right use helicopter applicable charge based hours flown compensation maintenance parts andor personnel support company may provide customer leases generally run two five years may contain early cancellation provisions air medical services provided contracts hospitals typically include fixed monthly hourly rate structure respect flightseeing operations company allocates block space cruise lines seats sold directly customers company also operated fixed base operation “fbo” ted stevens anchorage international airport sold fuel adhoc basis leased storage space fbo sold may 1 2015 see note 4 september 30 2015 deferred revenues included 421 million related drylease revenues certain helicopters leased company aeróleo taxi aéreo sa “aeróleo” brazilian joint venture see note 5 deferral originated difficulties experienced aeróleo following one customer’s cancellation certain contract awards number aw139 medium helicopters drylease company october 1 2015 company’s former partner aeróleo transfered 50 economic 80 voting interest third party result new shareholders’ agreement company began consolidating results aeróleo consolidated financial statements due aeróleo’s status vie company’s status primary beneficiary result future collections previously deferred revenues recorded revenue instead recorded settlement intercompany receivable eliminated consolidation deferred revenues related activity years ended december 31 2015 2014 follows thousands cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments trade receivables customers primarily international independent major integrated exploration development production companies hospitals international helicopter operators us government agencies customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted allowance doubtful accounts years ended december 31 2016 2015 2014 follows thousands derivative instruments company accounts derivative positions fair value accompanying consolidated balance sheets unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative losses net concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations company also exposed concentrations credit risk associated cash equivalents company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company’s two largest customers comprised 46 43 net trade receivables december 31 2016 2015 respectively inventories stated lower average cost market value consist primarily spare parts fuel company establishes allowance accrue retirement cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts following table roll forward allowance related obsolete excess inventory years ended december 31 2016 2015 2014 thousands property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life company reviews estimated useful lives salvage values property equipment ongoing basis changes estimates changes years ended december 31 2016 2015 2014 december 31 2016 estimated useful life years company’s categories new property equipment follows equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known powerbyhour “pbh” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments pbh provider case company records reduction operating expense company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered pbh arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives company capitalized interest less 01 million 61 million 47 million years ended december 31 2016 2015 2014 respectively december 31 2016 2015 construction progress component property equipment included capitalized interest 45 million 47 million respectively impairment longlived assets company performs impairment analysis longlived assets used operations indicators impairment present company’s helicopters evaluated impairment aggregate basis carrying value assets recoverable determined estimated undiscounted cash flows carrying value assets reduced fair value generally fair value determined using valuation techniques expected discounted cash flows appraisals appropriate years ended december 31 2016 2015 2014 company recognized impairment charges impairment equity investees company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments years ended december 31 2016 2015 2014 company recognize impairment charges goodwill recorded purchase price paid acquisition exceeds fair value net identified tangible intangible assets acquired company performs annual impairment test goodwill interim tests extent indicators impairment develop annual impairment tests company tests goodwill reporting unit level company’s impairment review process compares fair value reporting unit carrying value including goodwill determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests goodwill impairment typically developed part company’s routine business planning forecasting process company believes estimates assumptions reasonable variations estimates could produce materially different results december 31 2015 company performed interim impairment test noting several events circumstances led determination likely fair value company’s reporting unit less carrying value including decline price crude oil company’s stock price prolonged downturn oil gas market company recorded goodwill impairment 19 million year ended december 31 2015 write entire goodwill balance company’s estimate included use significant unobservable inputs representative level 3 measurements including assumptions related future performance described preceding paragraph company goodwill year ended december 31 2016 company recognize goodwill impairments year ended december 31 2014 intangible assets intangible assets indefinite lives recorded purchase price accounting business combination company performs annual impairment test indefinite lived intangible assets interim tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value book value determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests indefinite lived assets impairment company believes estimates assumptions reasonable variations estimates could produce materially different results intangible assets finite useful lives amortized respective estimated useful lives december 31 2016 company indefinite lived intangible assets 11 million intangible assets finite lives 01 million business combinations company recognizes certain exceptions 100 percent fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 15 million 10 million 09 million years ended december 31 2016 2015 2014 respectively including writeoff 05 million debt issuance costs connection amendment company’s amended restated senior secured revolving credit facility “revolving credit facility” amortization expense included interest expense consolidated statements operations income taxes era group majorityowned us subsidiaries file consolidated us federal tax return era group’s foreign consolidated subsidiaries file tax returns applicable jurisdictions deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general expense respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized foreign currency transactions time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method savings plan company provides defined contribution plan “savings plan” eligible usbased employees savings plan provides qualified nonelective company contributions amount equal 3 employee’s eligible pay plus amount equal 100 employee’s first 3 wages invested savings plan immediate full vesting company’s contributions savings plan subject annual review board directors era group company’s savings plan costs 28 million 32 million 36 million respectively years ended december 31 2016 2015 2014 recent accounting pronouncements may 2014 financial accounting standards board “fasb” issued accounting standards update “asu” 201409 revenue contracts customers base revenue recognition contract vendor customer require reporting entities allocate transaction price various performance obligations contract recognize revenues performance obligations satisfied march 2016 fasb issued asu 201608 revenue contracts customers april 2016 fasb issued asu 201610 revenue contracts customers may 2016 fasb issued asu 201612 revenue contracts customers provide guidance application certain principles asu 201409 asu 201409 201608 201610 201612 effective annual reporting periods beginning december 15 2017 interim periods within period early adoption permitted annual reporting periods beginning december 15 2016 interim periods within period company intends adopt asu 201409 asu 201608 asu 201610 asu 201612 2018 using modified retrospective application still evaluating potential impact adoption consolidated financial statements august 2014 fasb issued asu 201415 presentation financial statements going concern modifies existing guidance disclose goingconcern uncertainties financial statements requires management perform interim annual assessments entity’s ability continue going concern within year date financial statements issued asu 201415 effective annual periods ending december 15 2016 interim periods thereafter early adoption permitted company adopted asu 201415 adoption impact consolidated financial statements february 2015 fasb issued asu 201502 consolidation amends guidance evaluating whether certain entities consolidated particularly general partner limited partner relationships vies fee arrangements related party relationships reporting entity company adopted asu 201502 effective january 1 2016 adoption impact consolidated financial statements april 2015 fasb issued asu 201503 interest imputation interest requires debt issuance costs related recognized debt liability presented balance sheet direct reduction carrying amount liability recognition measurement guidance debt issuance costs affected asu september 2015 fasb issued asu 201515 interest imputation interest amends asu 201503 allow issuers continue recognize debt issuance costs related lineofcredit arrangements asset amortize asset term credit agreement company adopted asu 201503 asu 201515 effective january 1 2016 december 31 2016 2015 company debt issuance costs 24 million 27 million respectively exclusive debt issuance costs associated revolving credit facility adoption asu 201503 asu 201515 reduced assets longterm debt amounts condensed consolidated balance sheets presented july 2015 fasb issued asu 201511 inventory intended simplify way reporting entities account inventory requiring valued lower cost net realizable value unless entity uses lastin firstout retail inventory valuation method asu 201511 effective annual reporting periods beginning december 15 2016 interim periods within period early adoption permitted beginning interim annual reporting period company adopted asu 201511 believes adoption material impact consolidated financial statements february 2016 fasb issued asu 201602 leases amends existing accounting standards lease accounting including requiring lessees recognize leases balance sheets making targeted changes lessor accounting asu 201602 effective annual reporting periods beginning december 15 2018 early adoption permitted asu 201602 requires modified retrospective transition approach leases existing entered date initial application option use certain transition relief company still evaluating potential impact adoption asu 201602 consolidated financial statements march 2016 fasb issued asu 201607 investments equity method joint ventures eliminates requirement retroactively apply equity method accounting investment increase level ownership degree influence causes investment qualify equity method treatment instead requires entity add cost acquiring additional ownership degree influence current basis investment apply equity method accounting date investment qualifies treatment asu 201607 effective annual reporting periods beginning december 15 2016 early adoption permitted beginning interim annual reporting period company adopted asu 201607 believes adoption material impact consolidated financial statements march 2016 fasb issued asu 201609 compensation stock compensation simplifies several aspects accounting sharebased payment transactions including income tax consequences classification awards equity liabilities classification statement cash flows asu 201609 effective annual reporting periods beginning december 15 2016 including interim periods within period early adoption permitted beginning interim annual period provided adjustments applied beginning annual period statement adopted company adopted asu 201609 believes adoption material impact consolidated financial statements june 2016 fasb issued asu 201613 financial instruments credit losses amends guidance recording credit losses related financial assets net investments leases allowing issuers recognize expected losses prior meeting threshhold probable asu 201613 effective annual reporting periods beginning december 15 2019 including interim periods within period early adoption permitted annual reporting periods beginning december 15 2018 including interim periods within period company still evaluating potential impact adoption asu 201613 consolidated financial statements august 2016 fasb issued asu 201615 classification certain cash receipts cash payments intended reduce diversity reporting certain transactions statement cash flows clarifying current gaap may unclear include adequate explanation asu 201615 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted beginning interim annual period provided amendments included asu 201615 adopted period applied beginning annual period statement adopted company adopted asu 201615 believes adoption material impact consolidated financial statements october 2016 fasb issued asu 201616 income taxes requires entities recognize income tax consequences intraentity transfers assets inventory transfer occurs rather asset sold third party case current gaap asu 201616 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted beginning annual reporting period neither interim annual financial statements made available company adopted asu 201616 believes adoption material impact consolidated financial statements january 2017 fasb issued asu 201701 business combinations clarifying definition business narrows reach definition business exclude transactions akin asset acquisitions dispositions asu 201701 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted provided transactions affected adoption previously disclosed current gaap company adopted asu 201701 believes adoption material impact consolidated financial statements 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs observable inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities estimated fair value company’s financial assets liabilities december 31 2016 2015 follows thousands carrying values cash equivalents receivables accounts payable approximate fair value fair value company’s longterm debt estimated using discounted cash flow analysis based estimated current rates similar types arrangements considerable judgment required developing certain fair value estimates accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange 3 derivative instruments 2011 company entered two interest rate swap agreements calling company pay fixed interest rates 129 176 aggregate notional value equal balance promissory notes see note 8 receive variable interest rate based london interbank offered rate “libor” notional values interest rate swaps matured december 2015 renewed company recognized gains less 01 million 03 million derivative instruments year ended december 31 2015 2014 respectively included derivative losses net consolidated statements operations time company enters forward exchange option contracts hedge foreign currency payment commitments anticipated transaction exposures derivatives recognized assets liabilities marked fair value period company use financial instruments trading speculative purposes none company’s derivative instruments contain creditriskrelated contingent features counterparties derivative contracts high credit quality financial institutions company entered forward contracts 2014 mitigate exposure exchange rate fluctuations eurodenominated helicopter purchase commitments company designate contracts hedges accounting purposes contracts settled 2015 company recorded loss 03 million derivative instruments year ended december 31 2015 losses recorded foreign currency gains losses net consolidated statements operations company recorded unrealized loss 08 million derivative instruments year ended december 31 2014 losses recorded derivative losses net consolidated statements operations company open forward contracts december 31 2016 4 acquisitions dispositions sicher helicopters sas “sicher” april 9 2015 company contributed 32 million cash 75 interest hauser investments limited “hauser” owns 100 sicher colombian entity connection acquisition company also transferred title aw139 helicopter hauser used sicher’s operations company recorded identifiable assets acquired liabilities assumed estimated acquisition date fair value accordance accounting standards codification “asc” 805 business combinations acquisition represent material business combination asc 805 acquisition 75 interest hauser resulted recognition intangible assets comprised primarily colombian air operator certificate 12 million fair value noncontrolling interest determined using discounted cash flow analysis noncontrolling interest partner right put interest company right call partner’s 25 ownership interest upon occurrence certain events fair value time exercise determined independent accounting firm result put right noncontrolling interest related hauser recorded mezzanine section consolidated balance sheets meet definition liability equity us gaap aeróleo october 1 2015 company’s partner aeróleo transfered 50 economic 80 voting interest aeróleo third party see note 5 resulting consolidation aeróleo accounted business acquisition accordance asc 805 connection transfer company entered shareholders agreement new partner includes among things putcall option arrangement gives company right purchase time new partner right put company two years new partner’s interest aeróleo company recorded identifiable assets acquired liabilities assumed estimated acquisition date fair value accordance asc 805 business combinations consolidation resulted immaterial gain consolidation table presents fair value aeróleo’s identifiable assets acquired liabilities assumed october 1 2015 unaudited thousands consolidated statements operations years ended december 31 2016 2015 include operating revenues 293 million 134 million respectively net loss 44 million 15 million respectively result consolidation aeróleo including effects intercompany eliminations beginning date consolidation table represents company’s pro forma results operations assuming consolidation aeróleo took place january 1 2015 unaudited thousands part transaction company acquired remaining 50 ownership interest era brazil single purpose entity owns one aw139 helicopter leased aeróleo era brazil whollyowned subsidiary fbo may 1 2015 company sold fbo business ted stevens anchorage international airport piedmont hawthorne aviation llc pursuant membership interests purchase agreement piedmont hawthorne aviation llc acquired 100 era group’s whollyowned subsidiary era fbo llc cash proceeds 143 million company recognized pretax gain 129 million sale capital expenditures company’s capital expenditures 392 million 601 million 1067 million 2016 2015 2014 respectively consisted primarily helicopter acquisitions deposits future helicopter deliveries spare helicopter parts equipment building improvements company records helicopter acquisitions property equipment places helicopters service completion work finalized helicopters ready use company sold otherwise disposed property equipment cash proceeds 286 million 253 million 71 million 2016 2015 2014 respectively summary changes owned helicopter fleet years ended december 31 2016 2015 2014 follows 1 includes two heavy helicopters yet placed service december 31 2016 2 includes three lighttwin helicopters one single engine helicopter acquired connection acquisition hauser 1 includes two single engine helicopters disposed salestype leases 5 variable interest entities equity investments advances equity investments advances december 31 2016 2015 follows thousands company owns 50 interest aeróleo vie pursuant new shareholders’ agreement entered october 1 2015 see note 4 company primary beneficiary aeróleo consolidated entity company also owned 50 interest era brazil vie prior october 1 2015 primary beneficiary company consolidating entity since september 30 2012 october 1 2015 company acquired remaining 50 interest era brazil whollyowned subsidiary combined condensed financial statements summarized financial information company’s equity investments advances dart december 31 2016 2015 years ended december 31 2016 2015 2014 follows thousands summarized financial information company’s equity investments advances investees december 31 2016 2015 years ended december 31 2016 2015 2014 follows thousands december 31 2016 2015 cumulative undistributed net earnings equity investees included company’s consolidated retained earnings 11 million 01 million respectively vies aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company partner also loaned aeróleo 60 million interest rate 60 per annum october 1 2015 company’s partner completed transfer 50 economic 80 voting interest aeróleo third party connection transfer company entered shareholders agreement new partner requires supermajority shareholder andor board approval respect specified significant actions putcall option arrangement gives company right purchase time new partner right put company two years new partner’s interest aeróleo result liquidity issues related contract suspensions one aeróleo’s customers petroleo brasileiro sa “petrobras” aeróleo unable adequately finance activities without additional financial support making vie prior october 1 2015 company determined primary beneficiary 20 voting interest allow direct activities significantly affect aeróleo’s economic performance result new shareholders agreement following partner’s transfer interests company determined control activities significantly affect aeróleo’s economic performance vie’s primary beneficiary accordingly aeróleo’s results consolidated company’s financial statements beginning october 1 2015 years ended december 31 2015 2014 company recognized 214 million 167 million respectively operating revenues aeróleo 421 million outstanding september 30 2015 see note 1 company’s consolidated balance sheets december 31 2016 2015 include assets aeróleo totaling 129 million 179 million respectively distribution assets era group subsidiaries aeróleo subject restrictions addition company’s consolidated balance sheets include liabilities 92 million 159 million respectively creditors liabilities recourse era group subsidiaries aeróleo era brazil july 1 2011 company partner contributed 48 million cash era brazil 5050 joint venture era brazil highly leveraged entity outstanding debt due company made vie primary beneficiary company consolidated era brazil financial statements effective september 30 2012 connection aeróleo transaction october 1 2015 company acquired nominal consideration remaining 50 ownership interest era brazil making whollyowned subsidiary joint ventures dart era dhs llc wholly owned subsidiary company acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 50 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart exchange 50 economic voting interest dart note receivable 51 million note receivable balance 32 million december 31 2016 bears interest rate 40 per annum requires quarterly principal interest payments matures july 31 2023 years ended december 31 2016 2015 2014 company purchased 19 million 21 million 36 million respectively products dart era training center era training center llc “era training center” operates flight training devices provides training services company thirdparty customers years ended december 31 2016 2015 2014 company provided helicopter management services joint venture totaling 02 million 04 million 04 million respectively incurred 06 million 05 million 07 million respectively simulator fees era training center 40 million note company secured two flight simulators bears interest 60 per annum requires quarterly payments 01 million january 2026 lake palma lake palma operated seven helicopters spain effective july 24 2014 company sold 51 interest lake palma joint venture partner fumigacion aerea andaluza sa “faasa” purchase price 93 million recognized gain 15 million equity earnings net taxes connection transaction company assigned debt obligations 29 million due lake palma faasa balance purchase price funded cash 6 escrow deposits time company enters qualified exchange accommodation agreements third party meet likekind exchange requirements section 1031 internal revenue code 1986 amended “code” provisions revenue procedure 200037 accordance provisions company permitted deposit proceeds sale assets escrow accounts purpose acquiring assets qualifying temporary deferral taxable gains realized consequently company establishes escrow accounts financial institutions deposit funds received sale equipment designated replacement property within specified period time december 31 2016 2015 company 38 million 0 respectively deposited likekind exchange escrow accounts year ended december 31 2016 company sold two aw139 medium helicopters total cash proceeds 182 million net fees sale transactions treated taxfree likekind exchanges proceeds deposited qualified intermediary held qualifying asset delivered company used 74 million proceeds purchase aw189 heavy helicopter december 2016 completed first likekind exchange transaction company identified asset second likekind exchange transaction withdrew 70 million make progress payment s92 heavy helicopter december 2016 company intends complete second likekind exchange second quarter 2017 year ended december 31 2015 company sold one ec135 light twin helicopter cash proceeds 28 million net fees sale proceeds deposited qualified intermediary held qualifying asset delivered however company unable purchase qualifying asset prior expiration 180day period subsequent closing date sale result proceeds 28 million returned company sale treated taxable event also 2015 company transferred title one aw139 helicopter hauser connection acquisition hauser see note 4 transfer also treated taxfree likekind exchange whereby hauser deposited 118 million escrow account qualified intermediary benefit company used proceeds purchase s92 heavy helicopter december 2015 year ended december 31 2014 company sold two b212 medium helicopters cash proceeds totaling 64 million net fees deposited proceeds qualified intermediary qualifying property identified first sale prior expiration required 45day period subsequent closing date result proceeds 30 million returned company sale treated taxable event company identified qualifying property second sale within required 45day period subsequent closing date likekind exchange completed prior expiration required 180day period subsequent closing date 7 income taxes financial reporting purposes income loss income taxes equity earnings years ended december 31 2016 2015 2014 follows thousands components income tax expense benefit years ended december 31 2016 2015 2014 follows thousands following table reconciles difference statutory federal income tax rate company effective income tax rate years ended december 31 2016 2015 2014 components net deferred income tax liabilities december 31 2016 2015 follows thousands december 31 2016 2015 company federal net operating loss “nol” carryforwards 46 million 0 respectively state income tax nol carryforwards 3552 million 1252 million respectively various states 409 million 342 million respectively foreign jurisdictions company also foreign tax credits amount 06 million 0 december 31 2016 2015 respectively state nol carryforwards expire 2024 2036 foreign nol carryforwards unlimited carryforward periods federal nol carryforwards expire 2036 foreign tax credits expire 2026 considering available evidence assessing need valuation allowance company believes likely benefit foreign state deferred tax assets realized december 31 2016 company provided valuation allowance 80 million state deferred tax assets company provided valuation allowance 136 million respect foreign deferred tax assets included table made 131 million related aeróleo 05 million related sicher assumptions change company determines able realize deferred tax assets tax benefits relating reversal valuation allowance deferred tax assets would recorded income tax provision period adjustments identified company’s operations subject jurisdiction multiple tax authorities impose various types taxes including income taxes determining taxes owed jurisdiction requires interpretation relevant tax laws regulations judicial decisions administrative interpretation local tax authority result company subject tax assessments jurisdictions including redetermination taxable amounts tax authorities may agree company’s interpretations positions taken effects tax position recognized period determined likely tax position sustained upon examination including resolution related appeals litigation processes based technical merits position remain subject examination us federal major state tax jurisdictions tax years 2013 brazil 2012 subsequent years pursuant new shareholders’ agreement entered october 1 2015 company’s new partner aeróleo see note 4 company primary beneficiary aeróleo consolidated entity company analyzed filing positions aeróleo brazil required file income tax returns open tax years 2012 2016 reconciliation beginning ending amount gross unrecognized tax benefits excluding interest penalties follows thousands amounts accrued interest penalties associated unrecognized income tax benefits included expense consolidated statements operations december 31 2016 gross amount liability accrued interest penalties related unrecognized tax benefits 02 million amounts could change next twelve months company anticipate material impact financial statements 8 longterm debt company’s borrowings december 31 2016 2015 follows thousands company’s scheduled longterm debt maturities december 31 2016 follows thousands 7750 senior notes december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million interest 7750 senior notes payable semiannually arrears june 15 december 15 year 7750 senior notes may redeemed time december 15 2017 applicable redemption prices set forth indenture governing 7750 senior notes plus accrued unpaid interest redemption date prior december 15 2017 era group may also redeem 7750 senior notes whole part redemption price based “makewhole” premium plus accrued unpaid interest redemption date indenture contains covenants restrict era group’s ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries’ ability pay dividends consolidate merge sell substantially assets addition upon specified change control trigger event specified asset sale era group may required offer repurchase 7750 senior notes era group’s payment obligations 7750 senior notes fully unconditionally guaranteed wholly owned existing us subsidiaries guarantors revolving credit facility” net proceeds offering used repay 1900 million borrowings outstanding company’s prior 2000 million senior secured revolving credit facility “prior credit facility” year ended december 31 2016 company repurchased total 50 million 7750 senior notes price 8663 par total cash 45 million including accrued interest 02 million company recognized net gains 05 million repurchases year ended december 31 2015 company repurchased total 502 million 7750 senior notes prices ranging 7900 9750 par total cash 479 million including accrued interest 10 million company recognized net gains 16 million repurchases revolving credit facility march 31 2014 era group entered revolving credit facility amendment prior credit facility advances revolving credit facility closing used refinance indebtedness incurred prior credit facility october 27 2016 company entered consent amendment 3 company’s revolving credit facility among things revised maintenance covenants provide additional flexibility reduced aggregate principal amount revolving loan commitments added condition borrowing repayment mechanism connection excess cash amounts revolving credit facility provides company ability borrow 2000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million availability revolving credit facility may limited terms 7750 senior notes revolving credit facility matures march 2019 borrowings revolving credit facility bear interest rate per annum equal era group’s election either base rate libor defined plus applicable margin applicable margin based company’s ratio funded debt ebitda defined ranges 75 200 basis points base rate margin 175 300 basis points libor margin applicable margin december 31 2016 125 basis points “base rate” margin 225 basis points libor margin addition era group required pay quarterly commitment fee based average unfunded portion committed amount rate based company’s ratio funded debt ebitda defined ranges 375 50 basis points december 31 2016 commitment fee 50 basis points obligations revolving credit facility secured portion company’s helicopter fleet tangible assets guaranteed era group’s wholly owned us subsidiaries revolving credit facility contains various restrictive covenants including maintain maximum senior secured leverage ratio defined minimum interest coverage ratio minimum ratio sum fair market value mortgaged helicopters accounts receivable inventory funded committed secured debt well customary covenants including certain restrictions company’s ability enter certain transactions including could result incurrence additional indebtedness liens making loans guarantees investments sales assets payments dividends repurchases capital stock entering transactions affiliates december 31 2016 era group 650 million outstanding borrowings revolving credit facility remaining availability 1202 million net issued letters credit 12 million availability revolving credit facility subject company’s ability maintain compliance financial ratios discussed connection amendment prior credit facility entry revolving credit facility era group incurred debt issuance costs 24 million connection amendment 3 revolving credit facility reduced total commitment amount facility 2000 million era group wrote previously incurred debt issuance costs 05 million incurred additional debt issuance costs 09 million additional debt issuance costs included assets consolidated balance sheets amortized interest expense consolidated statements operations life revolving credit facility promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2016 247 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2016 243 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 connection refinancing company paid total 01 million debt issuance costs 2015 2016 notes amended among things provide crosscollateralization helicopter secures promissory notes aeróleo debt connection transfer partnership interests discussed note 5 company’s former partner assigned two existing notes receivable aeróleo totaling 83 million company’s new partner june 2016 company partner aeróleo contributed notes payable aeróleo including two notes contribution additional capital aeróleo result 63 million debt due company’s partner aeróleo recorded net loss attributable noncontrolling interest subsidiaries consolidated statements operations addition october 1 2015 aeróleo existing loan third party balance 14 million note payable brazilian reals bore interest rate 190 per annum called equal monthly payments principal interest final payment due september 2016 june 2016 company prepaid principal interest 15 million settle note full company also settled certain tax disputes brazil totaling 34 million agreed make installment payments amounts due applicable taxing authorities installments payable brazilian reals bear interest rate equal overnight rate published central bank brazil amounts included schedule longterm debt maturities noted 9 earnings per share basic earnings per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant exercise outstanding stock options computations basic diluted earnings per common share years ended december 31 2016 2015 2014 follows thousands except share per share data 1 excludes weighted average common shares 294273 209446 35260 years ended december 31 2016 2015 2014 respectively certain share awards effect inclusion would antidilutive 10 sharebased compensation share incentive plans 2013 company adopted era group inc 2012 incentive plan “2012 plan” maximum 4000000 shares company’s common stock reserved issuance awards granted 2012 plan may form stock options stock appreciation rights shares restricted stock sharebased awards payable cash common stock performance awards combination thereof may made outside directors employees consultants era group’s board directors determines award whether issue new shares company’s treasury account december 31 2016 2015 2747662 3071335 shares respectively remained available grant 2012 plan 2013 company adopted era group inc 2013 employee stock purchase plan “espp” company may offer maximum 300000 shares company’s common stock purchase eligible employees price equal 85 lesser fair market value common stock first day offering period ii fair market value common stock last day offering period common stock made available purchase espp sixmonth offering periods espp intended comply section 423 code intended subject section 401a code employee retirement income security act 1974 board directors company may amend terminate espp time however increase number shares common stock reserved issuance espp may made without stockholder approval 2016 board directors authorized additional 400000 reserved issuance espp however increase subject stockholder approval company intends seek annual meeting 2017 espp term ten years december 31 2016 2015 461811 180641 shares respectively remained available issuance espp year ended december 31 2016 company issued 118830 shares espp total sharebased compensation expense includes stock options restricted stock espp purchases 46 million 37 million 58 million years ended december 31 2016 2015 2014 respectively portion restricted stock awards performancebased december 31 2016 company approximately 41 million total unrecognized compensation costs weighted average period expected recognized 16 years restricted stock awards year ended december 31 2016 number shares weighted average grant price restricted stock award transactions follows years ended december 31 2016 2015 2014 company awarded 342913 193668 127050 shares respectively restricted stock weighted average grant date fair value 1056 2082 2923 respectively total fair value shares vested years ended december 31 2016 2015 2014 determined using closing price grant date 32 million 19 million 41 million respectively including 16 million related accelerated vesting shares 2014 company’s former chief executive officer stock option grants year ended december 31 2016 number shares weighted average grant date fair value weighted average exercise price stock option transactions follows company grant options year ended december 31 2016 years ended december 31 2015 2014 weighted average grant date fair value stock options granted 669 1086 respectively stock options exercised years ended december 31 2016 2015 year ended december 31 2014 aggregate intrinsic value exercised stock options 02 million december 31 2016 weighted average remaining contractual term total outstanding stock options vestedexercisable stock options 57 years 50 years respectively december 31 2016 aggregate intrinsic value total outstanding stock options vestedexercisable stock options outstanding 02 million company uses blackscholes option pricing model estimate fair value stock options following table shows assumptions used compute sharebased compensation expense stock options granted year ended december 31 2015 11 related party transactions years ended december 31 2015 2014 company provided less 01 million aviation services seacor flight charter arrangements amounts recorded operating revenues consolidated statements operations company provide services seacor year ended december 31 2016 prior spinoff part consolidated group certain costs expenses company borne seacor charged company conjunction spinoff company entered amended restated transition services agreement seacor subsequent january 31 2013 termination amended restated transition services agreement june 30 2015 costs classified administrative general expenses consolidated statements operations costs totaled 06 million 30 million years ended december 31 2015 2014 respectively additionally company leases office space seacor years ended december 31 2016 2015 2014 company paid 04 million 04 million 05 million respectively seacor rent utilities included administrative general expenses consolidated statements operations years ended december 31 2016 2015 2014 company purchased products dart totaling 19 million 21 million 36 million respectively note receivable dart balance 32 million 36 million december 31 2016 2015 respectively purchases dart included operating expenses consolidated statements income note receivable included equity investments advances consolidated balance sheets years ended december 31 2016 2015 2014 company provided helicopter management services era training center totaling 02 million 04 million 04 million respectively incurred 06 million 05 million 07 million respectively simulator fees revenues era training center recorded operating revenues expenses incurred recorded operating expenses consolidated statements operations december 31 2016 2015 company note receivable era training center balance 40 million 44 million respectively recorded equity investments advances consolidated balance sheets june 2016 company partner aeróleo contributed notes payable aeróleo contribution additional capital aeróleo see discussion note 8 12 commitments contingencies company’s unfunded capital commitments december 31 2016 consisted primarily agreements purchase helicopters totaled 1145 million 592 million payable 2017 balance payable 2018 noncancellable portion helicopter commitments payable 2017 120 million company also 13 million deposits paid options yet exercised company may terminate 1010 million total commitments inclusive deposits paid options yet exercised without liability liquidated damages 25 million aggregate brazilian tax disputes company disputing assessments approximately 72 million taxes penalties interest levied municipal authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal assessments” company believes based interpretation tax legislation supported clarifying guidance provided supreme court brazil respect issue 2006 ruling compliance applicable tax legislation paid applicable taxes penalties interest plans defend claims vigorously administrative levels jurisdiction event municipal assessments upheld last administrative level may necessary company deposit amounts issue security pursue appeals 2015 company received final unfavorable ruling respect similar assessment levied rio de janeiro state treasury periods 1994 1998 “1998 assessments” 1998 assessments upheld without taking consideration benefit clarifying guidance issued supreme court following assertion claims final adjudication 1998 assessments requires payment amounts within established accruals paid multiple installments time expected material effect company’s financial position results operations december 31 2016 possible determine outcome municipal assessments company expect outcome would material adverse effect business financial position results operations addition possible reasonably estimate likelihood potential amount assessments may issued subsequent periods company also disputing challenges raised brazilian tax authorities respect certain tax credits applied aeróleo 1995 2009 tax authorities seeking 22 million additional taxes interest penalties company believes based interpretation tax legislation compliance applicable tax legislation plans defend claim vigorously december 31 2016 possible determine outcome matter company expect outcome would material adverse effect business financial position results operations company disputing responsibility 27 million employer social security contributions required remitted one customers relating period 1995 1998 although company may deemed coresponsible remittances local regulatory regime customer’s payments company presented invoices made net specific remittances required made customer issue claim company plans defend claim vigorously december 31 2016 possible determine outcome matter company expect outcome would material adverse effect business financial position results operations company disputing certain penalties assessed state rio de janeiro respect company’s alleged failure submit accurate documentation fully comply filing requirements respect certain valueadded taxes company elected make payment 02 million installments time satisfy portion penalties upon confirming asserting authority originally proposed penalties 16 million respect balance assessments calculated based amounts containing typographical error aggregate penalties remain dispute total 04 million december 31 2016 possible determine outcome matter company expect outcome would material adverse effect business financial position results operations company disputing imposition 08 million fines levied brazilian customs authorities fines relate company’s alleged failure comply certain deadlines temporary regime pursuant imports helicopters brazil order dispute fines pursue legal remedies within judicial system company deposited certain amounts issue security escrow account presiding judge matters controls release funds pending outcome company believes documentation evidences timely compliance relevant deadlines company plans defend claims vigorously december 31 2016 possible determine outcome matters company expect outcome would material adverse effect business financial position results operations company disputing fines 03 million sought taxing authorities brazil following final adjudication disallow certain tax credits applied company offset certain social tax liabilities fine calculated 50 incremental tax liability resulting disallowance tax credits applied without taking account circumstances relating disallowance tax credits constitutionality fines review supreme court brazil number cases taxpayers received favorable rulings due lack constitutionality law company plans defend claim vigorously december 31 2016 possible determine outcome company expect would material adverse impact business financial position results operations company disputing contingent fees 05 million sought former tax consultant calculated based unrealized tax savings attributed consultant’s suggested tax strategies company contends fees due upon realized tax savings december 31 2016 possible determine outcome matters company expect outcome would material adverse effect business financial position results operations normal course business company may become involved various employmentrelated litigation matters december 31 2016 possible determine outcome several claims wherein aggregate 01 million company’s established accrual sought company expect outcome respect claims would material adverse effect business financial position results operations company also disputing claims brazilian tax authorities respect federal customs taxes levied upon helicopters leased company imported brazil temporary regime subject reexport order dispute assessments pursue available legal remedies within judicial system company deposited amounts issue security escrow account serves security presiding judge matters controlling release funds company believes based interpretation tax legislation well established aviation industry practice required pay taxes plans defend claims vigorously december 31 2016 possible determine outcome matter company expect outcome would material adverse effect business financial position results operations relates specific cases referred company currently anticipates administrative fine penalty ultimately would material effect financial position results operations company deposited 83 million escrow accounts controlled court respect certain cases described fully reserved amounts subject final determination judicial release escrow deposits estimated liabilities based company’s assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience settlements april 2014 company entered settlement agreement airbus helicopters formerly eurocopter division airbus group formerly european aeronautic defense space company respect extended suspension operations h225 heavy helicopters 2012 2013 settlement agreement provided certain service product credit discounts available company applied support services available airbus helicopters covering spare parts repair overhaul service bulletins technical assistance services years ended december 31 2016 2015 2014 company utilized credits amount 17 million 50 million 44 million respectively december 31 2016 company utilized credits available agreement minimum lease payments december 31 2016 company leased four helicopters certain facilities equipment leasing agreements classified operating leases financial reporting purposes related rental fees charged expense lease terms leases generally contain purchase lease renewal options rights first refusal respect sale lease equipment lease terms range duration one ten years total rental expense company’s operating leases years ended december 31 2016 2015 2014 57 million 45 million 44 million respectively company’s scheduled minimum lease payments operating leases remaining term excess one year december 31 2016 follows thousands 13 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate year ended december 31 2016 anadarko petroleum corporation “anadarko” petrobras us government accounted 24 20 16 respectively company’s operating revenues year ended december 31 2015 anadarko us government accounted 27 13 respectively company’s operating revenues year ended december 31 2014 anadarko us government accounted 26 10 respectively company’s operating revenues years ended december 31 2016 2015 2014 approximately 31 21 15 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived oil gas operations brazil colombia suriname well leasing activities following represents company’s operating revenues geographical region services provided years ended december 31 2016 2015 2014 thousands company’s longlived assets primarily property equipment employed various geographical regions world following represents company’s property equipment net accumulated depreciation based upon assets’ physical locations december 31 2016 2015 thousands company’s brazilian operations include 250 employees representing approximately 30 company’s total workforce covered collective bargaining agreements none expire within next year disputes employees terms collective bargaining agreements could result strikes work stoppages higher labor costs conditions may material adverse effect company’s financial condition results operations 14 supplemental information statements cash flows supplemental cash flow information years ended december 31 2016 2015 2014 follows thousands 15 quarterly financial information unaudited selected financial information interim quarterly periods presented thousands except per share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year 1 fourth quarter 2016 includes adjustments immaterial fiscal year ended december 31 2016 prior periods impact corrections made fourth quarter 2016 17 million decrease operating income including 20 million increase operating expense 05 million decrease depreciation amortization expense 03 million decrease gains asset dispositions 10 million increase net loss net loss attributable common shares 005 increase loss per common share 16 guarantors securities december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior notes era group’s payment obligations 7750 senior notes jointly severally guaranteed existing 100 owned us subsidiaries guarantee revolving credit facility future us subsidiaries guarantee revolving credit facility material indebtedness era group may incur future “guarantors” guarantors currently guarantee revolving credit facility guarantees guarantors full unconditional joint several result agreement guarantors guarantee 7750 senior notes company presenting following condensed consolidating balance sheets statements operations comprehensive income cash flows era group “parent” guarantors company’s subsidiaries “nonguarantors” statements read conjunction unaudited condensed consolidated financial statements company supplemental condensed consolidating financial information prepared pursuant rules regulations condensed financial information include disclosures included annual financial statements supplemental condensed consolidating balance sheet december 31 2016 supplemental condensed consolidating balance sheet december 31 2015 supplemental condensed consolidating statements operations year ended december 31 2016 supplemental condensed consolidating statements operations year ended december 31 2015 supplemental condensed consolidating statements operations year ended december 31 2014 supplemental condensed consolidating statements comprehensive income year ended december 31 2016 supplemental condensed consolidating statements comprehensive income year ended december 31 2015 supplemental condensed consolidating statements comprehensive income year ended december 31 2014 supplemental condensed consolidating statements cash flows year ended december 31 2016 supplemental condensed consolidating statements cash flows year ended december 31 2015 supplemental condensed consolidating statements cash flows year ended december 31 2014item 15 exhibits financial statement schedules documents filed part report 1 financial statements consolidated financial statements filed part report listed index consolidated financial statements annual report form 10k 2 financial statement schedules financial statement schedules omitted applicable required information shown consolidated financial statements notes thereto 3 exhibits incorporated herein reference indicated management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused report signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements report independent registered public accounting firm shareholders board directors era group inc opinion financial statements audited accompanying consolidated balance sheets era group inc company december 31 2017 2016 related consolidated statements operations comprehensive income changes equity cash flows three years period ended december 31 2017 related notes collectively referred “financial statements” opinion based audits report auditors financial statements present fairly material respects consolidated financial position company december 31 2017 2016 consolidated results operations cash flows three years period ended december 31 2017 conformity us generally accepted accounting principles audit 2016 2015 financial statements dart holding company ltd corporation company 50 interest consolidated financial statements company’s investment advances dart holding company ltd stated 248 million december 31 2016 company’s equity net income loss dart holding company ltd stated 13 million 2016 16 million 2015 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audits public accounting firm registered public company accounting oversight board united states pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud company required engaged perform audit internal control financial reporting part audits required obtain understanding internal control financial reporting purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits report auditors provide reasonable basis opinion sernst young llp served company’s auditor since 2007 houston texas march 8 2018 kpmg llp telephone 514 8402100 600 de maisonneuve blvd west fax 514 8402187 suite 1500 tour kpmg internet wwwkpmgca montréal québec h3a 0a3 canada independent auditors’ report registered public accounting firm directors dart holding company ltd audited consolidated balance sheets dart holding company ltd december 31 2016 2015 related consolidated statements income loss comprehensive income loss stockholders’ equity cash flows years twoyear period ended december 31 2016 consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audit auditors’ responsibility conducted audit accordance canadian generally accepted auditing standards accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement company required engaged perform audit internal control financial reporting audit included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures consolidated financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion consolidated financial statements referred present fairly material respects consolidated financial position dart holding company ltd december 31 2016 2015 consolidated results operations consolidated cash flows years twoyear period ended december 31 2016 conformity us generally accepted accounting principles kpmg llp chartered professional accountants licensed public accountants february 27 2017 montréal canada kpmg llp canadian limited liability partnership member firm kpmg network independent member firms affiliated kpmg international cooperative kpmg international swiss entity kpmg canada provides services kpmg llp era group inc consolidated balance sheets thousands except share amounts accompanying notes integral part consolidated financial statements era group inc consolidated statements operations thousands except share per share data accompanying notes integral part consolidated financial statements era group inc consolidated statements comprehensive income thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements changes equity thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” consolidated subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states “us” primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers international independent major integrated oil gas companies us government agencies addition serving oil gas industry company provides emergency response services utility services including support firefighting activities flightseeing tours alaska company operates federal aviation administration “faa” approved maintenance repair station lake charles louisiana company interest dart holding company ltd “dart” sales manufacturing organization based canada engineers manufactures distributes aftermarket helicopter parts accessories interest training center based lake charles louisiana provides instruction flight simulator training services basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries entities meet criteria variable interest entities “vies” company primary beneficiary significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures company reports investments accompanying consolidated balance sheets equity investments advances company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses net tax use estimates preparation financial statements conformity accounting principles generally accepted us “gaap” requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting periods estimates include among items related allowance doubtful accounts useful lives property equipment inventories income tax provisions impairments fair values used purchase price allocations certain accrued contingent liabilities actual results could differ estimates differences may material revenue recognition company recognizes revenues realized realizable earned revenues realized realizable earned persuasive evidence arrangement exists delivery occurred services rendered price buyer fixed determinable collectability reasonably assured revenues meet criteria deferred criteria met company defer revenue years ended december 31 2017 2016 company charters majority helicopters master service agreements subscription agreements daytoday charter arrangements fixedterm noncancelable contracts dryleases master service agreements subscription agreements typically require fixed monthly fee plus incremental payments based hours flown agreements fixed terms ranging one month five years generally may canceled providing 3090 days’ notice daytoday charter arrangements call either combination daily fixed fee plus charge based hours flown hourly rate minimum number hours charged daily leases require fixed monthly fee customer’s right use helicopter applicable charge based hours flown compensation maintenance parts andor personnel support company may provide customer leases generally run one five years may contain early cancellation provisions respect flightseeing operations company allocates block space cruise lines seats sold directly customers company also operated fixed base operation “fbo” ted stevens anchorage international airport sold fuel adhoc basis leased storage space fbo sold may 1 2015 see note 4 september 30 2015 deferred revenues included 421 million related drylease revenues certain helicopters leased company aeróleo taxi aéreo sa “aeróleo” brazilian joint venture see note 5 deferral originated difficulties experienced aeróleo following one customer’s cancellation certain contract awards number aw139 medium helicopters drylease company october 1 2015 company’s former partner aeróleo transfered 50 economic 80 voting interest third party result new shareholders’ agreement company began consolidating results aeróleo consolidated financial statements due aeróleo’s status vie company’s status primary beneficiary result future collections previously deferred revenues recorded revenue instead recorded settlement intercompany receivable eliminated consolidation deferred revenues related activity year ended december 31 2015 follows thousands cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments trade receivables customers primarily international independent major integrated exploration development production companies international helicopter operators us government agencies customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted allowance doubtful accounts years ended december 31 2017 2016 2015 follows thousands derivative instruments company accounts derivative positions fair value accompanying consolidated balance sheets unrealized gains losses derivatives designated hedges reported accompanying consolidated statements operations derivative losses net concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations company also exposed concentrations credit risk associated cash equivalents company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company’s two largest customers comprised 46 net trade receivables december 31 2017 2016 inventories stated lower average cost net realizable value consist primarily spare parts fuel company establishes allowance accrue retirement cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts following table roll forward allowance related obsolete excess inventory years ended december 31 2017 2016 2015 thousands 1 includes 119 elimination h225 inventory reserve property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life company reviews estimated useful lives salvage values property equipment ongoing basis changes estimates changes years ended december 31 2017 2016 2015 december 31 2017 estimated useful life years company’s categories new property equipment follows equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known powerbyhour “pbh” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments pbh provider case company records reduction operating expense company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered pbh arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives company capitalized interest 05 million less 01 million 61 million years ended december 31 2017 2016 2015 respectively december 31 2017 2016 construction progress component property equipment included capitalized interest 19 million 45 million respectively impairment longlived assets company performs impairment analysis longlived assets used operations events changes circumstances indicate carrying value assets may recoverable company’s longlived assets grouped lowest level identifiable cash flows largely independent cash flows groups assets generally fleet group level impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset group company would required recognize impairment loss 2017 company concluded cash flows associated h225 heavy helicopters largely independent cash flows associated remainder fleet evaluated separately impairment company performed impairment analysis h225 helicopters capital parts related inventory determined projected undiscounted cash flows remaining useful life less carrying amount determining fair value company used cost approach begins replacement cost new asset adjusts age functional economic obsolescence inputs used company’s fair value estimate level 3 fair value hierarchy discussed note 2 company recorded 117 million impairment charge h225 helicopters december 31 2017 impairment equity investees company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments years ended december 31 2017 2016 2015 company recognize impairment charges goodwill recorded purchase price paid acquisition exceeds fair value net identified tangible intangible assets acquired company performs annual impairment test goodwill interim tests extent indicators impairment develop annual impairment tests company tests goodwill reporting unit level company’s impairment review process compares fair value reporting unit carrying value including goodwill determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests goodwill impairment typically developed part company’s routine business planning forecasting process company believes estimates assumptions reasonable variations estimates could produce materially different results december 31 2015 company performed interim impairment test noting several events circumstances led determination likely fair value company’s reporting unit less carrying value including decline price crude oil company’s stock price prolonged downturn oil gas market company recorded goodwill impairment 19 million year ended december 31 2015 write entire goodwill balance company’s estimate included use significant unobservable inputs representative level 3 measurements including assumptions related future performance described preceding paragraph intangible assets intangible assets indefinite lives recorded purchase price accounting business combination company performs annual impairment test indefinite lived intangible assets interim tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value book value determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests indefinite lived assets impairment company believes estimates assumptions reasonable variations estimates could produce materially different results intangible assets finite useful lives amortized respective estimated useful lives december 31 2017 company indefinite lived intangible assets 11 million intangible assets finite lives 01 million business combinations company recognizes certain exceptions 100 percent fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 11 million 15 million 10 million years ended december 31 2017 2016 2015 respectively including writeoff 05 million debt issuance costs 2016 connection amendment company’s amended restated senior secured revolving credit facility “revolving credit facility” amortization expense included interest expense consolidated statements operations income taxes era group majorityowned us subsidiaries file consolidated us federal tax return era group’s foreign consolidated subsidiaries file tax returns applicable jurisdictions deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general expense respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized foreign currency transactions functional currency company’s foreign entities us dollar time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method savings plan company provides defined contribution plan “savings plan” eligible usbased employees savings plan provides qualified nonelective company contributions amount equal 3 employee’s eligible pay plus amount equal 100 employee’s first 3 wages invested savings plan immediate full vesting company’s contributions savings plan subject annual review board directors era group company’s savings plan costs 24 million 28 million 32 million respectively years ended december 31 2017 2016 2015 recent accounting pronouncements may 2014 financial accounting standards board “fasb” issued accounting standards update “asu” 201409 revenue contracts customers base revenue recognition contract vendor customer require reporting entities allocate transaction price various performance obligations contract recognize revenues performance obligations satisfied march 2016 fasb issued asu 201608 revenue contracts customers april 2016 fasb issued asu 201610 revenue contracts customers may 2016 fasb issued asu 201612 revenue contracts customers december 2016 fasb issued asu 201620 technical corrections improvements topic 606 revenue contracts customers provide guidance application certain principles asu 201409 asu 201409 amended effective annual reporting periods beginning december 15 2017 interim periods within period early adoption permitted annual reporting periods beginning december 15 2016 interim periods within period company adopt asu 201409 amended effective january 1 2018 using modified retrospective approach company reviewed contracts customers evaluated performance obligations contract expect adoption new standard material impact consolidated financial statements july 2015 fasb issued asu 201511 inventory intended simplify way reporting entities account inventory requiring valued lower cost net realizable value unless entity uses lastin firstout retail inventory valuation method asu 201511 effective annual reporting periods beginning december 15 2016 interim periods within period early adoption permitted beginning interim annual reporting period company adopted asu 201511 effective january 1 2017 adoption material impact consolidated financial statements february 2016 fasb issued asu 201602 leases amends existing accounting standards lease accounting including requiring lessees recognize leases balance sheets making targeted changes lessor accounting asu 201602 effective annual reporting periods beginning december 15 2018 early adoption permitted asu 201602 requires modified retrospective transition approach leases existing entered date initial application option use certain transition relief company still evaluating potential impact adoption asu 201602 consolidated financial statements march 2016 fasb issued asu 201607 investments equity method joint ventures eliminates requirement retroactively apply equity method accounting investment increase level ownership degree influence causes investment qualify equity method treatment instead requires entity add cost acquiring additional ownership degree influence current basis investment apply equity method accounting date investment qualifies treatment company adopted asu 201607 effective january 1 2017 adoption impact consolidated financial statements march 2016 fasb issued asu 201609 compensation stock compensation simplifies several aspects accounting sharebased payment transactions including income tax consequences classification statement cash flows treatment forfeitures main differences current gaap asu 201609 tax consequences changes fair value equity awards grant date vesting date charged income tax expense reported operating section statement cash flows period award vests ii entities option estimate award forfeitures previously prescribed gaap record forfeitures adjustment expense occur company adopted asu 201609 effective january 1 2017 elected record forfeitures equity awards adjustment expense occur period occur adoption election material impact company’s consolidated financial statements august 2016 fasb issued asu 201615 classification certain cash receipts cash payments intended reduce diversity reporting certain transactions statement cash flows clarifying current gaap may unclear include adequate explanation asu 201615 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted beginning interim annual period provided amendments included asu 201615 adopted period applied beginning annual period statement adopted company adopted asu 201615 believes adoption material impact consolidated financial statements october 2016 fasb issued asu 201616 income taxes requires entities recognize income tax consequences intraentity transfers assets inventory transfer occurs rather asset sold third party case current gaap asu 201616 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted beginning annual reporting period neither interim annual financial statements made available company adopted asu 201616 believes adoption material impact consolidated financial statements january 2017 fasb issued asu 201701 business combinations clarifying definition business narrows reach definition business exclude transactions akin asset acquisitions dispositions asu 201701 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted provided transactions affected adoption previously disclosed current gaap company adopted asu 201701 effective january 1 2017 adoption material impact consolidated financial statements may 2017 fasb issued asu 201709 compensation stock compensation scope modification accounting designed reduce diversity practice complexity accounting changes terms sharebased payment award asu 201709 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted interim period financial statements yet issued company adopted asu 201709 believes adoption material impact consolidated financial statements september 2017 fasb issued asu 201713 revenue recognition topic 605 revenue contracts customers topic 606 leases topic 840 leases topic 842 amendments sec paragraphs pursuant staff announcement july 20 2017 eitf meeting rescission prior sec staff announcements observer comments clarifies adoption date topics 606 842 public business entities would otherwise meet definition public business entity except inclusion financial statements another public entity’s filings states entities required comply adoption dates public entities company’s joint venture investments intend adopt topics 606 842 public business entities expected material impact company’s consolidated financial statements 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs observable inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities estimated fair value company’s financial assets liabilities december 31 2017 2016 follows thousands carrying values cash equivalents receivables accounts payable approximate fair value fair value company’s longterm debt estimated using discounted cash flow analysis based estimated current rates similar types arrangements considerable judgment required developing certain fair value estimates accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange 3 derivative instruments 2011 company entered two interest rate swap agreements calling company pay fixed interest rates 129 176 aggregate notional value equal balance promissory notes see note 8 receive variable interest rate based london interbank offered rate “libor” notional values interest rate swaps matured december 2015 renewed company recognized gains less 01 million derivative instruments year ended december 31 2015 included derivative losses net consolidated statements operations 4 acquisitions dispositions sicher helicopters sas “sicher” april 9 2015 company contributed 32 million cash 75 interest hauser investments limited “hauser” owns 100 sicher colombian entity connection acquisition company also transferred title aw139 helicopter hauser used sicher’s operations company recorded identifiable assets acquired liabilities assumed estimated acquisition date fair value accordance accounting standards codification “asc” 805 business combinations acquisition represent material business combination asc 805 acquisition 75 interest hauser resulted recognition intangible assets comprised primarily colombian air operator certificate 12 million fair value noncontrolling interest determined using discounted cash flow analysis noncontrolling interest partner right put interest company right call partner’s 25 ownership interest upon occurrence certain events fair value time exercise determined independent accounting firm result put right noncontrolling interest related hauser recorded mezzanine section consolidated balance sheets meet definition liability equity us gaap aeróleo october 1 2015 company’s partner aeróleo transfered 50 economic 80 voting interest aeróleo third party see note 5 resulting consolidation aeróleo accounted business acquisition accordance asc 805 connection transfer company entered shareholders’ agreement new partner includes among things putcall option arrangement gives company right purchase time new partner right put company two years new partner’s interest aeróleo company recorded identifiable assets acquired liabilities assumed estimated acquisition date fair value accordance asc 805 business combinations consolidation resulted immaterial gain consolidation consolidated statements operations years ended december 31 2017 2016 include operating revenues 358 million 293 million respectively net loss 36 million 44 million respectively result consolidation aeróleo including effects intercompany eliminations beginning date consolidation table represents company’s pro forma results operations assuming consolidation aeróleo took place january 1 2015 unaudited thousands part transaction company acquired remaining 50 ownership interest era brazil single purpose entity owns one aw139 helicopter leased aeróleo era brazil whollyowned subsidiary fbo may 1 2015 company sold fbo business ted stevens anchorage international airport piedmont hawthorne aviation llc pursuant membership interests purchase agreement piedmont hawthorne aviation llc acquired 100 era group’s whollyowned subsidiary era fbo llc cash proceeds 143 million company recognized pretax gain 129 million sale capital expenditures company’s capital expenditures 168 million 392 million 601 million 2017 2016 2015 respectively consisted primarily helicopter acquisitions deposits future helicopter deliveries spare helicopter parts equipment building improvements company records helicopter acquisitions property equipment places helicopters service completion work finalized helicopters ready use company sold otherwise disposed property equipment cash proceeds 94 million 286 million 253 million 2017 2016 2015 respectively summary changes owned helicopter fleet years ended december 31 2017 2016 2015 follows 1 includes two heavy helicopters yet placed service december 31 2016 2 includes three lighttwin helicopters one single engine helicopter acquired connection acquisition hauser 1 includes two single engine helicopters disposed salestype leases disposition february 23 2018 company sold flightseeing assets alaska consisted eight light single engine helicopters two operating facilities related property equipment cash proceeds 100 million 5 variable interest entities equity investments advances equity investments advances december 31 2017 2016 follows thousands company owns 50 interest aeróleo vie pursuant new shareholders’ agreement entered october 1 2015 see note 4 company primary beneficiary aeróleo consolidated entity company also owned 50 interest era brazil vie prior october 1 2015 primary beneficiary company consolidating entity since september 30 2012 october 1 2015 company acquired remaining 50 interest era brazil whollyowned subsidiary december 31 2017 2016 cumulative undistributed net earnings equity investees included company’s consolidated retained earnings 29 million 11 million respectively vies aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company partner also loaned aeróleo 60 million interest rate 60 per annum october 1 2015 company’s partner completed transfer 50 economic 80 voting interest aeróleo third party connection transfer company entered shareholders’ agreement new partner requires supermajority shareholder andor board approval respect specified significant actions putcall option arrangement gives company right purchase time new partner right put company two years new partner’s interest aeróleo unable adequately finance activities without additional financial support making vie prior october 1 2015 company determined primary beneficiary 20 voting interest allow direct activities significantly affect aeróleo’s economic performance result new shareholders’ agreement following partner’s transfer interests company determined control activities significantly affect aeróleo’s economic performance vie’s primary beneficiary accordingly aeróleo’s results consolidated company’s financial statements beginning october 1 2015 year ended december 31 2015 company recognized 214 million operating revenues aeróleo 421 million outstanding september 30 2015 see note 1 company’s consolidated balance sheets december 31 2017 2016 include assets aeróleo totaling 115 million 129 million respectively distribution assets era group subsidiaries aeróleo subject restrictions addition company’s consolidated balance sheets include liabilities aeróleo 76 million 92 million respectively creditors liabilities recourse era group subsidiaries aeróleo era brazil july 1 2011 company partner contributed 48 million cash era brazil 5050 joint venture era brazil highly leveraged entity outstanding debt due company made vie primary beneficiary company consolidated era brazil financial statements effective september 30 2012 connection aeróleo transaction october 1 2015 company acquired nominal consideration remaining 50 ownership interest era brazil making whollyowned subsidiary combined condensed financial statements summarized financial information company’s equity investments advances dart december 31 2017 2016 years ended december 31 2017 2016 2015 follows thousands summarized financial information company’s equity investments advances investees december 31 2017 2016 years ended december 31 2017 2016 2015 follows thousands joint ventures dart era dhs llc wholly owned subsidiary company acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 50 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart exchange 50 economic voting interest dart note receivable 51 million note receivable balance 28 million december 31 2017 bears interest rate 40 per annum requires quarterly principal interest payments matures july 31 2023 years ended december 31 2017 2016 2015 company purchased 20 million 19 million 21 million respectively products services dart era training center era training center llc “era training center” operates flight training devices provides training services company thirdparty customers years ended december 31 2017 2016 2015 company provided helicopter management services joint venture totaling 02 million 02 million 04 million respectively incurred 05 million 06 million 05 million respectively simulator fees era training center 37 million note company secured two flight training devices bears interest 60 per annum requires quarterly payments 01 million january 2026 6 escrow deposits time company enters qualified exchange accommodation agreements third party meet likekind exchange requirements section 1031 internal revenue code 1986 amended “code” provisions revenue procedure 200037 accordance provisions company permitted deposit proceeds sale assets escrow accounts purpose acquiring assets qualifying temporary deferral taxable gains realized consequently company establishes escrow accounts financial institutions deposit funds received sale equipment designated replacement property within specified period time december 31 2017 2016 company 33 million 38 million respectively deposited likekind exchange escrow accounts year ended december 31 2017 company sold one light twin helicopter total cash proceeds 32 million net fees sale transaction treated taxfree likekind exchange proceeds deposited qualified intermediary held qualifying asset delivered year ended december 31 2016 company sold two medium helicopters total cash proceeds 182 million net fees sale transaction treated taxfree likekind exchanges proceeds deposited qualified intermediary held qualifying asset delivered company used 74 million proceeds purchase aw189 heavy helicopter december 2016 completed first likekind exchange transaction company identified asset second likekind exchange transaction withdrew 70 million make progress payment s92 heavy helicopter december 2016 7 income taxes financial reporting purposes income loss income taxes equity earnings years ended december 31 2017 2016 2015 follows thousands components income tax expense benefit years ended december 31 2017 2016 2015 follows thousands following table reconciles difference statutory federal income tax rate company effective income tax rate years ended december 31 2017 2016 2015 components net deferred income tax liabilities december 31 2017 2016 follows thousands december 31 2017 2016 company federal net operating loss “nol” carryforwards 383 million 48 million respectively state income tax nol carryforwards 4113 million 3552 million respectively various states foreign nol carryforwards 585 million 409 million respectively various foreign jurisdictions december 31 2017 2016 company also foreign tax credits amounts 15 million 06 million respectively company’s federal nol carryforwards expire 2036 2037 company’s state nol carryforwards expire 2024 2037 foreign nol carryforwards unlimited carryforward periods company’s foreign tax credits expire 2026 2027 considering available evidence assessing need valuation allowance company believes likely benefit foreign state deferred tax assets realized december 31 2017 company provided valuation allowance 181 million state deferred tax assets company provided valuation allowance 170 million respect foreign deferred tax assets included table made 160 million related aeróleo 10 million related sicher assumptions change company determines able realize deferred tax assets tax benefits relating reversal valuation allowance deferred tax assets would recorded income tax provision period adjustments identified company’s operations subject jurisdiction multiple tax authorities impose various types taxes including income taxes determining taxes owed jurisdiction requires interpretation relevant tax laws regulations judicial decisions administrative interpretation local tax authority result company subject tax assessments jurisdictions including redetermination taxable amounts tax authorities may agree company’s interpretations positions taken company’s 2015 federal income tax return currently examination internal revenue service effects tax position recognized period determined likely tax position sustained upon examination including resolution related appeals litigation processes based technical merits position remain subject examination us federal multiple state tax jurisdictions tax years 2013 brazil 2013 subsequent years pursuant shareholders’ agreement entered october 1 2015 company’s partner aeróleo see note 4 company primary beneficiary aeróleo became consolidated entity company analyzed filing positions aeróleo brazil required file income tax returns open tax years 2013 2017 reconciliation beginning ending amount gross unrecognized tax benefits excluding interest penalties follows thousands reconciliation beginning ending amount valuation allowance follows thousands amounts accrued interest penalties associated unrecognized income tax benefits included expense consolidated statements operations december 31 2017 gross amount liability accrued interest penalties related unrecognized tax benefits 01 million amounts could change next twelve months company anticipate changes material impact financial statements fourth quarter 2017 aeroleo elected enter certain settled open tax claims tax special regularization program “pert program” pursuant brazil provisional measure 783 issued may 31 2017 pert program allows partial settling debts income tax debts nonincomebased tax debts due april 30 2017 brazil’s federal revenue service use tax credits including income tax loss carryforwards utilization 35 million income tax benefit recorded fourth quarter attributable income tax loss carryforwards pert program partially offset accrual operating expense associated certain indirect tax claims enrolled pert program december 22 2017 tax cuts jobs act tax act enacted law new legislation contains several key tax provisions affect company including onetime mandatory transition tax accumulated foreign earnings profits reduction us federal corporate income tax rate 35 21 effective january 1 2018 among others company required recognize effect tax law changes period enactment determining transition tax revaluing us deferred tax assets liabilities new effective rate december 2017 sec staff issued staff accounting bulletin 118 income tax accounting implications tax cuts jobs act sab 118 allows company record provisional amounts measurement period extend beyond one year enactment date december 31 2017 company completed accounting tax effects enactment tax act however company made reasonable estimate effects existing deferred tax balances onetime transitional tax recorded provisional benefit approximately 700 million amount due transitional tax company considers accounting transition tax deferred tax revaluations items incomplete due forthcoming guidance ongoing analysis final yearend data tax positions company continues evaluate newly enacted global intangible lowtaxed income gilti provisions could subject foreign earnings minimum level tax complexities new legislation company elected accounting policy gilti time recent fasb guidance indicates accounting gilti either part deferred taxes period cost applicable methods information gathered interpretation analysis tax legislation evolves company make appropriate accounting election company expects complete analysis within measurement period accordance sab 118 8 longterm debt company’s borrowings december 31 2017 2016 follows thousands company’s scheduled longterm debt maturities december 31 2017 follows thousands 7750 senior notes december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million interest 7750 senior notes payable semiannually arrears june 15 december 15 year 7750 senior notes may redeemed time december 15 2017 applicable redemption prices set forth indenture governing 7750 senior notes plus accrued unpaid interest redemption date indenture contains covenants restrict era group’s ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries’ ability pay dividends consolidate merge sell substantially assets addition upon specified change control trigger event specified asset sale era group may required offer repurchase 7750 senior notes era group’s payment obligations 7750 senior notes fully unconditionally guaranteed wholly owned existing us subsidiaries guarantors revolving credit facility net proceeds offering used repay 1900 million borrowings outstanding company’s prior 2000 million senior secured revolving credit facility “prior credit facility” year ended december 31 2016 company repurchased total 50 million 7750 senior notes price 8663 par total cash 45 million including accrued interest 02 million company recognized gains 05 million repurchases company repurchase 775 senior notes yearended 2017 revolving credit facility march 31 2014 era group entered revolving credit facility amendment prior credit facility advances revolving credit facility closing used refinance indebtedness incurred prior credit facility october 27 2016 company entered consent amendment 3 company’s revolving credit facility among things revised maintenance covenants provide additional flexibility reduced aggregate principal amount revolving loan commitments added condition borrowing repayment mechanism connection excess cash amounts revolving credit facility provides company ability borrow 2000 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 1000 million availability revolving credit facility may limited terms 7750 senior notes revolving credit facility matures march 2019 borrowings revolving credit facility bear interest rate per annum equal era group’s election either base rate libor defined plus applicable margin applicable margin based company’s ratio funded debt ebitda defined ranges 75 200 basis points base rate margin 175 300 basis points libor margin applicable margin december 31 2017 200 basis points “base rate” margin 300 basis points libor margin addition era group required pay quarterly commitment fee based average unfunded portion committed amount rate based company’s ratio funded debt ebitda defined ranges 375 50 basis points december 31 2017 commitment fee 50 basis points obligations revolving credit facility secured portion company’s helicopter fleet tangible assets guaranteed era group’s wholly owned us subsidiaries revolving credit facility contains various restrictive covenants including maintain maximum senior secured leverage ratio defined minimum interest coverage ratio minimum ratio sum fair market value mortgaged helicopters accounts receivable inventory committed amounts revolving credit facility well customary covenants including certain restrictions company’s ability enter certain transactions including could result incurrence additional indebtedness liens making loans guarantees investments sales assets payments dividends repurchases capital stock entering transactions affiliates december 31 2017 compliance debt covenants december 31 2017 era group 390 million outstanding borrowings revolving credit facility remaining availability 758 million based borrowing base date net issued letters credit 13 million availability revolving credit facility subject company’s ability maintain compliance financial ratios discussed connection amendment 3 revolving credit facility reduced total commitment amount facility 2000 million era group wrote previously incurred debt issuance costs 05 million incurred additional debt issuance costs 09 million 2016 additional debt issuance costs included assets consolidated balance sheets amortized interest expense consolidated statements operations life revolving credit facility march 7 2018 era group entered consent amendment 4 amended restated senior secured revolving credit facility agreement among things reduced aggregate principal amount revolving loan commitments 2000 million 1250 million b extended agreement’s maturity march 31 2021 c revised definition ebitda permit addback ongoing litigation expenses related h225 helicopters adjusted covenant requirement maintain interest coverage ratio less 175100 senior secured leverage ratio 325100 applicable margin based company’s ratio funded debt ebitda increased 50 basis points tier previous amendment promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2017 247 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 basis points interest rate resets monthly december 31 2017 243 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 connection refinancing company paid total 01 million debt issuance costs 2015 2016 notes amended among things provide crosscollateralization helicopter secures promissory notes aeróleo debt connection transfer partnership interests discussed note 5 company’s former partner assigned two existing notes receivable aeróleo totaling 83 million company’s new partner june 2016 company partner aeróleo contributed notes payable aeróleo including two notes contribution additional capital aeróleo result 63 million debt due company’s partner aeróleo recorded net loss attributable noncontrolling interest subsidiaries consolidated statements operations addition october 1 2015 aeróleo existing loan third party balance 14 million note payable brazilian reals bore interest rate 190 per annum called equal monthly payments principal interest final payment due september 2016 june 2016 company prepaid principal interest 15 million settle note full company also settled certain tax disputes brazil totaling 30 million pert program agreed make installment payments amounts due applicable taxing authorities installments payable brazilian reals bear interest rate equal overnight rate published central bank brazil paid next 19 63 months december 31 2017 amounts included schedule longterm debt maturities noted 9 earnings per share basic earnings per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant exercise outstanding stock options computations basic diluted earnings per common share years ended december 31 2017 2016 2015 follows thousands except share per share data 1 excludes weighted average common shares 273255 294273 209446 years ended december 31 2017 2016 2015 respectively certain share awards effect inclusion would antidilutive 10 sharebased compensation share incentive plans 2013 company adopted era group inc 2012 incentive plan “2012 plan” maximum 4000000 shares company’s common stock reserved issuance awards granted 2012 plan may form stock options stock appreciation rights shares restricted stock sharebased awards payable cash common stock performance awards combination thereof may made outside directors employees consultants era group’s board directors determines award whether issue new shares company’s treasury account december 31 2017 2016 2525563 2747662 shares respectively remained available grant 2012 plan 2013 company adopted era group inc 2013 employee stock purchase plan “espp” company may offer maximum 300000 shares company’s common stock purchase eligible employees price equal 85 lesser fair market value common stock first day offering period ii fair market value common stock last day offering period common stock made available purchase espp sixmonth offering periods espp intended comply section 423 code intended subject section 401a code employee retirement income security act 1974 board directors company may amend terminate espp time however increase number shares common stock reserved issuance espp may made without stockholder approval 2016 board directors authorized additional 400000 reserved issuance espp approved stockholders company’s annual meeting 2017 espp term ten years december 31 2017 2016 336763 461811 shares respectively remained available issuance espp year ended december 31 2017 company issued 125102 shares espp total sharebased compensation expense includes stock options restricted stock espp purchases 46 million 46 million 37 million years ended december 31 2017 2016 2015 respectively portion restricted stock awards performancebased december 31 2017 company approximately 28 million total unrecognized compensation costs weighted average period expected recognized 17 years restricted stock awards year ended december 31 2017 number shares weighted average grant price restricted stock award transactions follows years ended december 31 2017 2016 2015 company awarded 297256 342913 193668 shares respectively restricted stock weighted average grant date fair value 1144 1056 2082 respectively total fair value shares vested years ended december 31 2017 2016 2015 determined using closing price grant date 55 million 32 million 19 million respectively stock option grants year ended december 31 2017 number shares weighted average grant date fair value weighted average exercise price stock option transactions follows company grant options years ended december 31 2017 december 31 2016 11 related party transactions prior january 31 2013 company wholly owned seacor holdings inc along majorityowned subsidiaries collectively referred “seacor” represented seacor’s aviation services business segment january 31 2013 seacor completed spinoff means dividend seacor’s stockholders company’s issued outstanding common stock “spinoff” year ended december 31 2015 company provided less 01 million aviation services seacor flight charter arrangements amounts recorded operating revenues consolidated statements operations company provide services seacor years ended december 31 2017 2016 prior spinoff part consolidated group certain costs expenses company borne seacor charged company conjunction spinoff company entered amended restated transition services agreement seacor subsequent january 31 2013 termination amended restated transition services agreement june 30 2015 costs classified administrative general expenses consolidated statements operations costs totaled 06 million 30 million years ended december 31 2016 2015 respectively additionally company leases office space seacor years ended december 31 2017 2016 2015 company paid 04 million seacor rent utilities included administrative general expenses consolidated statements operations years ended december 31 2017 2016 2015 company purchased products services dart totaling 20 million 19 million 21 million respectively note receivable dart balance 28 million 32 million december 31 2017 2016 respectively purchases dart included operating expenses consolidated statements income note receivable included equity investments advances consolidated balance sheets years ended december 31 2017 2016 2015 company provided helicopter management services era training center totaling 02 million 02 million 04 million respectively incurred 05 million 06 million 05 million respectively flight training device fees revenues era training center recorded operating revenues expenses incurred recorded operating expenses consolidated statements operations december 31 2017 2016 company note receivable era training center balance 37 million 40 million respectively recorded equity investments advances consolidated balance sheets june 2016 company partner aeróleo contributed notes payable aeróleo contribution additional capital aeróleo see discussion note 8 12 commitments contingencies company’s unfunded capital commitments december 31 2017 consisted primarily agreements purchase helicopters totaled 1177 million 1064 million payable 2018 balance payable 2019 noncancellable portion helicopter commitments payable 2018 28 million company also 13 million deposits paid options yet exercised company may terminate 1162 million total commitments inclusive deposits paid options yet exercised without liability liquidated damages 26 million aggregate brazilian tax disputes company disputing assessments approximately 71 million taxes penalties interest levied municipal authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal assessments” company believes based interpretation tax legislation supported clarifying guidance provided supreme court brazil respect issue 2006 ruling compliance applicable tax legislation paid applicable taxes penalties interest plans defend claims vigorously administrative levels jurisdiction event municipal assessments upheld last administrative level may necessary company deposit amounts issue security pursue appeals 2015 company received final unfavorable ruling respect similar assessment levied rio de janeiro state treasury periods 1994 1998 “1998 assessments” 1998 assessments upheld without taking consideration benefit clarifying guidance issued supreme court following assertion claims final adjudication 1998 assessments requires payment amounts within established accruals paid multiple installments time expected material effect company’s financial position results operations december 31 2017 possible determine outcome municipal assessments company expect outcome would material adverse effect business financial position results operations addition possible reasonably estimate likelihood potential amount assessments may issued subsequent periods company disputing responsibility 30 million employer social security contributions required remitted one customers relating period 1995 1998 although company may deemed coresponsible remittances local regulatory regime customer’s payments company presented invoices made net specific remittances required made customer issue claim company plans defend claim vigorously december 31 2017 possible determine outcome matter company expect outcome would material adverse effect business financial position results operations company disputing certain penalties assessed state rio de janeiro respect company’s alleged failure submit accurate documentation fully comply filing requirements respect certain valueadded taxes company elected make payment 02 million installments time satisfy portion penalties upon confirming asserting authority originally proposed penalties 16 million respect balance assessments calculated based amounts containing typographical error aggregate penalties remain dispute total 04 million december 31 2017 possible determine outcome matter company expect outcome would material adverse effect business financial position results operations company disputing imposition 10 million fines levied brazilian customs authorities fines relate company’s alleged failure comply certain deadlines temporary regime pursuant imports helicopters brazil order dispute fines pursue legal remedies within judicial system company deposited certain amounts issue security escrow account presiding judge matters controls release funds pending outcome company believes documentation evidences timely compliance relevant deadlines company plans defend claims vigorously december 31 2017 possible determine outcome matters company expect outcome would material adverse effect business financial position results operations company disputing fines 03 million sought taxing authorities brazil following final adjudication disallow certain tax credits applied company offset certain social tax liabilities fine calculated 50 incremental tax liability resulting disallowance tax credits applied without taking account circumstances relating disallowance tax credits constitutionality fines review supreme court brazil number cases taxpayers received favorable rulings due lack constitutionality law company plans defend claim vigorously december 31 2017 possible determine outcome company expect would material adverse impact business financial position results operations company disputing contingent fees 06 million sought former tax consultant calculated based unrealized tax savings attributed consultant’s suggested tax strategies company contends fees due upon realized tax savings december 31 2017 possible determine outcome matters company expect outcome would material adverse effect business financial position results operations normal course business company may become involved various employmentrelated litigation matters december 31 2017 possible determine outcome several claims wherein aggregate 01 million company’s established accrual sought company expect outcome respect claims would material adverse effect business financial position results operations company also disputing claims brazilian tax authorities respect federal customs taxes levied upon helicopters leased company imported brazil temporary regime subject reexport order dispute assessments pursue available legal remedies within judicial system company deposited amounts issue security escrow account serves security presiding judge matters controlling release funds company believes based interpretation tax legislation well established aviation industry practice required pay taxes plans defend claims vigorously december 31 2017 possible determine outcome matter company expect outcome would material adverse effect business financial position results operations relates specific cases referred company currently anticipates administrative fine penalty ultimately would material effect financial position results operations company deposited 103 million escrow accounts controlled court respect certain cases described fully reserved amounts subject final determination judicial release escrow deposits estimated liabilities based company’s assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience november 21 2016 filed lawsuit district court dallas county texas airbus helicopters inc airbus helicopters sas collectively “airbus” alleging breaches various contracts us fraudulent inducement unjust enrichment connection sale airbus h225 model helicopters us october 26 2017 added claims airbus fraud negligent misrepresentation december 28 2017 amended complaint seek damages attributable impact airbus’ unlawful acts value h225 purchased another helicopter operator seek compensation monetary damages amount determined cannot predict ultimate outcome litigation time involved various legal actions incidental business including actions relating employee claims actions relating medical malpractice claims various tax issues grievance hearings labor regulatory agencies miscellaneous third party tort actions outcome proceedings predictable however based current circumstances believe ultimate resolution proceedings considering available defenses insurance coverage indemnification rights material adverse effect financial position results operations cash flows settlements april 2014 company entered settlement agreement airbus helicopters formerly eurocopter division airbus group formerly european aeronautic defense space company respect extended suspension operations h225 heavy helicopters 2012 2013 settlement agreement provided certain service product credit discounts available company applied support services available airbus helicopters covering spare parts repair overhaul service bulletins technical assistance services years ended december 31 2016 2015 company utilized credits amount 17 million 50 million respectively december 31 2016 company utilized credits available agreement minimum lease payments december 31 2017 company leased four helicopters certain facilities equipment leasing agreements classified operating leases financial reporting purposes related rental fees charged expense lease terms leases generally contain purchase lease renewal options rights first refusal respect sale lease equipment lease terms range duration one ten years total rental expense company’s operating leases years ended december 31 2017 2016 2015 55 million 57 million 45 million respectively company’s scheduled minimum lease payments operating leases remaining term excess one year december 31 2017 follows thousands 13 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate year ended december 31 2017 anadarko petroleum corporation “anadarko” petrobras us government accounted 28 22 16 respectively company’s operating revenues year ended december 31 2016 anadarko petrobras us government accounted 24 20 16 respectively company’s operating revenues year ended december 31 2015 anadarko us government accounted 27 13 respectively company’s operating revenues years ended december 31 2017 2016 2015 approximately 34 31 21 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived oil gas operations brazil colombia suriname well leasing activities following represents company’s operating revenues geographical region services provided years ended december 31 2017 2016 2015 thousands company’s longlived assets primarily property equipment employed various geographical regions world following represents company’s property equipment net accumulated depreciation based upon assets’ physical locations december 31 2017 2016 thousands company’s brazilian operations include 211 employees representing approximately 28 company’s total workforce covered collective bargaining agreements none expire within next year disputes employees terms collective bargaining agreements could result strikes work stoppages higher labor costs conditions may material adverse effect company’s financial condition results operations 14 supplemental information statements cash flows supplemental cash flow information years ended december 31 2017 2016 2015 follows thousands 15 quarterly financial information unaudited selected financial information interim quarterly periods presented thousands except per share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year 1 third quarter 2017 includes adjustments immaterial fiscal year ended december 31 2017 prior periods impact corrections made third quarter 2017 12 million increase operating loss including 02 million increase operating expense 07 million increase general administrative expense 03 million increase loss impairment 09 million increase tax benefit 03 million increase net loss net loss attributable common shares 002 increase loss per common share 2 fourth quarter 2017 includes adjustments immaterial fiscal year ended december 31 2017 prior periods impact corrections made fourth quarter 2017 03 million increase operating loss including 04 million increase operating expense 02 million decrease depreciation amortization expense 01 million decrease general administrative expense 02 million decrease gains asset dispositions 12 million increase interest expense 02 million increase tax benefit 14 million decrease net loss net loss attributable common shares 005 decrease loss per common share 3 fourth quarter 2016 includes adjustments immaterial fiscal year ended december 31 2016 prior periods impact corrections made fourth quarter 2016 17 million decrease operating income including 20 million increase operating expense 05 million decrease depreciation amortization expense 03 million decrease gains asset dispositions 10 million increase net loss net loss attributable common shares 005 increase loss per common share 16 guarantors securities era group’s payment obligations 7750 senior notes jointly severally guaranteed existing 100 owned us subsidiaries guarantee revolving credit facility future us subsidiaries guarantee revolving credit facility material indebtedness era group may incur future “guarantors” guarantors currently guarantee revolving credit facility guarantees guarantors full unconditional joint several result agreement guarantors guarantee 7750 senior notes company presents following condensed consolidating balance sheets statements operations comprehensive income cash flows era group “parent” guarantors company’s subsidiaries “nonguarantors” statements read conjunction accompanying consolidated financial statements notes company supplemental condensed consolidating balance sheet december 31 2017 supplemental condensed consolidating balance sheet december 31 2016 supplemental condensed consolidating statements operations year ended december 31 2017 supplemental condensed consolidating statements operations year ended december 31 2016 supplemental condensed consolidating statements operations year ended december 31 2015 supplemental condensed consolidating statements comprehensive income year ended december 31 2017 supplemental condensed consolidating statements comprehensive income year ended december 31 2016 supplemental condensed consolidating statements comprehensive income year ended december 31 2015 supplemental condensed consolidating statements cash flows year ended december 31 2017 supplemental condensed consolidating statements cash flows year ended december 31 2016 supplemental condensed consolidating statements cash flows year ended december 31 2015item 15 exhibits financial statement schedules documents filed part report 1 financial statements consolidated financial statements filed part report listed index consolidated financial statements annual report form 10k 2 financial statement schedules financial statement schedules omitted applicable required information shown consolidated financial statements notes thereto 3 exhibits incorporated herein reference indicated management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused report signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements report independent registered public accounting firm shareholders board directors era group inc opinion financial statements audited accompanying consolidated balance sheets era group inc delaware corporation subsidiaries “company” december 31 2018 related consolidated statements operations comprehensive income changes equity cash flows year ended december 31 2018 related notes collectively referred “financial statements” opinion based audit report auditors financial statements present fairly material respects financial position company december 31 2018 results operations cash flows year ended december 31 2018 conformity accounting principles generally accepted united states america audit financial statements dart holding company ltd corporation company 50 interest consolidated financial statements company’s investment advances dart holding company ltd stated 271 million december 31 2018 company’s equity earnings dart holding company ltd stated 25 million year ended december 31 2018 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors also audited accordance standards public company accounting oversight board united states “pcaob” company’s internal control financial reporting december 31 2018 based criteria established 2013 internal controlintegrated framework issued committee sponsoring organizations treadway commission “coso” report dated march 7 2019 expressed unqualified opinion basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audit included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence supporting amounts disclosures financial statements audit also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audit provide reasonable basis opinion grant thornton llp served company’s auditor since 2018 houston texas march 7 2019 report independent registered public accounting firm shareholders board directors era group inc opinion internal control financial reporting audited internal control financial reporting era group inc delaware corporation subsidiaries “company” december 31 2018 based criteria established 2013 internal controlintegrated framework issued committee sponsoring organizations treadway commission “coso” opinion company maintained material respects effective internal control financial reporting december 31 2018 based criteria established 2013 internal controlintegrated framework issued coso also audited accordance standards public company accounting oversight board united states “pcaob” consolidated financial statements company year ended december 31 2018 report dated march 7 2019 expressed unqualified opinion financial statements basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate grant thornton llp houston texas march 7 2019 report independent registered public accounting firm shareholders board directors dart holding company ltd opinion financial statements audited consolidated balance sheet dart holding company ltd “company” december 31 2018 related consolidated statements income comprehensive income stockholders’ equity cash flows year ended related notes collectively “consolidated financial statements” opinion consolidated financial statements present fairly material respects financial position company december 31 2018 results operations cash flows year ended conformity us generally accepted accounting principles basis opinion consolidated financial statements responsibility companys management responsibility express opinion companys consolidated financial statements based audit public accounting firm registered public company accounting oversight board united states “pcaob” required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audit included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audit also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audit provides reasonable basis opinion kpmg llp chartered professional accountants licensed public accountants served company’s auditor since 2011 montréal canada february 27 2019 report independent registered public accounting firm shareholders board directors era group inc opinion financial statements audited accompanying consolidated balance sheet era group inc company december 31 2017 related consolidated statements operations comprehensive income changes equity cash flows two years period ended december 31 2017 related notes collectively referred “financial statements” opinion based audits report auditors financial statements present fairly material respects consolidated financial position company december 31 2017 consolidated results operations cash flows two years period ended december 31 2017 conformity us generally accepted accounting principles audit 2016 financial statements dart holding company ltd corporation company 50 interest consolidated financial statements company’s equity net income dart holding company ltd stated 13 million 2016 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audits public accounting firm registered public company accounting oversight board united states pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud company required engaged perform audit internal control financial reporting part audits required obtain understanding internal control financial reporting purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits report auditors provide reasonable basis opinion sernst young llp served company’s auditor 2007 2018 houston texas march 8 2018 except note 1 note 10 date march 7 2019 independent auditors’ report registered public accounting firm stockholders board directors dart holding company ltd audited accompanying consolidated balance sheet dart holding company ltd december 31 2016 related consolidated statements income loss comprehensive income loss stockholders’ equity cash flows year ended consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audit auditors’ responsibility conducted audit accordance canadian generally accepted auditing standards accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement company required engaged perform audit internal control financial reporting audit included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures consolidated financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audit provide reasonable basis opinion consolidated financial statements referred present fairly material respects consolidated financial position dart holding company ltd december 31 2016 consolidated results operations consolidated cash flows year ended conformity us generally accepted accounting principles kpmg llp chartered professional accountants licensed public accountants february 27 2017 montréal canada era group inc consolidated balance sheets thousands except share amounts 1 refer footnote 5 detail variable interest entities “vie” accompanying notes integral part consolidated financial statements era group inc consolidated statements operations thousands except share per share data accompanying notes integral part consolidated financial statements era group inc consolidated statements comprehensive income thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements changes equity thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” consolidated subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states “us” primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers international independent major integrated oil gas companies us government agencies addition serving oil gas industry company provides emergency response services utility services including support firefighting activities company operates federal aviation administration “faa” approved maintenance repair station lake charles louisiana company interest dart holding company ltd “dart” sales manufacturing organization based canada engineers manufactures distributes aftermarket helicopter parts accessories basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries entities meet criteria vies company primary beneficiary significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures company reports investments accompanying consolidated balance sheets equity investments advances company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses net tax use estimates preparation financial statements conformity accounting principles generally accepted us “gaap” requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting periods estimates include among items related allowance doubtful accounts useful lives property equipment inventories income tax provisions impairments fair values used purchase price allocations certain accrued contingent liabilities actual results could differ estimates differences may material reclassification certain amounts reported prior periods consolidated financial statements reclassified conform current period’s presentation cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments supplemental cash flow information following table sets forth company’s reconciliation cash equivalents restricted cash reported within consolidated statement cash flows years ended december 31 2018 thousands 1 restricted cash represents amounts deposited escrow accounts end period escrow deposits shown separate line item consolidated balance sheet trade receivables customers primarily international independent major integrated exploration development production companies international helicopter operators us government agencies customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted allowance doubtful accounts years ended december 31 2018 2017 2016 follows thousands concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations company also exposed concentrations credit risk associated cash equivalents company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company’s two largest customers comprised 52 46 net trade receivables december 31 2018 2017 respectively inventories stated lower average cost net realizable value consist primarily spare parts fuel company establishes allowance accrue retirement cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts following table roll forward allowance related obsolete excess inventory years ended december 31 2018 2017 2016 thousands 1 includes 01 million elimination h225 inventory reserve 2017 property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life company reviews estimated useful lives salvage values property equipment ongoing basis changes estimates changes years ended december 31 2018 2017 2016 december 31 2018 estimated useful life years company’s categories new property equipment follows equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known powerbyhour “pbh” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments pbh provider case company records reduction operating expense company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered pbh arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful lives company capitalized interest 01 million 05 million less 01 million years ended december 31 2018 2017 2016 respectively december 31 2018 2017 construction progress component property equipment included capitalized interest 07 million 19 million respectively impairment longlived assets company performs impairment analysis longlived assets used operations events changes circumstances indicate carrying value assets may recoverable company’s longlived assets grouped lowest level identifiable cash flows largely independent cash flows groups assets generally fleet group level impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset group company would required recognize impairment loss 2017 company concluded cash flows associated h225 heavy helicopters largely independent cash flows associated remainder fleet evaluated separately impairment company performed impairment analysis h225 helicopters capital parts related inventory determined projected undiscounted cash flows remaining useful life less carrying amount determining fair value company used cost approach begins replacement cost new asset adjusts age functional economic obsolescence inputs used company’s fair value estimate level 3 fair value hierarchy discussed note 2 december 31 2018 company recorded 10 million impairment charge h225 helicopter 2017 company recorded 117 million impairment charge h225 helicopters impairment equity investees company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments years ended december 31 2018 2017 2016 company recognize impairment charges goodwill recorded purchase price paid acquisition exceeds fair value net identified tangible intangible assets acquired company performs annual impairment test goodwill interim tests extent indicators impairment develop annual impairment tests company tests goodwill reporting unit level company’s impairment review process compares fair value reporting unit carrying value including goodwill determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests goodwill impairment typically developed part company’s routine business planning forecasting process company believes estimates assumptions reasonable variations estimates could produce materially different results intangible assets intangible assets indefinite lives recorded purchase price accounting business combination company performs annual impairment test indefinite lived intangible assets interim tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value book value determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests indefinite lived assets impairment company believes estimates assumptions reasonable variations estimates could produce materially different results intangible assets finite useful lives amortized respective estimated useful lives december 31 2018 company indefinite lived intangible assets 11 million intangible assets finite lives less 01 million business combinations company recognizes certain exceptions 100 percent fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 14 million 11 million 15 million years ended december 31 2018 2017 2016 respectively including writeoff 04 million 05 million debt issuance costs 2018 2016 respectively connection amendment company’s amended restated senior secured revolving credit facility “revolving credit facility” amortization expense included interest expense consolidated statements operations revenue recognition company recognizes revenues flight services emergency response services passing day company right consideration customers amount corresponds directly value company’s customer performance completed date therefore company elected exercise right invoice practical expedient adoption asc 606 right invoice represents method recognizing revenue time using output measure “value customer” objective measure entity’s performance contract company typically invoices customers monthly basis revenues earned prior month payment terms 30 days company’s customer arrangements contain significant financing component customers income taxes era group majorityowned us subsidiaries file consolidated us federal tax return era group’s foreign consolidated subsidiaries file tax returns applicable jurisdictions deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general expense respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized company evaluated newly enacted global intangible lowtaxed income gilti provisions could subject foreign earnings minimum level tax decided make election treat costs period costs foreign currency transactions functional currency company’s foreign entities us dollar time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method savings plan company provides defined contribution plan “savings plan” eligible usbased employees savings plan provides qualified nonelective company contributions amount equal 3 employee’s eligible pay plus amount equal 100 employee’s first 3 wages invested savings plan immediate full vesting company’s contributions savings plan subject annual review board directors era group “board directors” company’s savings plan costs 23 million 24 million 28 million respectively years ended december 31 2018 2017 2016 recent accounting pronouncements adopted company adopted provisions financial accounting standards board fasb accounting standards update asu 201409 “revenue contracts customers” amendments issued provisions asu 201608 “principal versus agent considerations reporting revenue gross versus net” asu 201610 “identifying performance obligations licensing” asu 201612 “narrowscope improvements practical expedients” asu 201620 “technical corrections improvements topic 606 revenue contracts customers” collectively accounting standards codification asc topic 606 beginning january 1 2018 asc topic 606 outlines single comprehensive model entities use accounting revenue arising contracts customers except revenues scope another accounting standard asu superseded revenue recognition requirements asc topic 605 “revenue recognition” industryspecific guidance asc topic 606 sets forth fivestep model determining revenue recognized model entity required recognize revenue depict transfer goods services customer amount reflecting consideration expects receive exchange goods services adoption asc topic 606 material impact company’s consolidated financial statements see note 10 revenues additional information relating revenue contracts customers company adopted provisions fasb asu 201615 “classification certain cash receipts cash payments” beginning january 1 2018 asu clarifies certain cash receipts cash payments classified presented statement cash flows company made accounting policy election classify distributions received equity method investees using nature distribution approach classifies distributions received investees either cash inflows operating activities cash inflows investing activities based nature activities investee generated distribution adoption asu material impact company’s historical financial statements october 2016 fasb issued asu 201616 income taxes requires entities recognize income tax consequences intraentity transfers assets inventory transfer occurs rather asset sold third party case current gaap asu 201616 effective annual reporting periods beginning december 15 2017 including interim periods within period company adopted asu 201616 effective january 1 2018 adoption material impact consolidated financial statements company adopted provisions fasb asu 201618 “restricted cash” beginning january 1 2018 asu requires amounts deemed restricted cash included cash equivalents reconciling beginningofperiod endofperiod total amounts shown statement cash flows presentation permit reconciliation cash equivalents restricted cash presented one line item balance sheet company amounts deposited escrow accounts discussed note 3 amounts deemed restricted cash included “escrow deposits” line consolidated balance sheet impact adopting asu included adjustments prior period statement cash flows may 2017 fasb issued asu 201709 compensation stock compensation scope modification accounting designed reduce diversity practice complexity accounting changes terms sharebased payment award asu 201709 effective annual reporting periods beginning december 15 2017 including interim periods within period early adoption permitted interim period financial statements yet issued company adopted asu 201709 effective january 1 2018 adoption material impact consolidated financial statements new accounting standards yet adopted february 2016 fasb issued asu 201602 “leases” asu 201602 establishes comprehensive accounting financial reporting requirements leasing arrangements asu supersedes existing requirements fasb asc topic 840 “leases” requires lessees recognize substantially lease assets lease liabilities balance sheet provisions asu also modify definition lease outline requirements recognition measurement presentation disclosure leasing arrangements lessees lessors asu effective interim annual periods beginning december 15 2018 early adoption standard permitted entities required adopt asu using modified retrospective approach subject certain optional practical expedients apply provisions asu leasing arrangements existing entered earliest comparative period presented financial statements july 2018 asu amended provisions asu 201811 “targeted improvements” topic 842 whereby fasb decided provide alternate transition method allowing entities initially apply new leases standard adoption date january 1 2019 calendar yearend public business entities recognize cumulativeeffect adjustment opening balance retained earnings period adoption consistent preparers’ requests company currently plans adopt standard first quarter 2019 using currentperiod adjustment method recognize cumulativeeffect adjustment opening balance retained earnings period company elected package practical expedients permitted transition guidance within new standard allows us carry forward historical accounting related lease identification classification existing leases upon adoption company made accounting policy election keep leases initial term 12 months less consolidated balance sheet company identified relevant lease contracts review evaluation substantially complete company’s evaluation asu still ongoing company estimates approximately 70 million 90 million additional right use assets liabilities recognized consolidated balance sheet upon adoption company expects initial impact adopting new standard consolidated statement operations consolidated statement cash flows material june 2016 fasb issued asu 201613 “measurement credit losses financial instruments” asu 201613 sets forth current expected credit loss model new forwardlooking impairment model certain financial instruments based expected losses rather incurred losses asu effective interim annual periods beginning december 15 2019 early adoption standard permitted entities required adopt asu using modified retrospective approach subject certain limited exceptions company evaluating potential impact adoption asu consolidated financial statements august 2018 fasb issued asu201815 “intangiblesgoodwill otherinternaluse software” subtopic 35040 providing guidance addressing customers accounting implementation costs incurred cloud computing arrangement “cca” considered service contract new guidance implementation costs cca evaluated capitalization using approach implementation costs associated internaluse software expensed term hosting arrangement includes reasonably certain renewal periods new guidance effective fiscal years beginning december 15 2019 calendar yearend public business entities early adoption permitted including adoption interim period company evaluating potential impact adoption asu consolidated financial statements august 2018 fasb issued asu201813 “fair value measurements” asu no201813 update topic asc820 providing guidance changes unrealized gains losses period included comprehensive income recurring level 3 fair value measurements held end reporting period range weighted average significant unobservable inputs used develop level 3 fair value measurements certain unobservable inputs entity may disclose quantitative information median arithmetic average lieu weighted average entity determines quantitative information would reasonable rational method reflect distribution unobservable inputs used develop level 3 fair value measurements asu201813 effective interim annual periods beginning december 15 2019 company adopted asu believes adoption material impact consolidated financial statements 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs observable inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities estimated fair value company’s financial assets liabilities december 31 2018 2017 follows thousands carrying values cash equivalents receivables accounts payable approximate fair value fair value company’s longterm debt estimated using discounted cash flow analysis based estimated current rates similar types arrangements considerable judgment required developing certain fair value estimates accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange 3 escrow deposits prior change us tax code end 2017 company periodically entered qualified exchange accommodation agreements third parties meet likekind exchange requirements section 1031 internal revenue code 1986 amended “code” provisions revenue procedure 200037 accordance provisions company permitted deposit proceeds sale assets escrow accounts purpose acquiring assets qualifying temporary deferral taxable gains realized consequently company established escrow accounts financial institutions deposit funds received sales equipment designated replacement property within specified period time december 31 2018 company deposits likekind exchange escrow accounts december 31 2017 company 33 million deposited likekind exchange escrow accounts year ended december 31 2017 company sold one light twin helicopter total cash proceeds 32 million net fees sale transaction treated taxfree likekind exchange proceeds deposited qualified intermediary held qualifying asset delivered year ended december 31 2018 company used 28 million balance escrow accounts make final payment s92 heavy helicopter completed likekind exchange transaction remaining 05 million returned company 4 acquisitions dispositions capital expenditures company’s capital expenditures 92 million 168 million 392 million 2018 2017 2016 respectively consisted primarily helicopter acquisitions spare helicopter parts leasehold improvements company records helicopter acquisitions property equipment places helicopters service completion work finalized helicopters ready use company sold otherwise disposed property equipment cash proceeds 296 million 94 million 286 million 2018 2017 2016 respectively included proceeds 296 million 12 million related salestype leases six h225 heavy helicopters 40 million loss recognized lease commencement summary changes company’s owned helicopter fleet years ended december 31 2018 2017 2016 follows 1 includes two heavy helicopters yet placed service december 31 2016 1 includes six h225 heavy helicopters disposed salestype leases disposition february 23 2018 company sold flightseeing assets alaska consisted eight light single engine helicopters two operating facilities related property equipment cash proceeds 100 million 5 variable interest entities equity investments advances vies aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company partner also loaned aeróleo 60 million interest rate 60 per annum october 1 2015 company’s partner completed transfer 50 economic 80 voting interest aeróleo third party connection transfer company entered shareholders’ agreement new partner requires supermajority shareholder andor board approval specified significant actions putcall option arrangement gives company right purchase time new partner right put company two years new partner’s interest aeróleo company ability direct activities significantly affect aeróleo’s financial performance making company primary beneficiary result company concluded aeróleo variable interest entity therefore consolidated company’s financial statements company’s consolidated balance sheets december 31 2018 2017 include assets aeróleo totaling 119 million 115 million respectively distribution assets era group subsidiaries aeróleo subject restrictions addition company’s consolidated balance sheets december 31 2018 2017 include liabilities aeróleo 45 million 76 million respectively creditors liabilities recourse era group subsidiaries aeróleo joint ventures dart era dhs llc wholly owned subsidiary company acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 50 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart exchange 50 economic voting interest dart note receivable 51 million note receivable balance 23 million december 31 2018 bears interest rate 40 per annum requires quarterly principal interest payments matures july 31 2023 years ended december 31 2018 2017 2016 company purchased 20 million 20 million 19 million respectively products services dart year ended december 31 2018 company received dividends 10 million dart era training center era training center llc “era training center” previously operated flight training devices provided training services company thirdparty customers years ended december 31 2018 2017 2016 company provided helicopter management services joint venture totaling 01 million 02 million 02 million respectively incurred 02 million 05 million 06 million respectively simulator fees year ended december 31 2018 company entered agreement dissolve era training center exchange settlement existing promissory note outstanding principal amount 36 million acquiring assets joint venture agreement included sale three simulators company 29 million partial ownership fourth simulator 04 million note receivable company’s partner era training center 04 million equity investments advances december 31 2018 2017 follows thousands december 31 2018 2017 cumulative undistributed net earnings equity investees included company’s consolidated retained earnings 60 million 29 million respectively combined condensed financial statements summarized financial information company’s equity investments advances dart december 31 2018 2017 years ended december 31 2018 2017 2016 follows thousands summarized financial information company’s equity investments advances investees december 31 2018 2017 years ended december 31 2018 2017 2016 follows thousands 6 income taxes financial reporting purposes income loss income taxes equity earnings years ended december 31 2018 2017 2016 follows thousands components income tax expense benefit years ended december 31 2018 2017 2016 follows thousands following table reconciles difference statutory federal income tax rate company effective income tax rate years ended december 31 2018 2017 2016 components net deferred income tax liabilities december 31 2018 2017 follows thousands december 31 2018 company federal net operating loss “nol” carryforwards company 383 million federal net operating loss “nol” carryforwards 2017 state income tax nol carryforwards 3777 million 4113 million 2018 2017 respectively various states foreign nol carryforwards 569 million 585 million 2018 2017 respectively various foreign jurisdictions december 31 2017 company foreign tax credit carryforwards 15 million fully utilized period ended december 31 2018 company’s state nol carryforwards expire 2024 2038 foreign nol carryforwards unlimited carryforward periods considering available evidence assessing need valuation allowance company believes likely benefit certain foreign state deferred tax assets realized december 31 2018 company provided valuation allowance 181 million state deferred tax assets company provided valuation allowance 198 million respect foreign deferred tax assets included table made 186 million related aeróleo 12 million related sicher assumptions change company determines able realize deferred tax assets tax benefits relating reversal valuation allowance deferred tax assets would recorded income tax provision period adjustments identified company’s operations subject jurisdiction multiple tax authorities impose various types taxes including income taxes determining taxes owed jurisdiction requires interpretation relevant tax laws regulations judicial decisions administrative interpretation local tax authority result company subject tax assessments jurisdictions including redetermination taxable amounts tax authorities may agree company’s interpretations positions taken company’s 2015 federal income tax return currently examination internal revenue service pursuant asc 7403525 company asserts permanent reinvestment controlled foreign corporations within brazil colombia british virgin islands company assert reinvestment joint venture located canada recorded deferred tax liability 02 million tax basis 236 million effects tax position recognized period determined likely tax position sustained upon examination including resolution related appeals litigation processes based technical merits position remain subject examination us federal multiple state tax jurisdictions tax years 2015 brazil 2014 subsequent years pursuant shareholders’ agreement entered october 1 2015 company’s partner aeróleo see note 4 company primary beneficiary aeróleo became consolidated entity company analyzed filing positions aeróleo brazil required file income tax returns open tax years 2014 2018 reconciliation beginning ending amount gross unrecognized tax benefits excluding interest penalties follows thousands amounts accrued interest penalties associated unrecognized income tax benefits included expense consolidated statements operations december 31 2018 gross amount liability accrued interest penalties related unrecognized tax benefits 01 million amounts could change next twelve months company anticipate changes material impact financial statements reconciliation beginning ending amount valuation allowance follows thousands fourth quarter 2017 aeroleo elected enter certain settled open tax claims tax special regularization program “pert program” pursuant brazil provisional measure 783 issued may 31 2017 pert program allows partial settling debts income tax debts nonincomebased tax debts due april 30 2017 brazil’s federal revenue service use tax credits including income tax loss carryforwards utilization 35 million income tax benefit recorded fourth quarter attributable income tax loss carryforwards pert program partially offset accrual operating expense associated certain indirect tax claims enrolled pert program december 22 2017 tax cuts jobs act tax act enacted law new legislation contains several key tax provisions affect company including onetime mandatory transition tax accumulated foreign earnings profits reduction us federal corporate income tax rate 35 21 effective january 1 2018 among others company required recognize effect tax law changes period enactment determining transition tax revaluing us deferred tax assets liabilities new effective rate december 2017 sec staff issued staff accounting bulletin 118 income tax accounting implications tax cuts jobs act sab 118 allows company record provisional amounts measurement period extend beyond one year enactment date december 31 2018 company completed accounting tax effects enactment tax act company made adjustment deferred tax balances due revaluation 35 21 approximately 700 million amount due transitional tax however due revised earnings profits computations completed measurement period company adjustment deferred tax amount 02 million company considers accounting transition tax deferred tax revaluations items complete company evaluated newly enacted global intangible lowtaxed income gilti provisions could subject foreign earnings minimum level tax decided make election treat costs period costs 7 longterm debt company’s borrowings december 31 2018 2017 follows thousands company’s scheduled longterm debt maturities december 31 2018 follows thousands 7750 senior notes december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million interest 7750 senior notes payable semiannually arrears june 15 december 15 year 7750 senior notes may redeemed time applicable redemption prices set forth indenture governing 7750 senior notes plus accrued unpaid interest redemption date indenture governing 7750 senior notes contains covenants restrict era group’s ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries’ ability pay dividends consolidate merge sell substantially company’s assets addition upon specified change control trigger event specified asset sale era group may required repurchase 7750 senior notes era group’s payment obligations 7750 senior notes fully unconditionally guaranteed whollyowned existing us subsidiaries guarantors revolving credit facility net proceeds offering used repay 1900 million borrowings outstanding company’s prior 2000 million senior secured revolving credit facility “prior credit facility” year ended december 31 2016 company repurchased total 50 million 7750 senior notes price 8663 par total cash 45 million including accrued interest 02 million company recognized gains 05 million repurchases revolving credit facility march 31 2014 era group entered revolving credit facility amendment prior credit facility advances revolving credit facility closing used refinance indebtedness incurred prior credit facility march 7 2018 era group entered consent amendment 4 amended restated senior secured revolving credit facility agreement “amendment 4” amended restated revolving credit facility amended amendment 4 referred herein “revolving credit facility” among things reduced aggregate principal amount revolving loan commitments 2000 million 1250 million b extended agreement’s maturity march 31 2021 c revised definition ebitda permit addback certain litigation expenses related h225 helicopters adjusted maintenance covenant requirements maintain interest coverage ratio less 175100 senior secured leverage ratio 325100 applicable margin based company’s ratio funded debt ebitda increased 50 basis points tier previous amendment revolving credit facility provides company ability borrow 1250 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 500 million availability revolving credit facility may limited terms 7750 senior notes revolving credit facility matures march 2021 borrowings revolving credit facility bear interest rate per annum equal era group’s election either base rate libor defined plus applicable margin applicable margin based company’s ratio funded debt ebitda defined ranges 125 25 base rate margin 225 35 libor margin applicable margin december 31 2018 125 “base rate” margin 225 libor margin addition era group required pay quarterly commitment fee based average unfunded portion committed amount rate based company’s ratio funded debt ebitda defined ranges 0375 05 december 31 2018 commitment fee 0375 obligations revolving credit facility secured portion company’s helicopter fleet tangible assets guaranteed era group’s whollyowned us subsidiaries revolving credit facility contains various restrictive covenants including maintain maximum senior secured leverage ratio defined minimum interest coverage ratio minimum ratio sum fair market value mortgaged helicopters accounts receivable inventory committed amounts revolving credit facility well customary covenants including certain restrictions company’s ability enter certain transactions including could result incurrence additional indebtedness liens making loans guarantees investments sales assets payments dividends repurchases capital stock entering transactions affiliates december 31 2018 compliance debt covenants december 31 2018 era group outstanding borrowings revolving credit facility remaining availability 1241 million based borrowing base date net issued letters credit 09 million availability revolving credit facility subject company’s ability maintain compliance financial ratios discussed connection amendment 4 revolving credit facility reduced total commitment amount facility 1250 million era group wrote previously incurred debt issuance costs 04 million incurred additional debt issuance costs 13 million year ended december 31 2018 connection amendment 3 revolving credit facility era group wrote previously incurred debt issuance costs 05 million 2016 additional debt issuance costs included assets consolidated balance sheets amortized interest expense consolidated statements operations life revolving credit facility promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 interest rate resets monthly december 31 2018 416 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 interest rate resets monthly december 31 2018 416 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 year ended december 31 2018 company amended promissory notes remove one helicopter add two helicopters total three helicopters providing crosscollateralization helicopter secures promissory notes aeróleo debt connection transfer partnership interests discussed note 5 company’s former partner assigned two existing notes receivable aeróleo totaling 83 million company’s new partner june 2016 company partner aeróleo contributed notes payable aeróleo including two notes contribution additional capital aeróleo result 63 million debt due company’s partner aeróleo recorded net loss attributable noncontrolling interest subsidiaries consolidated statements operations year ended december 31 2017 company settled certain tax disputes brazil totaling 30 million pert program agreed make installment payments amounts due applicable taxing authorities installments payable brazilian reals bear interest rate equal overnight rate published central bank brazil paid next 7 months december 31 2018 amounts included schedule longterm debt maturities noted 8 commitments contingencies company’s unfunded capital commitments december 31 2018 consisted primarily agreements purchase helicopters totaled 811 million 702 million payable 2019 balance payable 2020 company also 13 million deposits paid options yet exercised company may terminate total commitments inclusive deposits paid options yet exercised without liability liquidated damages 21 million aggregate brazilian tax disputes connection ownership aeróleo operations brazil company several ongoing legal disputes related local municipal federal taxation requirements brazil including assessments associated import reexport helicopters brazil legal disputes related municipal tax assessments arising authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal tax disputes” ii social security contributions one customers required remit 1995 1998 iii penalties assessed due alleged failure comply certain deadlines related helicopters company imports exports brazil iv fines sought taxing authorities brazil related use certain tax credits used offset certain social tax liabilities collectively “tax disputes” aggregate amount issue tax disputes 145 million municipal tax disputes largest contributor total amount sought aeróleo approximately 101 million issue addition foregoing tax disputes unrelated thereto aeróleo engaged two additional civil litigation matters relating dispute former tax consultant alleged 05 million due payable contingency fee related execution certain tax strategies ii fatal accident occurred 1983 previously settled plaintiffs’ us “civil disputes” respect fatal accident plaintiffs seeking collect additional amounts brazil despite previous settlement agreed upon parties us company continues evaluate assess various legal strategies tax disputes civil disputes customary certain legal matters brazil aeróleo already deposited amounts security escrow account pursue legal appeals several tax disputes civil disputes december 31 2018 company deposited 54 million escrow accounts controlled court respect tax disputes civil disputes company fully reserved amounts subject final determination judicial release escrow deposits estimates based assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience aeróleo plans defend cases vigorously december 31 2018 possible determine outcome tax disputes civil disputes company expect outcome would material adverse effect business financial position results operations airbus lawsuit november 21 2016 company filed lawsuit district court dallas county texas airbus helicopters inc airbus helicopters sas collectively “airbus” alleging breaches various contracts us fraudulent inducement unjust enrichment connection airbus marketing sale h225 model helicopters us october 26 2017 company added claims airbus fraud negligent misrepresentation december 28 2017 company amended complaint seek damages attributable impact airbus’ unlawful acts value h225 company purchased another helicopter operator july 3 2018 company entered litigation settlement agreement “settlement agreement” airbus settle claims made company airbus related airbus marketing sale companys purchase eleven h225 model helicopters pursuant settlement agreement airbus agreed pay company 420 million cash provide certain trade account credits company may use five years company agreed release airbus liabilities claims counterclaims demands complaints costs losses expenses relating action dismiss action prejudice without party admitting fault general litigation disputes normal course business company involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time company involved tax disputes various government agencies management used estimates determining company’s potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur company expect changes estimated costs would material effect business consolidated financial position results operations minimum lease payments december 31 2018 company leased certain facilities equipment leasing agreements classified operating leases financial reporting purposes related rental fees charged expense lease terms leases generally contain purchase lease renewal options rights first refusal respect sale lease equipment lease terms range duration one ten years total rental expense company’s operating leases years ended december 31 2018 2017 2016 41 million 55 million 57 million respectively company’s scheduled minimum lease payments operating leases remaining term excess one year december 31 2018 follows thousands 9 earnings per share basic earnings per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant exercise outstanding stock options computations basic diluted earnings per common share years ended december 31 2018 2017 2016 follows thousands except share per share data 1 excludes weighted average common shares 218844 273255 294273 years ended december 31 2018 2017 2016 respectively certain share awards effect inclusion would antidilutive 10 revenues company derives revenues primarily oil gas flight services emergency response services dryleasing activities adoption asc 606 pertains company’s operating revenues dryleasing revenues recognized accordance asc 840 revenue recognized control promised goods services transferred customers amount reflects consideration entity expects entitled exchange goods services following table presents company’s operating revenues disaggregated geographical region services provided following table presents company’s revenues earned service line company determines revenue recognition applying following steps 1 identify contract customer 2 identify performance obligations contract 3 determine transaction price 4 allocate transaction price performance obligations 5 recognize revenue performance obligations satisfied company earns majority revenue master service agreements subscription agreements typically include fixed monthly daily fee incremental fees based hours flown fees ancillary items fuel security charter services etc company’s arrangements serve customers represent promise standready provide services customer’s discretion company recognizes revenue flight services emergency response services passing day company right consideration customers amount corresponds directly value customer performance completed date therefore company elected exercise right invoice practical expedient adoption asc 606 right invoice represents method recognizing revenue time using output measure “value customer” objective measure entity’s performance contract company typically invoices customers monthly basis revenues earned prior month payment terms 30 days company’s customer arrangements contain significant financing component customers amounts taxes collected customers remitted governmental authorities reported net basis practical expedients exemptions company incur material incremental costs obtain fulfill customer contracts require capitalization new revenue standard elected practical expedient afforded new revenue standard expense costs incurred upon adoption costs included operating expenses consolidated statements operations company disclose value unsatisfied performance obligations contracts original expected length one year less ii contracts recognizes revenue amount right invoice services performed 11 related party transactions mr fabrikant chairman board director company also executive chairman chief executive officer seacor holdings inc “seacor” company leases office space seacor years ended december 31 2018 2017 2016 company paid 04 million seacor rent utilities included administrative general expenses consolidated statements operations years ended december 31 2018 2017 2016 company purchased products services dart totaling 20 million 20 million 19 million respectively note receivable dart balance 23 million 28 million december 31 2018 2017 respectively purchases dart included operating expenses consolidated statements income note receivable included equity investments advances consolidated balance sheets years ended december 31 2018 2017 2016 company provided helicopter management services era training center totaling 01 million 02 million 02 million respectively incurred 02 million 05 million 06 million respectively flight training device fees revenues era training center recorded operating revenues expenses incurred recorded operating expenses consolidated statements operations december 31 2017 company note receivable era training center balance 37 million recorded equity investments advances consolidated balance sheets year ended december 31 2018 company entered agreement dissolve era training center see discussion note 5 june 2016 company partner aeróleo contributed notes payable aeróleo contribution additional capital aeróleo see discussion note 7 12 sharebased compensation share incentive plans 2013 company adopted era group inc 2012 incentive plan “2012 plan” maximum 4000000 shares company’s common stock par value 001 per share “common stock” reserved issuance awards granted 2012 plan may form stock options stock appreciation rights shares restricted stock sharebased awards payable cash common stock performance awards combination thereof may made outside directors employees consultants board directors determines award whether issue new shares company’s treasury account december 31 2018 2017 2235379 2525563 shares respectively remained available grant 2012 plan 2013 company adopted era group inc 2013 employee stock purchase plan “espp” company may offer maximum 300000 shares common stock purchase eligible employees price per share equal 85 lesser fair market value per share common stock first day offering period ii fair market value per share common stock last day offering period common stock made available purchase espp sixmonth offering periods espp intended comply section 423 code intended subject section 401a code employee retirement income security act 1974 board directors may amend terminate espp time however increase number shares common stock reserved issuance espp may made without stockholder approval 2016 board directors authorized additional 400000 reserved issuance espp approved stockholders company’s annual meeting 2017 espp term ten years december 31 2018 2017 222378 336763 shares respectively remained available issuance espp year ended december 31 2018 company issued 114385 shares espp total sharebased compensation expense includes stock options restricted stock espp purchases 29 million 46 million 46 million years ended december 31 2018 2017 2016 respectively portion restricted stock awards performancebased december 31 2018 company approximately 34 million total unrecognized compensation costs weighted average period expected recognized 18 years restricted stock awards year ended december 31 2018 number shares weighted average grant price restricted stock award transactions follows years ended december 31 2018 2017 2016 company awarded 331869 297256 342913 shares respectively restricted stock weighted average grant date fair value 980 1144 1056 respectively total fair value shares vested years ended december 31 2018 2017 2016 determined using closing price grant date 28 million 55 million 32 million respectively stock option grants year ended december 31 2018 number shares weighted average grant date fair value weighted average exercise price stock option transactions follows company grant options years ended december 31 2018 december 31 2017 13 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate year ended december 31 2018 anadarko petroleum corporation “anadarko” petrobras us government accounted 31 23 15 respectively company’s operating revenues year ended december 31 2017 anadarko petrobras us government accounted 28 22 16 respectively company’s operating revenues year ended december 31 2016 anadarko petrobras us government accounted 24 20 16 respectively company’s operating revenues years ended december 31 2018 2017 2016 approximately 29 34 31 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived oil gas operations brazil colombia suriname well leasing activities following represents company’s operating revenues geographical region services provided years ended december 31 2018 2017 2016 thousands company’s longlived assets primarily property equipment employed various geographical regions world following represents company’s property equipment net accumulated depreciation based upon assets’ physical locations december 31 2018 2017 thousands company’s brazilian operations include 194 employees representing approximately 28 company’s total workforce covered collective bargaining agreements none expire within next year disputes employees terms collective bargaining agreements could result strikes work stoppages higher labor costs conditions may material adverse effect company’s financial condition results operations 14 supplemental information statements cash flows supplemental cash flow information years ended december 31 2018 2017 2016 follows thousands 15 quarterly financial information unaudited selected financial information interim quarterly periods presented thousands except per share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year 1 third quarter 2017 includes adjustments immaterial fiscal year ended december 31 2017 prior periods impact corrections made third quarter 2017 12 million increase operating loss including 02 million increase operating expense 07 million increase general administrative expense 03 million increase loss impairment 09 million increase tax benefit 03 million increase net loss net loss attributable common shares 002 increase loss per common share 2 fourth quarter 2017 includes adjustments immaterial fiscal year ended december 31 2017 prior periods impact corrections made fourth quarter 2017 03 million increase operating loss including 04 million increase operating expense 02 million decrease depreciation amortization expense 01 million decrease general administrative expense 02 million decrease gains asset dispositions 12 million increase interest expense 02 million increase tax benefit 14 million decrease net loss net loss attributable common shares 005 decrease loss per common share 16 subsequent events march 7 2019 company conjunction 50 joint venture partner entered agreement sell dart 75 million transaction expected close second quarter 2019 subject satisfaction waiver customary closing conditions closing company expects receive cash proceeds including repayment related party note receivable approximately 40 million company’s tax basis dart 236 million december 31 2018 17 guarantors securities era group’s payment obligations 7750 senior notes jointly severally guaranteed existing 100 owned us subsidiaries guarantee revolving credit facility future us subsidiaries guarantee revolving credit facility material indebtedness era group may incur future “guarantors” guarantors currently guarantee revolving credit facility guarantees guarantors full unconditional joint several result agreement guarantors guarantee 7750 senior notes company presents following condensed consolidating balance sheets statements operations comprehensive income cash flows era group “parent” guarantors company’s subsidiaries “nonguarantors” statements read conjunction accompanying consolidated financial statements notes company supplemental condensed consolidating balance sheet december 31 2018 supplemental condensed consolidating balance sheet december 31 2017 supplemental condensed consolidating statements operations year ended december 31 2018 supplemental condensed consolidating statements operations year ended december 31 2017 supplemental condensed consolidating statements operations year ended december 31 2016 supplemental condensed consolidating statements comprehensive income year ended december 31 2018 supplemental condensed consolidating statements comprehensive income year ended december 31 2017 supplemental condensed consolidating statements comprehensive income year ended december 31 2016 supplemental condensed consolidating statements cash flows year ended december 31 2018 supplemental condensed consolidating statements cash flows year ended december 31 2017 supplemental condensed consolidating statements cash flows year ended december 31 2016item 15 exhibits financial statement schedules documents filed part report 1 financial statements consolidated financial statements filed part report listed index consolidated financial statements annual report form 10k 2 financial statement schedules financial statement schedules omitted applicable required information shown consolidated financial statements notes thereto 3 exhibits incorporated herein reference indicated schedules exhibits omitted pursuant item 601b2 regulation sk company hereby undertakes furnish supplemental copies omitted schedules exhibits upon request us securities exchange commission management contracts compensatory plans arrangements required filed exhibit pursuant item 15 b rules governing preparation annual report form 10k none signatures pursuant requirements section 13 securities exchange act 1934 registrant duly caused report signed behalf undersigned capacities indicated thereunto duly authorized index consolidated financial statements report independent registered public accounting firm shareholders board directors era group inc opinion financial statements audited accompanying consolidated balance sheets era group inc delaware corporation subsidiaries “company” december 31 2019 2018 related consolidated statements operations comprehensive income changes equity cash flows two years period ended december 31 2019 related notes collectively referred “financial statements” opinion based audits report auditors financial statements present fairly material respects financial position company december 31 2019 2018 results operations cash flows two years period ended december 31 2019 conformity accounting principles generally accepted united states america audit 2018 financial statements dart holding company ltd corporation company 50 interest consolidated financial statements company’s investment advances dart holding company ltd stated 271 million december 31 2018 company’s equity earnings dart holding company ltd stated 25 million year ended december 31 2018 statements audited auditors whose report furnished us opinion insofar relates amounts included dart holding company ltd based solely report auditors also audited accordance standards public company accounting oversight board united states “pcaob” company’s internal control financial reporting december 31 2019 based criteria established 2013 internal controlintegrated framework issued committee sponsoring organizations treadway commission “coso” report dated march 5 2020 expressed unqualified opinion change accounting principle discussed note 1 consolidated financial statements company changed method accounting leases january 1 2019 due adoption accounting standards codification 842 “leases” basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence supporting amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion grant thornton llp served company’s auditor since 2018 houston texas march 5 2020 report independent registered public accounting firm shareholders board directors era group inc opinion internal control financial reporting audited internal control financial reporting era group inc delaware corporation subsidiaries “company” december 31 2019 based criteria established 2013 internal controlintegrated framework issued committee sponsoring organizations treadway commission “coso” opinion company maintained material respects effective internal control financial reporting december 31 2019 based criteria established 2013 internal controlintegrated framework issued coso also audited accordance standards public company accounting oversight board united states “pcaob” consolidated financial statements company year ended december 31 2019 report dated march 5 2020 expressed unqualified opinion financial statements basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate grant thornton llp houston texas march 5 2020 report independent registered public accounting firm shareholders board directors dart holding company ltd opinion financial statements audited consolidated balance sheet dart holding company ltd “company” december 31 2018 related consolidated statements income comprehensive income stockholders’ equity cash flows year ended related notes collectively “consolidated financial statements” opinion consolidated financial statements present fairly material respects financial position company december 31 2018 results operations cash flows year ended conformity us generally accepted accounting principles basis opinion consolidated financial statements responsibility companys management responsibility express opinion companys consolidated financial statements based audit public accounting firm registered public company accounting oversight board united states “pcaob” required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audit included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audit also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audit provides reasonable basis opinion kpmg llp chartered professional accountants licensed public accountants served company’s auditor since 2011 montréal canada february 27 2019 report independent registered public accounting firm shareholders board directors era group inc opinion financial statements audited accompanying consolidated statements operations comprehensive income changes equity cash flows era group inc company year ended december 31 2017 related notes collectively referred “financial statements” opinion based audit financial statements present fairly material respects consolidated results operations cash flows year ended december 31 2017 conformity us generally accepted accounting principles basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audit public accounting firm registered public company accounting oversight board united states pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud company required engaged perform audit internal control financial reporting part audit required obtain understanding internal control financial reporting purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audit included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audit also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audit provides reasonable basis opinion sernst young llp served company’s auditor 2007 2018 houston texas march 8 2018 except note 1 note 10 date march 7 2019 era group inc consolidated balance sheets thousands except share amounts 1 refer footnote 5 detail variable interest entities “vie” accompanying notes integral part consolidated financial statements era group inc consolidated statements operations thousands except share per share data accompanying notes integral part consolidated financial statements era group inc consolidated statements comprehensive income thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements changes equity thousands accompanying notes integral part consolidated financial statements era group inc consolidated statements cash flows thousands accompanying notes integral part consolidated financial statements era group inc notes consolidated financial statements 1 nature operations accounting policies nature operations era group inc “era group” consolidated subsidiaries collectively referred “company” one largest helicopter operators world longest serving helicopter transport operator united states “us” primary area operation company primarily engaged transportation services offshore oil gas exploration development production industry major customers international independent major integrated oil gas companies us government agencies addition serving oil gas industry company provides emergency response services utility services company operates federal aviation administration “faa” approved maintenance repair station lake charles louisiana basis consolidation consolidated financial statements include accounts era group inc whollyowned subsidiaries entities meet criteria vies company primary beneficiary significant intercompany accounts transactions eliminated consolidation company employs equity method accounting investments business ventures ability exercise significant influence operating financial policies ventures company reports investments accompanying consolidated balance sheets equity investments advances company reports share earnings losses equity investees accompanying consolidated statements operations equity earnings losses net tax use estimates preparation financial statements conformity accounting principles generally accepted us “gaap” requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting periods estimates include among items related allowance doubtful accounts useful lives property equipment inventories income tax provisions impairments fair values used purchase price allocations certain accrued contingent liabilities actual results could differ estimates differences may material reclassification certain amounts reported prior periods consolidated financial statements reclassified conform current period’s presentation cash equivalents company considers highly liquid investments original maturity three months less purchased cash equivalents cash equivalents consist overnight investments supplemental cash flow information following table sets forth company’s reconciliation cash equivalents restricted cash reported within consolidated statement cash flows years ended december 31 2019 2018 2017 respectively thousands 1 restricted cash represents amounts deposited escrow accounts end period escrow deposits shown separate line item consolidated balance sheet trade receivables customers primarily international independent major integrated exploration development production companies international helicopter operators us government agencies customers typically granted credit shortterm basis related credit risks considered minimal company routinely reviews trade receivables makes provisions probable doubtful accounts however provisions estimates actual results could differ estimates differences may material trade receivables deemed uncollectible removed accounts receivable allowance doubtful accounts collection efforts exhausted allowance doubtful accounts years ended december 31 2019 2018 2017 follows thousands concentrations credit risk company exposed concentrations credit risk relating receivables due customers industries described company generally require collateral security support outstanding receivables company minimizes credit risk relating receivables performing ongoing credit evaluations company also exposed concentrations credit risk associated cash equivalents company minimizes credit risk relating positions monitoring financial condition financial institutions counterparties involved primarily conducting business large wellestablished financial institutions diversifying counterparties company’s two largest customers comprised 39 52 net trade receivables december 31 2019 2018 respectively inventories stated lower average cost net realizable value consist primarily spare parts fuel company establishes allowance accrue retirement cost spare parts expected hand end fleet’s life service lives related equipment taking account estimated salvage value parts following table roll forward allowance related obsolete excess inventory years ended december 31 2019 2018 2017 thousands 1 includes 01 million elimination h225 inventory reserve 2017 property equipment property equipment stated cost depreciated using straightline method estimated useful life asset estimated salvage value respect helicopters estimated useful life typically based upon newly built asset placed service represents point typically justifiable company continue operate asset similar manner time company may acquire older assets already exceeded company’s useful life policy case company depreciates assets based best estimate remaining useful life company reviews estimated useful lives salvage values property equipment ongoing basis changes estimates changes years ended december 31 2019 2018 2017 december 31 2019 estimated useful life years company’s categories new property equipment follows equipment maintenance repair costs routine overhauls inspections performed helicopter engines major components charged operating expense incurred expenditures extend useful life improve marketing commercial characteristics equipment well major improvements properties capitalized company engages number thirdparty vendors maintain engines certain components helicopter models programs known powerbyhour “pbh” maintenance contracts programs require company pay maintenance service ratably contract period typically based actual flight hours pbh providers generally bill monthly based hours flown prior month costs expensed incurred event company places helicopter program maintenance period begun may necessary pay initial buyin charge based hours flown since previous maintenance event buyin charge normally recorded prepaid expense amortized operating expense remaining pbh contract period helicopter sold otherwise removed program scheduled maintenance work carried company may able recover part payments pbh provider case company records reduction operating expense company also incurs repairs maintenance expense vendor arrangements whereby company obtains repair quotes authorizes service repair order process arrangements company records repairs maintenance cost work completed result timing repairs maintenance may result operating expenses varying substantially compared prior year prior quarter disproportionate number repairs refurbishments overhauls components covered pbh arrangements performed period certain interest costs incurred construction equipment capitalized part assets’ carrying values amortized assets’ estimated useful livesthe company capitalize interest year ended december 31 2019 company capitalized interest 01 million 05 million years ended december 31 2018 2017 respectively december 31 2019 2018 construction progress component property equipment included capitalized interest 07 million leases company determines arrangement lease inception modification renewal existing lease operating leases maintained number fixed assets including land hangars buildings fuel tanks tower sites rightofuse assets associated leases reflected longterm assets current portion longterm payables reflected current liabilities payables lease agreements past one year recorded longterm liabilities company’s consolidated balance sheets contracts terms twelve months less lease expense recognized straightline basis lease term recorded operating expenses consolidated statement operations company’s leases provide implicit rate incremental borrowing rate based information available commencement date used determine present value future payments company’s lease agreements allow option renewal extension considered part lease term reasonably certain lease extended incorporated calculations impairment longlived assets company performs impairment analysis longlived assets used operations events changes circumstances indicate carrying value assets may recoverable company’s longlived assets grouped lowest level identifiable cash flows largely independent cash flows groups assets generally fleet group level impairment indicated asset group classified held used impairment evaluation performed asset impairment evaluations based estimated undiscounted cash flows remaining useful life assets evaluated sum expected future cash flows less carrying amount asset group company would required recognize impairment loss 2017 company concluded cash flows associated h225 heavy helicopters largely independent cash flows associated remainder fleet evaluated separately impairment company performed impairment analysis h225 helicopters capital parts related inventory determined projected undiscounted cash flows remaining useful life less carrying amount determining fair value company used cost approach begins replacement cost new asset adjusts age functional economic obsolescence inputs used company’s fair value estimate level 3 fair value hierarchy discussed note 2 december 31 2019 company recorded 16 million impairment charge last remaining h225 helicopter 2018 2017 company recorded 10 million 1170 million impairment charge h225 helicopters respectively impairment equity investees equity investees held company performs regular reviews investee’s financial condition business outlook products services present projected results cash flows investee experienced consistent declines financial performance difficulties raising capital continue operations company expects decline otherthantemporary investment written fair value actual results may vary estimates due uncertainty regarding projected financial performance investees severity expected duration declines value available liquidity capital markets support continuing operations investees company investments years ended december 31 2019 2018 2017 company recognize impairment charges year ended december 31 2019 company sold equity investment dart holding company ltd “dart” joint venture see note 5 details sale joint venture december 31 2019 company equity investees intangible assets intangible assets indefinite lives recorded purchase price accounting business combination company performs annual impairment test indefinite lived intangible assets interim tests extent indicators impairment develop annual impairment tests company’s impairment review process compares fair value book value determine fair value company uses discounted future cash flow approach uses estimates including among others projected utilization fleet contract rates estimates reviewed time company tests indefinite lived assets impairment company believes estimates assumptions reasonable variations estimates could produce materially different results intangible assets finite useful lives amortized respective estimated useful lives year ended december 31 2019 company recorded 10 million impairment charge indefinite lived intangible assets related subsidiary colombia amount included loss impairment consolidated statement operations december 31 2019 company indefinite lived intangible assets 01 million intangible assets finite lives less 01 million business combinations company recognizes certain exceptions 100 fair value assets acquired liabilities assumed non controlling interests acquisition constitutes change control acquired entity shares issued consideration business combination contingent consideration arrangements preacquisition loss gain contingencies measured recorded acquisitiondate fair value subsequent changes fair value contingent consideration arrangements generally reflected earnings acquisitionrelated transaction costs expensed incurred changes acquirer’s existing income tax valuation allowances tax uncertainty accruals recorded adjustment income tax expense operating results entities acquired included accompanying consolidated statements operations date acquisition deferred financing costs deferred financing costs incurred connection issuance debt amortized life related debt using effective interest rate method term loans straight line method revolving credit facilities amortization expense deferred financing costs totaled 10 million 14 million 11 million years ended december 31 2019 2018 2017 respectively including writeoff 04 million debt issuance costs 2018 connection amendment company’s amended restated senior secured revolving credit facility “revolving credit facility” amortization expense included interest expense consolidated statements operations revenue recognition company recognizes revenues flight services emergency response services passing day company right consideration customers amount corresponds directly value company’s customer performance completed date therefore company elected exercise right invoice practical expedient adoption asc 606 right invoice represents method recognizing revenue time using output measure “value customer” objective measure entity’s performance contract company typically invoices customers monthly basis revenues earned prior month payment terms 30 days company’s customer arrangements contain significant financing component customers income taxes era group majorityowned us subsidiaries file consolidated us federal tax return era group’s foreign consolidated subsidiaries file tax returns applicable jurisdictions deferred income tax assets liabilities provided recognition income tax effect attributable book tax basis differences assets liabilities reported accompanying consolidated financial statements deferred tax assets liabilities provided using enacted tax rates expected apply taxable income periods expected settled realized interest penalties relating uncertain tax positions recognized interest expense administrative general expense respectively accompanying consolidated statements operations company records valuation allowance reduce deferred tax assets likely portion deferred tax assets realized company evaluated newly enacted global intangible lowtaxed income gilti provisions could subject foreign earnings minimum level tax decided make election treat costs period costs foreign currency transactions functional currency company’s foreign entities us dollar time company enters transactions denominated currencies functional currency gains losses resulting changes currency exchange rates functional currency transaction denominated included foreign currency gains losses net accompanying consolidated statements operations period currency exchange rates change earnings loss per common share basic earnings loss per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings loss per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method savings plan company provides defined contribution plan “savings plan” eligible usbased employees savings plan provides qualified nonelective company contributions amount equal 3 employee’s eligible pay plus amount equal 100 employee’s first 3 wages invested savings plan immediate full vesting company’s contributions savings plan subject annual review board directors era group “board directors” company’s savings plan costs 25 million 23 million 24 million respectively years ended december 31 2019 2018 2017 recent accounting pronouncements adopted february 2016 fasb issued asu 201602 “leases” asu 201602 establishes comprehensive accounting financial reporting requirements leasing arrangements asu supersedes existing requirements fasb asc topic 840 “leases” requires lessees recognize substantially lease assets lease liabilities balance sheet provisions asu also modified definition lease outline requirements recognition measurement presentation disclosure leasing arrangements lessees lessors asu effective interim annual periods beginning december 15 2018 early adoption standard permitted entities required adopt asu using modified retrospective approach subject certain optional practical expedients apply provisions asu leasing arrangements existing entered earliest comparative period presented financial statements july 2018 asu amended provisions asu 201811 “targeted improvements” topic 842 whereby fasb decided provide alternate transition method allowing entities initially apply new leases standard adoption date january 1 2019 calendar yearend public business entities recognize cumulativeeffect adjustment opening balance retained earnings period adoption consistent preparers’ requests company adopted amended asu 201811 effective january 1 2019 using currentperiod adjustment method however upon adoption standard company determined cumulativeeffect adjustment opening balance retained earnings period required company also elected optional practical expedient retain former classification leases result initial impact adopting new standard material impact consolidated financial statements additionally company elected bifurcate separately account non lease components contained single contract august 2018 fasb issued asu 201815 “intangiblesgoodwill otherinternaluse software” subtopic 35040 providing guidance addressing customers accounting implementation costs incurred cloud computing arrangement “cca” considered service contract new guidance implementation costs cca evaluated capitalization using approach implementation costs associated internaluse software expensed term hosting arrangement includes reasonably certain renewal periods new guidance effective fiscal years beginning december 15 2019 calendar yearend public business entities early adoption permitted including adoption interim period company take possession implemented software rely vendors host software thus determining cloud computing arrangements service contracts company adopted asu 201613 effective january 1 2019 appropriately accounted implementation costs cloud computing arrangements entered first half 2019 adoption asu201815 material impact company’s consolidated financial statements new accounting standards yet adopted january 2020 fasb issued asu 202001 “investmentsequity securities” topic 321 “investmentsequity method joint ventures” topic 323 “derivatives hedging” topic 815 asu 202001 update asu 201601 “financial instrumentsoverall” clarifying interaction accounting equity securities equity method investments certain derivative instruments asu clarifies company consider observable transactions require company either apply discontinue equity method accounting topic 323 purposes applying measurement alternative accordance topic 321 immediately applying upon discontinuing equity method update fasb aims clarify determining accounting certain forward contracts purchased options company consider whether upon settlement exercise underlying securities would accounted equity method fair value option fasb expects asu reduce diversity practice increase comparability accounting interactions asu effective interim annual periods beginning december 15 2020 company evaluating potential impact adopting asu expect adoption material impact consolidated financial statements june 2016 fasb issued asu 201613 “measurement credit losses financial instruments” asu 201613 sets forth current expected credit loss model new forwardlooking impairment model certain financial instruments based expected losses rather incurred losses asu effective interim annual periods beginning december 15 2019 early adoption standard permitted entities required adopt asu using modified retrospective approach subject certain limited exceptions company evaluated potential impact adopting asu believes adoption material impact consolidated financial statements august 2018 fasb issued asu201813 “fair value measurements” asu 201813 update topic asc820 providing guidance changes unrealized gains losses period included comprehensive income recurring level 3 fair value measurements held end reporting period range weighted average significant unobservable inputs used develop level 3 fair value measurements certain unobservable inputs entity may disclose quantitative information median arithmetic average lieu weighted average entity determines quantitative information would reasonable rational method reflect distribution unobservable inputs used develop level 3 fair value measurements asu201813 effective interim annual periods beginning december 15 2019 company adopted asu believes adoption material impact consolidated financial statements 2 fair value measurements fair value asset liability price would received sell asset transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date company utilizes fair value hierarchy maximizes use observable inputs minimizes use unobservable inputs measuring fair value defines three levels inputs may used measure fair value level 1 inputs quoted prices active markets identical assets liabilities level 2 inputs quoted prices included level 1 observable asset liability either directly indirectly including quoted prices similar assets liabilities active markets quoted prices markets active inputs quoted prices observable asset liability inputs derived observable market data level 3 inputs unobservable inputs supported little market activity significant fair value assets liabilities december 31 2019 2018 company assets liabilities measured fair value recurring basis estimated fair values company’s financial assets liabilities december 31 2019 2018 follows thousands carrying values cash equivalents receivables accounts payable approximate fair value fair value company’s longterm debt estimated using discounted cash flow analysis based estimated current rates similar types arrangements considerable judgment required developing certain estimates fair value accordingly estimates presented herein necessarily indicative amounts company could realize current market exchange investments 2019 company purchased 50 million corporate securities later 2019 company sold corporate securities cash proceeds 44 million resulting net loss 06 million 3 acquisitions dispositions capital expenditures company’s capital expenditures 66 million 92 million 168 million 2019 2018 2017 respectively consisted primarily spare helicopter parts leasehold improvements company records helicopter acquisitions property equipment places helicopters service completion work finalized helicopters ready use company sold otherwise disposed property equipment cash proceeds 133 million 296 million 94 million 2019 2018 2017 respectively summary changes company’s owned helicopter fleet years ended december 31 2019 2018 2017 follows 1 includes six h225 heavy helicopters disposed via salestype leases disposition february 23 2018 company sold flightseeing assets alaska consisted eight light single engine helicopters two operating facilities related property equipment cash proceeds 100 million 4 leases company leases land hangars buildings fuel tanks tower sites operating lease agreements company determines arrangement lease inception many leases offer option renewal extension adoption asc 842 allows company retain current classification leases optional practical expedience rule allowed use currentperiod adjustment method recognize cumulativeeffect adjustment opening balance retained earnings current period rather restatement prior year lease amounts majority bases company operates leased current remaining terms one year fiftynine years lease expense contracts initial terms twelve months less recognized straightline basis lease term recorded balance sheet company currently maintain finance leases operating lease agreements company’s maturity analysis lease payments operating leases initial terms excess one year december 31 2018 follows thousands company’s maturity analysis lease payments operating leases initial terms excess one year december 31 2019 follows thousands year ended december 31 2019 company recognized 40 million operating lease expense included amount 15 million contracts remaining terms less one year ended december 31 2019 december 31 2019 information related leases follows company generates revenues lessor dryleasing line service require fixed monthly fee customer’s right use helicopter applicable additional charges compensation support company may provide customer revenues dryleasing contracts shown face statement operations 2018 company disposed six h225 heavy helicopters salestype leases year ended december 31 2019 company recognized interest income leases 17 million year ended december 31 2019 company completed final sale two helicopters received cash proceeds 50 million december 31 2019 company remaining receivables 135 million due within year amounts included receivables consolidated balance sheet 5 variable interest entities equity investments advances vies aeróleo july 1 2011 company acquired 50 economic interest 20 voting interest aeróleo brazilian entity provides helicopter transport services brazilian offshore oil gas industry 48 million cash company original partner also loaned aeróleo 60 million interest rate 60 per annum october 1 2015 company’s original partner completed transfer 50 economic 80 voting interest aeróleo third party connection transfer company entered shareholders’ agreement new partner required supermajority shareholder andor board approval specified significant actions putcall option arrangement gave company right purchase time new partner right put company two years new partner’s interest aeróleo company ability direct activities significantly affect aeróleo’s financial performance making company primary beneficiary result company concluded aeróleo variable interest entity therefore consolidated company’s financial statements company’s consolidated balance sheets december 31 2018 included assets aeróleo totaling 119 million liabilities 45 million creditors liabilities recourse era group subsidiaries aeróleo fourth quarter 2019 company exercised contractual call option purchase remaining 50 economic interest 80 voting interest company’s partner aeróleo making whollyowned subsidiary december 31 2019 amount paid effect purchase material joint ventures dart era dhs llc whollyowned subsidiary company acquired 49 capital stock dart helicopter services llc “dart helicopters” sales marketing parts manufacturing organization based north america engineers manufactures aftermarket parts equipment sale helicopter manufacturers operators 2009 company provided 03 million loan dart helicopters maturity june 2012 annual interest rate 50 payable quarterly principal due maturity february 28 2011 company made additional investment 50 million dart helicopters july 31 2011 contributed ownership dart helicopters dart exchange 50 economic voting interest dart note receivable 51 million note receivable balance 23 million december 31 2018 paid full 2019 year ended december 31 2019 company conjunction 50 joint venture partner entered agreement sell dart transaction closed april 1 2019 gross proceeds 380 million including payment note receivable march 2019 net gains 109 million first quarter 2019 company purchased 06 million products services dart still joint venture years ended december 31 2018 2017 company purchased 20 million products services dart purchases dart included operating expenses consolidated statements income note receivable included equity investments advances consolidated balance sheets december 31 2018 equity investments advances dart 271 million year ended december 31 2018 company received dividends 10 million dart era training center era training center llc “era training center” previously operated flight training devices provided training services company thirdparty customers years ended december 31 2018 2017 company provided helicopter management services joint venture totaling 01 million 02 million respectively incurred 02 million 05 million respectively simulator fees year ended december 31 2018 company entered agreement dissolve era training center exchange settlement existing promissory note outstanding principal amount 36 million acquiring assets joint venture agreement included sale three simulators company 29 million partial ownership fourth simulator 04 million note receivable company’s partner era training center 04 million combined condensed financial statements summarized financial information company’s equity investments advances dart december 31 2018 years ended december 31 2018 2017 follows thousands summarized financial information company’s equity investments advances investees years ended december 31 2018 2017 follows thousands december 31 2018 cumulative undistributed net earnings equity investees included company’s consolidated retained earnings 60 million 6 income taxes financial reporting purposes income loss income taxes equity earnings years ended december 31 2019 2018 2017 follows thousands components income tax expense benefit years ended december 31 2019 2018 2017 follows thousands following table reconciles difference statutory federal income tax rate company effective income tax rate years ended december 31 2019 2018 2017 components net deferred income tax liabilities december 31 2019 2018 follows thousands company federal net operating loss “nol” carryforwards 2019 2018 company state income tax nol carryforwards 3887 million 3777 million 2019 2018 respectively various states foreign nol carryforwards 632 million 569 million 2019 2018 respectively various foreign jurisdictions december 31 2019 company foreign tax credits 06 million company’s state nol carryforwards expire 2024 2039 foreign nol carryforwards unlimited carryforward periods considering available evidence assessing need valuation allowance company believes likely benefit certain foreign state deferred tax assets realized december 31 2019 company provided valuation allowance 197 million respect state deferred tax assets 218 million valuation allowance respect foreign deferred tax assets included table made 199 million related aeróleo 13 million related sicher 06 million related foreign tax credits assumptions change company determines able realize deferred tax assets tax benefits relating reversal valuation allowance deferred tax assets would recorded income tax provision period adjustments identified company’s operations subject jurisdiction multiple tax authorities impose various types taxes including income taxes determining taxes owed jurisdiction requires interpretation relevant tax laws regulations judicial decisions administrative interpretation local tax authority result company subject tax assessments jurisdictions including redetermination taxable amounts tax authorities may agree company’s interpretations positions taken examination company’s 2015 federal income tax return concluded adjustments 2019 pursuant asc 7403525 company asserts permanent reinvestment controlled foreign corporations within brazil colombia british virgin islands effects tax position recognized period determined likely tax position sustained upon examination including resolution related appeals litigation processes based technical merits position company remains subject examination us federal multiple state tax jurisdictions tax years 2015 brazil 2015 subsequent years pursuant shareholders’ agreement entered october 1 2015 company’s partner aeróleo see note 5 company primary beneficiary aeróleo became consolidated entity company analyzed filing positions aeróleo brazil required file income tax returns open tax years 2014 2019 reconciliation beginning ending amount gross unrecognized tax benefits excluding interest penalties follows thousands amounts accrued interest penalties associated unrecognized income tax benefits included expense consolidated statements operations december 31 2019 gross amount liability accrued interest penalties related unrecognized tax benefits 01 million amounts could change next twelve months company anticipate changes material impact financial statements reconciliation beginning ending amount valuation allowance follows thousands fourth quarter 2017 aeróleo elected enter certain settled open tax claims tax special regularization program “pert program” pursuant brazil provisional measure 783 issued may 31 2017 pert program allows partial settling debts income tax debts nonincomebased tax debts due april 30 2017 brazil’s federal revenue service use tax credits including income tax loss carryforwards utilization 35 million income tax benefit recorded fourth quarter attributable income tax loss carryforwards pert program partially offset accrual operating expense associated certain indirect tax claims enrolled pert program 7 longterm debt company’s borrowings december 31 2019 2018 follows thousands company’s scheduled longterm debt maturities december 31 2019 follows thousands 7750 senior notes december 7 2012 era group issued 2000 million aggregate principal amount 7750 senior unsecured notes due december 15 2022 “7750 senior notes” received net proceeds 1919 million interest 7750 senior notes payable semiannually arrears june 15 december 15 year 7750 senior notes may redeemed time applicable redemption prices set forth indenture governing 7750 senior notes plus accrued unpaid interest redemption date indenture governing 7750 senior notes contains covenants restrict era group’s ability among things incur additional indebtedness pay dividends make distributions repurchase redeem capital stock prepay redeem repurchase certain debt make loans investments sell assets incur liens enter transactions affiliates enter agreements restricting subsidiaries’ ability pay dividends consolidate merge sell substantially company’s assets addition upon specified change control trigger event specified asset sale era group may required repurchase 7750 senior notes era group’s payment obligations 7750 senior notes fully unconditionally guaranteed whollyowned existing us subsidiaries guarantors revolving credit facility net proceeds offering used repay 1900 million borrowings outstanding company’s prior 2000 million senior secured revolving credit facility “prior credit facility” year ended december 31 2019 company repurchased 07 million 7750 senior notes par total cash 07 million including accrued interest less 01 million recognized loss debt extinguishment less 01 million revolving credit facility march 31 2014 era group entered revolving credit facility amendment prior credit facility advances revolving credit facility closing used refinance indebtedness incurred prior credit facility march 7 2018 era group entered consent amendment 4 amended restated senior secured revolving credit facility agreement “amendment 4” amended restated revolving credit facility amended amendment 4 referred herein “revolving credit facility” among things reduced aggregate principal amount revolving loan commitments 2000 million 1250 million b extended agreement’s maturity march 31 2021 c revised definition ebitda permit addback certain litigation expenses related h225 helicopters adjusted maintenance covenant requirements maintain interest coverage ratio less 175100 senior secured leverage ratio 325100 applicable margin based company’s ratio funded debt ebitda increased 50 basis points tier previous amendment revolving credit facility provides company ability borrow 1250 million sublimit 500 million letters credit includes “accordion” feature exercised subject agreement lenders satisfaction certain conditions would increase total commitments 500 million availability revolving credit facility may limited terms 7750 senior notes revolving credit facility matures march 2021 borrowings revolving credit facility bear interest rate per annum equal era group’s election either base rate libor defined plus applicable margin applicable margin based company’s ratio funded debt ebitda defined ranges 125 25 base rate margin 225 35 libor margin applicable margin december 31 2019 175 “base rate” margin 275 libor margin addition era group required pay quarterly commitment fee based average unfunded portion committed amount rate based company’s ratio funded debt ebitda defined ranges 0375 05 december 31 2019 commitment fee 05 obligations revolving credit facility secured portion company’s helicopter fleet tangible assets guaranteed era group’s whollyowned us subsidiaries revolving credit facility contains various restrictive covenants including company maintains maximum senior secured leverage ratio defined minimum interest coverage ratio minimum ratio sum fair market value mortgaged helicopters accounts receivable inventory committed amounts revolving credit facility well customary covenants including certain restrictions company’s ability enter certain transactions including could result incurrence additional indebtedness liens making loans guarantees investments sales assets payments dividends repurchases capital stock entering transactions affiliates december 31 2019 company compliance debt covenants december 31 2019 era group outstanding borrowings revolving credit facility remaining availability 1243 million based borrowing base date net issued letters credit 07 million availability revolving credit facility subject company’s ability maintain compliance financial ratios discussed connection amendment 4 revolving credit facility reduced total commitment amount facility 1250 million era group wrote previously incurred debt issuance costs 04 million incurred additional debt issuance costs 13 million year ended december 31 2018 additional debt issuance costs included assets consolidated balance sheets amortized interest expense consolidated statements operations life revolving credit facility promissory notes december 23 2010 company entered promissory note 270 million purchase heavy helicopter upon maturity note december 20 2015 company refinanced outstanding balance 190 million new note secured helicopter bears interest onemonth libor rate plus 181 interest rate resets monthly december 31 2019 350 note requires monthly principal interest payments 01 million final payment 128 million due december 2020 november 24 2010 company entered promissory note 117 million purchase medium helicopter upon maturity note december 1 2015 company refinanced outstanding balance 59 million new note secured helicopter bears interest onemonth libor rate plus 181 interest rate resets monthly december 31 2019 350 note requires monthly principal interest payments less 01 million final payment 40 million due december 2020 year ended december 31 2018 company amended promissory notes remove one helicopter add two helicopters total three helicopters providing crosscollateralization helicopter secures promissory notes aeróleo debt year ended december 31 2017 company settled certain tax disputes brazil totaling 30 million pert program agreed make installment payments amounts due applicable taxing authorities installments payable brazilian reals bore interest rate equal overnight rate published central bank brazil concluded year ended december 31 2019 8 commitments contingencies company’s unfunded capital commitments december 31 2019 consisted primarily agreements purchase helicopters totaled 805 million 695 million payable 2020 balance payable 2021 company also 13 million deposits paid options yet exercised company may terminate total commitments inclusive deposits paid options yet exercised without liability liquidated damages 21 million aggregate brazilian tax disputes connection ownership aeróleo operations brazil company several ongoing legal disputes related local municipal federal taxation requirements brazil including assessments associated import reexport helicopters brazil legal disputes related municipal tax assessments arising authorities rio de janeiro period 2000 2005 macaé period 2001 2006 collectively “municipal tax disputes” ii social security contributions one customers required remit 1995 1998 iii penalties assessed due alleged failure comply certain deadlines related helicopters company imports exports brazil iv fines sought taxing authorities brazil related use certain tax credits used offset certain social tax liabilities collectively “tax disputes” aggregate amount issue tax disputes 138 million municipal tax disputes represent largest claims total amount sought aeróleo approximately 103 million issue addition tax disputes unrelated thereto aeróleo engaged two additional civil litigation matters relating dispute former tax consultant alleged 05 million due payable contingency fee related execution certain tax strategies ii fatal accident occurred 1983 previously settled plaintiffs’ us “civil disputes” respect fatal accident plaintiffs seeking collect additional amounts brazil despite previous settlement agreed upon parties us company continues evaluate assess various legal strategies tax disputes civil disputes customary certain legal matters brazil aeróleo already deposited amounts security escrow account pursue legal appeals several tax disputes civil disputes december 31 2019 company deposited 50 million escrow accounts controlled court respect tax disputes civil disputes company fully reserved amounts subject final determination judicial release escrow deposits estimates based assessment nature matters progress toward resolution advice legal counsel outside experts well management’s intentions experience aeróleo plans defend cases vigorously december 31 2019 possible determine outcome tax disputes civil disputes company expect outcome would material adverse effect business financial position results operations general litigation disputes normal course business company involved various litigation matters including among things claims third parties alleged property damages personal injuries addition time company involved tax disputes various government agencies management used estimates determining company’s potential exposure matters recorded reserves financial statements related thereto appropriate possible change estimates related exposures could occur company expect changes estimated costs would material effect business consolidated financial position results operations 9 earnings per share basic earnings per common share company computed based weighted average number common shares issued outstanding relevant periods diluted earnings per common share company computed based weighted average number common shares issued outstanding plus effect potentially dilutive securities application ifconverted method andor treasury method dilutive securities purpose assumes common shares issued outstanding relevant periods pursuant exercise outstanding stock options computations basic diluted earnings per common share years ended december 31 2019 2018 2017 follows thousands except share per share data 1 excludes weighted average common shares 204965 218844 273255 years ended december 31 2019 2018 2017 respectively certain share awards effect inclusion would antidilutive share repurchases august 14 2014 company’s board directors approved share repurchase program authorizing 250 million share repurchases plan suspended following announcement noted year ended december 31 2019 era group repurchased 988721 shares common stock open market transactions gross consideration 76 million average cost per share 772 december 31 2019 153 million remained 250 million share repurchase program january 24 2020 2014 board authorized repurchase program suspended connection entry merger agreement bristow group inc “bristow” board authorized special stock repurchase program would allow purchase 10 million common stock time subject market conditions open market privately negotiated transactions special repurchase program commence soon practicable end upon mailing joint proxy statementprospectus merger 10 revenues company derives revenues primarily oil gas flight services emergency response services dryleasing activities adoption asc 606 pertains company’s operating revenues dryleasing revenues recognized accordance asc 842 revenue recognized control promised goods services transferred customers amount reflects consideration entity expects entitled exchange goods services following table presents company’s operating revenues disaggregated geographical region services provided following table presents company’s revenues earned service line company determines revenue recognition applying following steps 1 identify contract customer 2 identify performance obligations contract 3 determine transaction price 4 allocate transaction price performance obligations 5 recognize revenue performance obligations satisfied company earns majority revenue master service agreements subscription agreements typically include fixed monthly daily fee incremental fees based hours flown fees ancillary items fuel security charter services etc company’s arrangements serve customers represent promise standready provide services customer’s discretion company recognizes revenue flight services emergency response services passing day company right consideration customers amount corresponds directly value customer performance completed date therefore company elected exercise right invoice practical expedient adoption asc 606 right invoice represents method recognizing revenue time using output measure “value customer” objective measure entity’s performance contract company typically invoices customers monthly basis revenues earned prior month payment terms 30 days company’s customer arrangements contain significant financing component customers amounts taxes collected customers remitted governmental authorities reported net basis practical expedients exemptions company incur material incremental costs obtain fulfill customer contracts require capitalization new revenue standard elected practical expedient afforded new revenue standard expense costs incurred upon adoption costs included operating expenses consolidated statements operations company disclose value unsatisfied performance obligations contracts original expected length one year less ii contracts recognizes revenue amount right invoice services performed 11 related party transactions first quarter 2019 company purchased 06 million products services dart still joint venture years ended december 31 2018 2017 company purchased 20 million products services dart december 31 2018 company note receivable dart balance 23 million note paid full first quarter 2019 purchases dart included operating expenses consolidated statements income note receivable included equity investments advances consolidated balance sheets year ended december 31 2019 company conjunction 50 joint venture partner entered agreement sell dart transaction closed april 1 2019 gross proceeds 380 million including payment note receivable march 2019 net gains 109 million years ended december 31 2018 2017 company provided helicopter management services era training center totaling 01 million 02 million respectively incurred 02 million 05 million respectively flight training device fees revenues era training center recorded operating revenues expenses incurred recorded operating expenses consolidated statements operations december 31 2018 company note receivable era training center balance 37 million recorded equity investments advances consolidated balance sheets era training center dissolved third quarter 2018 see discussion note 5 12 sharebased compensation share incentive plans 2013 company adopted era group inc 2012 incentive plan “2012 plan” maximum 4000000 shares company’s common stock par value 001 per share “common stock” reserved issuance awards granted 2012 plan may form stock options stock appreciation rights shares restricted stock sharebased awards payable cash common stock performance awards combination thereof may made outside directors employees consultants board directors determines award whether issue new shares company’s treasury account december 31 2019 2018 1839835 2235379 shares respectively remained available grant 2012 plan 2013 company adopted era group inc 2013 employee stock purchase plan “espp” company may offer maximum 300000 shares common stock purchase eligible employees price per share equal 85 lesser fair market value per share common stock first day offering period ii fair market value per share common stock last day offering period common stock made available purchase espp sixmonth offering periods espp intended comply section 423 code intended subject section 401a code employee retirement income security act 1974 board directors may amend terminate espp time however increase number shares common stock reserved issuance espp may made without stockholder approval 2016 board directors authorized additional 400000 reserved issuance espp approved stockholders company’s annual meeting 2017 espp term ten years year ended december 31 2019 company issued 120754 shares espp december 31 2019 2018 101624 222378 shares respectively remained available issuance espp first quarter 2020 company connection entry definitive agreement merge bristow suspending espp total sharebased compensation expense includes stock options restricted stock espp purchases 36 million 29 million 46 million years ended december 31 2019 2018 2017 respectively december 31 2019 company approximately 42 million total unrecognized compensation costs weighted average period expected recognized 18 years restricted stock awards year ended december 31 2019 number shares weighted average grant price restricted stock award transactions follows years ended december 31 2019 2018 2017 company awarded 395544 331869 297256 shares respectively restricted stock weighted average grant date fair value 1035 980 1144 respectively total fair value shares vested years ended december 31 2019 2018 2017 determined using closing price grant date 29 million 28 million 55 million respectively stock option grants december 31 2019 company 203612 stock options outstanding fully vested exercisable weighted average exercise price 1962 company grant options years ended december 31 2019 december 31 2018 weighted average remaining contractual term options 32 years 13 segment information major customers geographical data company determined operations comprise single segment helicopters highly mobile may utilized company’s service lines business needs dictate year ended december 31 2019 anadarko petroleum corporation “anadarko” petroleo brasileiro sa “petrobras” us government accounted 28 21 14 respectively company’s operating revenues year ended december 31 2018 anadarko petrobras us government accounted 31 23 15 respectively company’s operating revenues year ended december 31 2017 anadarko petrobras us government accounted 28 22 16 respectively company’s operating revenues years ended december 31 2019 2018 2017 approximately 34 29 34 respectively company’s operating revenues derived foreign operations company’s foreign revenues primarily derived oil gas operations brazil colombia suriname well leasing activities jurisdictions following represents company’s operating revenues geographical region services provided years ended december 31 2019 2018 2017 thousands company’s longlived assets primarily property equipment employed various geographical regions world following represents company’s property equipment net accumulated depreciation based upon assets’ physical locations december 31 2019 2018 thousands company’s brazilian operations include 181 employees representing approximately 26 company’s total workforce covered collective bargaining agreements none expire within next year disputes employees terms collective bargaining agreements could result strikes work stoppages higher labor costs conditions may material adverse effect company’s financial condition results operations 14 supplemental information statements cash flows supplemental cash flow information years ended december 31 2019 2018 2017 follows thousands 15 quarterly financial information unaudited selected financial information interim quarterly periods presented thousands except per share data earnings loss per common share computed independently quarters presented sum quarterly earnings loss per share may necessarily equal total year 16 subsequent events january 23 2020 company entered definitive agreement bristow combine two companies stock transaction structured reverse triangular merger whereby company issue shares bristow stockholders company continues trade new york stock exchange “nyse” transaction expected close second half 2020 following receipt required regulatory approvals satisfaction customary closing conditions including approval bristow’s era’s stockholders 17 guarantors securities era group’s payment obligations 7750 senior notes jointly severally guaranteed existing 100 owned us subsidiaries guarantee revolving credit facility future us subsidiaries guarantee revolving credit facility material indebtedness era group may incur future “guarantors” guarantors currently guarantee revolving credit facility guarantees guarantors full unconditional joint several result agreement guarantors guarantee 7750 senior notes company presents following condensed consolidating balance sheets statements operations comprehensive income cash flows era group “parent” guarantors company’s subsidiaries “nonguarantors” statements read conjunction accompanying consolidated financial statements notes company supplemental condensed consolidating balance sheet december 31 2019 supplemental condensed consolidating balance sheet december 31 2018 supplemental condensed consolidating statements operations year ended december 31 2019 supplemental condensed consolidating statements operations year ended december 31 2018 supplemental condensed consolidating statements operations year ended december 31 2017 supplemental condensed consolidating statements comprehensive income year ended december 31 2019 supplemental condensed consolidating statements comprehensive income year ended december 31 2018 supplemental condensed consolidating statements comprehensive income year ended december 31 2017 supplemental condensed consolidating statements cash flows year ended december 31 2019 supplemental condensed consolidating statements cash flows year ended december 31 2018 supplemental condensed consolidating statements cash flows year ended december 31 2017