Moving Forward
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2012 ANNUAL REPORT Moving Forward Promises to keep. And miles to go. Dear Fellow Shareholders: Our fi scal year 2012 performance was characterized by signifi cant accomplishments resulting from the dedication and hard work of Bristow’s skilled and professional global team of 3,300 employees. 1 We achieved improved Bristow Value Added (BVA), our business units. As a result, our performance operating cash fl ow and adjusted net income over fell short of our own high expectations for the the prior fi scal year and the company won some fi scal year, but we are still pleased with our important tenders such as the U.K. Government’s accomplishments and the progress that was made. interim search and rescue contract. However, our business continued to be affected by general economic uncertainty and a delayed recovery in helicopter service activities in some regions, along with local competitive pressures in some of ADJUSTED EBITDAR* FISCAL YEAR 2012 ADJUSTED EBITDAR ADJUSTED EBITDAR MARGIN BY BUSINESS UNIT FOR FISCAL YEAR 2012 * Excludes corporate and other ($ in millions) 2 We go where our clients need us, with the fl eet they require, anywhere in the world. “ Punctuality of fl ights and on-time departures are fundamental for a supporting contractor to provide, together with model standards regarding safety. We believe Bristow have not only met these standards, but exceeded them, and we hope they will be providing us services in the future.” Saipem Limited “ Managing safety is a critical element in BP’s choice of contractors around the world. Bristow’s continued move towards global standards and safe operations through Target Zero aligns perfectly with our goal of continuous improvement in all of our operations.” BP 3 Unique opportunities ahead. 4 TOP TEN CLIENTS IN FISCAL YEAR 2012 AND THEIR PERCENTAGE AIR ACCIDENT RATE* CONTRIBUTION TO OUR CONSOLIDATED GROSS REVENUE PER 100,000 FLIGHT HOURS *Includes commercial operations only One thing is certain: Our employees’ commitment to Target Zero safety the Year award; John Wilson, Engineering Manager at our Europe Business performance remained the same. Our Air Accident Rate (AAR) continued Unit and a 40-year Bristow veteran, who received the Lifetime of Safety to be less than one-fourth the industry rate for the oil and gas and civil award at the CHC Safety Symposium; and Nick Mayhew, General Manager helicopter industries, and our ground safety performance, measured by at Bristow Academy, who was appointed Chairman, Training Working Total Recordable Incident Rate (TRIR), is world class performance by any Group, for the International Helicopter Safety Team’s U.S. Joint Helicopter measure. It is also noteworthy that we accomplished a Target Zero AAR Safety Implementation Team. rate in our commercial rotary wing fl ight operations as our three accidents Our clients frequently recognize our Target Zero commitment as well. A during the year involved a fi xed wing aircraft and two training aircraft with rig manager from a global offshore drilling company recently stated, “I no signifi cant injuries. thank you for the safety culture at Bristow that empowers employees to do For Bristow, fi scal year 2012 was about Gaining Altitude for our clients the right thing,” while a production manager from an international oil and and our shareholders by developing and implementing the steps needed gas company wrote, “Bristow’s continued move towards global standards to deliver better performance in all areas, including further improvement and safe operations through Target Zero aligns perfectly with our goal of in safety. The future will be about Moving Forward with the execution to continuous improvement for all of our operations… We are proud to have deliver tangible results. “Confi dence in fl ight. Worldwide.” continues to be them as partners in our global operations.” on display every day, not only in our operations, but also in our underlying As further recognition of the effectiveness of our Target Zero safety fi nancial strength and commitment to smarter growth and a balanced initiative, the National Ocean Industries Association selected Bristow as its return for our shareholders. recipient of the 2011 Safety in Seas award. In addition, I have the honor of Safe Operations Remain Our Number One Priority serving on the Executive Committee of the International Helicopter Safety Bristow’s commitment to Target Zero safety, our fi rst Core Value, remains Team, a worldwide organization leading a multi-year effort to reduce the as strong as it has ever been. In fi scal year 2012, we achieved a TRIR of civil helicopter accident rate. 0.23, a Lost Work Case Rate of 0.14 and an AAR of 0.53 in our commercial Cash Flow Was King in Fiscal Year 2012 fl ying operations and an AAR of ZERO in our commercial rotary wing For fi scal year 2012, our revenue was $1.34 billion, up almost nine percent operations. Our Other International Business Unit, consisting of a range of from the previous fi scal year, and net cash fl ow from operations was a operations from the Baltic Sea to Malaysia to Brazil, and our Centralized record $231.3 million, a 53 percent increase over the previous fi scal year. Operations Business Unit, which performs maintenance on our commercial This signifi cant increase in cash fl ow from operations resulted from our fl eet, achieved Target Zero safety during this fi scal year. This means no focus on improving our capital effi ciency and operating margins and we recordable air or ground incidents of any kind for these two operating units, made great strides on both fronts in the second half of fi scal year 2012. which is a remarkable accomplishment. Adjusted net income, which excludes gains and losses on asset Target Zero safety performance begins and ends with our people, and dispositions and special items, increased slightly to $114.6 million, or we are proud to recognize some outstanding employees who have been $3.12 per diluted share, compared to $113.0 million, or $3.08 per diluted honored over the past year: Captain Jay Slagle from our North America share, for the previous year, although GAAP net income (which includes Business Unit who was named Pilot of the Year by Helicopter Association the effect of these items) decreased 52 percent to $63.5 million, or $1.73 International; Todd Smith, Bristow Academy’s Director of Maintenance at per diluted share, compared to $132.3 million, or $3.60 per diluted share, our Titusville, Florida, campus, who received the Rolls Royce Mechanic of for fi scal year 2011. Adjusted EBITDAR, which excludes asset disposition 5 EARNINGS PER SHARE ADJUSTED “ Bristow’s safety culture, overall, falls into the FOR SPECIAL ITEMS AND AIRCRAFT SALES ‘proactive’ category of cultural maturity... One indication of this fi nding is the employees’ perception that Bristow’s safety culture has improved vastly since the inception of Target Zero.” Moody International effects and special items, was $319.5 million for our company. Our team is fully dedicated given our global operating footprint, access to compared to $297.7 million for fi scal year 2011, to delivering on the Promise each and every capital for acquiring new aircraft and ability to an increase of over seven percent. day. This requires a tireless focus on, and deliver premium quality services through our improvement of, safety, on-time departures Client Promise. Our Europe and West Africa Business Units were and aircraft availability as evidenced through the strongest contributors to our fi nancial results Creating a Unique Investment for Shareholders a consistent set of key performance indicators in fi scal year 2012, while the performance When we compare our fi ve-year return to other across all of our business units. This, in turn, of our North America and Australia Business metrics, Bristow’s total shareholder return at the allows us to create opportunities to build Units lagged year over year due to market end of fi scal year 2012 was 32.7 percent versus stronger relationships with our clients as we conditions and increased competition, but the S&P 500 at 10.5 percent and 6.3 percent work with them to improve their own operational showed sequential improvement in the second for the energy transportation services sector. performance. In one instance alone, our team half of fi scal year 2012 compared to the fi rst Not being satisfi ed with past performance, eliminated downtime caused by delays in getting half. Our Other International Business Unit was however, we are Moving Forward in taking the personnel to offshore facilities, saving a Bristow down somewhat in fi scal year 2012 primarily actions needed to improve the company’s total client an estimated $90 million. related to our Lider investment in Brazil, due to return to shareholders. both operational and foreign currency exchange We believe our results-focused strategy is In fi scal year 2012, we implemented our new issues affecting the business. However, we consistent with emerging client needs and BVA fi nancial management framework, which anticipate improvement in Lider as new aircraft industry trends. Oil and gas companies are replaced Return on Capital Employed as our begin operating and generating additional forecast to signifi cantly increase their investment key fi nancial performance measurement, and it revenue in fi scal year 2013. in exploration and production development, with was a good year in terms of delivering this BVA global spend expected to increase approximately Our focus on BVA — after-tax cash fl ow improvement for our shareholders. A big part 10 percent to $614 billion in 2012 versus $556 earned on our gross operating assets over our of improving our return on invested capital is billion in 2011 and, further, to top $800 billion cost of capital — resulted in year over year managing our capital investment and intensity by 2015.