View Annual Report
Total Page：16
File Type：pdf, Size：1020Kb
2009 ANNUAL REPORT ESSENTIAL TO ENERGY OUR VALUES SAFETY: Safety first! QUALITY AND EXCELLENCE: Set and achieve high standards in everything we do. INTEGRITY: Do the right thing. FULFILLMENT: Develop our talents and enjoy our work. TEAMWORK: Communicate openly and respect each other. PROFITABILITY: Make wise decisions and help grow the business. OUR HELICopTER SERVICES ARE A STRATEGIC RESOURCE TO THE WorLDWIDE OIL AND GAS INDUSTRY. To Our Shareholders: Supplying a strategic service to one of the world’s critical industries is an exceptional business foundation. In fiscal 2009, we expanded our business and improved our We have improved our ability to meet customer needs – financial results. Despite a turbulent market, we achieved and to profit from that foundation – through the following: record revenue of $1.1 billion, a 12% improvement from • investments in helicopter service providers in Norway a year ago, and increased earnings from continuing opera- and recently, Brazil; tions to $3.61 from $3.53 per diluted share. • upgrading our fleet with 11 new medium and 10 new Our safety results also showed improvement. We had large helicopters; no fatalities or major accidents in our oil and gas business, • introducing to our U.S. Gulf of Mexico fleet the Sikorsky although two incidents in our pilot-training business S-92 large helicopter and Eurocopter 135 light twin resulted in minor injuries. Our ultimate goal remains to aircraft to match our customers’ deepwater focus; and achieve Target Zero: Zero Accidents, Zero Harm to People • selling a significant number of our small, single-engine and Zero Harm to the Environment. We want to make aircraft. helicopter transportation as safe as fixed-wing commercial aviation. We believe this goal is achievable, and we Resilience in a challenging environment continue to pursue it in our operations. We were tested in fiscal 2009. The global recession, decreasing demand for oil and natural gas, and falling Providing an essential service energy prices adversely affected Bristow and other Overall, our results and our prospects reflect how Bristow’s companies throughout the energy industry. As the year helicopter services have become a strategic component progressed, many of our oil and gas customers began in the exploration and production of hydrocarbons around scaling back capital spending plans for offshore explora- the world. Increasingly, the search for offshore oil and tion and development projects. gas reserves takes place in deepwater fields far from Our customers appreciated our response to these shore. For many of these projects, helicopters are the challenges. Wherever possible, we helped them achieve only practical form of transportation, and Bristow is the their goals with cost-effective solutions to their helicopter preferred provider of this service. transportation needs. Typically, this involved working within existing long-term contracts, substituting aircraft and reducing the number of flights – while not reducing rates. We were fortunate, too, that most offshore flights for our energy customers were in support of production activities rather than exploration and development. This makes us less vulnerable to downturns than some other oil service companies. Most of the reduction in demand for our services was from exploration-based flying. 1 REVENUE INCOME FROM (in millions) CONTINUING OPERATIONS (in millions) * Includes $23.4 million attributable to the gain on sale of 53 aircraft and related equipment in the U.S. Gulf of Mexico in October 2008. 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Our capital structure and liquidity position are other Highlights by region advantages in the current down cycle. We ended the In the U.S. Gulf of Mexico, we sold 53 small, single-engine fiscal year with $301 million in cash and $100 million in helicopters and continued the transition to newer medium undrawn revolving credit. This strong financial position and large helicopters. In August 2008, we deployed the allowed us to complete our May 2009 investment in Brazil Sikorsky S-92, which is capable of ferrying 19 passengers (discussed below). To maintain that strong position, we a distance of approximately 350 nautical miles. We’ve continually revisit and adjust our capital expenditures and added three S-92s since then and expect more aircraft overall cost structure to match the current level of busi- to be added based on known deepwater exploration and ness activity. development activity. Two major hurricanes, Gustav and Ike, and one major storm, Dolly, pounded the Gulf of Mexico coast during the OUR FLEET UPGRADES REFLECT CUSTOMER year. I am proud to report that we successfully supported PREFERENCE AND WILLINGNESS TO PAY MORE our customers and recovered to full operations in spite of FOR TRANSPORTATION ON NEWER, LARGER serious damage to several bases. All of this was accom- AND FASTER AIRCRAFT WITH THE LATEST plished without a single injury, thanks to the professional- DEVELOPMENTS IN SAFETY EQUIPMENT. ism, training and dedication of our employees. 2 DIVERSITY OF REVENUES Europe 35% U.S. Gulf of Mexico 20% Centralized Operations 2% West Africa Arctic 2% 17% Other Int’l 4% Bristow Southeast Asia Academy Latin 11% 2% America 7% In the North Sea, we bought the remaining 51% budget by more than half to develop giant subsalt offshore interest in our Norwegian affiliate, Norsk Helikopter AS discoveries. This has dramatically increased demand for (renamed Bristow Norway), and made it part of our oil services, including offshore transportation. We expect to Europe business unit. Control of this business will allow participate in this growth through our Líder investment and us to further develop opportunities in the region and use by putting additional aircraft currently on order or under our operating experience and financial strength to realize option to work in Brazil. synergies and make operational improvements. Elsewhere in Latin America, we increased our interest In West Africa, we renewed contracts with several in Rotorwing Leasing Resources, LLC, a joint venture that of our major customers at improved rates. Our operations leases aircraft in Mexico, from 49% to 70%. Heliservicio, in Nigeria delivered the company’s strongest financial an affiliate in which we have a 24% stake, won long-term improvements, showing a 45% increase in operating contracts for Petróleos Mexicanos (PEMEX) requiring 15 income and a 29% margin improvement. This is a major additional aircraft. accomplishment over years past, and we continue to work We continued to invest in Bristow Academy, which toward higher returns that are commensurate with the forms the core of our Global Training division. We now have risks in the region. 77 aircraft operating at four different training facilities. We Southeast Asia experienced a transitional year as we hired 58 graduates as instructors at Bristow Academy and introduced new medium and large helicopters that will 33 graduates as pilots – mostly former instructors – into eventually replace older aircraft in the region. Disappoint- our other business units during the year. ing margins early in the year began to turn around by the fourth quarter, when margins reached 28%, excluding a one-time tax benefit. We expect that Latin America, Brazil especially, will be one of the best growth areas for Bristow over the next few years. In May 2009, we purchased a 42.5% interest in Líder Aviação Holding S.A., Brazil’s premier provider of he- licopter and executive aviation services. We view Brazil as the next North Sea in terms of growth opportunity. The country holds the world’s third-largest potential for offshore oil reserves, behind the Middle East and sub-Saharan Africa. Brazil’s national oil company, Petrobras, recently increased its five-year 3 Looking ahead optimism in the oil and gas industry for some recovery in We expect the current reduction in offshore activity to calendar year 2010. continue in fiscal year 2010. As always, our goal will be Still, we know it’s a dynamic market environment that to adjust our cost structure to our revenue and customer will present challenges to our management. We have activity while continuing to deliver safe, quality service to experienced these cycles before and will continue execut- our customers. At the same time, we will continue to use ing our strategic and operating plans. our capital to benefit shareholders by making investments In closing, I’d like to recognize the pilots, engineers, in promising opportunities, subject to maintaining an mechanics and support staff who live our core values each appropriate liquidity position and capital structure. day. Their efforts have made Bristow the company it is As a result of the current economic downturn, our today. Also, it is with sadness that we say goodbye to Alan five-year goal of achieving $1.5 billion in annual revenue E. Bristow, founder of the company that bears his name, by 2011 will likely be met later than expected. What hasn’t who passed away on April 26, 2009. Alan founded Bristow changed is our focus on positioning Bristow for revenue Helicopters Limited more than 55 years ago, and his vision expansion and increased return on capital employed. We of being the leading provider of helicopter services also will continue striving to improve our execution against continues to be our mission today. We will do our very best important nonfinancial goals, including safety, operational to preserve his legacy of innovation and excellence. excellence and customer service. What’s ahead for