Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Bristow Group’s First Quarter Earnings Conference Call. [Operator Instructions] This conference is being recorded today, August 6, 2013. I would now like to turn the conference over to Linda McNeill, Director of Investor Relations. Please go ahead.

Thank you, Doug. And good morning, everyone. Welcome to Bristow Group’s first quarter fiscal 2014 earnings call. I am Linda McNeill, Director of Investor Relations. And with me on the call today are Bill Chiles, President and CEO, Jonathan Baliff, Senior Vice President and Chief Financial Officer, Mark Duncan, Senior Vice President Commercial, Brian Allman, Vice President and Chief Accounting Officer and John Cloggie, Vice President and Chief Technical Officer. We hope you’ve seen our earnings release, which was issued yesterday afternoon. It is posted in the Investor Relations Section of our website at bristowgroup.com. Let me remind everyone that during the call, Bristow Group management may make forward-looking statements that reflect our beliefs, expectations, hopes, intentions or predictions of the future. Additional information concerning these forward-looking statements is contained in the Form 10-Q filed with the SEC for the period ended June 30, 2013. Additionally, to the extent we discuss non-GAAP measures during the call. Please see our earnings release or the investor presentation on our website for calculation of these measures and GAAP reconciliation. With that, I would like to turn the call over to Bill. Bill?

Okay. Thank you, Linda. Good morning to all of you. And thank you for joining us on our earnings call for the quarter ended June 30 first quarter of our fiscal 2014. As you know we always start off talking about safety and our commitment to target zero safety, which is our primary core value. And the first quarter was a very good quarter from the standpoint of our Air Accident Rate as you can see from this chart on Slide 5. And please look at Slide 5, we’ve had no Class A accidents, no Class B accidents and just a few Class Cs during the first quarter. This is action performance, we’re very happy about that. However, our ground safety is not been so good. Our total recordable incident rate is actually from last year during the first quarter of this year where we’ve had 4 Lost Work Cases already and one Medical Treatment Case which cost to total recordable incident rate to increase. Obviously we’re examining these incidents looking for common causes in doubling our efforts to increase our moves around the world to improve our culture and as you hear about Safety Management System. Just a couple of points about our Safety Management System, our system includes world-class Pilot and Engineering Training for an industry like this. We actually invest over $38 million annually in pilot training alone. We create our own training material internally in the content, we got 90 plus training captains and Check Airmen who conduct a significant portion in the annual 13000 aero simulator training and 8 Bristow-owned full flight simulators and flight training devices around the world. This investment underpins a consistent group wide approach to safety ensuring that the safety benefits and training are maximized and delivered to all of our…

Thank you Bill. So let’s review some of the financial highlights from this quarter. Please turn to Slide 16. As Bill said earlier our strong financial performance from the fourth quarter of fiscal 2013 as continued into the first quarter of 2014. Our first quarter FY 2014 adjusted EPS was $1 excluding special items and as to disposition effects. Special items include a one-time charge associated with the cancellation of a potential financing in connection with our successful UK SAR bid that we spoke about over the last 6 months. The first quarter fiscal 2014 adjusted earnings is at 23.5% increase over last year’s $0.81 and it’s consistent with the adjusted EBITDAR improvement of $18.2 million or 21.6% from the first quarter of fiscal 2013. The increase as we spoke about before in EPS and EBITDAR were primarily driven by strong top-line growth in Europe and West Africa. The addition of our large aircraft operating in Atlantic Canada that began last October higher earnings from our other international business unit including Lider in Brazil. And also net cost improvement at corporate. This was partially offset by the weaker margins in certain business units that Bill talked about but these are expected the non-recurring with adjusted EBITDAR margins expected to recover during the rest of the fiscal year 2014. In Brazil, excluding foreign exchange impacts our equity earnings from our investment in Lider improved $5.9 million primarily due to the additional aircraft among contract and better cost management which contributed $0.13 of improvement from Bristow’s first quarter. As you may recall we closed on our Cougar investment during the second half of fiscal 2013 so you’ll see large year-over-year additions in the first half of fiscal 2014. This quarter Cougar contributed $0.09 of the improvement to our North American business unit…

All right, please turn to Slide 22. I want to emphasize one more time with safety. I think our number one core value Target Zero we will achieve Target Zero is not a matter of if it’s a matter of when. Our commitment continues and will always be our number one commitment. Another point, clients are turning to Bristow as their provider of choice recognizing the size of the company the global reach in financial and operational safety which are becoming more and more important to them, they are now focusing on financial safety as well as operational safety. For example -- an example is the new contract win in East Africa. We continue to see growth in revenue from our very stable and growing oil and gas production and exploration business plus growth in the civilian SAR world. This anticipated lower business risk cash flow stream is allowing Bristow to implement a new dividend policy that creates a unique investment for existing shareholders and those of you out there that want to become new shareholders. So thank you again for joining the call. And now I’ll turn it over to the operator for questions.

[Operator Instructions] Our first question is from the line of Ryan Fitzgibbon with Global Hunter Securities.

Can I start off with the EC225 the modification inspection process, can you kind of walk us through the timing on maybe per aircraft basis that requires, one. And then two, will you be expensing to capitalizing those costs and make those upgrades and train the crews to be ready to get back to work by for fiscal Q3 of this year?

I’m going to let Jon -- John Cloggie is here. He is now formerly Head of our business unit of Central Operations is now overseeing global Transformation but he is directly involved in the 225 project matter of fact he leads our return to service team. So I’m going to let John answer the questions. I didn’t hear what was the first part of your question first part?

Yes, Bill I’m just trying to get better understanding of the process that goes into the modifications and the instructions, kind of the timing on a per aircraft basis take?

Yes, okay. And then whether we capitalize our expense, okay.

Yes, I just want to figure out in the process.

Process, the timing and whether we capitalize our expense. So John, over to you.

Okay. The -- what we were doing on the 225 is a number of simple modifications which involve changes to the inside of the transmission, some inspections that we carry out on current basis. And also indications in the cockpit for the crew whilst they operate the aircraft. We’ve stocked some of these modifications already and we’re working our way through the fleet, we have most of the kits delivered now from Eurocopter. And we’re embarking upon an extensive training program for our pilots and engineers so that they know how to manage the systems and operation. As we have stated previously we are still looking to return the aircraft to service in the last quarter of this calendar year. But regard to the cost, the labor cost is relatively insignificant but there may be an ongoing cost associated with the nondestructive inspections that we’re carrying out and these cost will be expensed in a way through. The…

The components, the components.

Sorry, I missed the last part. The time, the modifications and the timing.

Ryan was asking the labor costs are insignificant, with components.

Sorry, yes.

The hardware and software of company.

The modifications associated with the hardware and software are been provided by Eurocopter free of charge.

Okay, that’s helpful. And then in terms of the order of magnitude for the number of helicopters, that can go back to work in fiscal Q3, can you disclose what’s embedded in guidance?

Let me take that one and I’m going to turn it over to Mark because I think there is a commercial interaction so that’s important if you to understand Ryan. But we have given guidance with the explicit expectation of return to revenue service for the third quarter of our fiscal year. However I think we’re also being fairly conservative even with that timing as part of our guidance.

Yes, Ryan, it’s Mark Duncan here. A couple of interesting points to note on the 225 return to service, the physical work to be done and the training to be done on the crews is part of the challenge. We're also in significant dialogue with our customers and with the customers the passengers who fly in the aircraft. So they feel confident and we’re going to go through that entire process and make sure everyone is on board before we go back flying and that’s our focus on safety. On the ongoing cost of the 225 because there are additional procedures additional inspections required, we will be -- we tend to recover that from our clients when the aircraft back in service.

Okay, got it. And then second question, Jonathan you teased us little bit up there about the operational excellence initiative you have in place right now. Can you give us a little bit more of a tease as to what kind of magnitude that could have on your cost basis and how is that going to impact margins as we go through the year?

Ryan, I appreciate your question. And because we want you on the calls in the second, third and fourth quarter, we’re going to leave you little bit hanging there. One, we want to make sure that people understand how we're bringing the 225s back to revenue service and lot of our operational excellence niches are actually helping in that regard. So you already starting to see some of that but as far as the explicit because you’re really asking for explicit numbers associated with that, stay tuned.

Your next question is from the line of Jon Donnel with Howard Weil.

I was wondering if you might go on to a little bit more detail on the other international segment and the really good results we saw this quarter. I know that it was always a lot of moving pieces with the way that the Lider numbers end up hitting your income statement here but you mentioned a number of the benefits that they’ve been seeing from the increased aircraft. Why don’t if you just maybe give us a feel for how much of that number this quarter was more reflective of currently the ongoing operations or maybe just operations for this quarter specifically as supposed to maybe some catch up payments or foreign currency translations et cetera.

Yes, Jon, I’m going to divide this into 2 pieces. I’m going to let Mark Duncan talk about the commercial side and Jonathan talk more about the details of how this flows through our income statement.

Okay, Jon. Just in Brazil with Lider, Petrobras awarded several contracts over the last 12 to 18 months all of which were reported by us. You will recall that Lider’s margins took a dip as they were ramping up for those new contracts so they were incurring a lot of pilot training, aircraft acquisition cost et cetera. And the real change that’s happened as those costs are all sunk and the contracts are now all up in running and Lider are performing well. The S-92 is now there is significant fleet of S-92s there is large aircraft up to 10 aircraft in Brazil now with Lider, in the past it was all mediums and those higher margin large aircraft are driving forward now on a long-term contracts. So, we expect this to be a run rate given that there could be FX fluctuations, I don’t think the FX fluctuations in this quarter’s numbers were that significant but I’ll let Jonathan talk about that.

Yes, I mean we talked about -- we alluded to you in a little bit on Slide 16, when we talked about the contribution from Lider at $5.9 million. We didn’t include that there was a positive it’s in the 10-Q it will be in the 10-Q $2.7 million of benefit due to foreign exchange but really if you look at it 2/3 of the benefit is because of the excellent commercial and operational benefits that Lider is deriving has been really the provider of choice for Petrobras and the IOCs that are there. And again it’s important to note Lider is a business that on this been around a long time, the growth in fixed wing and helicopter services and we expect them to continue to get the lion's share of business in oil field flight services as we move forward with their exploration and then production in Brazil.

Okay, that’s helpful. And then regarding the Europe segment when you’d mentioned that some of the standing charges have been waived for the EC225, clearly that must had a negative impact under the EBITDAR margins that we saw in the quarter. Could you give us maybe a feel for the magnitude of how those may be continuing here as you ramp up in expectation of getting those helicopters back into the full service for the fleet in the third quarter.

Yes, Jon it’s Mark Duncan again. I just like to clarify for you that the 225 production and charges we actually report about 4. We have our position with our clients where we’ve reduced the charges based on being able to take costs out. So as an example our pilot costs are included in our monthly charges. When we’re able to use those pilots on alternative aircraft it would able to take that cost though and benefit the client who is suffering through this because they’re not flying the aircraft. And then we are using those pilots deploy additional aircraft which is backfilling. The real dilution in margins was due to heavy maintenance which was bringing a 3C2 aircraft that was previously held for sale or planned to be sold bringing it back into service and undergoing a major check and we expense that cost. So that expense is coming in this quarter. That aircraft will then go to work and the expense cost it’s taken so it won’t recur. So that is a temporary blip in those margins, there is no -- it’s not a market factor of lower margins at all.

That was one aircraft that had that big of an impact?

And there were some other costs too, we don’t get into the specifics of which costs but it was derived from bringing that last aircraft. We’ve been since you know and having those type of parts incurred in previous quarters the difference is that we took a lot of those and didn’t have to take those in third, second and fourth quarter of FY 2014 and that’s why you’re seeing a lot of it pile on into this quarter. The last thing I would mention really reiterating from a number standpoint Mark’s point, on Page 30 we give the LACE rates for EBU and you see that in first quarter were at $9.63 million LACE rate in the first quarter compared to $9.13 in the fourth quarter and this just again reiterates what Mark is getting at which is we’re not waving any of the MFCs we’re enjoying the revenue and it was really is major maintenance cost.

Our next question is from the line of Jim Crandell with Cowen and Company.

It seems you had a lot of one-time costs in the quarter first for the AS332 the [indiscernible] to get ready for new contracts. Can you try to quantify the amount of one-time cost of the quarter and how they impacted it?

Yes, Jim this is -- I’m going let Jonathan take that but I’ll emphasize this as one reason we try to get you guys to look at the full year rather than quarter-to-quarter performance. Because this typically happens in the first quarter but Jonathan go ahead.

Yes, I mean Jim I think we have to delineate between what we call one-time special items which are associated and not included in our adjusted earnings and those items were consisted over the past number of years and this quarter it included an item associated with a financing that we cancelled associated with the successful bid for UK SAR that was predominantly the difference between the $0.74 and $1. And then within that dollar I think the primary cost that we’ve been talking about is really just associated with the maintenance in Europe. And so it’s really those 2 I don’t think we really have talked in the press release and you’ll see in the 10-Q a whole lot of other one-off cost and again reiterating what Bill says we look at these cost as part of an annual and even multi-year management of our fleet.

Okay maybe it’s just the quarter-to-quarter volatility in the numbers which surprises me but I am little surprised on the revenue side the Gulf of Mexico is running down year-to-year now, is that -- am I reading it right?

You’re correct and I have to address the previous comment you just made Jim. If you look at the year-over-year and we’ve done a lot of metrics. When you look at the year-over-year measurements we’re at the top of our industry we have less than the 3% volatility in our yearly and actually we didn’t look at the quarterly in our volatility on quarter-to-quarter results were roughly 3quarters less than the Universal Oil Field Services. So I don’t like this agreeing with anybody on a call but again we don’t see at least in our analysis the same type of volatility you’re talking about and again we run the business on a year-to-year basis. As far as your other comment I’m going to turn it over to Mark.

Yes, Jim, it’s Mark. On our Gulf of Mexico business you are seeing a decline in the small aircraft utilization as the Shelf continues to decline and an increase in deepwater activity with a number of rigs still to come in. As we mentioned we have had an S-92 started in June that’s going to start driving significant revenue and remember our S-92 delivers a whole bunch more revenue than several small aircraft. And we’re also able to advice that we secured an additional contract for an S-92 starting in the first quarter of FY 2014 and that award was received yesterday -and that’s a 3to 5year contract. So again good sings for the Gulf of Mexico moving forward as we get larger aircraft and they’re going to generate higher margins.

Jim, I do want to make one point, I don’t want to sound like the lady that protest too much. But Jim I’m going to address this volatility issues that Jonathan talked about. You may recall 3, 4 years ago we had huge volatility quarter-over-quarter due to maintenance cost because Bristow was maintaining these over types of doing the major checks out of our own pocket on a month-to-month basis. So when we had a bunch of major checks pile up at one time in one quarter we had a horrible result you remember that very well. So the volatility has come off dramatically since those days. Primarily due to the fact that one the new types we buy powered by the aeros from the manufacturer. So when the major checks come up they’re done really primarily I mean -- they’re embedded into monthly standing charge and the flight hour rate that we charge our customer and they’re already accounted for in our accounting so when we actually, that money is paid out over a long period of time to the manufacturer so when we do those major checks now we don’t have to pay these big we don’t have to write these big checks on a monthly or quarter basis. So the 332s that caused the problem this quarter are the ones that we are pulling out of service that we had to bring back into service to back up the 225s that’s why this happened.

Okay.

Consistent with our guidance.

Our next question is from the line of Gregory Lewis with Credit Suisse.

Could you talk a little bit about the decision to sell FBH, that’s really my only question, just looking for some more clarity on the decision to sort of get out of that of [indiscernible].

We’ve been in that investment for about 14 years when I arrived here 10 years ago we formalized the investment signed a formal agreement with our -- from the former Cobham set up an office and got FBH up and running fully up and running. It’s done extremely well as you can see we’ve developed, we generate a lot of value in that company. We believe it’s not really core to Bristow its training military pilots in the UK primarily and it was -- in some cases standing in the way of Bristow doing other things around the world that we want to do directly. We saw an ability to get out of it the opportunity to get out of it take some money off the table and let Cobham run it 100% in the future just it’s just not, what we’re trying to focus on and what do we do well and what is core to Bristow, what’s not core to us is what we don’t do well we’re trying to get out of it.

Okay. Could you may be provide us some sort of thoughts around what were -- what Bristow’s plans are with that I guess that windfall of money is it -- should we just expect it to be redeployed in the order book in terms of building out existing, the existing footprint or could be may be see that money go into sort of developing another new business opportunity?

Well, I think the answer is yes and yes. I mean we have not made a very big deal of it because we usually don’t highlight such specific contract wins but that money will nearly almost dollar-for-dollar directly go into East Africa and so we’ve won a long term contract with a major client with new technology aircraft and higher BVA than we’ve seen out of FBH better earnings potential than FBH and better from a strategic standpoint even though we don’t like to use that word on these calls but the stars are going to line up very nicely because of the secular demand in our industry. So that money is going to go to East Africa and grow that business significantly.

Next question is from the line of David Smith with Johnson Rice.

Wanted to circle back to the U.S. Gulf deepwater market just with the contract announced this morning that looks like 20 incremental deepwater rigs scheduled to join the U.S. Gulf of Mexico fleet 3Q 2013 and 1Q 2013. And given the most of these units have term contracts 3 years plus just wanted to ask how far in advance your clients are looking to secure their aviation needs on these new rigs before they start drilling I didn’t quite catch that I think you mentioned one that was a new contract that you just picked up?

Yes, we just picked up a contract that will start in April of 2014 and that’s a 3year plus contract and there are several other customers who are bringing rigs in towards the end of next year who are already in dialogue in the market looking for additional heavy aircraft so we’re fairly confident that demand there is returning to be very robust and we look forward to deploying more of our heavy aircraft into the Gulf of Mexico.

Sounds great. I guess the follow up question is that this doesn’t gone right there is about 17 deepwater rigs in the U.S. Gulf that have been working down the term contracts and become available between December 2013 and December 2014, that leaving a lot of right now open availability in that timeframe that we’ve got 18 rigs are being added. I’m just wondering if you’re having any conversations regarding the service on these existing rigs that might lack official contracts or do you think the market could evolve over short-term call out market and would that make any difference?

Is that in the Gulf of Mexico, you’re talking about or else…

No, that’s the Gulf of Mexico. So through December 2014 I count 18 new rigs being added or we’ve got 17 existing deepwater rigs in the Gulf where the contracts expired before that.

Yes, there is a little bit of a bifurcation of the market in the Gulf of Mexico regarding the clients. The major companies tend to contract especially in the deepwater they take these big deepwater rigs and they contract for a number of years because the wells takes 6 months’ time to drill. Some of the other companies who use floating rigs they tend to go well to well and then they share the rig around and they found the rig over someone else. We actively monitor that on a day to day basis and follow that. So we’re looking our utilization in the Gulf of Mexico against rigs and remember that lot of our work is production based as well. One advantage we have and we’ve demonstrated this in the past is that when rigs stop and the aircraft become available we have multiple opportunities around the world where we can redeploy aircraft and we’ve done that in the Gulf of Mexico. At the moment we’re probably looking at aircraft coming into the Gulf of Mexico overall but opportunistically we will look at redeploying and we’ll do that.

Next question is from the line of Brandon Dobell with William Blair & Company.

One, we could focus I guess on maybe your thoughts on the sustainability of the LACE rate improvements in the Western Africa region and maybe you kind of tied into that your outlook for I guess sustainability of the improvements out of Cougar recently?

Okay, on Western Africa primarily Nigeria for us as we look forward what’s happening there is there are number of aircraft have been in there for on long-term contacts. The customers are looking to renew those aircraft and they want newer aircraft types. That will keep the rate levels up in that market so even if there is no growth by aircraft numbers there is growth by aircraft type.

Okay.

As we deploy in newer aircraft into that market. At the moment things are stagnated in Nigeria due to the petroleum bills are not being announced and we are actively looking at our contracts extending contracts waiting for bids to come, and I think most of the companies are waiting on their new projects in that region until they get clarity and what’s going to happen in the country.

Okay.

When that happens there will then be growth in that market as well as a just replacement.

Yes, I mean if you just take it down to on the finance side of it we expect the LACE numbers there to start really improving, we’ve been as you know kind of around low 20s of LACE I mean we expect that to start moving up because of the insertion of larger aircraft. And I think you’re alluding to we have employed for the first time in a business unit a greater than a $14 million LACE rate in an overall business unit but again what we have to emphasize in West Africa is it’s mostly a medium market and we enjoy good pricing there because of the great service we provide in a safe service. But we can continue to move that LACE rate because of the insertion of larger and new helicopters.

Okay. And any comments on Cougar, how this was nice run you’re having or maybe the magnitude of the opportunity for add new aircraft there looking up for this fiscal year?

Okay. Cougar passed a number of contracts that are in the process of being extended for several years tendering some future tendering that’s going to come for about existing work. Those fields are in place and producing and will be there for the long-term. In addition, there are 2 additional new projects happening in Eastern Canada and there will be additional tenders for that probably coming out in the next quarter for starting in calendar 2016 and that will provide additional growth for Cougar. The additional activity that’s happening then in [indiscernible] is utterly seismic that will count into drilling programs in the future and there are 2 majors going there next summer and Cougar already contracted for some of that work.

Let me add to that Mark. Brandon, there will be competition for those 2 tenders.

Okay. That makes sense. And then final one from me, it doesn’t seem like there is any other kind of global fallout from the 225 issues but is there been anything up note to talk about there in some of the different regions as you guys work close to resolution in this issue.

One note I would -- one thing I would say that we -- I believe we talked about last quarter was the introduction of the S-92 into Australia for INPEX as a result of the 225 issue.

[Operator Instructions] Our next question is from the line of David Anderson with JPMorgan. Please go ahead.

David, you’re there?

One moment please. Mr. Anderson has disconnected.

Okay.

Okay. We have no further questions operator?

At this time, there are no further questions in the queue.

Okay. Thanks to all of you for joining the call in this quarter. And we look forward to talking to you again next quarter and obviously in the interim we’d be like to give us a call. Thanks again.

Thank you. Ladies and gentlemen, this concludes the Bristow Group’s first quarter earnings conference call. You may now disconnect. Thank you for using ACT conferencing.