Era Group Inc. Reports Fourth Quarter and Full Year 2014 Results

HOUSTON, TX--(Marketwired - Mar 10, 2015) -  Era Group Inc. (NYSE: ERA) today reported net income for its fourth quarter ended December 31, 2014 of $3.2 million, or $0.16 per diluted share, on operating revenues of $74.7 million compared to net income of $1.8 million, or $0.09 per diluted share, on operating revenues of $76.0 million in the prior year quarter. The Company also reported net income for its fiscal year ended December 31, 2014 of $17.1 million, or $0.84 per diluted share, on operating revenues of $331.2 million compared to net income of $18.7 million, or $0.88 per diluted share, on operating revenues of $299.0 million in the prior fiscal year.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $18.6 million in the current quarter compared to $20.0 million in the prior year quarter. There were no significant gains on equipment dispositions in the current quarter compared to gains on asset dispositions of $0.5 million in the prior year quarter. EBITDA in the current quarter included $1.9 million of foreign currency losses compared to foreign currency gains of $0.2 million in the prior year quarter.

Fiscal year 2014 EBITDA was $85.9 million compared to EBITDA of $93.1 million in the prior fiscal year. EBITDA adjusted to exclude gains on asset dispositions and special items was $84.7 million in the current year compared to $77.0 million in the prior year. The Company sold helicopters and related equipment for gains of $6.1 million in the current year compared to gains of $18.3 million in the prior year. Special items in the current year consisted of $2.5 million in severance-related expenses for the Company's former Chief Executive Officer and a $2.5 million impairment charge related to a probable loss of a note receivable. Special items in the prior year consisted of a $2.0 million charge related to the early termination of operating leases on certain helicopters configured for air medical services and $0.2 million of management fees charged prior to the Spin-off from SEACOR Holdings Inc.

"Era achieved record financial results in fiscal year 2014 as revenues and Adjusted EBITDA excluding gains on asset sales increased by 11% and 10%, respectively, over the prior fiscal year," said Chris Bradshaw, Chief Executive Officer of Era Group. "However, fourth quarter results were weaker than the normal seasonal pattern primarily due to lower utilization of helicopters in our oil and gas line of service, as anticipated in our third quarter earnings announcement."

"In response to the significant decline in oil prices, oil and gas companies have announced substantial reductions in their spending plans for 2015, and many of them are seeking cost reductions from their service providers. The strength of our business model and balance sheet put us in a good position to weather market downturns of this nature. We are focused on maximizing the utilization of our helicopter fleet through new contract awards and fleet management initiatives."

"We also remain focused on realizing operational efficiencies in our business. We announced a management realignment and reduction in force during the fourth quarter which streamlined our organization and significantly reduced our personnel expenses. In addition, we plan to extract efficiencies from other areas of our cost structure during 2015."

Fourth Quarter Results

Operating revenues were $1.3 million lower in the current quarter primarily due to the conclusion of contracts subsequent to the prior year quarter in our international oil and gas and air medical service lines. These decreases were partially offset by increased revenues from search and rescue activities due to higher rates and increased dry-leasing revenues due to improved cash collections from a customer in India and the related change to accrual basis accounting for recognizing revenue from that customer.

Operating expenses were $0.6 million higher in the current quarter primarily due to increased repairs and maintenance expense related to increased flight hours for our EC225 heavy helicopters.

Administrative and general expenses were $0.9 million lower in the current quarter primarily due to the recovery of a previously reserved account receivable from a customer in bankruptcy.

Depreciation expense was $0.7 million higher in the current quarter primarily due to depreciation on new helicopters placed into service.

Interest expense was $0.8 million lower in the current quarter primarily due to increased capitalized interest related to deposits on helicopter orders and a base expansion project.

Derivative gains of $0.8 million in the current quarter were primarily due to a reduction in the amount of unsettled forward currency contracts.

Foreign currency losses of $1.9 million in the current quarter were primarily due to the strengthening of the U.S. dollar resulting in losses on the translation of euro-denominated cash balances and realized losses on forward currency contracts. 

Income tax expense was $2.9 million lower in the current quarter primarily due to lower pre-tax income and adjustments related to the state apportionment rates.

Equity earnings were $0.4 million in the current quarter compared to losses of $0.9 million in the prior year quarter. The increase in earnings was due to higher income from our Dart Holding Company Ltd. joint venture. 

Sequential Quarter Results

Net income for the current quarter was $1.1 million lower than in the third quarter of 2014. EBITDA was $3.8 million lower in the current quarter compared to the preceding quarter. EBITDA adjusted to exclude gains on asset dispositions and special items was $18.6 million in the current quarter compared to $24.8 million in the preceding quarter. Special items in the third quarter consisted of $2.5 million in severance-related expenses for the Company's former Chief Executive Officer. 

Operating revenues in the current quarter were $15.8 million lower compared to the preceding quarter primarily due to lower utilization of helicopters in our oil and gas line of service and the end of seasonal activities in Alaska. Operating expenses were $8.5 million lower primarily due to reduced repairs and maintenance and fuel expenses resulting from decreased activity and lower fuel prices, as well as reduced personnel expenses resulting from the reduction in headcount during the fourth quarter. Administrative and general expenses were $3.3 million lower due to the absence of severance-related expenses for the former CEO noted above and the recovery of a previously reserved account receivable from a customer in bankruptcy.

Full Year Results

Operating revenues were $32.3 million higher in the current year primarily due to our EC225 heavy helicopters operating for the full year in 2014 compared to a partial year in 2013 and an increase in charter activity at higher rates for our medium helicopters operating in the U.S. Gulf of Mexico. These increases were partially offset by lower revenues from oil and gas activities in Alaska primarily due to a smaller fleet count and reduced utilization.

Operating expenses were $17.8 million higher in the current year primarily due to increased repairs and maintenance and fuel expenses related to the resumption of our EC225 helicopter operations, increased personnel expenses related to pay scale and benefit adjustments and increased rebillable expenses, freight expenses and parts cost of sales. These increases were partially offset by decreases in leased-in equipment expenses due to a one-time charge in the prior year related to operating leases on certain helicopters configured for air medical services and reduced insurance and loss reserves due to changes in insured helicopter values.

Administrative and general expenses were $5.1 million higher in the current year primarily due to severance-related expenses resulting from changes in senior management positions and annual salary adjustments and stock compensation grants.

During the current year, the Company sold or otherwise disposed of helicopters and other equipment for proceeds of $7.1 million, resulting in gains of $6.1 million, compared to proceeds from helicopter and equipment sales of $65.2 million and gains of $18.3 million in the prior year.

Interest expense was $3.3 million lower in the current year primarily due to increased capitalized interest related to deposits on helicopter orders and a base expansion project.

Note receivable impairments were $2.5 million in the current year related to a probable loss of a note receivable.

Foreign currency losses of $2.4 million in the current year were primarily due to the strengthening of the U.S. dollar resulting in losses on the translation of euro-denominated cash balances and realized losses on forward currency contracts.

Income tax expense was $3.4 million lower in the current year due to lower pre-tax income and a lower effective tax rate.

Equity earnings were $1.8 million higher in the current year primarily due to a gain recognized on the sale of our 51% interest in our Lake Palma S.L. joint venture.

Fleet Update

During the current quarter, the Company's capital expenditures were $42.8 million, which consisted primarily of deposits on future helicopter deliveries and a base expansion project. The Company made a $22.7 million progress payment on a S92 heavy helicopter during the fourth quarter of 2014 and accelerated the delivery date to August 2015. The Company records helicopter acquisitions in property and equipment and places helicopters in service once all completion work has been finalized and the helicopters are ready for use.

The current excess capacity of our medium helicopters is higher than in recent periods. Excess helicopters include our helicopters other than those under customer contracts, undergoing maintenance or dedicated for charter activity. A decline in the near-term utilization of our medium helicopters may adversely impact our near-term financial results. We have recently been awarded a number of new contracts in the U.S. Gulf of Mexico and Brazil. Some of those contracts have already begun, but most of them are not scheduled to begin until the second half of 2015 or early 2016. In addition, we may sell certain helicopters on an opportunistic basis consistent with our stated strategy.

Capital Commitments

The Company's unfunded capital commitments as of December 31, 2014 consisted primarily of orders for helicopters and totaled $232.3 million, of which $114.9 million is payable during 2015 with the balance payable through 2017. The Company also had $1.9 million of deposits paid on options not yet exercised. The Company may terminate $131.3 million of its total commitments (inclusive of deposits paid on options not yet exercised) without further liability other than liquidated damages of $8.7 million in the aggregate. 

Included in these capital commitments are agreements to purchase ten AW189 heavy helicopters, four S92 heavy helicopters and five AW169 light twin helicopters. The AW189 helicopters are scheduled to be delivered in 2015 through 2017. The S92 helicopters are scheduled to be delivered in 2015 through 2016. Delivery dates for the AW169 helicopters have yet to be determined. In addition, the Company had outstanding options to purchase up to an additional ten AW189 helicopters, five S92 helicopters and one AW139 medium helicopter. If these options are exercised, the helicopters would be scheduled for delivery in 2015 through 2018.

Liquidity

As of December 31, 2014, the Company had $40.9 million in cash balances and remaining availability under its senior secured revolving credit facility of $214.3 million.

Conference Call

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Wednesday, March 11, 2015 to review the results for the fourth quarter ended December 31, 2014. The conference call can be accessed as follows:

All callers will need to reference the access code 85831106

Within the U.S.: Operator Assisted Toll-Free Dial-In Number: [phone]

Outside the U.S.: Operator Assisted International Dial-In Number: [phone]

Replay

A telephone replay will be available through March 25, 2015 and may be accessed by calling [phone] for domestic callers or [phone] for international callers. An audio replay will also be available on the Company's website at www.eragroupinc.com shortly after the call and will be accessible for approximately 90 days.

About Era Group

Era Group is one of the largest helicopter operators in the world and the longest serving helicopter transport operator in the U.S. In addition to servicing its U.S. customers, Era Group also provides helicopters and related services to customers and third-party helicopter operators in other countries, including Brazil, India, Norway, Spain, and the United Kingdom. Era Group's helicopters are primarily used to transport personnel to, from and between offshore installations, drilling rigs and platforms.

Forward-Looking Statements Disclosure

Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements concerning management's expectations, strategic objectives, business prospects, anticipated performance and financial condition and other similar matters involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others, the Company's dependence on, and the cyclical nature of, offshore oil and gas exploration, development and production activity; fluctuations in worldwide prices of and demand for oil and natural gas; the Company's reliance on a small number of customers and reduction of the Company's customer base resulting from consolidation; inherent risks in operating helicopters; the failure to maintain an acceptable safety record; the ability to successfully expand into other geographic and helicopter service markets; the impact of increased United States ("U.S.") and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities; the requirement to engage in competitive processes or expend significant resources with no guaranty of recoupment; the grounding of all or a portion of our fleet for extended periods of time or indefinitely; reduction or cancellation of services for government agencies; reliance on a small number of helicopter manufacturers and suppliers; political instability, governmental action, war, acts of terrorism and changes in the economic condition in any foreign country where the Company does business, which may result in expropriation, nationalization, confiscation or deprivation of our assets or result in claims of a force majeure situation; declines in the global economy and financial markets; foreign currency exposure and exchange controls; credit risk exposure; the ongoing need to replace aging helicopters; the Company's reliance on the secondary used helicopter market to dispose of older helicopters; the Company's reliance on information technology; allocation of risk between the Company and its customers; liability, legal fees and costs in connection with providing emergency response services; risks associated with the Company's debt structure; operational and financial difficulties of the Company's joint ventures and partners; conflict with the other owners of the Company's non-wholly owned subsidiaries and other equity investees; adverse results of legal proceedings; adverse weather conditions and seasonality; adequacy of insurance coverage; the attraction and retention of qualified personnel; restrictions on the amount of foreign ownership of the Company's common stock; the effect of the Spin-off, and; and various other matters and factors, many of which are beyond the Company's control. In addition, these statements constitute Era Group's cautionary statements under the Private Securities Litigation Reform Act of 1995. It is not possible to predict or identify all such factors. Consequently, the foregoing should not be considered a complete discussion of all potential risks or uncertainties. The words "estimate," "project," "intend," "believe," "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. Era Group disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in Era Group's expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. The forward-looking statements in this release should be evaluated together with the many uncertainties that affect the Company's businesses, particularly those mentioned under "Risk Factors" in Era Group's Annual Report on Form 10-K for the year ended December 31, 2014, in Era Group's subsequent Quarterly Reports on Form 10-Q and in Era Group's current reporting on Form 8-K (if any), which are incorporated by reference.

For additional information concerning Era Group, contact Benjamin Slusarchuk at [phone] or visit EraGroup's website at www.eragroupinc.com.

ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts)
			Three Months Ended  December 31,								Year Ended  December 31,
			2014				2013				2014				2013
			(unaudited)
Operating revenues			$	74,689			$	75,998			$	331,222			$	298,959
Costs and expenses:
	Operating			45,772				45,213				204,373				186,612
	Administrative and general			9,647				10,562				43,987				38,924
	Depreciation			11,854				11,129				46,312				45,561
		Total costs and expenses		67,273				66,904				294,672				271,097
Gains on asset dispositions, net				29				464				6,101				18,301
Operating income				7,445				9,558				42,651				46,163
Other income (expense):
	Interest income			122				139				540				591
	Interest expense			(3,556	)			(4,311	)			(14,778	)			(18,050	)
	SEACOR management fees			--				--				--				(168	)
	Derivative gains (losses), net			800				(26	)			(944	)			(104	)
	Note receivable impairment			--				--				(2,457	)			--
	Foreign currency gains (losses), net			(1,856	)			233				(2,377	)			698
	Other, net			(14	)			--				(4	)			19
		Total other income (expense)		(4,504	)			(3,965	)			(20,020	)			(17,014	)
Income before income tax expense and equity earnings (losses)				2,941				5,593				22,631				29,149
Income tax expense				155				3,036				8,285				11,727
Income before equity earnings (losses)				2,786				2,557				14,346				17,422
Equity earnings (losses), net of tax				354				(880	)			2,675				882
Net income				3,140				1,677				17,021				18,304
Net loss attributable to non-controlling interest in subsidiary				45				75				96				401
Net income attributable to Era Group Inc.				3,185				1,752				17,117				18,705
Accretion of redemption value on Series A preferred stock				--				--				--				721
Net income attributable to common shares			$	3,185			$	1,752			$	17,117			$	17,984
Basic earnings per common share			$	0.16			$	0.09			$	0.84			$	0.88
Diluted earnings per common share			$	0.16			$	0.09			$	0.84			$	0.88
Weighted average common shares outstanding, basic				20,173,583				19,924,708				20,073,378				20,299,854
Weighted average common shares outstanding, diluted				20,232,025				19,991,868				20,139,581				20,344,782
EBITDA			$	18,583			$	20,014			$	85,856			$	93,051
Adjusted EBITDA			$	18,583			$	20,014			$	90,775			$	95,264
Adjusted EBITDA excluding Gains			$	18,554			$	19,550			$	84,674			$	76,963

ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share amounts)
				Three Months Ended
				Dec 31,  2014			Sep 30,  2014			Jun 30,  2014			Mar 31,  2014			Dec 31,  2013
Operating revenues				$	74,689		$	90,510		$	86,580		$	79,443		$	75,998
	Costs and expenses:
	Operating				45,772			54,282			54,679			49,640			45,213
	Administrative and general				9,647			12,941			10,065			11,334			10,562
	Depreciation				11,854			11,746			11,425			11,287			11,129
		Total costs and expenses			67,273			78,969			76,169			72,261			66,904
Gains on asset dispositions, net					29			42			3,139			2,891			464
Operating income					7,445			11,583			13,550			10,073			9,558
Other income (expense):
	Interest income				122			130			143			145			139
	Interest expense				(3,556	)		(3,629	)		(3,840	)		(3,753	)		(4,311	)
	SEACOR management fees				--			--			--			--			--
	Derivative gains (losses), net				800			(1,703	)		(11	)		(30	)		(26	)
	Note receivable impairment				--			--			(2,457	)		--			--
	Foreign currency gains (losses), net				(1,856	)		(485	)		21			(57	)		233
	Other, net				(14	)		(3	)		13			--			--
		Total other income (expense)			(4,504	)		(5,690	)		(6,131	)		(3,695	)		(3,965	)
Income before income tax expense and equity earnings (losses)					2,941			5,893			7,419			6,378			5,593
Income tax expense					155			2,868			2,759			2,503			3,036
Income before equity earnings (losses)					2,786			3,025			4,660			3,875			2,557
Equity earnings (losses), net of tax					354			1,286			536			499			(880	)
Net income					3,140			4,311			5,196			4,374			1,677
Net loss attributable to non-controlling interest in subsidiary					45			(45	)		25			71			75
Net income attributable to Era Group Inc.				$	3,185		$	4,266		$	5,221		$	4,445		$	1,752
Basic earnings per common share				$	0.16		$	0.21		$	0.26		$	0.22		$	0.09
Diluted earnings per common share				$	0.16		$	0.21		$	0.26		$	0.22		$	0.09
Weighted average common shares outstanding, basic					20,173,583			20,098,239			20,066,060			19,952,930			19,924,708
Weighted average common shares outstanding, diluted					20,232,025			20,163,990			20,134,474			20,025,135			19,991,868
EBITDA				$	18,583		$	22,424		$	23,077		$	21,772		$	20,014
Adjusted EBITDA				$	18,583		$	24,886		$	25,534		$	21,772		$	20,014
Adjusted EBITDA excluding Gains				$	18,554		$	24,844		$	22,395		$	18,881		$	19,550

ERA GROUP INC. OPERATING REVENUES BY LINE OF SERVICE (unaudited, in thousands)
			Three Months Ended
			Dec 31,  2014				Sep 30,  2014				Jun 30,  2014				Mar 31,  2014				Dec 31,  2013
Oil and gas:(1)
	U.S. Gulf of Mexico		$	45,837			$	52,870			$	51,715			$	49,141			$	45,435
	Alaska			6,496				7,984				9,305				6,197				6,885
	International			183				1,514				173				1,245				1,228
		Total oil and gas		52,516				62,368				61,193				56,583				53,548
Dry-leasing				11,911				12,392				11,466				10,876				11,566
Search and rescue				5,650				5,666				5,095				6,152				5,417
Air medical services				2,301				2,569				3,137				3,091				3,135
Flightseeing				--				4,043				2,946				--				--
Fixed Base Operations				2,403				3,562				2,858				2,842				2,434
Eliminations				(92	)			(90	)			(115	)			(101	)			(102	)
			$	74,689			$	90,510			$	86,580			$	79,443			$	75,998

FLIGHT HOURS BY LINE OF SERVICE(2) (unaudited)
			Three Months Ended
			Dec 31,  2014		Sep 30,  2014		Jun 30,  2014		Mar 31,  2014		Dec 31,  2013
Oil and gas:(1)
	U.S. Gulf of Mexico		8,514		10,594		11,065		9,447		10,304
	Alaska		560		939		1,122		682		895
	International		--		--		--		57		62
		Total oil and gas	9,074		11,533		12,187		10,186		11,261
Search and rescue			355		348		258		382		305
Air medical services			831		1,239		1,100		951		1,059
Flightseeing			--		1,505		1,080		--		--
			10,260		14,625		14,625		11,519		12,625

(1)	Primarily oil and gas services, but also includes revenues from activities such as firefighting and utility support.
(2)	Does not include hours flown by helicopters in our dry-leasing line of service.

ERA GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
				Dec 31,  2014			Sep 30,  2014			Jun 30,  2014			Mar 31,  2014			Dec 31,  2013
ASSETS							(unaudited)			(unaudited)			(unaudited)
Current assets:
	Cash and cash equivalents			$	40,867		$	40,357		$	14,940		$	22,290		$	31,335
	Receivables:
		Trade, net of allowance for doubtful accounts			33,390			48,307			52,582			47,780			38,137
		Other			2,062			1,679			2,078			4,824			4,374
	Inventories, net				26,869			27,039			26,863			26,780			26,853
	Prepaid expenses and other				2,661			1,712			2,991			3,292			2,167
	Deferred income taxes				1,996			2,065			1,991			2,138			2,347
	Escrow deposits				--			--			--			3,048			--
		Total current assets			107,845			121,159			101,445			110,152			105,213
Property and equipment					1,171,267			1,128,510			1,116,678			1,084,199			1,066,958
		Accumulated depreciation			(308,141	)		(296,294	)		(284,547	)		(273,754	)		(263,306	)
		Net property and equipment			863,126			832,216			832,131			810,445			803,652
Equity investments and advances					31,753			31,641			36,053			35,433			34,986
Goodwill					352			352			352			352			352
Other assets					14,098			14,794			15,868			16,074			14,380
Total assets				$	1,017,174		$	1,000,162		$	985,849		$	972,456		$	958,583
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable and accrued expenses			$	15,120		$	21,819		$	23,129		$	13,639		$	13,293
	Accrued wages and benefits				7,521			9,651			9,791			9,583			8,792
	Accrued interest				949			4,805			950			4,624			772
	Accrued income taxes				267			1,029			236			781			613
	Derivative instruments				1,109			1,991			569			529			621
	Current portion of long-term debt				27,426			2,787			2,787			2,787			2,787
	Other current liabilities				3,162			4,154			4,258			4,171			3,267
		Total current liabilities			55,554			46,236			41,720			36,114			30,145
Long-term debt					282,118			277,390			278,023			278,755			279,391
Deferred income taxes					217,027			216,985			214,117			211,479			209,574
Deferred gains and other liabilities					2,111			2,898			3,120			3,476			3,412
		Total liabilities			556,810			543,509			536,980			529,824			522,522
Equity:
	Era Group Inc. stockholders' equity:
		Common stock			204			204			204			203			202
		Additional paid-in capital			429,109			428,530			425,010			423,728			421,310
		Retained earnings			31,797			28,612			24,346			19,125			14,680
		Treasury shares, at cost			(551	)		(547	)		(547	)		(334	)		(113	)
		Accumulated other comprehensive income (loss), net of tax			95			99			146			175			176
			Total Era Group Inc. stockholders' equity		460,654			456,898			449,159			442,897			436,255
	Non-controlling interest in subsidiary				(290	)		(245	)		(290	)		(265	)		(194	)
		Total equity			460,364			456,653			448,869			442,632			436,061
Total liabilities and stockholders' equity				$	1,017,174		$	1,000,162		$	985,849		$	972,456		$	958,583

The Company's management uses EBITDA and Adjusted EBITDA to assess the performance and operating results of our business. EBITDA is defined as Earnings before Interest (includes interest income and interest expense), Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA further adjusted for certain non-recurring items that occur during the reported period, as noted below. We include EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of our operating performance. Neither EBITDA nor Adjusted EBITDA is a recognized term under generally accepted accounting principles in the U.S. ("GAAP"). Accordingly, they should not be used as an indicator of, or an alternative to, net income as a measure of operating performance. In addition, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management's discretionary use, as they do not consider certain cash requirements, such as debt service requirements. Because the definitions of EBITDA and Adjusted EBITDA (or similar measures) may vary among companies and industries, they may not be comparable to other similarly titled measures used by other companies.

The following table provides a reconciliation of Net Income, the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDA further adjusted to exclude gains on dispositions (in thousands).

			Three Months Ended															Year Ended
			Dec 31,  2014			Sep 30,  2014			Jun 30,  2014			Mar 31,  2014			Dec 31,  2013			Dec 31,  2014			Dec 31,  2013
Net Income			$	3,140		$	4,311		$	5,196		$	4,374		$	1,677		$	17,021		$	18,304
	Depreciation			11,854			11,746			11,425			11,287			11,129			46,312			45,561
	Interest income			(122	)		(130	)		(143	)		(145	)		(139	)		(540	)		(591	)
	Interest expense			3,556			3,629			3,840			3,753			4,311			14,778			18,050
	Income tax expense			155			2,868			2,759			2,503			3,036			8,285			11,727
EBITDA			$	18,583		$	22,424		$	23,077		$	21,772		$	20,014		$	85,856		$	93,051
	Special items (1)			--			2,462			2,457			--			--			4,919			2,213
Adjusted EBITDA			$	18,583		$	24,886		$	25,534		$	21,772		$	20,014		$	90,775		$	95,264
	Gains on asset dispositions, net ("Gains")			(29	)		(42	)		(3,139	)		(2,891	)		(464	)		(6,101	)		(18,301	)
Adjusted EBITDA excluding Gains			$	18,554		$	24,844		$	22,395		$	18,881		$	19,550		$	84,674		$	76,963

(1)	Special items include the following:

• In the three months ended September 30, 2014, a pre-tax charge of $2.5 million related to the accelerated recognition of previously awarded but deferred compensation awards following the resignation of our former CEO;
• In the three months ended June 30, 2014, a pre-tax impairment charge of $2.5 million on a note receivable from a foreign company with whom we participated in bids for contracts; and
• In the year ended December 31, 2013, a one-time charge of $2.0 million related to the early termination of operating leases on certain helicopters configured for air medical services and SEACOR management fees of $0.2 million incurred prior to the Spin-off on January 31, 2013.

ERA GROUP INC. FLEET COUNTS(1) (unaudited)
		Dec 31,  2014		Sep 30,  2014		Jun 30,  2014		Mar 31,  2014		Dec 31,  2013
Heavy:
	EC225	9		9		9		9		9
Medium:
	AW139	39		39		38		37		35
	B212	9		9		9		10		11
	B412	6		6		6		6		6
	S76 A/A++	2		2		2		2		3
	S76 C+/C++	6		6		6		6		6
		62		62		61		61		61
Light--twin engine:
	A109	9		9		9		9		9
	BK-117	3		3		3		3		3
	EC135	20		20		20		20		20
	EC145	5		5		5		4		4
		37		37		37		36		36
Light--single engine:
	A119	17		17		24		24		24
	AS350	35		35		35		35		35
		52		52		59		59		59
Total Helicopters		160		160		166		165		165

(1)	Includes all owned, joint ventured, leased-in and managed helicopters and excludes helicopters fully paid for and delivered but not yet placed in service as of the applicable dates.

Contact
Benjamin Slusarchuk
[phone]
www.eragroupinc.com