Bristow Group Inc.

11/04/2026 | Press release | Distributed by Public on 11/04/2026 05:02

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes, included elsewhere herein, as well as our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC") on February 26, 2026 (the "Annual Report on Form 10-K"). Unless the context otherwise indicates, in this MD&A, any references to the "Company," "Bristow," "we," "us" and "our" refer to Bristow Group Inc. and its consolidated entities.
In the discussions that follow, the terms "Current Quarter" and "Preceding Quarter" refer to the three months ended September 30, 2026 and June 30, 2026, respectively, and "Current Year" and "Prior Year" refer to the nine months ended September 30, 2026 and 2025, respectively.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are statements about our future business, strategy, operations, capabilities and results; financial projections; plans and objectives of our management, including our expectations regarding our quarterly dividend program and our intention to pay down debt; expected actions by us and by third parties, including our customers, competitors, vendors and regulators; and other matters. Some of the forward-looking statements can be identified by the use of words such as "believes," "belief," "forecasts," "expects," "plans," "anticipates," "intends," "projects," "estimates," "may," "might," "will," "would," "could," "should" or other similar words. However, all statements in this Quarterly Report on Form 10-Q, other than statements of historical fact or historical financial results, are forward-looking statements.
Our forward-looking statements reflect our views and assumptions on the date we are filing this Quarterly Report on Form 10-Q regarding future events and operating performance. We believe that they are reasonable, but they involve significant known and unknown risks, uncertainties, assumptions and other factors, many of which may be beyond our control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks, uncertainties and factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed in Part II, Item 1A, "Risk Factors" of this report and those discussed in other documents we file with the SEC. Accordingly, you should not put undue reliance on any forward-looking statements.
You should consider the following key factors when evaluating these forward-looking statements:
•the impact of supply chain disruptions, inflation and increased fuel prices and our ability or inability to recoup rising costs in the rates we charge to our customers;
•our reliance on a limited number of helicopter manufacturers and suppliers and the impact of a shortfall in availability of aircraft components and parts required for maintenance and repairs of our helicopters, including significant delays in the delivery of parts for our S92 and AW189 fleet and aircraft in general;
•our reliance on a limited number of customers and the reduction of our customer base as a result of consolidation and/or the energy transition;
•public health crises, such as pandemics and epidemics, and any related government policies and actions;
•our inability to execute our business strategy for diversification efforts related to government services and advanced air mobility;
•the potential for cyberattacks or security breaches that could disrupt operations, compromise confidential or sensitive information, damage reputation, expose to legal liability, or cause financial losses;
•the possibility that we may be unable to maintain compliance with covenants in our financing or other agreements;
•global and regional changes in the demand, supply, prices or other market conditions affecting oil and gas, including changes resulting from the imposition or lifting of crude oil production
quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries ("OPEC") and other producing countries, and geopolitical risks;
•fluctuations in the demand for our services;
•the possibility of significant changes in foreign exchange rates and controls;
•potential effects of increased competition and the introduction of alternative modes of transportation and solutions;
•the possibility that portions of our fleet may be grounded for extended periods of time or indefinitely (including due to severe weather events);
•the possibility of political instability, civil unrest, war or acts of terrorism in any of the countries where we operate or elsewhere, including the ongoing conflict with Iran, which could result in operational interruptions and supply impacts, including fuel shortages and price increases;
•the possibility that we may be unable to re-deploy our aircraft to regions with greater demand;
•the existence of operating risks inherent in our business, including the possibility of declining safety performance;
•labor issues, including our inability to negotiate acceptable collective bargaining or union agreements with employees covered by such agreements;
•the possibility of changes in tax, environmental, trade, labor, immigration and other laws and regulations and policies, including, without limitation, tariffs and actions of the governments that impact the aviation industry, oil and gas operations, favor renewable energy projects or address climate change;
•any failure to effectively manage, and receive anticipated returns from acquisitions, divestitures, investments, joint ventures and other portfolio actions;
•the possibility that we may be unable to dispose of older aircraft through sales into the aftermarket;
•the possibility that we may impair our long-lived assets and other assets, including inventory, property and equipment and investments in unconsolidated affiliates;
•general economic conditions, including interest rates or uncertainty in the capital and credit markets;
•disruptions in global trade, including as a result of tariffs, trade restrictions, retaliatory trade measures or the effect of such actions on trading relationships between the United States ("U.S.") and other countries;
•the potential effects of any future government shutdown on our Government Services business;
•the possibility that reductions in spending on aviation services by governmental agencies where we are seeking contracts could adversely affect or lead to modifications of the procurement process or that such reductions in spending could adversely affect Government Services contract terms or otherwise delay service or the receipt of payments under such contracts; and
•the effectiveness of our environmental, social and governance initiatives.
The above description of risks and uncertainties is by no means all-inclusive, but is designed to highlight what we believe are important factors to consider. All forward-looking statements in this Quarterly Report on Form 10-Q are qualified by these cautionary statements and are only made as of the date of this Quarterly Report on Form 10-Q. The forward-looking statements in this Quarterly Report on Form 10-Q should be evaluated together with the many uncertainties that affect our businesses, particularly those discussed in greater detail in Part I, Item 1A, "Risk Factors" and Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Annual Report on Form 10-K and Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part II, Item 1A, "Risk Factors" of the Company's subsequent Quarterly Reports on Form 10-Q.
We disclaim any obligation or undertaking, other than as required by law, to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, whether as a result of new information, future events or otherwise.
Overview
Bristow Group Inc. is a leading global provider of mission-critical aviation services for government entities, offshore energy companies and other customers around the world. Our business is comprised of three operating segments: Offshore Energy Services (OES), Government Services and Other Services. Through the use of helicopters, fixed-wing aircraft, unmanned aerial systems ("UAS") and highly skilled personnel, we provide aviation services such as personnel transportation, offshore energy logistics, search and rescue (SAR), special missions, intelligence, surveillance and reconnaissance ("ISR") operations, maintenance, repair and overhaul ("MRO") services, medevac, unmanned systems, on-demand cargo logistics ("ODC") and other specialized aviation solutions. We are also involved in various advanced air mobility ("AAM") initiatives and emerging next-generation aviation technologies.
Our diversified customer and revenue mix, coupled with our broad geographic footprint, supports a durable and balanced business profile. We currently have a presence in Australia, Benin, Brazil, Canada, Chile, Djibouti, the Dutch Caribbean, the Falkland Islands, Ireland, Kenya, the Marshall Islands, the Netherlands, Nigeria, Norway, the Philippines, Spain, Suriname, Trinidad, the United Kingdom ("UK") and the United States ("U.S.").
In general, the winter months are seasonally our lowest revenue periods, with fewer daylight hours resulting in reduced flight hours in our Offshore Energy Services segment and fewer missions in our Government Services segment. For example, operations in the U.S. Gulf of America are often at their highest levels from April to September, as daylight hours increase, and are at their lowest levels from December to February, as daylight hours decrease. See "Segments and Markets" in Part I, Item 1, "Business" of our Annual Report on Form 10-K for further discussion on seasonality.
Fleet Information
The management of our fleet involves a careful evaluation of the expected demand for aviation services across global markets, segments and the types of aircraft needed to meet this demand. Heavy and medium helicopters can fly longer distances, carry heavier payloads than light helicopters and are usually equipped with sophisticated avionics permitting them to operate in more demanding weather conditions and difficult climates. Heavy and medium helicopters are most commonly used for crew changes on large offshore production facilities and drilling rigs servicing the offshore energy industry and for SAR operations.
The table below presents the number of aircraft in our fleet as of September 30, 2026, their distribution among the segments through which we operate, as a percentage of total revenues for the three months ended September 30, 2026, and the number of aircraft not yet reflected in our fleet as they were on order or under construction as of September 30, 2026.
Percentage of
Total
Revenues 		Helicopters Fixed
Wing 		UAS
Heavy Medium Light Twin Light Single Total
Offshore Energy Services 59 % 57 58 12 - - - 127
Government Services 30 % 30 10 3 20 15 3 81
Other Services 11 % - - - 5 21 - 26
Total 100 % 87 68 15 25 36 3 234
Aircraft not currently in fleet:
Under construction(1)(3)
3 - - - - - 3
Options(2)
9 - 5 - - - 14
______________________
(1)Under construction reflects new aircraft that the Company has either taken possession of and are undergoing additional configuration before being placed into service or are currently under construction by the Original Equipment Manufacturer ("OEM") and pending delivery. Includes three AW189 heavy helicopters (of which all but one were delivered and are undergoing additional configuration).
(2)Options include nine AW189 heavy helicopters and five H135 light-twin helicopters.
(3)Excludes leased aircraft in the Company's possession but not yet placed in service and any orders or options for electric/hybrid vertical takeoff and landing and short takeoff and landing aircraft, collectively known as AAM aircraft, that may have deposits but are pending regulatory certification and/or are under construction.
The following table identifies the types of aircraft that comprise our fleet and the number of those aircraft in our fleet as of September 30, 2026.
Number of Aircraft
Type
Owned
Aircraft(1)
Leased
Aircraft 		Total Aircraft Maximum
Passenger
Capacity
Average Age (years)(1)
Heavy Helicopters:
S92 32 25 57 19 16
AW189 25 5 30 16 8
57 30 87
Medium Helicopters:
AW139 45 9 54 12 14
S76 D/C++ 10 - 10 12 15
H160 - 4 4 14 -
55 13 68
Light-Twin Engine Helicopters:
AW109 3 - 3 7 19
H135 12 - 12 6 10
15 - 15
Light-Single Engine Helicopters:
AS350 12 - 12 4 27
AW119 13 - 13 7 20
25 - 25
Total Helicopters 152 43 195 17
Fixed Wing 23 13 36
Unmanned Aerial Systems ("UAS")(3)
3 - 3
Total Fleet(2)
178 56 234
______________________
(1)Reflects the average age of helicopters that are owned by the Company.
(2)Does not include certain aircraft shown in the under construction line in the segment fleet table above. Upon completion of additional configuration, the newly-delivered aircraft will appear in the fleet table above when placed into service.
(3)Does not include UAS platforms developed, designed or produced by BSM.
Results of Operations for Current Quarter compared to Preceding Quarter
(in thousands, except percentages)
The following table presents our operating results and other statement of operations information for the Current Quarter and Preceding Quarter.
Three Months Ended Favorable
(Unfavorable)
September 30,
2026 		June 30,
2026
Revenues:
Offshore Energy Services:
Europe $ 93,690 $ 104,566 $ (10,876) (10.4) %
Americas 112,602 106,619 5,983 5.6 %
Africa 49,724 50,433 (709) (1.4) %
Total Offshore Energy Services 256,016 261,618 (5,602) (2.1) %
Government Services 130,036 112,234 17,802 15.9 %
Other Services 51,868 37,903 13,965 36.8 %
Total revenues 437,920 411,755 26,165 6.4 %
Operating income (loss):
Offshore Energy Services 49,236 46,053 3,183 6.9 %
Government Services (1,425) (2,145) 720 33.6 %
Other Services 9,870 2,929 6,941 nm
Corporate (9,978) (7,261) (2,717) (37.4) %
Total operating income 47,703 39,576 8,127 20.5 %
Interest income 2,180 2,870 (690) (24.0) %
Interest expense, net (11,924) (12,228) 304 2.5 %
Other, net (1,046) (8,930) 7,884 88.3 %
Total other income (expense), net (10,790) (18,288) 7,498 41.0 %
Income before income taxes 36,913 21,288 15,625 73.4 %
Income tax expense (9,143) (108) (9,035) nm
Net income 27,770 21,180 6,590 31.1 %
Net income attributable to noncontrolling interests (40) (26) (14) (53.8) %
Net income attributable to Bristow Group Inc. $ 27,730 $ 21,154 $ 6,576 31.1 %
Operating income margins:
Offshore Energy Services 19 % 18 %
Government Services (1) % (2) %
Other Services 19 % 8 %
__________________
nm = Not Meaningful
Flight Hours by Segment
Three Months Ended Favorable
(Unfavorable)
September 30,
2026 		June 30,
2026
Offshore Energy Services:
Europe 6,593 7,658 (1,065) (13.9) %
Americas 10,793 10,112 681 6.7 %
Africa 5,144 5,288 (144) (2.7) %
Total Offshore Energy Services 22,530 23,058 (528) (2.3) %
Government Services 5,487 4,620 867 18.8 %
Other Services 4,764 3,697 1,067 28.9 %
32,781 31,375 1,406 4.5 %
Offshore Energy Services
Revenues from Offshore Energy Services were $5.6 million lower in the Current Quarter. Revenues in Europe were $10.9 million lower primarily due to lower utilization, partially offset by lower penalties and increased rates. Revenues in the Americas were $6.0 million higher primarily due to higher utilization and rates. Revenues in Africa were $0.7 million lower primarily due to higher penalties.
Operating income from Offshore Energy Services was $3.2 million higher in the Current Quarter primarily due to lower operating expenses of $8.3 million, lower depreciation and amortization expense of $1.6 million and lower general and administrative expenses of $1.1 million, offsetting the lower revenues of $5.6 million and lower earnings from unconsolidated affiliates of $2.3 million.
Other operating costs were $5.2 million lower in the Current Quarter primarily due to lower reimbursable expenses, lease costs, training and freight costs. Fuel costs were $3.2 million lower due to lower flight hours and lower global fuel prices. Repairs and maintenance costs were $2.7 million lower primarily due to lower power-by-the-hour ("PBH") expense related to lower flight hours in Europe and Africa and higher vendor credits, partially offset by higher inventory reserves associated with the S76D medium helicopters. Leased-in equipment costs were $1.6 million higher primarily due to the introduction of new H160 medium helicopters in Africa. Personnel costs were $1.1 million higher primarily due to a seasonal personnel cost benefit in Norway in the Preceding Quarter, partially offset by lower headcount in the Current Quarter. Depreciation and amortization expense was lower primarily due to the absence of accelerated depreciation of certain assets recognized in the Preceding Quarter. The decrease in general and administrative expenses was primarily due to lower professional services fees. Earnings from unconsolidated affiliates were $2.3 million lower in the Current Quarter primarily due to the timing of dividends received.
Government Services
Revenues from Government Services were $17.8 million higher in the Current Quarter primarily due to the acquisition of Berry Aviation, Inc., now known as Bristow Special Mission Inc. ("BSM"), which contributed $16.9 million of revenues during the Current Quarter. Revenues on the UK search and rescue ("UKSAR") contract were $1.6 million higher primarily due to lower penalties and increased fuel revenues. Revenues on the Irish Coast Guard ("IRCG") contract were $0.7 million lower primarily due to higher penalties related to aircraft availability.
Operating loss was $0.7 million lower in the Current Quarter primarily due to the increased revenues, partially offset by higher operating expenses of $13.0 million, general and administrative expenses of $2.4 million and depreciation and amortization expense of $1.7 million.
Other operating costs were $5.0 million higher in the Current Quarter primarily due to the inclusion of BSM. Personnel costs were $4.4 million higher primarily due to the inclusion of BSM personnel and the recognition of previously deferred personnel costs in Ireland following the completion of their training, partially offset by lower personnel costs in the UK. Repairs and maintenance costs were $2.4 million higher primarily due to the timing of repairs and lower vendor credits. Leased-in equipment, insurance and fuel costs were $1.2 million higher in total, primarily due to the inclusion of BSM. General and administrative expenses were $2.4 million higher primarily due to personnel and IT costs also related to the inclusion of BSM. Depreciation and amortization expense was $1.7 million higher primarily due to the inclusion of BSM assets and additional assets placed into service.
Other Services
Revenues from Other Services were $14.0 million higher in the Current Quarter primarily due to the acquisition of BSM of $9.2 million and increased activity in Australia of $4.8 million. Operating income was $6.9 million higher primarily due to the increased revenues, partially offset by higher operating expenses of $4.7 million, general and administrative expenses of $1.9 million and depreciation and amortization expense of $0.4 million, primarily attributable to the inclusion of BSM.
Corporate
Operating loss was $2.7 million higher in the Current Quarter primarily due to higher general and administrative expenses of $4.4 million primarily due to professional services fees related to the acquisition of BSM, partially offset by higher net gains on asset dispositions of $1.8 million.
During the Current Quarter, the Company sold one AW189 heavy helicopter as part of a sale lease-back transaction, two AW139 medium helicopters and sold or disposed of various other assets resulting in net gains
of $1.9 million. During the Preceding Quarter, the Company sold one AW139 medium helicopter, one AS365 medium helicopter, one fixed wing aircraft and various other assets resulting in net gains of $0.1 million.
Interest income was $0.7 million lower due to lower investment balances.
Other expense, net of $1.0 million in the Current Quarter was primarily due to non-cash foreign exchange losses. Other expense, net of $8.9 million in the Preceding Quarter was primarily due to non-cash foreign exchange losses of $7.7 million and pension-related costs of $1.9 million, partially offset by gains related to insurance claims of $0.7 million.
Income tax expense was $9.0 million higher in the Current Quarter primarily due to higher pre-tax book income and the absence of a tax credit utilized in Nigeria in the Preceding Quarter.
Results of Operations for Current Year compared to Prior Year
(in thousands, except percentages)
The following table presents our operating results and other statement of operations information for the Current Year and Prior Year:
Nine Months Ended
September 30,
2026 2025 Favorable
(Unfavorable)
Revenues:
Offshore Energy Services:
Europe $ 296,907 $ 309,869 $ (12,962) (4.2) %
Americas 324,620 287,744 36,876 12.8 %
Africa 150,440 145,413 5,027 3.5 %
Total Offshore Energy Services 771,967 743,026 28,941 3.9 %
Government Services 350,140 279,340 70,800 25.3 %
Other Services 116,273 90,882 25,391 27.9 %
Total revenues 1,238,380 1,113,248 125,132 11.2 %
Operating income (loss):
Offshore Energy Services 131,009 123,389 7,620 6.2 %
Government Services (2,627) 6,685 (9,312) nm
Other Services 11,454 8,284 3,170 38.3 %
Corporate (17,882) (11,635) (6,247) (53.7) %
Total operating income 121,954 126,723 (4,769) (3.8) %
Interest income 8,968 6,419 2,549 39.7 %
Interest expense, net (37,968) (29,486) (8,482) (28.8) %
Loss on extinguishment of debt (2,849) - (2,849) nm
Other, net (15,329) 25,878 (41,207) nm
Total other income (expense), net (47,178) 2,811 (49,989) nm
Income before income taxes 74,776 129,534 (54,758) (42.3) %
Income tax expense (12,761) (18,783) 6,022 32.1 %
Net income 62,015 110,751 (48,736) (44.0) %
Net income attributable to noncontrolling interests (25) (100) 75 75.0 %
Net income attributable to Bristow Group Inc. $ 61,990 $ 110,651 $ (48,661) (44.0) %
Operating income margins:
Offshore Energy Services 17 % 17 %
Government Services (1) % 2 %
Other Services 10 % 9 %
Flight Hours by Segment
Nine Months Ended
September 30,
2026 2025 Favorable
(Unfavorable)
Offshore Energy Services:
Europe 22,468 26,057 (3,589) (13.8) %
Americas 31,375 31,805 (430) (1.4) %
Africa 15,977 14,026 1,951 13.9 %
Total Offshore Energy Services 69,820 71,888 (2,068) (2.9) %
Government Services 14,158 13,825 333 2.4 %
Other Services 11,798 11,026 772 7.0 %
95,776 96,739 (963) (1.0) %
Offshore Energy Services
Revenues from Offshore Energy Services were $28.9 million higher in the Current Year. Revenues in the Americas were $36.9 million higher primarily due to increased rates and utilization across multiple markets. Revenues in Africa were $5.0 million higher primarily due to lower penalties related to aircraft availability, higher rates, higher fuel revenues due to increased fuel prices and increased utilization, partially offset by the conclusion of fixed-wing operations. Revenues in Europe were $13.0 million lower primarily due to lower utilization and reimbursable revenues in the UK, partially offset by favorable foreign exchange rate impacts and higher ad hoc activity in Norway.
Operating income was $7.6 million higher in the Current Year primarily due to the higher revenues and earnings from unconsolidated affiliates of $2.8 million coupled with lower general and administrative expenses of $1.1 million, partially offset by higher depreciation and amortization expense of $24.8 million and operating expenses of $0.3 million.
Earnings from unconsolidated affiliates were higher in the Current Year primarily due to the timing of dividends received. The decrease in general and administrative expenses was primarily due to lower headcount, partially offset by higher professional services fees. Depreciation and amortization expense was higher primarily due to the acceleration of depreciation on S76D medium helicopters. Fuel costs were $10.1 million higher primarily due to increased global fuel prices and unfavorable foreign exchange rate impacts, partially offset by lower flight hours. Leased-in equipment costs were $5.7 million higher primarily due to additional aircraft and facilities leases. Personnel costs were $4.6 million higher primarily due to unfavorable foreign exchange rate impacts in Norway and higher headcount in Brazil and Africa, partially offset by lower headcount in the UK and U.S. Other operating costs were $16.0 million lower primarily due to lower subcontractor costs, reimbursable expenses primarily related to the conclusion of fixed wing operations in Africa and the UK and lower training costs, partially offset by higher property and other taxes, freight, and landing and passenger costs primarily related to increased activity and logistics rates. Repairs and maintenance costs were $4.4 million lower primarily due to higher vendor credits.
Government Services
Revenues from Government Services were $70.8 million higher in the Current Year primarily due to the commencement of IRCG and UKSAR2G operations of $51.4 million, the acquisition of BSM of $16.9 million and favorable foreign exchange rate impacts of $7.3 million, partially offset by lower utilization of $4.0 million and higher penalties of $1.3 million due to aircraft availability primarily attributable to supply chain challenges in the UK and Ireland, which have remained elevated in the Current Year.
Operating loss was $2.6 million in the Current Year compared to operating income of $6.7 million in the Prior Year primarily due to higher operating expenses of $68.7 million, depreciation and amortization expense of $5.9 million and general and administrative expenses of $5.4 million, offsetting the increased revenues.
Personnel costs were $27.7 million higher primarily due to increased headcount in Ireland, the recognition of costs that were previously deferred until the commencement of operations at the IRCG and UKSAR2G bases and the inclusion of BSM personnel. Other operating costs were $22.9 million higher primarily due to higher pass-through subcontractor costs related to the fixed-wing element of the IRCG and UKSAR2G contracts, increased amortization of deferred costs for the bases that have commenced operations and higher training and travel costs, which remain elevated through the completion of contract transitions. Repairs and maintenance costs were $11.1 million higher due to the timing of repairs. Fuel costs were $4.2 million higher due to higher global fuel prices and increased activity. Leased-in equipment costs were $2.8 million higher due to the inclusion of BSM leases and additional leased operating bases in the UK and Ireland. Depreciation and amortization expense was $5.9 million higher primarily due to additional assets placed into service, the inclusion of BSM assets and the accelerated depreciation of certain assets. General and administrative expenses were $5.4 million higher primarily due to higher personnel costs related to the commencement of operations at IRCG and the inclusion of BSM.
In summary, the operating income margin in the Current Year was adversely impacted by total penalties related to aircraft availability of $9.8 million in the UK and Ireland, fuel expenses in excess of fuel revenues and certain transition costs that have persisted beyond the commencement of operations at select bases.
Other Services
Revenues from Other Services were $25.4 million higher in the Current Year primarily due to increased activity and rates in Australia of $17.2 million, revenues associated with the acquisition of BSM of $9.2 million and higher fuel revenues in the UK of $0.9 million, partially offset by lower dry-lease revenues of $2.0 million resulting from the conclusion of certain dry-lease contracts.
Operating income was $3.2 million higher primarily due to the higher revenues, partially offset by higher operating expenses of $21.0 million and higher general and administrative expenses of $1.6 million. Fuel costs were $8.0 million higher due to increased fuel prices and unfavorable foreign exchange rate impacts in Australia. Personnel costs were $6.2 million higher primarily due to increased headcount in Australia and the inclusion of BSM personnel. Other operating costs were $5.2 million higher primarily due to costs associated with the inclusion of BSM and higher agent, landing and subcontractor costs related to increased activity in Australia. Repairs and maintenance costs were $0.9 million higher primarily due to increased activity. General and administrative expenses were $1.6 million higher primarily due to the inclusion of BSM.
Corporate
Operating losses were $6.2 million higher than the Prior Year primarily due to lower gains on disposal of assets of $4.2 million and higher general and administrative expenses of $1.7 million primarily due to professional services fees related to the acquisition of BSM, partially offset by lower compensation and lease costs. During the Current Year, the Company sold two AW189 heavy helicopters through sale lease-back transactions and three AW139 medium helicopters. The Company also sold or otherwise disposed of one S92 heavy helicopter, one AS365 medium helicopter and various other assets, resulting in overall net gains of $9.7 million. During the Prior Year, the Company sold or otherwise disposed of four AW139 medium helicopters and various other assets, resulting in net gains of $13.9 million.
Interest income was $2.5 million higher in the Current Year primarily due to higher investment balances as well as income from U.S. Treasury bill investments related to escrowed funds used in the satisfaction and discharge of the 6.875% Senior Secured Notes of $1.2 million.
Interest expense, net was $8.5 million higher in the Current Year primarily due to lower capitalized interest related to aircraft that were placed into service of $6.5 million and higher interest expense of $3.7 million on higher debt balances and concurrent interest expense incurred during the refinancing of the Senior Secured Notes, partially offset by lower amortization of deferred financing costs of $1.8 million due to prepayments of principal on the Company's UKSAR Debt in the Prior Year.
Other expense, net was $15.3 million in the Current Year primarily due to foreign exchange losses of $13.3 million and pension-related costs of $2.8 million, partially offset by other income of $0.7 million related to insurance proceeds. Other income, net was $25.9 million in the Prior Year primarily due to foreign exchange gains.
Income tax expense was $6.0 million lower in the Current Year primarily due to lower pretax book income.
Liquidity and Capital Resources
General
As of September 30, 2026, we had $233.4 million of unrestricted cash and $53.9 million of remaining availability under our ABL Facility for total liquidity of $287.3 million. As of September 30, 2026, approximately 75% of our total cash balance was held outside the U.S. Most of our cash held outside the U.S. could be repatriated to the U.S., and any such repatriation could be subject to additional taxes. If cash held by non-U.S. operations is required for funding operations in the U.S., we may make a provision for additional taxes in connection with repatriating this cash, which is not expected to have a significant impact on our results of operations.
Summary of Cash Flows
Nine Months Ended
September 30,
2026 2025
(in thousands)
Cash flows provided by or (used in):
Operating activities $ 93,987 $ 121,493
Investing activities (183,120) (60,177)
Financing activities 23,210 (55,966)
Operating Activities
Operating cash flows were $27.5 million lower in the Current Year primarily due to an increase in net working capital uses, partially offset by an increase in operating income. Working capital uses of $73.3 million in the Current Year primarily resulted from an increase in accounts receivables due to increased activity, increases in other assets primarily related to start-up costs for new Government Services contracts as the costs are incurred prior to the full commencement of revenues and a decrease in accounts payables and accrued liabilities primarily related to the timing of OEM vendor payments.
Working capital uses of $49.3 million in the Prior Year primarily resulted from increases in inventory to support new contracts and to mitigate risks related to supply chain constraints and an increase in other assets primarily related to start-up costs for new Government Services contracts.
Investing Activities
During the Current Year, net cash used in investing activities was $183.1 million consisting of:
•Capital expenditures of $129.5 million primarily related to payments for aircraft, leasehold improvements and purchases of equipment,
•Acquisition of BSM, net of cash received of $102.8 million, partially offset by
•Proceeds of $49.2 million from the sale of assets.
During the Prior Year, net cash used in investing activities was $60.2 million consisting of:
•Capital expenditures of $112.9 million primarily related to payments for aircraft, leasehold improvements and purchases of equipment, partially offset by
•Proceeds of $52.7 million from the sale of assets.
Financing Activities
During the Current Year, net cash provided by financing activities was $23.2 million primarily consisting of:
•Proceeds from borrowings of $500.0 million from the issuance of 6.750% Senior Notes, partially offset by
•Repayments of debt of $417.7 million primarily related to the refinancing of the 6.875% Senior Notes and principal payments on secured equipment term loans,
•Debt issuance costs of $12.4 million,
•Share repurchases of $36.1 million, and
•Dividend payments of $11.1 million.
During the Prior Year, net cash used in financing activities was $56.0 million primarily consisting of:
•Repayments of debt of $53.7 million related to the principal payments on secured equipment term loans, and
•Share repurchases of $9.1 million, partially offset by
•Proceeds from borrowings of $5.8 million.
Effect of Exchange Rate Changes
The effect of exchange rate changes on cash and cash equivalents denominated in currencies other than the reporting currency are reflected in a separate line on the condensed consolidated statement of cash flows. Through our foreign operations, we are exposed to currency fluctuations, and changes in the value of the GBP relative to the U.S. dollar have the most significant impacts to the effect of exchange rate changes on our cash, cash equivalents and restricted cash.
Capital Allocation Framework
We consistently evaluate the best uses of our cash flow and aim to yield the highest value and return on capital. Our capital allocation strategy includes the following:
Balance Sheet:
•Protect and maintain strong balance sheet and liquidity position. During the nine months ended September 30, 2026, we completed the refinancing of our senior notes and ABL at lower rates and extended maturity dates in support of this target.
•Structure leases and debt to facilitate financial flexibility.
Growth:
•Pursue high impact, high return organic growth opportunities, which currently prioritizes the completion of the UKSAR2G contract transition. We are also currently upgrading our fleet with new AW189 helicopters configured for OES operations to meet customer demand and enhance profitability.
•Assess other growth opportunities including potential mergers and acquisitions. We completed the acquisition of BSM, a provider of a broad range of aviation services, such as special missions, intelligence, surveillance and reconnaissance (ISR) operations, maintenance, repair and overhaul (MRO) services, training and mission support, UAS design and development capabilities, on-demand cargo (ODC) logistics for blue chip end-customers and aftermarket supply-chain aviation solutions. We also announced plans to pursue the sale of our Norway Offshore Energy Services business as part of our portfolio optimization strategy. The planned divestiture aligns with the Company's disciplined approach to capital allocation and strategic portfolio management. In addition, we are pursuing various AAM opportunities.
Shareholder Capital Returns:
•Pay a quarterly cash dividend. Bristow's quarterly cash dividend program commenced in the first quarter of 2026, with an initial dividend payment of $0.125 per share ($0.50 per share annualized). During the nine months ended September 30, 2026, we paid cash dividends of $11.1 million.
•Opportunistically buy back shares using our $125 million share repurchase program. During the nine months ended September 30, 2026, we repurchased 547,785 shares of common stock in open market transactions for gross consideration of $25.0 million, representing an average cost per share of $45.64. As of September 30, 2026, $96.0 million remained available of the $125.0 million share repurchase program authorized in February 2025.
Material Cash Requirements
Our primary sources of liquidity include unrestricted cash balances, cash flows from operations, borrowings under our ABL Facility and, from time to time, we may obtain additional liquidity through the issuance of equity, debt, other financing options or through asset sales. Our primary uses of liquidity include working capital needs to fund operations, meeting our capital commitments and growth expenditure plans (including the purchase of aircraft, property and other equipment), the repurchase of stock or debt securities, payment of debt service obligations and executing on our other capital allocation targets. We may, from time to time, redeem, repurchase, retire or otherwise acquire our outstanding debt through privately-negotiated transactions, open market purchases, redemptions, tender offers or otherwise, but we are under no obligation to do so.
As of September 30, 2026, we had no near-term debt maturities, other than the current portion of long-term debt of $27.4 million, and our total debt balance, net of deferred financing fees, was $741.7 million which was comprised of the 6.750% Senior Notes due in February 2033, the UKSAR Debt maturing in March 2036, and the IRCG Debt maturing in June 2031.
We believe that our cash flows from operations and other sources of liquidity will continue to be sufficient to meet working capital requirements, debt service obligations and capital expenditure commitments, while meeting capital allocation targets. Our long-term liquidity is dependent upon our ability to generate operating profits sufficient to meet our requirements for operations, debt service, capital expenditures and a reasonable return on investment.
Contractual Obligations and Commercial Commitments
We have various contractual obligations that are recorded as liabilities on our consolidated balance sheets. Other items, such as certain purchase commitments and other executory contracts, are not recognized as liabilities on our consolidated balance sheets.
As of September 30, 2026, we had unfunded capital commitments of $50.9 million, consisting primarily of agreements to purchase two AW189 heavy helicopters, scheduled to be delivered in 2026 and 2027, and deposits for preferred aircraft delivery slots on five EL9 aircraft scheduled for delivery between 2029 and 2030 (subject to aircraft certification). In addition, the Company has outstanding options to purchase up to nine additional AW189 helicopters and five H135 light-twin helicopters. If these options are exercised, the AW189 helicopters and H135 helicopters would be scheduled for delivery between 2027 and 2028. The Company may, from time to time, purchase aircraft for which it has no orders. Orders to purchase electric vertical takeoff and landing and short takeoff and landing aircraft, collectively known as AAM aircraft, are subject to, among other things, deadlines for regulatory certification of such aircraft and minimum performance requirements. Failure to satisfy such deadlines or requirements would allow such orders to be terminated by the Company without further liability and require the applicable manufacturer to refund certain deposits to the Company. In addition, the Company has outstanding options for several AAM aircraft models with various OEMs that do not involve financial commitments at this time.
Lease Obligations
From time to time, we may, under favorable market conditions and when necessary, enter into aircraft lease agreements in support of our global operations.
We have non-cancelable operating leases in connection with the lease of certain equipment, including leases for aircraft, land and facilities used in our operations. The related lease agreements, which range from non-cancelable to month-to-month terms, generally provide for fixed monthly rentals and can also include renewal options.
As of September 30, 2026, aggregate undiscounted future payments under all non-cancelable operating leases that have initial or remaining terms in excess of one year were as follows (in thousands):
Aircraft Other Total
Remaining in 2026 $ 19,218 $ 3,226 $ 22,444
2027 64,121 9,793 73,914
2028 45,839 8,071 53,910
2029 27,066 5,475 32,541
2030 19,634 2,849 22,483
Thereafter 60,964 16,549 77,513
$ 236,842 $ 45,963 $ 282,805
Critical Accounting Estimates
See Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" of the Annual Report on Form 10-K for a discussion of our critical accounting estimates. There have been no material changes to our critical accounting policies and estimates since the Annual Report on Form 10-K.
For discussion of recent accounting pronouncements and accounting changes, see Part I, Item 1, "Financial Statements", Note 1 in this Quarterly Report on Form 10-Q.
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