Shefali Shah – Senior Vice President & General Counsel Chris Bradshaw – President and Chief Executive Officer Jennifer Whalen – Vice President and Chief Financial Officer.

Bill Mastoris – Baird & Company Adam Ritzer – Pressprich John Deysher – Pinnacle Christopher Hagedorn – Redwood Capital Management DeForest Hinman – Walthausen & Company.

Good day, and welcome to the Era Group Reports Third Quarter 2017 Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Shefali Shah. Please go ahead, ma’am..

Thank you, Michelle. Good morning, everyone. Thank you for joining Era’s Third Quarter 2017 Earnings Call. I’m here today with our President and CEO, Chris Bradshaw; our VP and CFO, Jennifer Whalen; our SVP, Operations and Fleet Management, Stuart Stavley; our Corporate Controller, Tricia Shroeder; and her FP&A Manager, Seema Parikh.

If you have not already done so, you may access our most recent earnings press release and presentation slides on our website, erahelicopters.com, or the SEC website, sec.gov.

Forward-looking statements expressed on this call are subject to a number of risks, uncertainties and other factors, including those described in our most recent annual report on Form 10-K and the other filings we make with the SEC.

These risks, uncertainties and other factors could cause actual results to differ materially from those expressed in the forward-looking statements. In addition, we will discuss certain non-GAAP financial measures such as EBITDA and adjusted EBITDA.

Please refer to our earnings press release or the presentation slides for the calculation of these measures and the appropriate GAAP reconciliation. I’d now like to turn the call over to our President and CEO.

Chris?.

Thank you, Shefali, and welcome to the call, everyone. As always, I will begin our prepared remarks with a note on safety, which is Era’s most important core value and our highest operational priority. We are pleased to report that Era has achieved our goal of 0 air accidents in year-to-date 2017.

In regard to workplace injuries, we had one OSHA recordable incident through the first 10 months of 2017, resulting in a world-class total recordable injury rate of 0.2. As we near the end of a very active tropical cyclone season, I would like to provide a summary of the storm-related impacts on the company.

First and foremost, I’m happy to report that no Era personnel were injured. Second, the storms did not cause any material damage to Era facilities or property. Third, from a financial standpoint, there were some positive revenue events related to the storms and also some offsetting negative impacts.

On a net basis, the storms resulted in a positive financial impact, but this was not a significant driver of profitability in Q3. I do want to highlight that Era’s award-winning search and rescue program performed humanitarian missions in the greater Houston and Southeast Texas regions during hurricane Harvey.

One of those missions was the emergency location and retrieval of a mother and a 13 -month-old baby. The baby was dependent upon a feeding tube. The electricity was out at their home and the battery power was running low.

Our search and rescue crew was able to locate the mother and her baby, safely retrieve them and deliver them to a nearby hospital for care and safety.

I would like to publicly thank all of the hard-working men and women of Era who worked tirelessly throughout the multiple storms to protect lives, serve both existing and new customers missions and protect company-owned property.

Their efforts demonstrated our core values of safety, integrity, service, teamwork and the commitment to excellence throughout a very difficult time. I’m proud to work with such a talented, dedicated and compassionate group of people.

The next topic is an update on the status of H225 and AS332 L2 model helicopters following the fatal accidents off the coast of Norway in April 2016, and resultant operational suspension of the helicopter models. The root cause of the accident remains under investigation by the AIBN.

While Civil Aviation Authorities have issued directives that permit to return to service, subject to numerous requirements. The vast majority of the offshore oil and gas fleet of these helicopter models remains on operational suspension.

Beyond regulatory approval and the completion of the accident investigation, a potential broad-based return to service of these helicopters, in the offshore oil and gas industry, will be dependent upon the development of a detailed safety case by operators as well as confidence amongst our oil and gas customers and the labor unions representing their employees.

During Q3, Era noted certain developments that led us to come to the belief that there will not be a broad-based return to service of these helicopter models in the offshore oil and gas industry. As such, we performed an impairment analysis to assess the value of these helicopters.

It was determined that the book value of our H225 helicopters, capital parts and related inventory, exceeded the fair value and a noncash impairment charge of $117 million was recorded in Q3.

The new book values represent an average of approximately $4 million per H225 helicopter in our fleet, which is consistent with the third-party values we received in a recent appraisal report conducted by one of the leading helicopter valuation firms.

As previously disclosed, Era filed a lawsuit in November 2016, seeking damages from Airbus related to our purchase of H225 helicopters. We cannot predict the ultimate outcome of the litigation and we may spend significant resources pursuing our legal remedies against Airbus. Moving now to a brief discussion of market conditions.

As previewed on our last earnings call, we have experienced an increase in oil and gas customer activity, as evidenced by the 15% sequential quarter revenue improvement in our oil and gas service line. The increased customer activity is comprised mostly of short-term projects, but also includes longer-term contracts.

We are not yet out of the proverbial woods, as activity in the offshore oil and gas industry remains well below historical levels. There continues to be an excess supply of helicopters globally and competition in the industry is fierce.

However, we have observed an increase in customer activity from recent levels experienced during the prolonged market downturn, including some successful contract awards that had not yet commenced as of the end of Q3 and a number of competitive tenders for customer projects that, if awarded, would not begin until 2018.

As we head into the end of the year, I want to remind you that our business is seasonal. Our flightseeing and firefighting activities in Alaska generally run from May to September. In addition, flight hours in our oil and gas operations are generally reduced in Q4 and Q1 due to fewer daylight hours and inclement weather.

Although operating revenues improved in the current quarter, our Q3 profitability was adversely impacted by a number of factors, which our CFO, Jennifer Whalen, will discuss in conjunction with a more detailed review of Q3 financial results.

Jennifer?.

Thank you, Chris. Turning to the financial highlights for Q3. Net loss attributable to the company was $81.4 million or $3.91 per diluted share on operating revenues of $61.4 million compared to a net loss of $2.8 million or $0.13 per diluted share on operating revenues of $57.9 million in Q2 of this year.

The most significant impact to the third quarter results from the noncash impairment charges of $117 million primarily related to our H225 helicopters, which Chris described earlier. Excluding the impact of these noncash impairment charges, net loss in Q3 would have been $6.2 million or $0.30 per diluted share.

Revenues were $3.5 million higher versus Q2 of this year, primarily due to better utilization in the oil and gas operations, which were higher by 15%. These increases were partially offset by the absence of the benefit from lease return charges recognized in Q2 of this year.

Operating expenses were higher due to increases in repairs and maintenance, primarily due to an unusually high volume of engine overhauls, which were $2.8 million higher than the trailing fourth quarter average and $0.6 million of expenses to prepare helicopters for new customer contracts that did not contribute revenue during the quarter.

General and administrative expenses were higher, primarily due to non-routine professional service fees, which totaled $1.9 million and $1 million of expenses related to the correction of immaterial errors related to prior periods.

Adjusted EBITDA, excluding gains on asset sales was $6.7 million in the quarter compared to $7.5 million in the prior quarter. Compared to the third quarter of 2016, revenues were $3.6 million lower, primarily due to the end of air medical contracts, fewer SAR subscribers and lower utilization of light helicopters in our U.S. oil and gas operations.

These decreases were partially offset by higher utilization of heavy and medium helicopters in our U.S. oil and gas operations.

Operating expenses were $3.6 million higher in the current quarter, largely due to the recognition of repairs and maintenance credits taken in the prior year and increases related to the timing of repairs in the current period.

G&A expenses were $1.4 million higher in the current quarter, primarily due to non-routine professional service fees and the correction of immaterial errors. Transitioning to the balance sheet and a discussion of our liquidity, we generated $4.6 million of cash flows from operations in the quarter.

We used these funds to reduce the outstanding balance on our revolving credit facility. Despite the prolonged downturn we continue to consistently generate positive operating cash flows. At the end of Q3, our total available liquidity is $152 million, which includes our cash and additional availability under our revolving credit facility.

We believe we have sufficient liquidity as we continue to manage through the current downturn and execute our strategy. At this time, I’ll turn the call back to Chris for further remarks.

Chris?.

Thank you, Jennifer. In conclusion, Era has demonstrated the ability to generate positive cash flows even at depressed oil and gas activity levels, and our financial stability has proven to be a competitive advantage.

We continue to prioritize the protection of our strong balance sheet and liquidity position, and we maintain an order book that provides optionality for growth, while limiting our non-cancellable capital commitments to just $5.5 million.

While activity levels in the offshore oil and gas industry remain depressed compared to historical levels, we have observed an increase in customer activity, and we’ll continue to try to capitalize on those market opportunities as they present themselves. As a final note, I want to extend a special thank you to the veterans of our U.S. Armed Forces.

We’re fortunate to have representatives from every branch of the military in the Era family. We owe them an immeasurable debt of gratitude for their service, along with the active members of our Armed Forces. The greatness of America is found in the bravery and heroism of the men and women who serve and have served in the protection of our freedom.

Thank you all. With that, let’s open the line for questions.

Michelle?.

[Operator Instructions] We’ll take our first question from Bill Mastoris with Baird & Company..

Chris, I’m wondering because of the increased activity that you’ve experienced in the Gulf and also, obviously, the very questionable situation with the H225s as to whether they will ever be flying again. Is it fair to say that you’re going to be accepting all of your commitments? Those are the 5 AW189s, 1 S92 and 5 AW169s.

Would that be kind of a fair assessment? And then, kind of as a follow-up to that, are you done making the progress payments on everything that you intend to take? And then if you could talk a little bit about how you plan to finance those? I’m assuming it’s going to be a combination of cash and revolving credit facility..

Bill, in regard to our order book, we do expect to take delivery of the final S92 helicopter in early 2018. The amount of capital commitments or progress payments that we have left related to that aircraft is the $5.5 million that we’ve disclosed as the non-cancellable capital commitment.

50% of that amount is payable later this year and 50% in early 2018. Beyond that, we have no contractual obligations to take the liberty of additional aircraft. We have secured a good deal of optionality in our order book.

If market opportunities present themselves, we have the ability to ramp up our new aircraft deliveries to capitalize on these opportunities. But we have no obligation to do that. There is a schedule for when we need to make these decisions.

As those dates come up, we’ll evaluate the current market opportunities that we see and make a decision at that point in time as to whether or not it makes sense to commit the additional capital..

So it sounds like, you have, right now, the fleet that could actually service all of the new contracts that you secured recently? Is that fair at this point? And that you really don’t need any of the H225s?.

What is correct is that we have the fleet today to service our current expectations for market activity. Though our utilization of having a medium aircraft has improved from lower levels previously as we were early in the downturn, but that is not to say that is 100%.

As these opportunities come up, as contracts are awarded, we do have the ability to put incremental aircraft to work and increase cash flows..

Okay. And then, if you’re at liberty to disclose it.

How much have you written down the H225s to? I mean, what’s the net balance on the remaining 9 owned H225s?.

Yes. After the write-down, the average value of our 225 helicopters in our fleet is approximately $4 million, and that is consistent with the third-party values that we recently received from one of the leading helicopter valuation firms..

Okay. And then finally, the maintenance expenses to return the helicopters to a condition where they can service all those contracts, I assume that is going to be non-recurring. And that, we will not be seeing any of those same expenses in the fourth quarter.

Would that be fair?.

It’s going to be a mix in terms of the timing. So we did call out in our Q3 results that there was approximately $600,000 of expenses that related to taking aircraft out of storage to prepare them for new customer contracts, for customer contracts that had not yet begun and therefore, did not generate revenue during Q3.

We expect that there’ll be some of that in Q4 as well, and while it’s too early to determine if there are additional contract awards that require us to pull incremental aircraft out of storage and get them ready to go to work. There may be some of those expenses in 2018 as well.

That type of expense is more nonrecurring in nature, since it relates to pulling aircraft out of storage. And when we are being impacted by those expenses, without the commensurate revenues showing up yet, we will – we do expect that we may highlight them as we did in our Q3 results..

Okay. And as a quick adjunct to that question. The maintenance expenses, in general, were much higher. This is a way for preparing, obviously, the aircraft to services contracts. Can we expect a return to a much more normalized maintenance expense in the fourth quarter? It was really the gist of my question.

Would that be a fair assessment?.

By far, the biggest item impacting the higher R&M expense in the quarter was an unusually high volume of engine overhaul expense. We have certain engine types in our fleet that we maintain on a time and cost-to-repair basis. So by definition, there will be some variability from period-to-period, depending on when that work is required.

That being said, we did experience, and we are highlighting in our disclosure that the level of that engine-related expense in Q3 was unusually high. And we quantified that as being $2.8 million higher in Q3 than it was in the trailing four-quarter average.

And while we do not provide financial guidance consistent with our longstanding disclosure policy, we will note that the level experienced in Q3 for those expenses is higher than we expect it to be going forward. So this was an unusually high amount of expense..

And next we move to Adam Ritzer with Pressprich..

Just following up a little bit on the additional expenses.

What would your EBITDA have been without those additional 3 or 4 excess expenses?.

We’ve disclosed them as the 4 different components of additional expenses that adversely impacted profitability in Q3, and I think, folks have the ability to determine, which of those they may want to adjust for. Our adjusted EBITDA, excluding asset dispositions was $6.7 million in the quarter.

If you want to make adjustments for the $1.9 million of nonroutine professional services fees, the unusually high number volume of engine-related expenses, that again, was $2.8 million higher than the trailing four-quarter average, or the $1 million of out of period accounting corrections, or the $600,000 of expenses related to preparing helicopters for new customer contracts, really even a subset of those items would comfortably get you into an adjusted EBITDA level in the double digits..

Right. So if I do that, I’d come up more like $12 million, $13 million of EBITDA, which makes more sense with the revenue pickup the last couple of quarters.

So it’d be fair to add those back is what you’re saying, right?.

Yes. We wanted to highlight those given the nature of those expenses, which we do believe are exceptional from our normal recurring operations..

Got it. Couple of other things. No particular order. The PHI buy of HNZ’s Asia Pac operations.

Did you guys look at that? Not look at that? Something you might care on doing in the future expansion?.

Yes, so I won’t comment on any specific deals that we’ve evaluated or are evaluating.

I would say that we very much believe that the industry is in need of consolidation and that the consolidation should take place both at the operator level as well as the asset ownership level and by that, I mean, that you have this group of specialty helicopter lessors who now represent a meaningful portion of the asset ownership in our industry.

We believe that there should be consolidation both amongst the operators and the lessors and that such consolidation would be a positive for the industry as a whole..

Okay, but – I mean, so you’re not – you wouldn’t say, if you guys looked at that or shown that and perhaps considered something like that, that? Doing the consolidation yourselves?.

We evaluate a lot of consolidation opportunities. We’re not just going to comment on any specific one that is something that we spend a good amount of time on looking at whether there are strategic opportunities, which will create value for shareholders.

We believe that we’re one of the few companies in the industry who has a stable financial position today and the ability to capitalize on some of those opportunities. So we are and we’ll explore them, which is, obviously, no guarantee that anything will be consummated. We’re just not at liberty to talk about any opportunities..

Okay. I doubt you’re going to be at liberty to discuss this. But I’m going to ask it anyway. Bristow, obviously, yesterday settled their EC225, call it, disputes for $130 million. You guys obviously have a different approach. You have a lawsuit regarding that.

Can you – I mean I know you probably not, but maybe you can talk about your approach versus the settlement? If this helps you guys out, in potentially settling things for the 225 issue?.

Yes. I think it’s a very fair question, Adam. It’s obviously a major issue impacting the entire industry and certainly one that impacts Era as well. I’m not going to provide specific commentary on what another party may have done. I’ll direct those questions to the principal parties involved.

I would note that each company is in a different position, and there is a different set of facts and circumstances for everybody, and I won’t enumerate all of those but just to name a couple and some of the considerations depend on whether you own your 225s or lease them, also where you have the ability to file a legal claim.

We benefit from being one of the couple of parties who has clear jurisdiction in the U.S. And as I’m sure you’re aware, the U.S. legal system protects and affords certain rights to plaintiffs that are well established, which don’t necessarily exist in other jurisdictions.

We also have the financial wherewithal with liquidity that we have and our strong financial position to prosecute a claim of this nature. But to pull it back to a higher level, fundamentally, we believe we’ve been harmed by the 225 situation, and we seek compensation for those damages in whatever form possible.

We have always been and remain open to a commercial resolution of the matter. In fact, that would be our preference. But our desire is to generate the best financial result and return possible for our shareholders, given the current situation, with the 225s and the significant amount of capital that was invested to acquire them..

So let’s see. Do you think you’re owning all 9 of yours versus Bristow, I don’t know how many they own of the 27 and how many the lease, maybe you do. I guess that puts you in a different position and having title in the U.S. where they probably run a lot of these through other leasing companies.

So that’s a big difference, is what you’re saying, right?.

I don’t want to comment on any one particular competitor’s situation. I do want to note that everybody has different facts and circumstances. In our case, we own all 9 of ours. We do have clear jurisdiction in the U.S. We have the ability to pursue this lawsuit and we’re open to all forms of settlement.

We’re just looking to get the best result for shareholders to try to compensate us for the significant amount of capital that was invested in these assets..

Got it. And then last question I had is regarding Brazil. It looks like in just kind of quickly going over the 10-Q, just filed this morning that you settled some of the cash tax settlement issues. You’ve settled some of those. But still have some disputes and potential fines.

Maybe, you can just give a high-level summary of what’s going on down there?.

This is Jennifer. Thank you for the question. In October of this year, the Brazilian tax authorities passed some legislation for a tax amnesty program that allows companies to bundle certain tax either settled or unsettled claims for some percentage of it – of the settlement in cash and part of it with your net operating losses.

We have, in Brazil, decided to join in that program and that happened in October. So we have some discussion in the Q4, something that happened after the end of the quarter. But yes, we’re settling some of those open claims..

Good. Right, I saw that. But there are still open claims that they’re saying you guys owe them? Or did that settlement clear everything up? I guess that’s my question..

There are still open claims. This is just a subset of claims that were eligible for this program, and that the company decided it was the best choice to settle and limit potential exposures in the future..

Okay.

So you settled what you could under this PRT program? And there’s still some left that you’re – that are pending, let’s say?.

Correct..

And next we’ll move to John Deysher with Pinnacle..

After the H225s, what’s the plan for those helicopters now? Do you keep them in the fleet, pending the outcome of the litigation and the regulatory evolution? And if you keep them, is there significant maintenance cost involved with those? How do you deal with those going forward?.

We are actively marketing our H225s helicopters for either lease or sale. We do think, that a potential and perhaps likely market for them are certain utility applications that require heavy lift capacity.

There’s a well-established market for those type of missions that’s currently being serviced by older generation of the aircraft and the 225s could be a good alternative for those missions. We also believe they may go back to work in certain search and rescue applications in different regions around the world.

So we’re actively marketing the aircraft that we have in our fleet either to generate cash flow from leasing them or to generate cash from selling them. In terms of cost, we have put these aircraft and we did this last year. We placed them into long-term storage.

We either reassigned or reduced staffing and we withdrew them from Power-by-the-Hour maintenance programs. So there’s not a significant amount of cost associated with their current status today..

Okay. And you’ve written them down in total to $4 million and you’ve got the lawsuit that’s, I guess, been out there for about a year or so, almost a year.

Where are we with the lawsuit? Have we gotten to the point where it starts getting expensive in terms of hiring expert witnesses and discovery and all of that? Or kind of – where exactly are we? It’s been a year or so..

Right. And I certainly understand and appreciate the question because it is a big issue for us. Upon the advice of our legal counsel, we are not going to comment on the status or any of the details related to the lawsuit. It does remain ongoing.

We did disclose in our MD&A that we had $1.9 million of nonroutine professional services fees in Q3, which impacted profitability. That being said, we have a strong balance sheet. We have a good liquidity position. We’re still generating positive cash flows.

We have the financial wherewithal to pursue, what we believe, is in the best interest of our shareholders, which is to try to generate the best return possible on this significant amount of capital that was invested in these assets..

Okay. Fair enough.

So the $1.9 million that was highlighted, that was primarily lawsuit related?.

Yes. Though we’re highlighting there the nonroutine expenses and they tie to the ongoing litigation that we’re pursuing..

Okay. Fair enough. Chris, you mentioned some contracts, I think, that may have been signed or in the works post quarter end.

Assuming you get those, will that merit a public announcement of some type?.

No. We wouldn’t plan to announce or discuss those until such time as we start to see the financial impact and drive variability in our operating results..

Okay. Fair enough. And then, finally, what percentage of capacity would you guess the fleet is operating currently.

I mean, if you put all the helicopters in the air or as many shifts as possible, what percentage of capacity would you say, approximately, you’re working at right now?.

So pursuant to our longstanding disclosure policy, we don’t discuss the specifics of utilization, primarily for competitive reasons. We don’t want to give the competition the benefit of that information.

That being said, earlier in the downturn, we did have some disclosures about how utilization and – utilization was particularly low and excess capacity was particularly high for our heavy and medium aircraft.

We removed that language from our disclosures, not because we’re at a 100%, by any means, but because we are now within a range that we believe, can be expected for a business of our nature.

What that means is that we do have incremental aircraft that can go to work, and if we are successful in securing these new contract awards, those aircraft will start generating cash flows, which will improve the financial results of the company..

[Operator Instructions] Next, we move to Christopher Hagedorn with Redwood Capital Management..

Just one question, also on H225, I think you mentioned that certain events during the quarter basically led you to take that write-down charge or that impairment charge.

Can you just speak to what those events were? What sort of – what informs your view of this quarter?.

Yes. And impairment analysis by definition is the technical accounting exercise. We’re not going to discuss all the details that we went through, but we can provide a general review of events related to the 225. Namely, the suspension has been in effect now for more than 1.5 years.

The investigation remains ongoing, but the root cause has not been identified.

It remains the case that there is an absence of a robust and empirical data set that could be used to inform a reliable safety case that would define with any specificity, things like the propagation rate once the underlying issue occurs or the successful identification rate once the underlying issue has developed.

We also note that certain customer tenders have excluded the 225 helicopters as eligible aircraft, and it’s also the case that we now have available a third-party appraisal for the 225s. As, I think, we’ve discussed in previous calls, the major appraisal firms in the industry have stopped providing those appraised values.

But we now have that available and again, that was one of the many factors that we considered as we determined an impairment analysis was necessary in Q3. And then we went through the technical accounting exercise to determine what the appropriate new carrying value for these assets should be..

Got it. And I need – I have a one follow-up question on that. I think you mentioned that the Civil Aviation Authorities in the main markets have put in place a protocol under which you can operate the aircraft, but pretty much nobody is doing it. Customers don’t want, unions don’t want it and so on and so forth.

So I guess, what – can you just shed some light into what the relative positions are of the Civil Aviation Authorities? And who have basically given this cautious go-ahead versus why it’s not happening in practice?.

So the OEM has put forward a series of measures, which have been approved by the Civil Aviation Authorities, which are really targeted to detecting a problem once it’s occurred. Nothing that’s happened to date fixes the root cause. It’s all targeted around identifying the problem once it’s happened.

it’s our belief that in order to have a reliable safety case, you need to have a robust empirical data set that provides some specificity around what the propagation rate is once the underlying event has occurred as well as the successful identification rates for these measures to determine them.

So that’s why we, as an operator, do not see a viable safety case today. And I think, it’s also – I don’t want to speak for other parties but, clearly, there remains some serious concern about the safety case of this aircraft amongst the oil and gas companies and the union members – or the unions that represent their employees..

And next we move to DeForest Hinman with Walthausen & Company..

Couple of questions. On the commentary regarding some of the prep for some of the units and knowing we don’t want to talk too much about utilization. But we were somewhat transparent in our thoughts that the results would be improving sequentially in the third quarter, directionally.

Should we be thinking that the fourth quarter has the potential for year-over-year revenue improvement?.

Yes. DeForest, since we don’t provide financial guidance pursuant to our disclosure policy, I can’t comment on any specific numbers. What I will say is that there are some projects, that we have been awarded contracts for that had not yet begun operations at the end of Q3.

Some of those projects are Q4 projects, some would be early 2018 and some of those are – and the majority of them are short term in nature. But there also are some long-term contracts in that mix as well. And then I do want to just refer, folks by way of reminder, to the fact that our business is seasonal.

So our firefighting and flightseeing activities have come to an end as of September and it’s also the case in our oil and gas operations. All else being equal, Q4 is usually a weaker quarter for us because of the reduced number of daylight hours and inclement weather, which tends to be more prevalent in Q4 and Q1 of the year..

Okay. And then just a little clarity on SAR or I guess more ad hoc work related to the hurricanes.

Is some of that stuff that we do that without an assigned mission and try to get paid afterwards? Or is it more like charity work and then maybe some of the stuff related to maybe get some crews, rapid deployments on or off platforms as storms come in? Would that be all in the third quarter results? Or would that be carry over potentially into the fourth quarter?.

Yes. To address that question, maybe I’ll talk first about a typical storm. So a typical tropical storm that we might experience coming through the Gulf of Mexico is generally a pretty clear case of increased flight hours for us.

And that when the main storm comes in to the operational area, we pick up flight hours to pick up personnel offshore and bring them back to safe locations onshore. The storm blows through, we pick up flight hours to take those same personnel and repopulate those offshore installations.

Hurricane Harvey, in particular, was an unusual storm because it hung around in our area of operations for so long, basically, 5 days over the Houston area and then it moved eastward into more of the heart of our operations in southern Louisiana. So it was about a week that the storm was impacting operations.

So we did pick up our main oil and gas business. We did pick up flight hours in advance of the storm but then we went for about seven days of having very few flight hours and then we picked up flight hours to repopulate the offshore installations.

Beyond that typical oil and gas activity, we did pick up some nonroutine positive revenue-generating missions. These included things like resupply runs for refineries that were isolated because of flooding. It included flying television news crews to report on the crisis from the air.

It included flying insurance companies to assess the damage to the area from the storm. It also included many flights to conduct surveillance and rescue and aid for animals. So those were some additional positive revenue factors for us beyond our normal business.

And I would note, because we did respond, not just to Harvey, we responded to some of the other storms including in the Caribbean where we had a helicopter helping out in Puerto Rico. Some of those will also be Q4, early Q4 revenue events.

Beyond that, I did note that on a humanitarian basis, we made our search and rescue, one of our search aircraft available to try to save and protect lives in the greater Houston and Southeast Texas areas. So we’re pleased to be able to provide that service for the community..

Okay. And that’s helpful for my understanding.

And when I think about the EC225 and that appraisal and I try to read as many of those court documents as I can, there is a lot of them, but there is some commentary in some of those releases that some of those designs and maybe some of those parts are available for use on some other models that are out there.

So when I think about that number, the $4 million carrying value, is that an economic value of a unit used as a helicopter? Or is it more reflective of a unit where you’re just saying well the engines worth x and electronics worth x and blades worth x, and we add up all those numbers and that’s worth $4 million.

So maybe another way of asking, is that kind of a part-out number? Or is it a blend of both?.

It’s not a part-out number. It is reflective of economic value for a helicopter that will be used. But one that is likely to be used not in the offshore oil and gas industry but in other markets such as utility missions that require heavy lift capacity or certain search and rescue operations.

That’s really what the appraisal assumed is that there would be alternative uses for this aircraft beyond the principal market, which is, it had served prior to the accident..

Okay. And then also on the EC225, you called out one-time legal fees.

But if the legal case continues going forward, should we be modeling some level of ongoing legal expenses? $1 million to $2 million range, is that a fair assessment for the quarter?.

Pursuant to our disclosure policy, I can’t provide specific financial guidance. But I would note that what you observed is correct that we have incurred higher professional services fees related to the losses that we disclosed. So long as that lawsuit is active, there will be expenses associated with that.

And as those expenses are incurred, they will impact our G&A line item..

Okay. And it might be a little bit early, but it’s probably worth asking. With the maturity of the revolving credit facility, it looks like we’re making pretty good progress paying that down.

Have we started any discussions with the banks about extending that facility? Or begin to engage other banks regarding a new revolving credit facility?.

We have begun discussions with our banks in our current credit facility about an amendment or extension of our existing facility. The feedback has been very good, very encouraged by the level of support that we have from our banking group. I think, just in terms of timing, it’s unlikely that we would look to do anything formal prior to 2018.

But we are obviously aware of the scheduled maturity in March of 2019. We have begun active dialogue with all of our banks, and are very encouraged by the feedback to date..

Okay. And then you talked about outlook. Maybe you want to talk about this, maybe don’t.

But Gulf versus Brazil, is the improving outlook in one or the other? Or is it coming from both areas right now?.

In Q3, we saw an increase in both domestic U.S. as well as international oil and gas activity.

I think, breaking it down by region – some of the more active opportunities that we are seeing both in terms of work that has already led to additional revenues in Q3 as well as some of the work that is scheduled to start based upon contract awards and opportunities that are available, but remain competitive and have not been awarded yet.

A lot of that is happening in the U.S. In Brazil, our near-term expectation is probably more of the same in terms of the activity levels we have been experiencing in recent periods with some incremental activity – or opportunities I should say, looking to become available there in 2018.

But again, those opportunities are still competitive bids at this point. So – and there’s no guarantee that we will be successful in winning them..

And now we’ll conclude today’s question-and-answer session. At this time, I would like to turn the call back over to Chris Bradshaw for any additional or closing remarks..

Thanks, Michelle. And thanks, everyone, for your participation. Please stay safe. Happy Veterans Day to those who have served. We’ll talk you next quarter..

And that does conclude today’s call. We thank you for your participation..