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Era Group Inc. Reports Fourth Quarter and Full Year 2013 Results

HOUSTON, TX -- (Marketwired) -- 03/17/14 -- Era Group Inc. (NYSE: ERA)

  • Full year 2013 net income of $18.7 million on operating revenues of $299.0 million compared to net income of $7.8 million on operating revenues of $272.9 million in 2012
  • Fourth quarter net income of $1.8 million on operating revenues of $76.0 million compared to net income of $3.6 million on operating revenues of $70.9 million in the prior year quarter
  • Adjusted EBITDA of $95.3 million in full year 2013 compared to $78.8 million in 2012
  • Adjusted EBITDA of $20.0 million in fourth quarter 2013 compared to $21.2 million in the prior year quarter
  • In the fourth quarter, higher revenues due to the EC225 heavy helicopters resuming operations, increased utilization and rates for single engine helicopters in the U.S. Gulf of Mexico and new search and rescue customers were offset by lower dry-leasing revenues, an increase in headcount and compensation expenses and losses on equity investments
  • The increase in headcount, compensation expense and other administrative and general expenses is related to being an independent public company, which was not the case in the fourth quarter of 2012
  • As of December 31, 2013, unfunded capital commitments totaled $341.7 million of which $98.7 million is payable during 2014
  • Total long-term debt was $279.4 million as of December 31, 2013
  • As of December 31, 2013, cash balances were $31.3 million and remaining availability under our revolving credit facility was $136.1 million

Era Group Inc. today reported net income for its fourth quarter ended December 31, 2013 of $1.8 million on operating revenues of $76.0 million compared to net income of $3.6 million on operating revenues of $70.9 million in the prior year quarter. The Company also reported net income for its fiscal year ended December 31, 2013 of $18.7 million on operating revenues of $299.0 million compared to net income of $7.8 million on operating revenues of $272.9 million in the prior fiscal year.

Operating income for the current quarter was $9.6 million compared to $9.7 million in the prior year quarter. Operating income for fiscal year 2013 was $46.2 million compared to $32.1 million in the prior fiscal year. Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $20.0 million in the current quarter compared to $20.7 million in the prior year quarter. EBITDA for fiscal year 2013 was $93.1 million compared to $67.3 million in the prior fiscal year. Fourth quarter and full year 2013 results included $0.5 million and $18.3 million in gains on asset dispositions, respectively, compared to $0.2 million and $3.6 million of gains in the fourth quarter and full year 2012.

Adjusted EBITDA for fiscal year 2013, which excludes a one-time charge of $2.0 million related to operating leases on certain helicopters configured for air medical services, was $95.3 million. Adjusted EBITDA for fiscal year 2012, which excludes an impairment charge of $5.9 million on our Brazilian joint venture, $2.9 million of expenses related to non-prosecution of our initial public offering, $2.0 million in SEACOR Management Fees, and $0.7 million in severance expense related to prior changes in executive management, was $78.8 million. The $16.4 million increase in Adjusted EBITDA in fiscal year 2013 is primarily due to the $14.7 million increase in gains on asset dispositions compared to fiscal year 2012.

"2013 was a record year for Era. Operating revenues and Adjusted EBITDA increased by 10% and 21%, respectively, over the prior fiscal year. This record financial performance was achieved despite the suspension of flight operations of the EC225 heavy helicopters for more than half the year, which represent almost 25% of our fleet value," said Sten Gustafson, Chief Executive Officer of Era Group. "The significant gains recognized from asset dispositions during the year not only represent a continuation of our returns-focused strategy to deliver value for our shareholders but also further validate our strategy of owning our equipment. We have continued to deploy capital to selectively expand and upgrade our helicopter fleet as evidenced by our orders for new S92 and AW189 heavy helicopters and AW139 medium helicopters."

"Operating revenues of $76.0 million were also a record for the fourth quarter, representing a 7% increase over the prior year quarter. Fourth quarter Adjusted EBITDA of $20.0 million represented a decrease of $1.2 million from the prior year quarter. Our policy of recognizing revenue from our Brazilian joint venture and our customer in India only when cash is remitted resulted in a $2.8 million negative impact to revenues and EBITDA in the fourth quarter of 2013 compared to the fourth quarter of 2012."

Fourth Quarter Results

Operating revenues in the fourth quarter ended December 31, 2013 increased $5.1 million over the prior year quarter primarily due to the resumption of operations of the EC225 helicopters, increased utilization and higher rates for single engine helicopters in the U.S. Gulf of Mexico, and new search and rescue customers. These increases were partially offset by a decrease in dry-leasing revenues primarily due to lower cash receipts from our Brazilian joint venture and our customer in India and dry-leases that ended since the prior year quarter when the helicopters were sold or reassigned to our oil and gas operations. We collected cash receipts of $6.4 million from our Brazilian joint venture and our customer in India in the fourth quarter of 2013, which represents a $2.8 million decrease from the $9.2 million of cash collected in the prior year quarter.

Operating expenses were $2.9 million higher in the current quarter. Repairs and maintenance expenses were $1.6 million higher primarily due to the timing of repairs and an increase in power-by-hour expense as a result of an increase in flight hours and the resumption of the EC225 helicopter operations. Personnel costs increased $1.2 million primarily due to an increase in personnel to support the increased activity with oil and gas customers.

Administrative and general expenses were $3.0 million higher in the current quarter. Compensation and employee costs were $1.8 million higher primarily due to an increase in personnel, management bonus awards and share-based compensation related to incentive equity awards granted following our spin-off from SEACOR Holdings Inc. ("SEACOR"). Legal, professional and other expenses increased $0.6 million as a result of being an independent public company. Allowance for doubtful accounts increased $0.5 million due to collection issues related to a note with a customer that purchased parts in a previous year.

Depreciation expense was $11.1 million in the current quarter, a decrease of $0.3 million, primarily due to helicopters and related parts sold in 2013.

Losses from equity investments were $0.9 million in the current year quarter, which was $0.8 million lower than in the prior year quarter.

Sequential Quarter Results

Fourth quarter operating revenues decreased $5.0 million compared to the third quarter ended September 30, 2013, primarily due to the end of seasonal activities. Fourth quarter net income decreased $3.5 million. Operating income and Adjusted EBITDA for the fourth quarter decreased by $1.6 million and $5.4 million, respectively. In addition to the impact of seasonality factors, the decreases in net income, operating income and Adjusted EBITDA in the fourth quarter were also due to lower gains on asset dispositions and losses from equity investments.

Full Year Results

Operating revenues in 2013 increased $26.0 million compared to 2012 primarily due to higher utilization of medium helicopters related to an increase in oil and gas activities in the U.S. Gulf of Mexico and Alaska, the commencement of international oil and gas operations in 2013, and an increase in search and rescue activities. These increases were partially offset by a decrease in dry-leasing and air medical revenues.

Operating expenses were $19.4 million higher in 2013 compared to 2012. Repairs and maintenance expenses increased $12.9 million primarily due to the timing of repairs and the prior year benefit from vendor credits. Personnel costs increased $4.4 million primarily due to increased headcount to support the increase in oil and gas activities discussed above. In addition, lease expense was $1.5 million higher in the current year due to a one-time charge related to operating leases on certain air medical helicopters.

Administrative and general expenses increased $4.1 million in 2013 compared to 2012 primarily due to an increase in compensation and employee costs and expenses related to being an independent public company. Depreciation expense was $3.1 million higher in the current year primarily due to the addition of new and higher cost helicopters.

Gains on asset dispositions were $18.3 million in fiscal year 2013, a $14.7 million increase from the prior year.

Interest expense increased $7.4 million primarily due to the placement of the Company's 7.75% Senior Notes in December 2012. Income tax expense increased $4.4 million due to higher income before taxes and equity earnings in the current year.

Earnings from equity investments were $0.9 million in the current year, an increase of $6.4 million compared to the prior year loss of $5.5 million, primarily due to the recognition of a loss of $0.6 million and an impairment charge of $5.9 million, net of tax, on our investment in our Brazilian joint venture in the first quarter of 2012.

Equipment Acquisitions

During the quarter ended December 31, 2013, the Company's capital expenditures were $61.9 million, which consisted primarily of deposits on future helicopter deliveries. 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 Company accepted delivery of two new AW139 helicopters in January 2014, and placed both of them into service in late February.

Capital Commitments

The Company's unfunded capital commitments as of December 31, 2013 consisted primarily of orders for helicopters and totaled $341.7 million, of which $98.7 million is payable during 2014 with the balance payable through 2017. The Company also had $2.3 million of deposits paid on options not yet exercised. The Company may terminate $164.4 million of its total commitments (inclusive of deposits paid on options not yet exercised) without further liability other than liquidated damages of $11.1 million in the aggregate.

Included in these capital commitments are agreements to purchase ten AW189 heavy helicopters, four S92 heavy helicopters, two AW139 medium helicopters, and five AW169 light twin helicopters. The AW189 helicopters are scheduled to be delivered beginning in late 2014 through 2017. The S92 helicopters are scheduled to be delivered in 2016 and 2017. The AW139 helicopters are scheduled to be delivered in 2014. Delivery dates for the AW169 helicopters have yet to be determined. In addition, we had outstanding options to purchase up to an additional ten AW189 helicopters, five S92 helicopters and four AW139 helicopters.

Liquidity Update

As of December 31, 2013, the Company had a cash balance of $31.3 million and remaining availability under its senior secured revolving credit facility of $136.1 million.

Brazilian Joint Venture

On February 15, 2014, definitive agreements were executed with respect to the transfer to a third party of the 50% economic interest and 80% voting interest held by the Company's partner in Aeróleo Taxi Aero S/A ("Aeróleo"), its Brazilian joint venture. As consideration for the transfer of interests and the other terms and conditions of the transaction, Aeróleo will be required to make payment to affiliates of the transferring partner in the form of severance and partial repayment of shareholder loans that will likely require a capital infusion by the Company of approximately $2 million. The transaction remains subject to customary closing conditions, including receipt of required local regulatory approval, and is expected to close in the second half of 2014. On February 19, 2014, in connection with execution of the definitive agreements, the Company and its partner filed a joint motion to dismiss their ongoing arbitration.

As a result of the transaction, the Company may be required to consolidate the financial results of Aeróleo in its financial statements following the consummation of the transactions.

Conference Call

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Tuesday, March 18, 2014, to review the results for the fourth quarter and fiscal year ended December 31, 2013. The conference call can be accessed as follows:

All callers will need to reference the access code 12521582

Within the U.S.:
Operator Assisted Toll-Free Dial-In Number: (866) 607-0535

Outside the U.S.:
Operator Assisted International Dial-In Number: (832) 445-1827

Replay
A telephone replay will be available through March 31, 2014 and may be accessed by calling (855) 859-2056 for domestic callers or (404) 537-3406 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 third-party helicopter operators and customers in other countries, including Brazil, Canada, India, Mexico, Norway, Spain, Sweden, the United Kingdom and Uruguay. Era Group's helicopters are primarily used to transport personnel to, from and between offshore installations, drilling rigs and platforms.

This release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concerning management's expectations, strategic objectives, business prospects, anticipated economic 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 effect of the Spin-off, including the ability of the Company to recognize the expected benefits from the Spin-off and the Company's dependence on SEACOR's performance under various agreements; decreased demand and loss of revenues resulting from developments that may adversely impact the offshore oil and gas industry, including the issuance of new safety and environmental guidelines or regulations that could increase the costs of exploration and production, reduce the area of operations and result in permitting delays, U.S. government implemented moratoriums directing operators to cease certain drilling activities and any extension of such moratoriums that may result in unplanned customer suspensions, cancellations, rate reductions or non-renewals of aviation equipment contracts or failures to finalize commitments to contract aviation equipment; safety issues experienced by a particular helicopter model that could result in customers refusing to use that helicopter model or a regulatory body grounding that helicopter model, which could also permanently devalue that helicopter model; the cyclical nature of the oil and gas industry; increased U.S. and foreign government legislation and regulation, including environmental and aviation laws and regulations, and the Company's compliance therewith and the costs thereof; dependence on the activity in the U.S. Gulf of Mexico and Alaska and the Company's ability to expand into other markets; liability, legal fees and costs in connection with providing emergency response services; decreased demand for the Company's services as a result of declines in the global economy; declines in valuations in the global financial markets and a lack of liquidity in the credit sectors, including, interest rate fluctuations, availability of credit, inflation rates, change in laws, trade barriers, commodity prices and currency exchange fluctuations; activity in foreign countries and changes in foreign political, military and economic conditions; the failure to maintain an acceptable safety record; the dependence on small number of customers; consolidation of the Company's customer base; the ongoing need to replace aging aircraft; the Company's dependence on the used aircraft market; industry fleet capacity; restrictions imposed by the U.S. federal aviation laws and regulations on the amount of foreign ownership of the Company's common stock; operational risks; risks associated with our debt structure; operational and financial difficulties of our joint ventures, partners and customers; effects of adverse weather conditions and seasonality; adequacy of insurance coverage; the attraction and retention of qualified personnel; 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 Era Group's businesses, particularly those mentioned under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, in our subsequent Quarterly Reports on Form 10-Q and in our periodic reporting on From 8-K (if any), which are incorporated by reference.

For additional information concerning Era Group, contact Christopher Bradshaw at (281) 606-4871 or visit Era Group's website at www.eragroupinc.com.


                               ERA GROUP INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            (in thousands, except per share amounts, unaudited)

                                     Three Months Ended      Year Ended
                                        December 31,        December 31,
                                     ------------------  ------------------
                                       2013      2012      2013      2012
                                     --------  --------  --------  --------
Operating Revenues                   $ 75,998  $ 70,895  $298,959  $272,921
                                     --------  --------  --------  --------
Costs and Expenses:
  Operating                            45,213    42,282   186,612   167,195
  Administrative and general           10,562     7,575    38,924    34,785
  Depreciation                         11,129    11,471    45,561    42,502
                                     --------  --------  --------  --------
                                       66,904    61,328   271,097   244,482
                                     --------  --------  --------  --------
Gains on Asset Dispositions, Net          464       157    18,301     3,612
                                     --------  --------  --------  --------
Operating Income                        9,558     9,724    46,163    32,051
                                     --------  --------  --------  --------
Other Income (Expense):
  Interest income                         139       145       591       910
  Interest expense                     (4,311)   (3,757)  (18,050)  (10,648)
  SEACOR management fees                   --      (500)     (168)   (2,000)
  Derivative (losses) gains, net          (26)        2      (104)     (490)
  Foreign currency gains, net             233        87       698       720
  Other, net                               --        --        19        30
                                     --------  --------  --------  --------
                                       (3,965)   (4,023)  (17,014)  (11,478)
                                     --------  --------  --------  --------
Income Before Income Tax Expense and
 Equity In Earnings (Losses) of 50%
 or Less Owned Companies                5,593     5,701    29,149    20,573
Income Tax Expense                      3,036     2,086    11,727     7,298
                                     --------  --------  --------  --------
Income Before Equity in Earnings
 (Losses) of 50% or Less Owned
 Companies                              2,557     3,615    17,422    13,275
Equity in Earnings (Losses) of 50%
 or Less Owned Companies, Net of Tax     (880)      (84)      882    (5,528)
                                     --------  --------  --------  --------
Net Income                              1,677     3,531    18,304     7,747
Net Loss Attributable to
 Noncontrolling Interest in
 Subsidiary                                75        40       401        40
                                     --------  --------  --------  --------
Net Income Attributable to Era Group
 Inc.                                   1,752     3,571    18,705     7,787
Accretion of Redemption Value on
 Series A Preferred Stock                  --     2,135       721     8,469
                                     --------  --------  --------  --------
Net Income (Loss) Attributable to
 Common Shares                       $  1,752  $  1,436  $ 17,984  $   (682)
                                     ========  ========  ========  ========

Basic Earnings (Loss) Per Common
 Share                               $   0.09  $   0.06  $   0.88  $  (0.03)
Diluted Earnings (Loss) Per Common
 Share                               $   0.09  $   0.06  $   0.88  $  (0.03)

EBITDA                               $ 20,014  $ 20,700  $ 93,051  $ 67,285
Adjusted EBITDA                      $ 20,014  $ 21,200  $ 95,264  $ 78,837


                               ERA GROUP INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            (in thousands, except per share amounts, unaudited)

                                          Three Months Ended
                           ------------------------------------------------
                           Dec. 31,  Sep. 30,  Jun. 30,  Mar. 31,  Dec. 31,
                             2013      2013      2013      2013      2012
                           --------  --------  --------  --------  --------
Operating Revenues         $ 75,998  $ 80,997  $ 74,237  $ 67,727  $ 70,895
                           --------  --------  --------  --------  --------
Costs and Expenses:
  Operating                  45,213    51,338    46,945    43,116    42,282
  Administrative and
   general                   10,562     9,683     9,545     9,134     7,575
  Depreciation               11,129    11,340    11,431    11,661    11,471
                           --------  --------  --------  --------  --------
                             66,904    72,361    67,921    63,911    61,328
                           --------  --------  --------  --------  --------
Gains on Asset
 Dispositions, Net              464     2,560     4,476    10,801       157
                           --------  --------  --------  --------  --------
Operating Income              9,558    11,196    10,792    14,617     9,724
                           --------  --------  --------  --------  --------
Other Income (Expense):
  Interest income               139       155       150       147       145
  Interest expense           (4,311)   (4,394)   (4,613)   (4,732)   (3,757)
  SEACOR management fees         --        --        --      (168)     (500)
  Derivative (losses)
   gains, net                   (26)      (96)       21        (3)        2
  Foreign currency gains
   (losses), net                233       409       315      (259)       87
  Other, net                     --         7         9         3        --
                           --------  --------  --------  --------  --------
                             (3,965)   (3,919)   (4,118)   (5,012)   (4,023)
                           --------  --------  --------  --------  --------
Income Before Income Tax
 Expense and Equity In
 Earnings (Losses) of 50%
 or Less Owned Companies      5,593     7,277     6,674     9,605     5,701
Income Tax Expense            3,036     2,715     2,398     3,578     2,086
                           --------  --------  --------  --------  --------
Income Before Equity in
 Earnings (Losses) of 50%
 or Less Owned Companies      2,557     4,562     4,276     6,027     3,615
Equity in Earnings
 (Losses) of 50% or Less
 Owned Companies, Net of
 Tax                           (880)      526       674       562       (84)
                           --------  --------  --------  --------  --------
Net Income                    1,677     5,088     4,950     6,589     3,531
Net Loss Attributable to
 Noncontrolling Interest
 in Subsidiary                   75       116       105       105        40
                           --------  --------  --------  --------  --------
Net Income Attributable to
 Era Group Inc.               1,752     5,204     5,055     6,694     3,571
Accretion of Redemption
 Value on Series A
 Preferred Stock                 --        --        --       721     2,135
                           --------  --------  --------  --------  --------
Net Income Attributable to
 Common Shares             $  1,752  $  5,204  $  5,055  $  5,973  $  1,436
                           ========  ========  ========  ========  ========

Basic Earnings Per Common
 Share                     $   0.09  $   0.26  $   0.25  $   0.28  $   0.06
Diluted Earnings Per
 Common Share              $   0.09  $   0.25  $   0.25  $   0.28  $   0.06

EBITDA                     $ 20,014  $ 23,382  $ 23,242  $ 26,413  $ 20,700
Adjusted EBITDA            $ 20,014  $ 25,427  $ 23,242  $ 26,581  $ 21,200


                               ERA GROUP INC.
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                         (in thousands, unaudited)

                  Dec. 31,    Sep. 30,    Jun. 30,    Mar. 31,    Dec. 31,
                    2013        2013        2013        2013        2012
                 ----------  ----------  ----------  ----------  ----------
     ASSETS
Current Assets:
  Cash and cash
   equivalents   $   31,335  $   22,517  $   27,345  $   25,032  $   11,505
  Receivables:
    Trade, net
     of allowance
     for doubtful
     accounts        38,137      48,435      40,645      41,044      48,810
    Other             4,374       2,961      14,607      16,133       4,430
  Inventories, net   26,853      26,692      26,223      26,696      26,650
  Prepaid
   expenses and
   other              2,167       1,278       2,854       2,715       1,803
  Deferred
   income taxes       2,347       3,642       3,642       3,642       3,642
  Escrow
   deposits              --       9,900      16,010          --          --
                 ----------  ----------  ----------  ----------  ----------
    Total
     current
     assets         105,213     115,425     131,326     115,262      96,840
                 ----------  ----------  ----------  ----------  ----------
Property and
 Equipment        1,066,958   1,014,907   1,012,661   1,021,453   1,030,276
    Accumulated
     depreciation  (263,306)   (255,299)   (251,613)   (246,498)   (242,471)
                 ----------  ----------  ----------  ----------  ----------
    Net property
     and equipment  803,652     759,608     761,048     774,955     787,805
                 ----------  ----------  ----------  ----------  ----------
Investments, at
 Equity, and
 Advances to 50%
 or Less Owned
 Companies           34,986      36,113      35,529      34,705      34,696
Goodwill                352         352         352         352         352
Other Assets         14,380      16,071      17,300      17,830      17,871
                 ----------  ----------  ----------  ----------  ----------
Total Assets     $  958,583  $  927,569  $  945,555  $  943,104  $  937,564
                 ==========  ==========  ==========  ==========  ==========

 LIABILITIES AND STOCKHOLDERS' EQUITY

Current
 Liabilities:
  Accounts
   payable and
   accrued
   expenses      $   12,946  $   16,606  $   15,585  $   13,126  $   15,703
  Accrued wages
   and benefits       8,792       8,937       6,976       7,662       4,576
  Accrued
   interest             772       4,625         770       5,213       1,401
  Accrued income
   taxes                613          --          --          --          --
  Derivatives           621          --          --          --          --
  Due to SEACOR         347         190         211         270          --
  Current
   portion of
   long-term
   debt               2,787       2,787       2,787       2,787       2,787
  Other current
   liabilities        3,267       6,894       5,253       4,309       5,232
                 ----------  ----------  ----------  ----------  ----------
    Total
     current
     liabilities     30,145      40,039      31,582      33,367      29,699
                 ----------  ----------  ----------  ----------  ----------
Deferred Income
 Taxes              209,574     208,483     204,487     203,343     203,536
Long-Term Debt      279,391     240,029     275,667     276,307     276,948
Deferred Gains
 and Other
 Liabilities          3,412       5,343       5,947       8,164       7,864
                 ----------  ----------  ----------  ----------  ----------
    Total
     liabilities    522,522     493,894     517,683     521,181     518,047
                 ----------  ----------  ----------  ----------  ----------
Preferred Stock:
  Series A
   Preferred
   Stock                 --          --          --          --     144,232
  Series B
   Preferred
   Stock                 --          --          --          --          --
                 ----------  ----------  ----------  ----------  ----------
    Total
     preferred
     stock               --          --          --          --     144,232
                 ----------  ----------  ----------  ----------  ----------
Equity:
  Era Group Inc.
   Stockholders'
   Equity:
    Common stock        202         202         202         201          --
    Class B
     common
     stock               --          --          --          --         245
    Additional
     paid-in
     capital        421,310     420,650     420,056     419,036     278,838
    Retained
     earnings
     (accumulated
     deficit)        14,680      12,928       7,724       2,669      (4,025)
    Treasury
     shares, at
     cost              (113)        (94)        (63)         --          --
    Accumulated
     other
     comprehensive
     income (loss)
     net of tax         176         108         (44)        (85)         20
                 ----------  ----------  ----------  ----------  ----------
                    436,255     433,794     427,875     421,821     275,078
  Noncontrolling
   interest in
   subsidiary          (194)       (119)         (3)        102         207
                 ----------  ----------  ----------  ----------  ----------
    Total equity    436,061     433,675     427,872     421,923     275,285
                 ----------  ----------  ----------  ----------  ----------
Total
 Liabilities and
 Stockholders'
 Equity          $  958,583  $  927,569  $  945,555  $  943,104  $  937,564
                 ==========  ==========  ==========  ==========  ==========

Our 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, interest expense and interest expense on advances from SEACOR), Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA further adjusted for SEACOR Management Fees and certain other items that occur during the reported period. 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 and Adjusted EBITDA.


                                                              Year Ended
                         Three Months Ended                  December 31,
            --------------------------------------------  -----------------
              Dec.     Sep.     Jun.     Mar.      Dec.
              31,      30,      30,      31,       31,
              2013     2013     2013     2013      2012     2013      2012
            -------  -------  -------  --------  -------  --------  -------
                                    (in thousands)
Net Income  $ 1,677  $ 5,088  $ 4,950  $  6,589  $ 3,531  $ 18,304  $ 7,747
  Deprecia-
   tion      11,129   11,340   11,431    11,661   11,471    45,561   42,502
  Interest
   Income      (139)    (155)    (150)     (147)    (145)     (591)    (910)
  Interest
   Expense    4,311    4,394    4,613     4,732    3,757    18,050   10,648
  Income
   Tax
   Expense    3,036    2,715    2,398     3,578    2,086    11,727    7,298
            -------  -------  -------  --------  -------  --------  -------
EBITDA      $20,014  $23,382  $23,242  $ 26,413  $20,700  $ 93,051  $67,285
  SEACOR
   Management
   Fees          --       --       --       168      500       168    2,000
  Special
   Items(1)      --    2,045       --        --       --     2,045    9,552
            -------  -------  -------  --------  -------  --------  -------
Adjusted
 EBITDA     $20,014  $25,427  $23,242  $ 26,581  $21,200  $ 95,264  $78,837
  Gains on
   Asset
   Disposi-
   tions, Net
   ("Gains")   (464)  (2,560)  (4,476)  (10,801)    (157)  (18,301)  (3,612)
            -------  -------  -------  --------  -------  --------  -------
Adjusted
 EBITDA
 Excluding
 Gains      $19,550  $22,867  $18,766  $ 15,780  $21,043  $ 76,963  $75,225
            -------  -------  -------  --------  -------  --------  -------


(1) Special items include the following:

  • Severance expense of $0.7 million for the year ended December 31, 2012, due to prior changes in executive management;
  • Expenses incurred in connection with our abandoned initial public offering of $2.9 million for the year ended December 31, 2012;
  • An impairment charge of $5.9 million, net of tax, for the year ended December 31, 2012, on our investment in Aeróleo Taxi Aéreo S/A; and
  • A one-time charge of $2.0 million related to operating leases on certain air medical helicopters for the three months ended September 30, 2013 and the year ended December 31, 2013.


                               ERA GROUP INC.
                              FLEET COUNTS(1)
                                 (unaudited)

                           Dec. 31,   Sep. 30,  Jun. 30,  Mar. 31,  Dec. 31,
                           2013 (2)     2013      2013      2013      2012
------------------------- ----------  --------  --------  --------  --------
Heavy:
  EC225                            9         9         9         9        10
                          ==========  ========  ========  ========  ========

Medium:
  AW139                           35        36        35        35        33
  B212                            11        11        11        11        13
  B412                             6         6         6         6         6
  S76 A/A++                        3         3         6         6         7
  S76 C+/C++                       6         6         7         9        10
                          ----------  --------  --------  --------  --------
                                  61        62        65        67        69
                          ==========  ========  ========  ========  ========

Light--twin engine:
  A109                             9         9         9         9         9
  BK-117                           3         6         6         6         6
  EC135                           20        20        20        20        19
  EC145                            4         4         3         3         3
                          ----------  --------  --------  --------  --------
                                  36        39        38        38        37
                          ==========  ========  ========  ========  ========

Light--single engine:
  A119                            24        24        24        24        24
  AS350                           35        35        35        35        35
                          ----------  --------  --------  --------  --------
                                  59        59        59        59        59
                          ==========  ========  ========  ========  ========
Total Helicopters                165       169       171       173       175
                          ==========  ========  ========  ========  ========

____________________
(1) Includes all owned, joint ventured, leased-in and managed helicopters.
(2) The Company accepted delivery of two new AW139 helicopters in January 2014, and placed both of them into service in late February.

Era Group
Christopher Bradshaw
(281) 606-4871
www.eragroupinc.com

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