OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operations

Bristow Group Inc., a Delaware corporation (together with its consolidated entities, unless the context requires otherwise, “Bristow Group”, the “Company”, “we”, “us”, or “our”), is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated and one of two helicopter service providers to the offshore energy industry with global operations. With a fleet of 501 aircraft as of March 31, 2015, including 130 held by unconsolidated affiliates, Bristow Group and its affiliates conduct major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, and in most of the other major offshore energy regions of the world, including Australia, Brazil, Canada, Russia and Trinidad. We and our affiliates provide private sector search and rescue (“SAR”) services in Australia, Canada, Norway, Russia and Trinidad, and we provide public sector SAR services in North Scotland on behalf of the Maritime & Coastguard Agency. Additionally, in March 2013, we were awarded a contract to provide public sector SAR services for all of the U.K. (the “U.K. SAR contract”) that commenced in April 2015. Certain of our affiliates also provide fixed wing charter and scheduled services targeting U.K. and Australia oil and gas industry transport, helicopter military training and helicopter flight training.

Basis of Presentation

The consolidated financial statements include the accounts of Bristow Group Inc. and its consolidated entities after elimination of all significant intercompany accounts and transactions. Investments in affiliates in which we have a majority voting interest and entities that meet the criteria of Variable Interest Entities (“VIEs”) of which we are the primary beneficiary are consolidated. See discussion of VIEs in Note 3. We apply the equity method of accounting for investments in entities if we have the ability to exercise significant influence over an entity that (a) does not meet the variable interest entity criteria or (b) meets the variable interest entity criteria, but for which we are not deemed to be the primary beneficiary. We apply the cost method of accounting for investments in other entities if we do not have the ability to exercise significant influence over the unconsolidated affiliate. These investments in private companies are carried at cost and are adjusted only for capital distributions and other-than-temporary declines in value. Dividends from cost method investments are recognized in earnings from unconsolidated affiliates, net of losses, when paid.

Effective January 29, 2015, we acquired and began consolidating Capiteq Limited which operates under the name Airnorth. Effective February 6, 2014, we acquired and began consolidating Eastern Airways International Limited (“Eastern Airways”). See Note 2 for further details.

Our fiscal year ends March 31, and we refer to fiscal years based on the end of such period. Therefore, the fiscal year ended March 31, 2015 is referred to as fiscal year 2015.

Certain reclassifications of prior period information have been made to conform to the presentation of the current period information. These reclassifications had no effect on net income as previously reported.

Summary of Significant Accounting Policies

Use of Estimates — The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Areas where accounting estimates are made by management include:


•	Allowances for doubtful accounts;


•	Inventory allowances;


•	Property and equipment;


•	Goodwill, intangible and other long-lived assets;


•	Pension benefits;


•	Contingent liabilities; and


•	Taxes.

Cash and Cash Equivalents — Our cash equivalents include funds invested in highly-liquid debt instruments with original maturities of 90 days or less.

Accounts Receivable — Trade and other receivables are stated at net realizable value. We grant short-term credit to our clients, primarily major integrated, national and independent oil and gas companies. We establish allowances for doubtful accounts on a case-by-case basis when a determination is made that the required payment is unlikely to occur. In establishing these allowances, we consider a number of factors, including our historical experience, change in our clients’ financial position and restrictions placed on the conversion of local currency into U.S. dollars, as well as disputes with clients regarding the application of contract provisions to our services.

The following table is a rollforward of the allowance for doubtful accounts, including affiliates and non-affiliates (in thousands):



	Fiscal Year Ended March 31,
	2015			2014			2013
Balance – beginning of fiscal year	$	5,074		$	5,079		$	243
Additional allowances	1,050			87			4,887
Write-offs and collections	(5,265		)	(92		)	(51		)
Balance – end of fiscal year	$	859		$	5,074		$	5,079

During fiscal year 2013, the allowance for doubtful accounts for non-affiliates was increased by $4.9 million related to amounts due from ATP Oil and Gas Corporation, a client in the U.S. Gulf of Mexico, due to its filing for bankruptcy. During fiscal year 2015, the allowance recorded for ATP was reversed as we settled outstanding matters related to ongoing bankruptcy proceedings, which resulted in a $4.4 million reduction in bad debt expense, included within direct cost on our consolidated statements of income. The remaining amount of $0.5 million related to ATP was written off as no further settlement is expected. As of March 31, 2015 and 2014, there were no allowances for doubtful accounts related to accounts receivable due from affiliates.

Inventories — Inventories are stated at the lower of average cost or market value and consist primarily of spare parts. The following table is a rollforward of the allowance related to dormant, obsolete and excess inventory (in thousands):



	Fiscal Year Ended March 31,
	2015			2014			2013
Balance – beginning of fiscal year	$	47,298		$	31,504		$	34,364
Impairment of inventories	7,167			12,669			—
Additional allowances	4,867			6,807			8,479
Inventory disposed and scrapped	(10,125		)	(6,096		)	(10,053		)
Foreign currency effects	(3,793		)	2,414			(1,286		)
Balance – end of fiscal year	$	45,414		$	47,298		$	31,504

During fiscal years 2015 and 2014, we increased our inventory allowance by $4.9 million and $6.8 million, respectively, as a result of our periodic assessment of inventory that was dormant, obsolete or excess within our operational fleet of aircraft.

During fiscal years 2015 and 2014, we recorded impairment charges of $7.2 million and $12.7 million, respectively, to write-down certain spare parts within inventories to market value. These impairment charges resulted from the identification of $19.1 million and $50.5 million, respectively, of inventory that was dormant, obsolete or excess based on a review of our future inventory needs related to changes to our fleet strategy and plans. The fiscal year 2015 impairment charge related primarily to spare parts held for a large aircraft model where we decided to accelerate removal from our fleet into fiscal year 2016. The fiscal year 2014 impairment charge related primarily to spare parts held for a medium aircraft model where we have decided to remove this model from our fleet over the next two fiscal years. As we had intended to operate these model types longer in certain markets, we identified excess inventory that would not be used on our aircraft and therefore needed to be sold or otherwise disposed of. These impairment charges are included on a separate line within operating expense on the consolidated statements of income.

Also during fiscal year 2014, we wrote off $11.1 million of inventory destroyed in a fire at our Port Harcourt facility in Nigeria, which was insured and therefore fully offset by a receivable recorded of $11.1 million for insurance proceeds. See Note 4 for further details on the fire in Port Harcourt.

Prepaid Expenses and Other Current Assets — As of March 31, 2015 and 2014, prepaid expenses and other current assets included the short-term portion of contract acquisition and pre-operating costs totaling $8.9 million and $5.5 million, respectively, related to the SAR contracts in the U.K. and a client contract in Norway which are recoverable under the contracts and will be expensed over the terms of the contracts. During fiscal year 2015, we have expensed $2.6 million due to the start-up of some of these contracts.

Property and Equipment — Property and equipment are stated at cost. Property and equipment includes construction in progress, primarily consisting of progress payments on aircraft purchases and facility construction, of $306.0 million and $477.9 million as of March 31, 2015 and 2014, respectively. Interest costs applicable to the construction of qualifying assets are capitalized as a component of the cost of such assets.

Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets. The estimated useful lives of aircraft generally range from 5 to 15 years, and the residual value used in calculating depreciation of aircraft generally ranges from 30% to 50% of cost. The estimated useful lives for buildings on owned properties range from 15 to 40 years. Other depreciable assets are depreciated over estimated useful lives ranging from 3 to 15 years, except for leasehold improvements which are depreciated over the lesser of the useful life of the improvement or the lease term (including any period where we have options to renew if it is probable that we will renew the lease). The cost and related accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts and the resulting gains or losses are included in gain (loss) on disposal of assets.

We capitalize betterments and improvements to our aircraft and amortize such costs over the remaining useful lives of the aircraft. Betterments and improvements increase the life or utility of an aircraft.

Effective April 1, 2014, we changed the useful lives of certain non-aircraft assets. These changes were driven by our annual review of useful lives and impacted our depreciation on the assets. During fiscal year 2015, we recorded a reduction of approximately $3.5 million (or approximately $0.08 of diluted earnings per share) in depreciation expense as a result of this change in useful lives.

For further details on property and equipment, see Note 4.

Goodwill — Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill has an indefinite useful life and is not amortized, but is assessed for impairment annually as of March 31.

Goodwill totaling $75.6 million and $56.7 million as of March 31, 2015 and 2014, respectively, relates to our business units as follows (in thousands):



	Europe			Bristow Academy			Australia			West Africa			Other International			Total
March 31, 2013	$	11,883		$	10,212		$	—		$	6,226		$	576		$	28,897
Foreign currency translation	1,839			90			—			(49		)	—			1,880
Eastern Airways acquisition	26,479			—			—			—			—			26,479
Impairments	—			—			—			—			(576		)	(576		)
March 31, 2014	40,201			10,302			—			6,177			—			56,680
Foreign currency translation	(4,500		)	(112		)	(461		)	(231		)	—			(5,304		)
Airnorth acquisition	—			—			24,252			—			—			24,252
March 31, 2015	$	35,701		$	10,190		$	23,791		$	5,946		$	—		$	75,628

To complete our annual assessment of goodwill impairment, we first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and if a quantitative assessment should be performed. As of March 31, 2015, we performed a qualitative analysis and concluded it is more likely than not that the fair value of each reporting unit is not less than the carrying value and, therefore, did not perform a quantitative analysis for the reporting units with goodwill except for Bristow Academy, which is included within Corporate and other for segment reporting purposes in Note 11. Bristow Academy's fiscal year 2015 results were lower than internal expectations; therefore, we performed a quantitative analysis as of March 31, 2015 and concluded that the fair value of the reporting unit was 18.3% more than the carrying value for Bristow Academy. Accordingly, the annual impairment assessment as of March 31, 2015 indicated that there is no impairment of goodwill. Qualitative factors considered during our assessments included the capital markets environment, global economic conditions, the demand for helicopter services, the necessity for training of new pilots (Bristow Academy only), changes in our results of operations, the magnitude of the excess of fair value over the carrying amount of each reporting unit as determined in prior years’ quantitative testing and other factors. In addition to the annual assessment, an impairment assessment of goodwill is conducted when events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. During fiscal year 2014, we impaired our goodwill in our Other International business unit related to Mexico as all of the contracts in Mexico had expired. As of March 31, 2015, goodwill totaling approximately $4.8 million is expected to be deductible for tax purposes. For further details on the Eastern Airways and the Airnorth acquisitions, see Note 2.

Other Intangible Assets — Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values. Intangible assets by type were as follows (in thousands):



	Client contracts			Client relationships			Trade name and trademarks			Internally developed software			Licenses			Total
	Gross Carrying Amount
March 31, 2013	$	7,187		$	1,730		$	—		$	—		$	833		$	9,750
Foreign currency translation	(58		)	(14		)	—			—			(6		)	(78		)
Eastern Airways acquisition	—			10,291			5,326			1,339			—			16,956
March 31, 2014	7,129			12,007			5,326			1,339			827			26,628
Foreign currency translation	(76		)	(1,238		)	(542		)	(160		)	(69		)	(2,085		)
Airnorth acquisition	1,112			2,287			364			—			—			3,763
March 31, 2015	$	8,165		$	13,056		$	5,148		$	1,179		$	758		$	28,306

	Accumulated Amortization
March 31, 2013	$	(5,662	)	$	(758	)	$	—		$	—		$	(388	)	$	(6,808	)
Amortization expense	(1,270		)	(170		)	—			—			(81		)	(1,521		)
March 31, 2014	(6,932		)	(928		)	—			—			(469		)	(8,329		)
Amortization expense	(467		)	(655		)	(323		)	(244		)	(73		)	(1,762		)
March 31, 2015	$	(7,399	)	$	(1,583	)	$	(323	)	$	(244	)	$	(542	)	$	(10,091	)

Weighted average remaining contractual life, in years	1.6			17.5			14.9			3.8			3.0			10.3

Future amortization expense of intangible assets for each of the years ending March 31 are as follows (in thousands):



2016	$	2,114
2017	1,553
2018	1,472
2019	1,200
2020	996
Thereafter	10,880
	$	18,215

The Bristow Norway and Eastern Airways acquisitions, included in our Europe business unit, resulted in intangible assets for client contracts, client relationships, trade name and trademarks, internally developed software and licenses. The Airnorth acquisition, included in our Australia business unit, resulted in intangible assets for client contracts, client relationships and trade name and trademarks. For further details on the Eastern Airways and Airnorth acquisitions, see Note 2.

Impairment of Long-Lived Assets — Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of an asset or asset group to be held and used exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. Assets held for sale are classified as current assets on our consolidated balance sheets and recorded at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale (if any) are presented separately in the appropriate asset and liability sections of the consolidated balance sheets. We recorded impairment charges of $36.1 million, $6.8 million and $4.4 million included in gain (loss) on disposal of assets to reduce the carrying value of aircraft held for sale in fiscal years 2015, 2014 and 2013, respectively.

During fiscal year 2013, we reclassified four large aircraft previously classified as held for sale to aircraft and equipment as they were returned to operational status as a result of the issues associated with H225 Super Puma helicopter and we reversed previously recorded impairment charges of $8.7 million. This reversal of charges is included in gain (loss) on disposal of assets on the consolidated statements of income for fiscal year 2013. See further discussion in Note 4.

Impairment of Investments in Unconsolidated Affiliates — We perform regular reviews of each investee’s financial condition, the business outlook for its products and services, and its present and projected results and cash flows. When an investee has experienced consistent declines in financial performance or difficulties raising capital to continue operations, and when we expect the decline to be other-than-temporary, the investment is written down to fair value. Actual results may vary from estimates due to the uncertainty regarding the projected financial performance of investees, the severity and expected duration of declines in value, and the available liquidity in the capital markets to support the continuing operations of the investees in which we have investments. We did not recognize any impairment charges related to our investments in unconsolidated affiliates in fiscal years 2015, 2014 and 2013.

Other Assets — In addition to the intangible assets discussed above, other assets primarily include debt issuance costs of $10.0 million and $12.3 million as of March 31, 2015 and 2014, respectively, which are being amortized over the life of the related debt, deferred tax assets of $50.7 million and $17.6 million as of March 31, 2015 and 2014, respectively, and the long-term portion of contract acquisition and pre-operating costs totaling $42.4 million and $15.2 million as of March 31, 2015 and 2014, respectively, related to the SAR contracts in the U.K. and a client contract in Norway which are recoverable under the contracts and will be expensed over the terms of the contracts.

Contingent Liabilities — We establish reserves for estimated loss contingencies when we believe a loss is probable and the amount of the loss can be reasonably estimated. Our contingent liability reserves relate primarily to potential tax assessments, litigation, personal injury claims and environmental liabilities. Income for each reporting period includes revisions to contingent liability reserves resulting from different facts or information which become known or circumstances which change and affect our previous assumptions with respect to the likelihood or amount of loss. Such revisions are based on information which becomes known or circumstances that change after the reporting date for the previous period through the reporting date of the current period. Reserves for contingent liabilities are based upon our assumptions and estimates regarding the probable outcome of the matter. Should the outcome differ from our assumptions and estimates or other events result in a material adjustment to the accrued estimated reserves, revisions to the estimated reserves for contingent liabilities would be required to be recognized. Legal costs are expensed as incurred.

Proceeds from casualty insurance settlements in excess of the carrying value of damaged assets are recognized in gain (loss) on disposal of assets when we have received proof of loss documentation or are otherwise assured of collection of these amounts.

Some of our acquisitions include a provision that provides for additional consideration to be paid to the sellers of the acquired company based on the achievement of specified performance thresholds. In such cases, we record the obligations to pay those amounts at fair value at the acquisition date and include such obligations in the consideration transferred. This contingent consideration obligation is included in other accrued liabilities for the current portion and other liabilities and deferred credits for the long-term portion on our consolidated balance sheet. We assess the estimated fair value of the contractual obligation to pay the contingent consideration on a quarterly basis and any changes in estimated fair value are recorded as accretion expense included in depreciation and amortization on our consolidated statements of income. In other cases, additional consideration is based on the achievement of performance thresholds and continued employment with the Company. In these cases, we record such amounts in general and administrative expense when such additional consideration is earned. See Note 2 for a discussion on our acquisitions, Note 3 for a discussion on contingent consideration obligations related to our investments in unconsolidated affiliates and Note 6 for details on the fair value of the contingent consideration obligation.

Deferred Sale Leaseback Advance — As of March 31, 2015 and 2014, respectively, we had a total deferred sale leaseback advance of $55.9 million and $166.3 million, of which the current portion is included in deferred sale leaseback advance ($55.9 million and $136.9 million) and the long-term portion is included in other liabilities and deferred credits (zero and $29.4 million) on our consolidated balance sheets. During fiscal year 2014, we received payment of approximately $106.1 million for progress payments we had previously made on seven aircraft under construction, and we assigned any future payments due on these construction agreements to the purchaser. As we had the obligation and intent to lease the aircraft back from the purchaser upon completion, we recorded a liability equal to the cash received and payments made by the purchaser totaling $129.9 million, with a corresponding increase to construction in progress. During fiscal year 2015, we took delivery and entered into leases for five of these aircraft and removed a total of $183.7 million and $182.6 million, respectively, from construction in progress and deferred sale leaseback advance, current on our consolidated balance sheet. We will continue to increase both construction in progress and deferred sale leaseback advance, current or long-term, until we lease the remaining two aircraft, at which time the construction in progress and the liabilities will be removed from our consolidated balance sheet.

Revenue Recognition — In general, we recognize revenue when it is both realized or realizable and earned. We consider revenue to be realized or realizable and earned when the following conditions exist: there is persuasive evidence of an arrangement, generally a client contract exists; the services or products have been performed or delivered to the client; the sales price is fixed or determinable; and collection has occurred or is probable. More specifically, revenue from helicopter services is recognized based on contractual rates as the related services are performed. The charges under these contracts are generally based on a two-tier rate structure consisting of a daily or monthly fixed fee plus additional fees for each hour flown. These contracts are for varying periods and generally permit the client to cancel the contract before the end of the term. We also provide services to clients on an “ad hoc” basis, which usually entails a shorter contract notice period and duration. The charges for ad hoc services are based on an hourly rate or a daily or monthly fixed fee plus additional fees for each hour flown. In order to offset potential increases in operating costs, our long-term contracts may provide for periodic increases in the contractual rates charged for our services. We recognize the impact of these rate increases when the criteria outlined above have been met. This generally includes written recognition from the clients that they are in agreement with the amount of the rate escalation. Cost reimbursements from clients are recorded as reimbursable revenue with the related reimbursed costs recorded as reimbursable expense on our consolidated statements of income.

Bristow Academy, our helicopter training business unit, primarily earns revenue from military training, flight training provided to individual students and ground school courses. We recognize revenue from these sources using the same revenue recognition principles described above as services are provided. We consider revenue to be realized or realizable and earned when the following conditions exist: there is persuasive evidence of an arrangement (generally a contract exists); the services have been performed or delivered to the client or student; the sales price is fixed and determinable; and collection has occurred or is probable.

Eastern Airways and Airnorth primarily earn revenue through charter and scheduled airline services and provision of airport services (Eastern Airways only). Both chartered and scheduled revenue is recognized net of passenger taxes and discounts. Revenue is recognized at the earlier of the period in which the service is provided or the period in which the right to travel expires which is determined by the terms and conditions of the ticket. Ticket sales are recorded within deferred revenue until recognized as revenue in accordance with the above policy. Airport services revenue is recognized when earned.

Pension Benefits — See Note 9 for a discussion of our accounting for pension benefits.

Maintenance and Repairs — We generally charge maintenance and repair costs, including major aircraft component overhaul costs, to earnings as the costs are incurred. However, certain major aircraft components, such as engines and transmissions, are maintained by third-party vendors under contractual agreements. Under these agreements, we are charged an agreed amount per hour of flying time related to maintenance, repair and overhaul of the parts and components covered. The costs charged under these contractual agreements are recognized in the period in which the flight hours occur. To the extent that we have not yet been billed for costs incurred under these arrangements, these costs are included in accrued maintenance and repairs on our consolidated balance sheets. From time to time, we receive credits from our original equipment manufacturers as settlement for additional labor and maintenance expense costs incurred for aircraft performance issues. We record these credits as a reduction in maintenance expense when the credits are utilized in lieu of cash payments for purchases or services. The cost of certain major overhauls on fixed-wing aircraft operated by Eastern Airways and Airnorth are capitalized when incurred and depreciated over the period until the next expected major overhaul.

Taxes — We follow the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are determined based upon temporary differences between the carrying amount and tax basis of our assets and liabilities and measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on deferred income tax assets and liabilities of a change in the tax rates is recognized in income in the period in which the change occurs. We record a valuation reserve when we believe that it is more likely than not that any deferred income tax asset created will not be realized.

In assessing the realizability of deferred income tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which such temporary differences become deductible.

We recognize tax benefits attributable to uncertain tax positions when it is more-likely-than-not that a tax position will be sustained upon examination by the authorities. The benefit from a position that has surpassed the more-likely-than-not threshold is the largest amount of benefit that is more than 50% likely to be realized upon settlement. We recognize interest and penalties accrued related to unrecognized tax benefits as a component of provision for income taxes.

Foreign Currency — In preparing our financial statements, we must convert all non-U.S. dollar currencies to U.S. dollars. Balance sheet information is presented based on the exchange rate as of the balance sheet date, and statement of income information is presented based on the average exchange rate for the period. The various components of stockholders’ investment are presented at their historical average exchange rates. The resulting difference after applying the different exchange rates is the currency translation adjustment. Foreign currency transaction gains and losses are recorded in other income (expense), net and result from the effect of changes in exchange rates on transactions denominated in currencies other than a company’s functional currency, including transactions between consolidated companies. An exception is made where an intercompany loan or advance is deemed to be of a long-term investment nature, in which instance foreign currency transaction gains or losses are included as currency translation adjustments and are reported in stockholders’ investment as accumulated other comprehensive gains or losses. Changes in exchange rates could cause significant changes in our financial position and results of operations in the future.

As a result of changes in exchange rates, we recorded foreign currency transaction losses of approximately $6.5 million, $3.7 million and $1.1 million during fiscal years 2015, 2014 and 2013, respectively. Our earnings from unconsolidated affiliates, net of losses, are also affected by the impact of changes in foreign currency exchange rates on the reported results of our unconsolidated affiliates. During fiscal years 2015, 2014 and 2013, earnings from unconsolidated affiliates, net of losses, were decreased by $25.7 million, $3.9 million and $3.9 million, respectively, as a result of the impact of changes in foreign currency exchange rates on the results of our unconsolidated affiliates, primarily the impact of changes in the Brazilian real and U.S. dollar exchange rate on results for our affiliate in Brazil.

Incentive Compensation — See Note 9 for a discussion of our accounting for incentive compensation arrangements.

Extinguishment of Debt — Extinguishment of debt includes $2.6 million related to premiums paid for the repurchase of a portion of our 6¼% Senior Notes due 2022 (the “6¼% Senior Notes”) during fiscal year 2015 and $14.9 million in redemption premium and fees paid for the early redemption of our 7 ½% Senior Notes due 2017 (the “7 ½% Senior Notes”) during fiscal year 2013. See further discussion in Note 5. We did not have any extinguishment of debt during fiscal year 2014.

Other Income (Expense), Net — The amounts for fiscal years 2015, 2014 and 2013 include the foreign currency transaction gains and losses described under “Foreign Currency” above. Other income (expense), net also includes a gain of $1.1 million for the sale of intellectual property during fiscal year 2014. Other income (expense), net in fiscal years 2015 and 2013 did not include any other significant items.

Recent Accounting Pronouncement

We consider the applicability and impact of all accounting standard updates (ASUs). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued accounting guidance on revenue recognition for revenue from contracts with customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance when it becomes effective. This new standard is effective for annual reporting periods beginning after December 15, 2016. Early application is not permitted and the standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this standard will have on our financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

In April 2015, the FASB issued accounting guidance relating to the presentation of debt issuance costs. The intent is to simplify the presentation of debt issuance costs by requiring entities to record debt issuance costs on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to debt discounts or premiums. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. We do not believe adoption of this new guidance will have a significant impact on our consolidated financial statements.