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FAIR VALUE DISCLOSURES | 6 Months Ended
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Sep. 30, 2015
Fair Value Disclosures [Abstract] |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Assets and liabilities subject to fair value measurement are categorized into one of three different levels depending on the observability of the inputs employed in the measurement, as follows:
• | Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
• | Level 2 – inputs that reflect quoted prices for identical assets or liabilities in markets which are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
• | Level 3 – unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
Non-recurring Fair Value Measurements The majority of our non-financial assets, which include inventories, property and equipment, assets held for sale, goodwill and other intangible assets, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial asset is required to be evaluated for impairment and deemed to be impaired, the impaired non-financial asset is recorded at its fair value. The following table summarizes the assets as of September 30, 2015, valued at fair value on a non-recurring basis (in thousands):
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance as of September 30, 2015 |  | Total Loss for the Three Months Ended September 30, 2015 |  | Total Loss for the Six Months Ended September 30, 2015
Inventories |  | $ | — |  |  | $ | 12,118 |  |  | $ | — |  |  | $ | 12,118 |  |  | $ | — |  |  | $ | (5,439 | )
Assets held for sale |  | — |  |  | 33,647 |  |  | — |  |  | 33,647 |  |  | (12,169 | ) |  | (22,031 | )
Goodwill |  | — |  |  | — |  |  | 52,404 |  |  | 52,404 |  |  | (22,274 | ) |  | (22,274 | )
Total assets |  | $ | — |  |  | $ | 45,765 |  |  | $ | 52,404 |  |  | $ | 98,169 |  |  | $ | (34,443 | ) |  | $ | (49,744 | )
The following table summarizes the assets as of September 30, 2014, valued at fair value on a non-recurring basis (in thousands):
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance as of September 30, 2014 |  | Total Loss for the Three Months Ended September 30, 2014 |  | Total Loss for the Six Months Ended September 30, 2014
Inventories |  | $ | — |  |  | $ | 19,446 |  |  | $ | — |  |  | $ | 19,446 |  |  | $ | (3,362 | ) |  | $ | (3,362 | )
Assets held for sale |  | — |  |  | 4,650 |  |  | — |  |  | 4,650 |  |  | (558 | ) |  | (3,137 | )
Total assets |  | $ | — |  |  | $ | 24,096 |  |  | $ | — |  |  | $ | 24,096 |  |  | $ | (3,920 | ) |  | $ | (6,499 | )
The fair value of inventories using Level 2 inputs is determined by evaluating the current economic conditions for sale and disposal of spare parts, which includes estimates as to the recoverability of the carrying value of the parts based on historical experience with sales and disposal of similar spare parts, the expected timeframe of sales or disposals, the location of the spare parts to be sold and the condition of the spare parts to be sold or otherwise disposed of. The fair value of assets held for sale using Level 2 inputs is determined through evaluation of expected sales proceeds for aircraft. This analysis includes estimates based on historical experience with sales, recent transactions involving similar assets, quoted market prices for similar assets and condition and location of aircraft to be sold or otherwise disposed of. The loss for the three and six months ended September 30, 2015 related to 10 and 11 aircraft held for sale, respectively, and the loss for the three and six months ended September 30, 2014 related to two and six aircraft held for sale, respectively. The fair value of goodwill and other intangible assets is estimated using a variety of valuation methods, including the income and market approaches. These estimates of fair value include unobservable inputs, representative of Level 3 fair value measurement, including assumptions related to future performance, such as projected demand for our services and rates. For further details on our goodwill and other intangible assets, see Note 1. Recurring Fair Value Measurements The following table summarizes the financial instruments we had as of September 30, 2015, valued at fair value on a recurring basis (in thousands):
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance as of September 30, 2015 |  | Balance Sheet Classification
Rabbi Trust investments |  | $ | 2,219 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,219 |  |  | Other assets
Total assets |  | $ | 2,219 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,219 |  |  |
Contingent consideration: (1) |  |  |  |  |  |  |  |  |  |
Current |  | $ | — |  |  | $ | — |  |  | $ | 28,727 |  |  | $ | 28,727 |  |  | Other accrued liabilities
Long-term |  | — |  |  | — |  |  | 2,444 |  |  | 2,444 |  |  | Other liabilities and deferred credits
Total liabilities |  | $ | — |  |  | $ | — |  |  | $ | 31,171 |  |  | $ | 31,171 |  |  |
______________
(1) | Relates to our investment in Cougar Helicopters Inc. (“Cougar”) totaling $25.0 million and the acquisition of Airnorth totaling $6.2 million. For further details on Cougar and Airnorth, see Notes 2 and 3 to the fiscal year 2015 Financial Statements.
The following table summarizes the financial instruments we had as of March 31, 2015, valued at fair value on a recurring basis (in thousands):
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance as of March 31, 2015 |  | Balance Sheet Classification
Rabbi Trust investments |  | $ | 2,379 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,379 |  |  | Other assets
Total assets |  | $ | 2,379 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,379 |  |  |
Contingent consideration: (1) |  |  |  |  |  |  |  |  |  |
Current |  | $ | — |  |  | $ | — |  |  | $ | 33,938 |  |  | $ | 33,938 |  |  | Other accrued liabilities
Long-term |  | — |  |  | — |  |  | 4,967 |  |  | 4,967 |  |  | Other liabilities and deferred credits
Total liabilities |  | $ | — |  |  | $ | — |  |  | $ | 38,905 |  |  | $ | 38,905 |  |  |
______________
(1) | Relates to our investment in Cougar totaling $32.5 million and Airnorth totaling $6.4 million. For further details on Cougar and Airnorth, see Notes 2 and 3 to the fiscal year 2015 Financial Statements.
The rabbi trust investments consist of cash and mutual funds whose fair value are based on quoted prices in active markets for identical assets, and are designated as Level 1 within the valuation hierarchy. The rabbi trust holds investments related to our non-qualified deferred compensation plan for our senior executives. The following table provides a rollforward of the contingent consideration liability Level 3 fair value measurements during the six months ended September 30, 2015 (in thousands):
|  | Significant Unobservable Inputs (Level 3)
Balance as of March 31, 2015 |  | $ | 38,905 |
Change in fair value of contingent consideration |  | 266 |
Payment of Cougar second year earn-out |  | (8,000 | )
Balance as of September 30, 2015 |  | $ | 31,171 |
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 condensed consolidated statements of operations. Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability of Cougar or Airnorth achieving certain agreed performance targets and the estimated discount rate. As of September 30 and March 31, 2015, the discount rate approximated 4% for the contingent consideration related to Cougar and 2% for the contingent consideration related to Airnorth. Fair Value of Debt The fair value of our debt has been estimated in accordance with the accounting standard regarding fair value. The fair value of our fixed rate long-term debt is estimated based on quoted market prices. The carrying and fair value of our long-term debt, including the current portion, are as follows (in thousands):
|  | September 30, 2015 |  | March 31, 2015
|  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
6¼% Senior Notes |  | $ | 401,535 |  |  | $ | 345,320 |  |  | $ | 401,535 |  |  | $ | 381,458 |
Term Loan |  | 342,611 |  |  | 342,611 |  |  | 222,179 |  |  | 222,179 |
Revolving Credit Facility |  | 223,800 |  |  | 223,800 |  |  | 83,800 |  |  | 83,800 |
Airnorth debt |  | 20,839 |  |  | 20,839 |  |  | 23,119 |  |  | 23,119 |
Eastern Airways debt |  | 14,595 |  |  | 14,595 |  |  | 19,680 |  |  | 19,680 |
3% Convertible Senior Notes |  | — |  |  | — |  |  | 114,109 |  |  | 115,288 |
|  | $ | 1,003,380 |  |  | $ | 947,165 |  |  | $ | 864,422 |  |  | $ | 845,524 |
Other The fair values of our cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to the short-term nature of these items.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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