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COMMITMENTS AND CONTINGENCIES | 6 Months Ended
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Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Aircraft Purchase Contracts — As shown in the table below, we expect to make additional capital expenditures over the next five fiscal years to purchase additional aircraft. As of September 30, 2015, we had 41 aircraft on order and options to acquire an additional 21 aircraft. Although a similar number of our existing aircraft may be sold during the same period, the additional aircraft on order will provide incremental fleet capacity in terms of revenue and operating income.
|  | Six Months Ending March 31, 2016 |  | Fiscal Year Ending March 31, |  |
|  | 2017 |  | 2018 |  | 2019 |  | 2020 and thereafter |  | Total
Commitments as of September 30, 2015: (1) (2) |  |  |  |  |  |  |  |  |  |  |  |
Number of aircraft: |  |  |  |  |  |  |  |  |  |  |  |
Medium |  | 10 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10 |
Large (3) |  | 3 |  |  | 4 |  |  | 6 |  |  | 4 |  |  | 3 |  |  | 20 |
U.K. SAR |  | 6 |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | 10 |
Other SAR |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |
|  | 20 |  |  | 8 |  |  | 6 |  |  | 4 |  |  | 3 |  |  | 41 |
Related expenditures (in thousands)(4) |  |  |  |  |  |  |  |  |  |  |  |
Medium and large |  | $ | 116,662 |  |  | $ | 77,204 |  |  | $ | 78,778 |  |  | $ | 58,945 |  |  | $ | 31,550 |  |  | $ | 363,139 |
U.K. SAR |  | 109,052 |  |  | 58,428 |  |  | — |  |  | — |  |  | — |  |  | 167,480 |
Other SAR |  | 26,259 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 26,259 |
|  | $ | 251,973 |  |  | $ | 135,632 |  |  | $ | 78,778 |  |  | $ | 58,945 |  |  | $ | 31,550 |  |  | $ | 556,878 |
Options as of September 30, 2015: (3) |  |  |  |  |  |  |  |  |  |  |  |
Number of aircraft: |  |  |  |  |  |  |  |  |  |  |  |
Medium |  | — |  |  | 1 |  |  | 7 |  |  | — |  |  | — |  |  | 8 |
Large |  | — |  |  | 4 |  |  | 9 |  |  | — |  |  | — |  |  | 13 |
|  | — |  |  | 5 |  |  | 16 |  |  | — |  |  | — |  |  | 21 |
Related expenditures (in thousands)(4) |  | $ | 26,291 |  |  | $ | 180,100 |  |  | $ | 214,008 |  |  | $ | — |  |  | $ | — |  |  | $ | 420,399 |
______
(1) | Signed client contracts are currently in place that will utilize 11 of these aircraft.
(2) | We are currently in discussions with our helicopter manufacturers to defer payment on certain ordered aircraft into future fiscal years and take delivery of certain aircraft later than reflected herein. The aim of these discussions is to more closely align the expenditures and delivery of aircraft with the applicable revenue and cash flow associated with the aircraft. We expect to defer approximately $100 million in capital expenditures out of the six months ending March 31, 2016 into future periods and push deliveries into future periods further out resulting in anticipated capital expenditures of approximately $100 million for each of fiscal year 2017 and fiscal year 2018 and $50 million per fiscal year thereafter.
(3) | Seventeen large aircraft on order expected to enter service between fiscal years 2017 and 2020 are subject to the successful development and certification of the aircraft.
(4) | Includes progress payments on aircraft scheduled to be delivered in future periods.
The following chart presents an analysis of our aircraft orders and options during fiscal year 2016:
|  |  | Three Months Ended
|  |  | September 30, 2015 |  | June 30, 2015
|  |  | Orders |  | Options |  | Orders |  | Options
| Beginning of period |  | 46 |  |  | 21 |  |  | 45 |  |  | 30 |
| Aircraft delivered |  | (1 | ) |  | — |  |  | (2 | ) |  | — |
| Aircraft ordered |  | — |  |  | — |  |  | — |  |  | — |
| Exercised options |  | — |  |  | — |  |  | 3 |  |  | (3 | )
| Expired options |  | — |  |  | (4 | ) |  | — |  |  | (6 | )
| Reclassification (1) |  | (4 | ) |  | 4 |  |  | — |  |  | — |
| End of period |  | 41 |  |  | 21 |  |  | 46 |  |  | 21 |
______ (1) We have determined that several aircraft were previously classified as orders in error. We periodically purchase aircraft for which we have no orders. Operating Leases — We have non-cancelable operating leases in connection with the lease of certain equipment, land and facilities, including leases for aircraft. Rental expense incurred under all operating leases was $54.4 million and $35.4 million for the three months ended September 30, 2015 and 2014, respectively, and $108.3 million and $68.6 million for the six months ended September 30, 2015 and 2014, respectively. Rental expense incurred under operating leases for aircraft was $47.3 million and $28.5 million for the three months ended September 30, 2015 and 2014, respectively, and $93.9 million and $54.9 million for the six months ended September 30, 2015 and 2014, respectively. During the three and six months ended September 30, 2014 we sold 14 aircraft for $380.7 million and entered into 14 separate agreements to lease back these aircraft. We did not enter into any sale leaseback transactions during the three and six months ended September 30, 2015. The aircraft leases range from base terms of up to 180 months with renewal options of up to 240 months in some cases, include purchase options upon expiration and some include early purchase options. The leases contain terms customary in transactions of this type, including provisions that allow the lessor to repossess the aircraft and require us to pay a stipulated amount if we default on our obligations under the agreements. The following is a summary of the terms related to aircraft leased under operating leases with original or remaining terms in excess of one year as of September 30, 2015:
| End of Lease Term |  | Number of Aircraft |  | Monthly Lease Payments (in thousands)
| Six months ending March 31, 2016 to fiscal year 2017 |  | 9 |  |  | $ | 1,070 |
| Fiscal year 2018 to fiscal year 2020 |  | 47 |  |  | 9,255 |
| Fiscal year 2021 to fiscal year 2024 |  | 25 |  |  | 2,742 |
|  |  | 81 |  |  | $ | 13,067 |
Employee Agreements — Approximately 49% of our employees are represented by collective bargaining agreements and/or unions with 6% of these employees being represented by collective bargaining agreements and/or unions that have expired or will expire in one year. These agreements generally include annual escalations of up to 21%. Periodically, certain groups of our employees who are not covered by a collective bargaining agreement consider entering into such an agreement. We also have employment agreements with members of senior management. Separation Programs — In March 2015, we offered a voluntary separation program (“VSP”) to certain employees as part of our ongoing efforts to improve efficiencies and reduce costs. The VSP was offered to approximately 2,888 employees and 137 employees accepted prior to the expiration of the offers, the date of which varied by region. We will recognize the expense related to their termination benefits over their remaining service period, which we estimate will be $3.5 million through May 2017. During the three months ended September 30, 2015, we recognized $0.9 million in severance expense as a result of the VSP, which is included in direct cost. During the six months ended September 30, 2015, we recognized $7.3 million in severance expense as a result of the VSP, $6.7 million of which is included in direct cost and $0.6 million in general administrative expense. Additionally, beginning in March 2015, we initiated involuntary separation programs (“ISPs”) and other reductions in force in certain regions. During the three months ended September 30, 2015, we recognized $4.8 million in severance expense as a result of the ISPs and other reductions in force, $2.0 million of which is included in direct cost and $2.8 million in general administrative expense. During the six months ended September 30, 2015, we recognized $6.4 million in severance expense as a result of the ISPs and other reductions in force, $2.5 million of which is included in direct cost and $3.9 million in general administrative expense. We expect to incur approximately $5.5 million in severance expense related to this plan over the remainder of fiscal year 2016. Environmental Contingencies — The U.S. Environmental Protection Agency, also referred to as the EPA, has in the past notified us that we are a potential responsible party, or PRP, at three former waste disposal facilities that are on the National Priorities List of contaminated sites. Under the federal Comprehensive Environmental Response, Compensation and Liability Act, also known as the Superfund law, persons who are identified as PRPs may be subject to strict, joint and several liability for the costs of cleaning up environmental contamination resulting from releases of hazardous substances at National Priorities List sites. Although we have not yet obtained a formal release of liability from the EPA with respect to any of the sites, we believe that our potential liability in connection with the sites is not likely to have a material adverse effect on our business, financial condition or results of operations. Other Purchase Obligations — As of September 30, 2015, we had $395.7 million of other purchase obligations representing unfilled purchase orders for aircraft parts, commitments associated with upgrading facilities at our bases and non-cancelable power-by-the-hour maintenance commitments. Other Matters — Although infrequent, aircraft accidents have occurred in the past, and the related losses and liability claims have been covered by insurance subject to deductible, self-insured retention and loss sensitive factors. On August 12, 2015, a Sikorsky S-76C+ operated by us was involved in an accident in which two of our crew members and four passengers were fatally injured. There were six other passengers on board who suffered injuries in the accident. The Nigerian Accident Investigation Bureau issued its preliminary report related to the accident on September 21, 2015. The cause(s) of the accident remain unknown at this time. We continue to work with authorities in their investigation. We operate in jurisdictions internationally where we are subject to risks that include government action to obtain additional tax revenue. In a number of these jurisdictions, political unrest, the lack of well-developed legal systems and legislation that is not clear enough in its wording to determine the ultimate application, can make it difficult to determine whether legislation may impact our earnings until such time as a clear court or other ruling exists. We operate in jurisdictions currently where amounts may be due to governmental bodies that we are not currently recording liabilities for as it is unclear how broad or narrow legislation may ultimately be interpreted. We believe that payment of amounts in these instances is not probable at this time, but is reasonably possible. A loss contingency is reasonably possible if the contingency has a more than remote but less than probable chance of occurring. Although management believes that there is no clear requirement to pay amounts at this time and that positions exist suggesting that no further amounts are currently due, it is reasonably possible that a loss could occur for which we have estimated a maximum loss at September 30, 2015 to be approximately $6 million to $9 million. We are a defendant in certain claims and litigation arising out of operations in the normal course of business. In the opinion of management, uninsured losses, if any, will not be material to our financial position, results of operations or cash flows.

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