Q2 2024 Bristow Group Inc Earnings Call

of such measures, the gap is included in the earnings release of our investor presentation. I will now turn the call over to our President and CEO . Chris? Thank you.

Operator: I will now turn the call over to our President and CEO.

Christopher Bradshaw: and pass the call over to our president and CEO, Chris. Thank you, Red. I want to begin by thanking all the Bristow team members around the world for their continued focus on safety, our number one core value and highest operational priority, which resulted in very good safety performance in the second quarter. I also want to thank our global team for their contributions to Bristow's strong financial results in Q2. In conjunction with these results, we are pleased to raise the company's financial guidance for full years 2024 and 2025.

Christopher Bradshaw: Thank you, Red. I want to begin by thanking all the Bristow team members around the world for their continued focus on safety, our number one core value and highest operational priority, which resulted in very good safety performance in the second quarter. I also want to thank our global team for their contributions to Bristow's strong financial results.

Chris: Thank you, Red. I want to begin by thanking all the Bristow team members around the world for their continued focus on safety, our number one core value, and highest operational priority.

Chris: which resulted in very good safety performance in the second quarter. I also want to thank our global team for their contributions to Bristow's strong financial results in Q2, highlighted by the 50% sequential quarter increase in adjusted EBITDA.

Christopher Bradshaw: Thank you too. Highlighted by the 50% financial quarter increased in adjusted EBITDA.

Christopher Bradshaw: In conjunction with these results, we are pleased to raise the company's financial guidance for full year 2024 and 2025. This builds on the outlook we shared last quarter and is aligned with our conviction that we are in the early stages of a multi-year growth cycle.

Chris: In conjunction with these results, we are pleased to raise the company's financial guidance for full year 2024 and 2025.

Chris: This builds on the outlook we shared last quarter and is aligned with our conviction that we are in the early stages of a multi-year growth cycle.

Christopher Bradshaw: I will now hand it over to our CFO for a more detailed review of Q2 results and our increased guidance ranges.

Jennifer: I will now hand it over to our CFO for a more detailed review of Q2 results and our increased guidance ranges. Jennifer. Thank you, Chris. Today, I will begin with the sequential comparison of Bristow's financial results.

Jennifer Whalen: Jennifer. Thank you, Chris.

Christopher Bradshaw: Today, I will begin with the sequential comparison of the financial results. General and administrative expenses were $1.6 million higher, primarily due to higher professional services.

Jennifer Whalen: Today, I will begin with the sequential comparison of Bristow's financial results. EBITDA adjusted to a special item as a decision and foreign exchange with 71.3 million for the second quarter of 2024, compared to 47.5 million in the first quarter. Or an increase of approximately 23.8 million. Operating revenues increased 23.1 million, primarily due to higher utilization and increased rates in offshore energy and fixed-stream services, partially offset by government services. Operating expenses were 0.9 million lower in the current quarter. Lower personnel and lease and equipment costs were partially offset by higher repairs and maintenance and other operating expenses.

Jennifer: EBITDA adjusted to exclude special items, asset dispositions, and foreign exchange with $71.3 million for the second quarter of 2024, compared to $47.5 million in the first quarter, or an increase of approximately $23.8 million.

Speaker Change: Operating revenues increased $23.1 million primarily due to higher utilization and increased rates in offshore energy and fixturing services partially offset by government services.

Speaker Change: Operating expenses were $0.9 million lower in the current quarter. Lower personnel and leasing equipment costs were partially offset by higher repairs and maintenance and other operating expenses.

Jennifer Whalen: General and administrative expenses were 1.6 million higher, primarily due to higher professional services. As noted in previous earnings calls, the other income and expense line item is primarily comprised of non-cash foreign currency gains and losses, which we've excluded from our adjusted EBITDA calculation. Our effective tax rate is approximately 25% for the current year, compared to 86% in the prior year. The decrease in stabilization of our effective tax rate is attributable to the positive changes in our global mix of earnings.

Speaker Change: General and administrative expenses were $1.6 million higher, primarily due to higher professional service fees.

Christopher Bradshaw: As noted in previous earnings calls, the other income and expense line item is primarily comprised of non-cash foreign currency gains and losses, which we've excluded from our adjusted EBITDA calculation. As a result, our effective tax rate is approximately 25% for the current year, compared to 86% in the prior year. The decrease in stabilization of our effective tax rate is attributable to positive changes in our global mix of earnings. The fixed-wing business saw higher yields in scheduled passenger transport, as well as a short-term increase in charter activity. Due to the factors that I noted, we are pleased to be able to increase guidance for 2024 and 2025, while our targets for 2026 remain unchanged.

Speaker Change: As noted in previous earnings calls, the Other Income and Expense line item is primarily comprised of non-cash foreign currency gains and losses, which we've excluded from our adjusted EBITDA calculation.

Speaker Change: Our effective tax rate is approximately 25% for the current year, compared to 86% in the prior year. The decrease in stabilization of our effective tax rate is attributable to the positive changes in our global mix of earnings.

Jennifer Whalen: Of note, there are a few quarter-specific items which benefited our financial results in Q2. These include a seasonal personnel cost benefit in Norway, the transition from cash basis recognition to an accrual basis of accounting for lease payments from Cougar, an adjustment for tax equalization and serenom, and the release of an insurance reserves. In aggregate, these items resulted in an 8.6 million benefit to Q2 results. The change in accounting methodology for lease revenues from Cougar, our joint venture in Canada, will have the benefit of more consistent and stable earnings for quarter going forward.

Speaker Change: Of note, there are a few quarter-specific items which benefited our financial results in Q2.

Speaker Change: These include a Seasonal Personnel Cost Benefit in Norway.

Speaker Change: The Transition from Cash Basis Recognition to an Accrual Basis of Accounting for Lease Payments from Cougar.

Speaker Change: an adjustment for tax equalization in Suriname, and the release of an insurance reserve. In aggregate, these items resulted in an $8.6 million benefit to Q2 results.

Speaker Change: The change in accounting methodology for lease revenues from Cougar, our joint venture in Canada, will have the benefit of more consistent and stable earnings per quarter going forward.

Jennifer Whalen: As a result of the second quarter's earnings and the review of the forecast for the rest of the year, we have raised our 2024 adjusted EBITDA guidance to 210 to 230 million. In addition, we have raised our 2025 estimates for adjusted EBITDA to 230 to 260 million. The increase is being driven by several factors. First and most impactful are higher rates in utilization in Africa. This region has outperformed over the last quarter and is expected to continue to perform well throughout the rest of 2024 and into 2025. Our UK OES business benefited from higher ad hoc activity during the first half of 2024.

Speaker Change: as a result of the second quarter's earnings and the review of the forecast for the rest of the year.

Speaker Change: Our UK OES business benefited from higher ad-hoc activity during the first half of 2024. However, that is expected to reduce in the second half of 2024.

Jennifer Whalen: However, that is expected to reduce in the second half of 2024. The six swing business saw higher yields and scheduled passenger transport, as well as a short-term increase in charter activity. Our America's OES is benefited from short-term projects with attractive rates. This is expected to reduce in the second half of the year. These positive drivers are partially offset by penalties related to availability in our government services business. These availability penalties are primarily due to spy chain challenges, namely delayed parts and repairs from the helicopter OEM.

Jennifer Whalen: Due to the factors that I noted, we're pleased to be able to increase guidance for 2024 and 2025. Our targets for 2020 fixed remain unchanged. Further details are available on slide seven and eight of the presentation.

Speaker Change: Due to the factors that I noted, we are pleased to be able to increase guidance for 2024 and 2025. Our targets for 2026 remain unchanged.

Jennifer Whalen: Moving on to recent updates on capital expenditures for our new SAR contract. As we have noted in our last several earnings presentations, we have a capital investment of approximately 300 million related to the successful award of contracts with the UK and Irish Coast Guard. As of the end of July, we have completed 157 million, or just a little over half of the total investment required. In the second quarter, we completed an additional financing with the United Kingdom expert base for up to 100 million euros and very attractive rates. The financing will be used to support the Irish Coast Guard contract.

Speaker Change: In the second quarter, we completed an additional financing with the United Kingdom Export Bank for up to 100 million euros and very attractive rates.

Jennifer Whalen: With this new financing and the upside of our UK SAR facility with Matt West earlier this year, we are well positioned to fund the capital that is needs for these two very important contracts.

Jennifer Whalen: Finally, Bristol continues to benefit from a strong balance sheet and liquidity position. As of June 30th, our available liquidity was 246 million. We generated an adjusted free cash flow of 33 million in Q2. And as we have stated before, we believe that our business model will continue to generate strong cash flows.

Speaker Change: As of June 30th, our available liquidity was $246 million. We generated adjusted free cash flow of $33 million in Q2. And, as we have stated before, we believe that our business model will continue to generate strong cash flows.

Christopher Bradshaw: At this time, our turn the callback over to Chris before the remarks.

Christopher Bradshaw: Chris? Thank you. As Jennifer noted, Bristol's business is performing well today, and we expect the company's growth to accelerate over the next two years. Our leading government services business is experiencing growth and diversification through the addition of key search and rescue contracts. And we are excited to launch operations for the Irish Coast Guard later this year. The investments we are making now will result in attractive long-term cash flow yields for the company well into the middle of the next decade. In addition, the financial performance of our in offshore energy services, where Bristow is the leading global helicopter operator, the industry fundamentals remain very positive, and we are experiencing an accelerating upcycle.

Speaker Change: At this time, I'll turn the call back over to Chris for further remarks. Chris?

Chris: Thank you. As Jennifer noted, Bristow's business is performing well today and we expect the company's growth to accelerate over the next two years.

Christopher Bradshaw: and we are excited to launch operations for the Irish Coast Guard later this year. In addition, the financial performance of our fixed-wing business has improved over the last year, and we expect this improvement to continue, and Offshore Energy Services, where Bristow is the leading global helicopter operator. The industry fundamentals remain very positive, and we are experiencing an accelerating upcycle. Bristow has a disciplined and focused capital allocation approach that will prioritize the protection of our strong balance sheet.

Christopher Bradshaw: Offshore basins offer very compelling return prospects, with break-even economic thresholds well under prevailing commodity price levels. As a result, offshore projects have seen renewed focus and investment from the upstream industry, and global offshore spending is expected to increase significantly over the next several years, as illustrated on slide 11 of our presentation. These positive market trends are occurring amidst the backdrop of a tight supply dynamic, with limited new helicopter additions over the last eight years and long lead times for new builds. The current effective utilization for the most relevant heavy, super medium, and medium helicopter models is at or near 100%, which has contributed to higher rate.

Speaker Change: Offshore basins offer very compelling return prospects, with breakeven economic thresholds well under prevailing commodity price levels. As a result, offshore projects have seen renewed focus and investment from the upstream industry.

Speaker Change: The current effective utilization for the most relevant heavy, supermedium, and medium helicopter models is at or near 100%, which has contributed to higher rates.

Christopher Bradshaw: The combination of these factors has increased Bristow's visibility from material improvement in margins, free cash flow, and capital returns. As indicated by the company's guidance metrics, we expect to generate significant cash in the latter half of 2025 and beyond. Bristow has a discipline and focused capital allocation approach that will prioritize protections of our strong balance sheet, allow for attractive organic investment like the ones driving our increased financial guidance, and facilitate the return of capital to shareholders.

Speaker Change: The combination of these factors has increased Bristow's visibility for material improvements in margins, free cash flow, and capital returns.

Speaker Change: Bristow has a disciplined and focused capital allocation approach that will prioritize protection of our strong balance sheet, allow for attractive organic investment like the ones driving our increased financial guidance, and facilitate the return of capital to shareholders.

Operator: With that, let's open the line for questions.

Operator: Bobby. At this time, I would like to remind everyone that in order to ask a question, press star, then the number five on your telephone keypad. If you would like to withdraw your question, press star in the number five once again.

Speaker Change: With that, let's open the line for questions. Bobby?

Speaker Change: At this time, I would like to remind everyone in order to ask a question, press star then the number 5 on your telephone keypad. If you would like to withdraw your question, press star and the number 5 once again.

Operator: If you would like to withdraw your question, press the star and the number five once again.

Operator: We'll pause for just a moment to compile the Q&A roster.

Speaker Change: We'll pause for just a moment to compile the Q&A roster.

Josh Sullivan: The first question is from Josh Sullivan from the Benchmark Company. Please go ahead.

Josh Sullivan: Hey, good morning. Congratulations, Donna. Great Quarter game.

Joshua Sullivan: Hey, good morning. Congratulations on a great quarter here. Morning, Josh. Thank you.

Jennifer Whalen: Morning, Josh. Thank you.

Speaker Change: Hey, good morning. Congratulations on a great quarter here.

Josh Sullivan: Just looking at the sizable feet here for two Q, why might you not have raised the guidance range even higher? Or maybe what are the major puts and takes? You did mention some of them there, but curious what the major ones are.

Josh: Morning, Josh. Thank you.

Josh: Just looking at the sizable year for 2Q, you know, why might have you not raised the guidance range even higher? Or, you know, maybe what are the major puts and takes? You did mention some of them there, but, you know, curious what the major ones are.

Jennifer Whalen: Sure, Josh.

Jennifer Whalen: Good morning. As I talked about my preparatory remarks, you know, the parts of our business are performing better than expected and should continue to perform well. We did have the one-time item that resulted in the 8.6 million benefit for the quarter. You know, those were the seasonal personnel cost benefit in Norway, changing Cougar back to in a cruel basis of accounting, tax equalization, and serenom and a release of insurance reserves.

Speaker Change: Sure, Josh. Good morning.

Jennifer Whalen: We do expect to end the year strongly, and our new midpoint of the range is approximately 30% over where we ended 2023.

Speaker Change: We do expect to end the year strongly, and our new midpoint of the range is approximately 30% over where we ended 2023.

Josh Sullivan: Yes, and then I get those drivers for 24.

Josh Sullivan: But, you know, as far as taking up the 25 guidance as well, you know, you've mentioned some increased visibility here in the release. Can you just expand on, you know, where you see that visibility?

Speaker Change: And then I get those drivers for 24, but you know, as far as taking up the 25 guidance as well, you know, you mentioned some increased visibility here in the release. Can you just expand on, you know, where you see that visibility?

Christopher Bradshaw: Sure. Thank you for the question. The 2025 guidance raised is being driven primarily by Africa. That region is really outperformed, and we expect that to continue into 2025.

Jennifer Whalen: Thank you for the question. The 2025 guidance raise is being driven primarily by Africa. That region is really outperformed, and we expect that to continue into 2025.

Jennifer Whalen: And then can we just maybe get a little more color on the penalties in your government services business, partially offsetting some of the success here. But how long should we expect those penalties to last? And then maybe how should we think about, you know, potential financial impact long term? Sure, so the penalties that we're experiencing our government services business are primarily being driven by these supply chain issues that we've been talking about for quite some time now. We do expect them to continue into the future, and we have a level of the expectation that is factored into our guidance.

Speaker Change: Sure. So the penalties that we're experiencing in our government services business are primarily being driven by these supply chain issues that we've been talking about for quite some time now.

Speaker Change: We do expect them to continue into the future, and we have a level of that expectation that is factored into our guidance. So, if they end up being...

Jennifer Whalen: So if they end up being better than what we have in that, you know, advise us to the higher end of that of our guidance range or vice versa. They're worse than what we expect they would be on the lower end of that range.

Jennifer Whalen: And then just as we look at the cadence of investments for aircraft here, should we think of three Q and four Q and then, you know, even into Q1 how dramatically does it just fall off? I mean, we have we expect to continue to take the delivery of the helicopters related to the to both of the star contracts, mostly over the next couple of quarters; it does drop off. I think we have it in our early presentation where we get into 2025, and it drops up quite dramatically. I think there's only 18 20 million laughs into into 2025 related to these big star contracts that we have.

Unidentified Speaker: Cadence of Investments for Aircraft Here, what should we think of 3Q and 4Q and then even into Q1, how dramatically does it fall off?

Speaker Change: And then just as we look at the cadence of investments for aircraft here, how should we think of 3Q and 4Q and then, you know, even into Q1, how dramatically does it fall off?

Speaker Change: I mean, we have, we expect to continue to take the delivery of the helicopters related to both of the SAR contracts.

Speaker Change: mostly over the next two quarters, it does drop off. I think we have it in our earnings presentation where we get into 2025 and it drops off quite dramatically. I think there's only 18, 20 million left in FYS.

Speaker Change: and to 2025 related to the big star contracts that we have.

Josh Sullivan: Are you confident in those deliveries, just given the overall supply chain issues? I mean, are for the OEMs, you know, providing you with confidence those states are going to be met. Yes, Josh, as of this time, we're expecting the aircraft and the deliveries to arrive on time.

Unidentified Speaker: I'm confident in those deliveries just given the, you know, the overall supply chain issues. I mean, are the OEMs, you know, providing you with confidence that those dates are going to be met?

Speaker Change: And are you confident in those deliveries just given the, you know, the overall supply chain issues? I mean, are the OEMs, you know, providing you with confidence those dates are going to be met?

Josh Sullivan: Great.

Josh Sullivan: Thank you for the time.

Chris Lee: The next question is from Chris Lee from Evercore, ISI. Your line is now open. Hi, team.

Speaker Change: Great, thank you for the time.

Speaker Change: The next question is from Chris Lee from Evercore ISI. Your line is now open.

Chris Lee: Thank you for taking my questions. Yeah, good morning.

Christopher Bradshaw: Yeah, good morning. Now, there is a dynamic related to the S-92 where there are a number of idle airframes today that probably could be working, but they are not serviceable as they're awaiting delayed parts and repairs from the OEM. As that supply chain situation is rectified over time, we do see those S-92s coming back into the market, and we see them being readily absorbed at the leading edge rates that we're seeing in the market today.

Chris Lee: Hi team, thank you for taking my questions.

Chris Lee: I guess my first question is, could you provide some context on also a helicopter utilization, right? And do you anticipate utilization to stay tight as the cycle continues and the pace of S92 for the treatment increases?

Chris Lee: Yeah, good morning.

Chris Lee: I guess my first question is, could you provide some context on offshore helicopter utilization rates, and do you anticipate utilization to stay tight as the cycle continues and the pace of S-92 fleet attrition increases?

Christopher Bradshaw: Yes, thank you for the question, Chris. If we think about the relevant helicopter models for our business, particularly for any new projects that we're bidding on, we're really talking about the super mediums, that being the AW189, the H175, the medium category leader being the AW139, and then the S92 on the traditional heavy category. For each of those relevant helicopter models, current effective utilization levels are at or near 100%.

Speaker Change: Yes, thank you for the question, Chris. If we think about the relevant helicopter models for our business, particularly for any new projects that we're bidding on.

Speaker Change: They're really talking about the super mediums, that being the...

Speaker Change: AW189s, H175s, the medium category leader being the AW139, and then the S92 on the traditional heavy category. For each of those relevant helicopter models, current effective utilization levels are at or near 100%.

Christopher Bradshaw: Now, there is a dynamic related to the S92 where there are a number of idle airframes today, which probably could be working, but they are not serviceable as they're awaiting delayed parts and repairs from the OEM. As that supply chain situation is rectified over time, we do see those S92s coming back into the market, and we see them being readily absorbed at the leading edge rates that we're seeing in the market today.

Speaker Change: As that supply chain situation is rectified over time, we do see those S92s coming back into the market and we see them being readily absorbed at the leading edge rates that we're seeing in the market today.

Chris Lee: Gotcha.

Christopher Bradshaw: And have you observed a shift towards greater utilization of large capacitive transfer devices for offshore transportation? So, such as like growing preference for crew transfers via boats over helicopters? Really, the personnel transportation market for offshore facilities is pretty well segmented between helicopters, which obviously is what we do, and then the marine options. It's really well segmented by geography and then, in some cases, by distance from shore. So, we don't end up competing against marine vessels on a day-to-day basis. In one area where we do geographically have some overlaps, such as the US Gulf of Mexico, the facilities that are being supported by marine vessels for crew transportation are really on the shelf in shallow water, and that's not a market that Bristow services today.

Speaker Change: Gotcha. And have you observed a shift towards greater utilization of large capacity transfer devices for offshore transportation? So, such as like, growing preference for crew transfers via boats over helicopters?

Speaker Change: Really, the personnel transportation market for offshore facilities is pretty well segmented between helicopters, which obviously is what we do, and then the marine options.

Speaker Change: It's really well segmented by geography, and then in some cases by distance from shore. So we don't end up competing against marine vessels on a day-to-day basis. In one area where we do geographically have some overlap, such as the U.S., Gulf of Mexico,

Speaker Change: The facilities that are being supported by Marine Vessel for crew transportation are really on the shelf and in shallow water And that's not a market that Bristow services today. We in the Gulf of Mexico our crew Transportation services that we're providing via helicopter are really all deepwater. So again on a on a day-to-day basis We're not competing against the Marine Vessel option. Those markets tend to be fairly well segmented

Christopher Bradshaw: In the Gulf of Mexico, our crew transportation services that we're providing via helicopter are really all deep water. So, again, on a day-to-day basis, we're not competing against the marine vessel option. Those markets tend to be fairly well segmented. Right.

Christopher Bradshaw: And I guess my last question is that recently, energy prices have been trending lower. So, how significant of a risk are current and potentially more energy prices to Bristow's outlook? And we believe the thesis for a robust and long duration offshore energy upcycle is firmly intact. Really, if we look at the offshore basins that we're servicing, most of the breakeven economic thresholds are at levels well below current prevailing commodity prices. So, we believe, again, while Brent is at $77, $78 a barrel today, expectations for really long-term prices would have to be substantially below that before we start to impact the attractive economics of most of the offshore projects we're servicing.

Speaker Change: Right, and I guess my last question is that recently energy prices have been trending lower. So how significant a risk are current and potentially lower energy prices to Bristol's outlook?

Speaker Change: And we believe the thesis for a robust and long-duration offshore energy upcycle is firmly intact. Really, if we look at the offshore basins that we're servicing,

Speaker Change: So we believe, again, while Brent is at $77, $78 a barrel today, expectations for really long-term prices would have to be

Speaker Change: substantially below that before we start to impact the attractive economics of most of the offshore projects we're servicing. So again, we believe the thesis for a long-duration strong offshore upcycle is firmly intact.

Christopher Bradshaw: So, again, we believe the thesis for a long duration, strong offshore upcycle is firmly intact.

Chris Lee: Gotcha. Perfect. Thank you so much.

Unidentified Speaker: Gotcha. Perfect. Thank you. Thank you so much.

Steve Silver: The next question is from Steve Silver from Argus. Your line is now open.

Speaker Change: Gotcha. Perfect. Thank you. Thank you so much.

Speaker Change: Thank you.

Speaker Change: The next question is from Steve Silver from Argus. Your line is now open.

Steve Silver: Thanks, operator, and good morning, and thanks for taking the questions. Congratulations on the quarter on the raised outlook.

Steve Silver: Thanks, operator, and good morning, and thanks for taking the questions. Congratulations on the quarter and the raised outlook. First question, given the fact that the 2026 targets were unchanged despite the raising of guidance for 2024 and 2025, can you just remind us of the underlying assumptions behind the wide range in 2026?

Steve Silver: First question, given the fact that the 2026 targets were unchanged despite the raising of guidance for 24 and 25, can you just remind us of the underlying assumptions behind the wide range in 26 given that the new start contracts coming online will be more fixed rate in nature and that the outlook for contract renewals and offshore energy remain positive? Sure, Steve, good morning. As you know, last quarter, we put out these longer-term financial targets through 2026. And, as you noted, there is quite a lot of range for 2026. This is due to the long-term nature that we put out there.

Speaker Change: given that the new SARS contracts coming online will be more fixed rate in nature and that the outlook for contract renewals and offshore energy remain positive.

Christopher Bradshaw: Sure, good morning. As you know, last quarter, we put out these longer-term financial targets through 2026. And as you noted, there is quite a large range for 2026. And, you know, this is due to the long-term nature that we put out there. So, you know, if things continue this way, it could bias us to the higher end of that range, but we seem to have deemed it to be reasonable to leave the targets as is for now.

Speaker Change: Sure. Good morning. As you know, last quarter we put out these longer-term financial targets through 2026, and as you noted, there is quite a large range for 2026.

Speaker Change: You know, this is due to the long-term nature that we put out there. So, you know, if things continue this way, it could bias us to the higher end of that range, but we deemed it to be reasonable to leave the targets as is for now.

Jennifer Whalen: So, if things continue this way, it could buy us to the higher end of that range, but we seem deemed it to be reasonable to leave the targets that it has is for now.

Steve Silver: Thank you. Great.

Steve Silver: Thanks. And given the strong performance in Q2, the recent financing now behind you, and now being more than halfway through the contract investments for the new SAR contract, is there any change in your thinking in terms of potential timing on capital allocation and shareholder returns? No material change.

Speaker Change: Great, thanks. And given the strong performance in Q2, the recent financing now behind you, and now being more than halfway through the contract investments for the new SAR contract, is there any change in your thinking in terms of potential timing on capital allocation and shareholder returns?

Jennifer Whalen: Steve, I think it affirms the framework that we have thinking about capital allocation, namely that we want to ensure that we protect our strong balance sheet. We are the significant exposure to the offshore energy services space exposed to volatility from oil and gas. A cycle, so we want to make sure that we have a strong balance sheet that we can withstand various cycles over time. We also want to make sure that we have the ability to continue to invest in attractive organic investments, like the ones that are driving our higher-guidance ranges.

Speaker Change: No material change, Steve. I think it affirms the framework that we have for thinking about capital allocation, namely that we want to ensure that we protect our strong balance sheet. We are, via our significant exposure to the offshore energy services space,

Speaker Change: exposed to volatility from oil and gas cycles. We want to make sure that we have a strong balance sheet that can withstand various cycles over time.

Speaker Change: We also want to make sure that we have the ability to continue to invest in attractive, organic investments, like the ones that are driving our higher guidance ranges.

Jennifer Whalen: And then we also believe we'll be in a position, particularly in the latter half of 2025 and beyond, to return capital to shareholders, to share buybacks, whether that be programmatic or optimistic, and potential dividends.

Speaker Change: And then we also believe we'll be in a position, particularly in the latter half of 2025 and beyond, to return capital to shareholders via share buybacks, whether that be programmatic or opportunistic, and potential dividends.

Steve Silver: Great.

Steve Silver: And one last one, if I may.

Steve Silver: Can you provide any update on the timing of the overall fleet expansion? You've mentioned the tight supply dynamics around the industry. Looks like the overall fleet was down 4 aircraft from last quarter, and the presentation sites nearly 40 aircraft either under construction or on order. So is there any thinking in terms of the timing over the near term of returning to an expansion of the overall fleet?

Speaker Change: Great, and one last one if I may.

Speaker Change: Can you provide any update on the timing of the overall fleet expansion? You've mentioned the tight supply dynamics around the industry. It looks like the overall fleet was down four aircraft from last quarter, and the presentation cites nearly 40 aircraft either under construction or on order. So is there any thinking in terms of the timing over the near term of returning to an expansion of the overall fleet?

Jennifer Whalen: Yes, on a net basis, we expect the fleet will be drawing over the next couple of years.

Jennifer Whalen: I'll start first with our government services business. So we, in total for Iris Coast Guard, we're taking delivery of five new-build SARS-configured AW189s. Those will be delivered this year and next. For UK-SR2G, we are taking delivery of a total of six SARS-configured AW139 model helicopters, which we expect to take delivery of this year. We have also ordered five light twin H-135 helicopters to support a key offshore energy services customer, and those aircraft will begin delivery later this year and in the first quarter of 2025. And then on the sticking with the OAS space, we also have an order book for AW189 super-medium aircraft, which we believe is a very helpful competitive advantage to have access to those orders as they are finite and become pretty valuable delivery slots over the next couple of years.

Speaker Change: Yes, on a net basis, we expect the fleet will be growing over the next couple of years. I'll start first with our government services business.

Speaker Change: In total, for Irish Coast Guard, we're taking delivery of five new builds to our configured AW189s. Those will be delivered this year and next.

Speaker Change: For UK SAR 2G, we are taking delivery of a total of six SAR configured AW139 model helicopters, which we expect to take delivery of this year.

Speaker Change: We have also ordered five light twin H-135 helicopters to support a key offshore energy services customer and those aircraft will begin delivery later this year and in the first quarter of 2025.

Speaker Change: And then, sticking with the OAS space, we also have an order book for the AW189 supermedium aircraft, which we believe is a very helpful competitive advantage to have access to those orders as they are finite and become

Jennifer Whalen: With long lead times, we think we're well positioned to actually have deliveries next year in 2026 for those super-medium AW189s. So the timing of those, again, we'll begin next year and then have more that we expect to be delivered in 2026.

Speaker Change: pretty valuable delivery slots over the next couple of years. With long lead times, we think we're well-positioned to actually have deliveries next year in 2026 for those super-medium AW189s. So the timing of those, again, will begin next year and then have more that we expect to be delivered in 2026.

Steve Silver: Great. Thanks for the color and congratulations again.

Unidentified Speaker: Great, thanks for the call and congratulations again.

Steve Silver: Thank you, Steve.

Speaker Change: Great, thanks for the call and congratulations again.

Patrick Fitzgerald: The next question is from Patrick Fitzgerald from Baird. Your line is now open.

Speaker Change: Thank you, Steve.

Speaker Change: The next question is from Patrick Fixgerald from Baird. Your line is now open.

Patrick Fitzgerald: Hi. Thanks for taking the question.

Patrick Fixgerald: Hi, thanks for taking the question.

Patrick Fitzgerald: Could you talk a little bit more about the growth you saw in America and Africa, oil and gas flight hours on a year-over-year basis in the quarter? Is that a big change in behavior, number of jobs, one-off issues, or, you know, at the accounting change, or could you just talk a little bit about that?

Patrick Fixgerald: Could you talk a little bit more about the growth you saw in America and Africa oil and gas flight hours on a year-over-year basis in the quarter? Is that a big change in behavior, number of jobs, one-off issues, or you know...

Christopher Bradshaw: at the accounting change, or could you just talk a little bit about that? So, within our OES contract portfolio, as of now, we've reset about 30% of the contract mix. So, we still have 70% to go in terms of the runway of what's left to be reset. I think you referenced a good rule of thumb just at a high level.

Speaker Change: That'd be accounting change or could you just talk a little bit about that?

Jennifer Whalen: Yeah, thank you for the questions, Patrick. Happy to address that. So specific to Africa and the Americas overall, I'd say that the trend is on theme with the activity ramp up that we've been talking about, which is both increased utilization of aircraft, as well as increased rates on new contracts that we've signed. So in Africa, really market activity has picked up there. Customers are working more. We've also had some customers who had previously left Bristow for a lower cost competitor in the country come back to Bristow, which has helped with the utilization levels of our fleet there.

Speaker Change: Yeah, thank you for the question, Patrick. Happy to address that. So, specific to Africa and...

Speaker Change: The Americas. Overall, I'd say that the trend is on theme with the activity ramp-up that we've been talking about, which is both increased utilization of aircraft as well as increased rates on new contracts that we've signed.

Speaker Change: So in Africa, really market activity has picked up there, customers are working more. We've also had some customers who had previously left Bristow for a lower-cost

Speaker Change: competitor in the country come back to Bristow, which has helped with the utilization levels of our fleet there.

Jennifer Whalen: So Africa is certainly a market that, as Jennifer referenced, has improved significantly, and we expect that performance improvement to continue well into next year and beyond. And in the Americas, overall, we've increased utilization, particularly with some new contracts that started in Brazil, as well as some short-term projects that we've seen in places like Trinidad and the Caribbean. So utilization is better, and then again, any opportunity that we've had within this window to sign new contracts, those rates have been higher on average, roughly 25% higher than the legacy rates that they were replacing. So overall, again, it's both higher utilization and higher rates driving the better improvement in both Africa and the Americas.

Speaker Change: So Africa's...

Speaker Change: certainly in a market that, as Jennifer referenced, has improved significantly, and we expect that.

Speaker Change: performance improvement to continue well into next year and beyond. And in the Americas, overall, we've increased utilization, particularly with some new contracts that started in Brazil.

Speaker Change: as well as some...

Speaker Change: short-term projects that we've seen in places like Trinidad and the Caribbean.

Speaker Change: So utilization is better and then again any any opportunity that we've had within this window

Speaker Change: to sign new contracts, those rates have been higher, on average, roughly 25% higher than the legacy rates that they were replacing. So, overall, again, it's both higher utilization and higher rates driving the better improvement in both Africa and in America.

Patrick Fitzgerald: Okay, and then if you kind of reprise your contracts every 20% every year and you're repricing them 25% higher than the previous level, what are we, year two or three into that process? So there would be an additional like 60% of contracts that would be reprised higher.

Speaker Change: Okay and then if you kind of reprice your contracts every you know 20% every year and you're repricing them 25% higher than the previous

Speaker Change: level. What are we, year two or three into that process? So there would be an additional like 60% of

Jennifer Whalen: How should we think about that? So, within our OES contract portfolio, as of now, we've reset about 30% of the contract mix, but we still have 70% to go in terms of the runway of what's left to be reset. I think you referenced the good rule of thumb just at a high level. However, of course, in any given year, there will be some variability there in 2024. A lot of the improvements that we're seeing are the full year run rate impacts of new contracts that were signed last year.

Speaker Change: contracts that would be repriced higher. How should we think about that?

Speaker Change: So within our OES contract portfolio, as of now, we've reset about 30% of the contract mix. So we still have 70% to go in terms of the runway of what's left to be reset.

Christopher Bradshaw: However, of course, in any given year, there will be some variability there. For example, in 2024, a lot of the improvements that we're seeing are the four-year run rate impacts of new contracts that were signed last year. 2025 is seeing some growth, but it's not as active of a renewal and new contract year as 2026 is. 2026 is really a more active period for us, where we expect to be starting new contracts. And that's one of the reasons why when you look at our 2026 target levels, there's such a large improvement in OES revenues and the overall company EBITDA range.

Speaker Change: I think you referenced a good rule of thumb just at a high level, however, of course, in any given year, there will be some variability there. In 2024, a lot of the improvements that we're seeing are the full-year run rate impacts of new contracts that were signed last year.

Jennifer Whalen: 2025 is seeing some growth, but it's not as active as of a renewal and new contract year. 2026 is really a more active period for us. So we expect to be starting new contracts, and that's one of the reasons when you look at our 2026 target levels that there's such a large improvement in the OES revenues and the overall company, even daughter ranges.

Speaker Change: 2025 is seeing some growth but it's not as active as of a renewal and new contract year as 2026 is. 2026 is

Speaker Change: It's really a more active period for us where we expect to be starting new contracts. And that's one of the reasons when you look at our 2026 target levels that there's such a large improvement in the OES revenues and the overall company EBITDA ranges.

Patrick Fitzgerald: Okay, yeah, that's helpful because I was actually going to ask about that.

Jennifer Whalen: How much of your, so how much of the 2025 guidance, I guess, is contracted versus, you know, still kind of, I guess, in the spot market in terms of, you know, things changed, you would see that fall back a bit. Overall, looking at our EBITDA ranges for 2025, one of the bigger impacts is that we're launching our Irish Coast Guard contract beginning later this year. It's a large contract with a long transition period, so we'll begin the transition. And October of this year, it won't be completed with the final base in Ireland until the middle of 2025, but a good component of the improvement in 2025 is attributable to Ireland on the government services side.

Speaker Change: Okay, yeah, that's helpful because I was actually going to ask about that. How much of your...

Speaker Change: So, how much of the 2025 guidance, I guess, is contracted versus, you know,

Speaker Change: Still kind of, I guess, in the spot market in terms of, you know, if things changed, you would see that fall back a bit.

Christopher Bradshaw: Overall, looking at our EBITDA ranges for 2025, one of the bigger impacts is that we're launching our Irish Coast Guard contract beginning later this year. It's a large contract with a long transition period, so we'll begin the transition in October of this year. It won't be completed with the final base in Ireland until the middle of 2025, but a good component of the improvement in 2025 EBITDA is attributable to Ireland on the government services side.

Speaker Change: Overall, looking at our EBITDA ranges for 2025, one of the bigger impacts is that we're launching our Irish Coast Guard contract beginning later this year. It's a large contract with a long transition period, so we'll begin the transition in October of this year. It won't be completed with the final base in Ireland until the middle of 2025.

Speaker Change: But a good component of the improvement in 2025 is attributable to Ireland on the government services side.

Jennifer Whalen: Within the OES side of our business, most of what we will have in our 25 guidance ranges is contracted; although there is some component from spot or short-term work in there as well.

Christopher Bradshaw: Within the OES side of our business, most of what we would have in our 2025 guidance range is contracted, although there is some component from spot or short-term work in there as well. A couple quarters ago, or something, you expected to spend $250 million on oil and gas helicopters from 2025 to 2029. Do you want to take that one, Jennifer, or I can address it, too? And then Jennifer can compliment me.

Speaker Change: Within the OES side of our business, most of what we would have in our 25 guidance ranges is contracted, although there is some component from spot or short-term work in there as well.

Jennifer Whalen: Okay, and thank you for the detail on the detailed guidance in general and the guidance for the Star CapEx spend. So I guess just doing the math, you have like 125 million more of that CapEx for the rest of this year and then 18 million next year. And then you have, you said, I believe a couple quarters ago or something, you expected to spend 250 million on oil and gas helicopters from 25 to 29. Just wondering about the cadence of that as well as we kind of think about what your CapEx looks like in the out years and free cash loads, etc.

Speaker Change: Okay, and thank you for the detail on the, you know, the detailed guidance in general, and the guidance for the SAR CapEx spend. So I guess...

Speaker Change: Just doing the math, you have like $125 million more of that CapEx for the rest of this year and then $18 million next year. And then you have, you said, I believe...

Speaker Change: A couple quarters ago or something, you expected to spend $250 million on oil and gas, helicopters from 25 to 29.

Speaker Change: Just wondering about the cadence of that as well, as we kind of think about, you know, what your CapEx looks like in the out years and, you know, free cash flow, etc.

Jennifer Whalen: You want to take that one, Jennifer, or I can address it too, and then Jennifer can compliment me. So, as you noted, we expect to be largely complete with the government services capital investments for both UK Star 2G and Irish Coast Guard by Q1 of next year. We have identified an opportunity, and we did note in an earlier question that we have some aircraft on order for our OES. That includes the five light twin helicopters. It also includes an order book for AW189 helicopters that we see being demanded by customers. The numbers we expect to be, you know, significantly below the threshold that you reference.

Speaker Change: Do you want to take that one, Jennifer? Or I can address it too, and then...

Christopher Bradshaw: So, as you noted, we expect to be largely complete with the government services capital investments for both UK SAR 2G and Irish Coast Guard by Q1 of next year. We have identified an opportunity, and we did note in an earlier question that we have some aircraft on order for our OAS. That includes the five light twin helicopters. It also includes an order book for AW189 helicopters that we see being demanded by customers.

Jennifer: Jennifer can compliment.

Jennifer: So, as you noted, we expect to be largely complete with the government services.

Jennifer: Capital Investments for both.

Jennifer: UK SAR 2G and Irish Coast Guard by Q1 of next year.

Speaker Change: We have identified an opportunity, and we did note in an earlier question that we have some aircraft on order for our OAS.

Speaker Change: That includes the five light twin helicopters.

Speaker Change: It also includes an order book for AW189 helicopters that we see being demanded by customers.

Christopher Bradshaw: The numbers we expect to be significantly below the threshold that you referenced. And next year, you know, it'll be under 100 million and then maybe maybe a similar size in 2026. We do have some good flexibility within that order book from a timing standpoint if we need to move orders around to match up with customer opportunities. All right, last one. Just, if you do, the guidance reflects those new helicopters being in the fleet in 25 and 26.

Speaker Change: The numbers we expect to be significantly below the threshold that you referenced.

Jennifer Whalen: In next year, you know, it'll be under 100 million, and then maybe a similar size in 2026. We do have some good flexibility within that order book from a timing standpoint if we need to move orders around to match up with customer opportunities.

Speaker Change: And next year, it would be under $100 million, and then maybe a similar size in 2026.

Speaker Change: We do have some good flexibility within that order book from a timing standpoint if we need to move orders around to match up with customer opportunities.

Jennifer Whalen: All right, last one. Just if you do, the guidance reflects those new helicopters being in the fleet in 25 and 26. It does for a for certainly the light twins that are referenced, and then for a smaller number of the handful of AW189s by the end of 2026.

Speaker Change: Alright, last one. Just, if you do, the guidance reflects those new helicopters?

Speaker Change: being in the fleet in 25 and 26.

Speaker Change: It does, for certainly the Light Twins that I referenced, and then for a smaller number, probably a handful of AW189s by the end of 2026.

Patrick Fitzgerald: All right, thanks very much.

Josh Jayne: The next question is from Josh Jayne, from Daniel Energy Partners; your line is now open. Thanks. Good morning.

Operator: The next question is from Josh Jayne from Daniel Energy Partners. Your line is now open.

Speaker Change: All right. Thanks very much.

Speaker Change: Thank you.

Speaker Change: The next question is from Josh Jane from Daniel Energy Partners. Your line is now open.

Josh Jayne: Good morning. The first question I want to ask is just on the financing side. You guys have obviously been successful with a couple of equipment financing zero to date. A little bit different for you as they're backed by significant contracts, but could you just talk us through the financing market today, what you're seeing, your expectations going forward, and how you're thinking about that.

Josh Jane: Thanks, good morning.

Josh Jane: Good morning.

Josh Jane: The first question I want to ask is just on the financing side. You guys have obviously been successful with a couple of equipment financings year-to-date.

Speaker Change: a little bit different for you as they're backed by significant contracts but could you just talk us through the financing market today what you're seeing your expectations going forward and how you're thinking about that

Christopher Bradshaw: Sure, thank you for the question, and it's a bit of a unique situation for us with these search and rescue contracts that we have. So we've been able to go to these banks, and in the case of this newest financing to an export bank, which is a government-backed sort of organization, and be able to get financing where they look basically through our credit quality to the credit quality of the government. That's that's back in this is our 10 year long term, at least 10 year contract pass generative. And there's a lot of security there, so we're able to get very attractive terms for the specific equipment financing related to both the UK SAR and the Irish SAR contract.

Speaker Change: Sure. Thank you for the question. And it's a bit of a unique situation for us with these search and rescue contracts that we have. So we've been able to go to these banks, and in the case of this newest financing to an export bank, which is a government-backed sort of organization,

Speaker Change: and be able to get...

Speaker Change: financing where they look basically through

Speaker Change: Our credit quality to the credit quality of the government that's backing us. These are 10-year, long-term, at least 10-year contracts, cash-generative.

Speaker Change: And there's a lot of security there. So we're able to get very attractive terms for the specific equipment financing related to both the UK SAR and the Irish SAR contract. So that's the reason we went down this.

Christopher Bradshaw: So that's the reason we went down this path for this financing: it really is, you know, the newest one is the best that we have out there today.

Speaker Change: for this financing. It really is, you know, the newest one is the best, the best that we have out there today.

Christopher Bradshaw: You know, as it we move forward, we don't really, as of this time, see a need for any additional that to protect to work on. You know, as we take these other deliveries, we have sufficient cash flows to manage that capital.

Speaker Change: As we move forward, we don't really, as of this time, see a need for any additional to work on as we take these other deliveries. We have sufficient cash flows to manage that capex.

Josh Jayne: Okay, and then on the offshore energy services side, I mean, if we just do rough math based on your Q2 top line for where you were when we think about the offshore drilling market going forward, a lot of the offshore drilling calls over the last couple of weeks sort of highlighted. Let's call it the flatish activity over the next 12 months. When I look at your guidance, I'm going to ask the guidance on 25 questions a little bit differently. When I see where you were in Q2, and even if we're in a flatish recount environment, it seems very reasonable.

Joshua Jayne: Okay, and then on the offshore energy services side, if we just do rough math based on your Q2 top line for where you were, when we think about the offshore drilling market going forward, a lot of the offshore drilling calls over the last couple of weeks sort of highlighted, let's call it, flattish activity over the next 12 months. When I look at your guidance, for example, I'm going to ask the question on 25 a little bit differently.

Speaker Change: Okay, and then on the offshore energy services side, I mean, if we just do rough math based on your Q2 top line for where you were, when we think about the offshore drilling market going forward, a lot of the offshore drilling calls over the last

Speaker Change: a couple of weeks sort of highlighted.

Joshua Jayne: When I see where you were in Q2, and even if we're in a flattish recount environment, it seems very reasonable, even without some material price increases, to be sort of at the billion dollar level of top line in the offshore energy business. Would you confirm that? And then also maybe elaborate a little bit on your expectations for rig activity in 25 and 26 and beyond, especially in West Africa, where we would expect to see a decent amount of growth.

Christopher Bradshaw: Even without some material price increases to be sort of at the billion dollar level of top line in the offshore energy business, would you confirm that and then also maybe elaborate a little bit on your expectations for rig activity in 25 and 26 and beyond, especially in West Africa, where we would expect to see a decent amount of growth. I mean, I mean, you know, I'll go back to, you know, a big portion of our offshore energy business's production related. So that does, that does, you know, put some stability into that offshore energy as Chris talks about in one of the other questions around rate increases and where those rates are going to go.

Speaker Change: to be sort of at the billion-dollar level of the top line in the offshore energy business. Would you confirm that, and then also maybe elaborate a little bit on your expectations for rig activity in 2025 and 2026 and beyond, especially in West Africa, where we would expect to see a decent amount of growth?

Speaker Change: I mean, you know, I'll go back to, you know, a big portion of our offshore energy business is production related.

Speaker Change: So that that does, that does.

Christopher Bradshaw: There's a lot more in 26 than there is in 25, so, you know, we.

Christopher Bradshaw: We have a price in, you know, for 2025, a fairly stable number based on the fact that we're not going to have likely as many ratings, but we will not have as many rating cases as we will on 25, and a lot of our growth today in Africa is in Nigeria, which is really related to customers we already have or customers that came back to us, not necessarily the growth and the rigs that are coming into that region. Yeah, I would just add that I think we have a similar view that you reference, Josh, in terms of the activity levels in Africa.

Speaker Change: We have priced in, you know, for 2025, a fairly stable number based on the fact that we're not going to have likely as many rate increases, well, we will not have as many rate increases as we will on 2020.

Speaker Change: 5, and a lot of our growth today in Africa is in Nigeria, which is really related to customers we already have or customers that came back to us, not necessarily the growth and the rigs that are coming into that region.

Unidentified Speaker: Yeah, I would just add.

Speaker Change: Yeah, I would just add that I think we have a similar view that you referenced, Josh, in terms of the activity levels in Africa. We expect that it's a market that will continue to see a pretty high level of activity from the upstream customers, and we're working to ensure that we'll have the capacity

Christopher Bradshaw: We expect that it's the market that will continue to see a pretty high level of activity from the upstream customers, and we're working to ensure that we'll have the capacity and the fleet availability to meet that need.

Josh Jayne: Okay, and then just from my final question, could you update us on lead times today for helicopters across the industry? So if things start getting ordered today, you know, when ultimately they could be delivered. I'm just trying to think about competition from a standpoint of how, how long the cycle could remain tight and just potential issues with lead times and things of that nature. If you could just update on that, so we could think about the supply demand balance, that would be helpful. Thanks.

Speaker Change: and the fleet availability to meet that need.

Speaker Change: Okay, and then just for my final question, could you update us on lead times today for helicopters across the industry? So if things start getting ordered today, you know, when ultimately they could be delivered. I'm just trying to think about competition from a standpoint of how long the cycle could remain tight and just potential issues with lead times and things of that nature. If you could just update on that so we could think about the supply-demand balance would be helpful. Thanks.

Christopher Bradshaw: Sure, and thank you for the question, Josh. I think it is a good opportunity to update on the status of what potential new builds look like. So if we look at the heavier side of the market today, the S92 production line has been closed for a couple of years now. What is really being manufactured today that could be available to meet the future needs of the industry and the growth that we've been talking about is primarily focused on the super medium category. So that would be both the AW189 and the H175, the first being a Leonardo product, the second being an Airbus product.

Speaker Change: Sure, and thank you for the question, Josh. I think it is a good opportunity to update on the status of what potential new builds look like. So, if we look at the heavier side of the market today, the S92 production line has been closed for a couple of years now.

Speaker Change: What is really being manufactured today that could be available to meet the future needs of the industry and the growth that we've been talking about is primarily focused on the supermedium category.

Christopher Bradshaw: So, that would be both the AW189 and the H175, the first being a Leonardo product, and the second being an Airbus product. Both of those production lines have relatively finite numbers they can produce a year. I'll quote as a broad reference around 20 aircraft per year for the AW189. And that production line needs to be shared between the military customers, which are significant in terms of their orders, as well as the civilian market. So, for folks like Bristow,

Speaker Change: So that would be both the AW189 and the H175, the first being a Leonardo product, the second being an Airbus product.

Christopher Bradshaw: Both of those production lines have relatively finite numbers they can produce a year. I'll quote as a broad reference around 20 aircraft per year for the AW189. And that production line needs to be shared between the military customers, which are significant in terms of their orders, as well as the civilian market, so for folks like Risto. Because of that relatively tight production capacity, lead times are long; I'd say 24 months or more. So it will be a while if you were to turn up at the OEM today and want to order a super medium like a 189 before you would actually have an opportunity to receive that.

Speaker Change: Both of those production lines have relatively finite numbers they can produce a year. I'll quote as a broad reference, around 20 aircraft per year for the AW189.

Speaker Change: And that production line needs to be shared between the military customers, which are significant in terms of their orders, as well as the civilian market, so for folks like Bristow.

Christopher Bradshaw: Because of that relatively tight production capacity, lead times are long. I'd say 24 months or more. So, it will be a while if you were to turn up at the OEM today and want to order a super medium like a 189 before you would actually have an opportunity to receive that. This is one of the reasons that we're pleased to have the order book that we do with Leonardo for those AW189s, and the ability to actually deliver aircraft in 2025 and 2026 has become a scarce and valuable delivery spot. So, we think that positions us well.

Speaker Change: Because of that relatively tight production capacity, lead times are long. I'd say 24 months or more.

Speaker Change: So it will be a while if you were to turn up at the OEM today and want to order a supermedium like a 189 before you would actually have an opportunity to receive that. This is one of the reasons that...

Christopher Bradshaw: This is one of the reasons that we're pleased to have the order book that we do with Leonardo for those AW189s, and the ability to actually deliver aircraft in 2025 and 2026 has become a scarce and valuable delivery slot. So we think that positions as well.

Speaker Change: We're pleased to have the order book that we do with Leonardo for those AW189s, and the ability to actually deliver aircraft in 2025 and 2026 has become a scarce and valuable delivery slot, so we think that positions us well.

Josh Jayne: Thanks, I'll turn it back.

Operator: Thank you. There are no further questions in the queue.

Speaker Change: Thanks. I'll turn it back.

Speaker Change: Thank you.

Christopher Bradshaw: I will now turn the call back over to Christopher Bradshaw for closing remarks. Thank you, Robbie, and thank you, everyone, for joining the call. We look forward to speaking again next quarter.

Operator: Stay safe.

Speaker Change: Thank you, Robbie, and thank you everyone for joining the call. We look forward to speaking again next quarter. Stay safe.

Operator: This concludes today's call. You may now disconnect at any time.

Speaker Change: Music