Good day, everyone, and welcome to the Era Group Fiscal Year and Q4 2015 Results Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Shefali Shah, Senior Vice President and General Counsel. Please go ahead.

Thank you, Dana. Good morning, everyone, and thank you for joining Era's fourth quarter and fiscal year 2015 earnings call. I am here today with our President and CEO, Chris Bradshaw; our Senior Vice President and Chief Financial Officer, Andy Puhala; our Senior Vice President, Operations and Fleet Management, Stuart Stavley; our Senior Vice President, Commercial, Paul White; our Vice President and Chief Accounting Officer, Jennifer Whalen; and our Director of Corporate Development and Finance, Matt McCarville. If you have not already done so, I would encourage you to access our earnings press release for the fourth quarter and fiscal year 2015 and the accompanying presentation slides available under the Investor Relations link on our website, eargroupinc.com, and also on the SEC website, sec.gov. I would like to note that we may discuss forward-looking statements on this call. These forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements, as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and the other filings we make with the SEC. In addition, we may discuss non-GAAP financial measures, such as adjusted EBITDA during the call. Please refer to our earnings release or the investor presentation for the calculation of these measures and the appropriate GAAP reconciliation. I’d now like to turn the call over to our President and CEO, Chris Bradshaw. Chris?

Thank you, Shefali, and welcome to the call, everyone. As always, I would like to begin with a safety note and express my appreciation to everyone at Era for their diligence and achieving our objective of zero error accidents in fiscal year 2015, extending the clean sheet of zero error accidents in 2014. Safety is our most important core value and remains the highest operational priority for our customers and Era. I'm also pleased to report that despite the challenging industry conditions, which continued to deteriorate throughout the year, Era generated positive operating cash flow of $44 million in 2015. If you subtract net cash used in investing activities of $23 million, Era generated positive free cash flow of over $21 million in 2015. Given the difficult and uncertain market environment, we will continue to prioritize the protection of our strong balance sheet and liquidity position. As of year-end, our total liquidity was $221 million and our funded debt to EBITDA and interest coverage ratios, as defined under our credit facility, had improved to 2.6x and 8.4x, respectively. These positive cash flows and strong credit metrics have been supported by our focus on realizing efficiencies throughout our cost structure. These cost control initiatives began in Q4 2014, had included all aspects of our business, and remain ongoing today. For example, we have taken the difficult steps to adjust staffing levels for the prevailing market conditions, which have resulted in a 26% reduction in our U.S. headcount, including a 44% reduction in general and administrative staff. Another example is the repurchase of $50 million of ours 7.750% senior notes at discounts to par value. These repurchases represent 25% of the bonds that were outstanding at the beginning of last year. At the current borrowing rate under our credit facility, these repurchases…

Thanks Chris. To summarize Era’s financial performance for Q4 of 2015, in the quarter, we reported a net loss of $3.4 million or $0.17 per diluted share on operating revenues of $74 million, compared to net income of $3.2 million or $0.16 per diluted share on operating revenues of $75 million in Q4 of 2014. Excluding special items and a $3.8 million write-off of a deferred tax asset resulting from the consolidation of Aeróleo, current quarter net income would have been $0.9 million or $0.04 per diluted share. Beginning with the fourth quarter of 2015, based on a change in the ownership structure of our Brazilian joined venture, Aeróleo, we began including Aeróleo’s results in our consolidated financials. Era’s consolidated results now include Aeróleo’s end customer revenues as well as Aeróleo’s expenses. Aeróleo revenues were included in the international oil and gas line of service. Prior to the fourth quarter, Aeróleo was treated as an equity investment and we recognized revenue only when cash was received from Aeróleo, and these revenues were included in our dry-leasing line of service. The consolidation of Aeróleo added $15.6 million of revenue in the current quarter compared to Q4 of last year. Total revenues were $0.7 million lower in the current quarter, as the contribution from Aeróleo was more than offset by decreases due to lower utilization and lower rates in the U.S. Gulf of Mexico and Alaska, dry-leasing and air medical contracts that ended and the sale of the FBO in May of 2015. The consolidation of Aeróleo in the fourth quarter added $9 million to operating expenses. Excluding the accounting impact of the Aeróleo consolidation, operating expenses in the quarter were $36.1 million, down 21% on a comparative basis from Q4 of 2014, primarily due to lower fuel, insurance and repair and…

Thank you, Andy. I would now like to offer some brief comments on current market conditions and summarize our corporate priorities in 2016. The oil and gas market environment has continued to deteriorate, and we believe that challenging industry conditions prevalent in 2015, are likely to persist for the next several quarters. We had a number of helicopters come off contract during December 2015, including the previously disclosed contracts for three heavy helicopters with Petrobras in Brazil, as well as a couple of medium helicopters in Alaska and a couple of light helicopters in the Gulf of Mexico. Our oil and gas customers continued to look for ways to improve the efficiency of their operations and we are supporting them in those efforts. These factors may have an adverse impact on our financial results. On the positive side, we are seeing select opportunities to compete for new projects and certain opportunities to take market share, but those opportunities are limited and we face competition. In summary, we believe 2016 will be an even more difficult year than 2015. Despite the unfavorable industry conditions, we have continued to generate strong cash flows, and we will continue to protect our balance sheet and maintain ample liquidity to withstand the pressures of a prolonged market downturn. We have taken a proactive ongoing approach to cost management, which we believe will enhance our competitive position in the market. In cooperation with our partners at the OEMs, we have successfully reduced and deferred capital commitments. In addition, we have continued to monetize underutilized aircrafts and redeploy that capital to opportunities such as the repurchase of our senior notes at discounts to par value. In 2016, we will remain focused on the following key objectives: number one, maintaining the best safety standards; number two, maximizing the utilization of our helicopter fleet; number three, realizing efficiencies in our cost structure; and number four, protecting our balance sheet and liquidity position. With that, let's open the line for questions. Operator?

Thank you, sir. [Operator Instructions] And we'll take our first question today from James West of Evercore ISI.

Hi, good morning guys.

Good morning James.

Chris, as you look at your fleet today and the developed market conditions that you guys are facing, would you say that utilization is the biggest issue, or is it pricing? It seems to me utilization seems to be more of an issue in a helicopter space, but I wanted to get your perspective on that?

That's correct, James. Really the utilization of our fleet will have a much larger impact on our overall financial results, and we remain focused on maximizing the utilization of the fleet, whether that be operating in our regions in the Gulf of Mexico, Alaska, Brazil and Colombia or dry-leasing to other parts of the world.

Okay, thanks. And then another question for me. You mentioned market share gains. Could you be a bit more specific? I mean, I don't want any competitive data or information, but are there issues with other helicopter providers or there are just target markets where others may not be watching and see to pick up share. In what ways do you think you can grab some market share this year?

We've been very focused on realizing cost efficiencies throughout our cost structure. We think there are opportunities in the current market environment wherein our oil and gas customers are reducing to look - looking to reduce their operating expenditures, where we will have an opportunity to leverage our efficient cost structure to potentially take market share. Obviously the opportunities to do that are finite and we do face competition in the marketplace, but we believe that we have improved our competitive position in the market through the efficiencies recognized in that cost structure.

Okay, got it. Thanks guys.

Thank you.

And we'll take our next question from Bill Mastoris with Robert W. Baird.

Thank you. Chris, I wonder if you could give us an idea of the number of unencumbered aircraft that you currently have in your fleet. And really what I'm getting at here is - and the logical follow-up to that is, would you be willing if this prolonged period of energy prices has extended a little bit further than you anticipate to engage in sale/leaseback transactions as a liquidity option, and may be if you could also maybe touch on some of the other liquidity options away from maybe the sale/leaseback market, that would also be greatly appreciated.

Sure. Thanks for the question, Bill. So the aircraft that we have pledged as collateral represent a subset of our U.S.-based aircraft. We are looking at sale/leaseback opportunities. To-date we have engaged in outright sales of aircraft. We've been quite active in the secondary market and really our most active year in terms of the number of aircraft sold, having sold 20 helicopters, which represent 14% of the fleet that we started last year with. We’ll also look at leasebacks obviously with the recognition that a leaseback represents another form of a fixed charge and recognizing that - we believe we've benefited in the current downturn by the flexibility provided by our mostly owned helicopter fleet. Having said that, we do believe that there are certain aircraft in our fleet, certain contracts that may be better suited to leaseback structures, and we are continuing to evaluate those and evaluate the conditions in the market and may capitalize on those opportunities, should the conditions be right.

Okay. And are there any other liquidity options right now which are on the table that you would care to articulate?

We believe we are in a very good position from a liquidity standpoint today. Based upon what we are seeing, both within our fleet and opportunities as well as the secondary market, we think there will continue to be opportunities to monetize underutilized assets at values that we believe are attractive. So asset sales on an outright basis, potential sale/leasebacks represent some of the primary forms of liquidity levers that we can pull.

And then finally for me, how should we be thinking about the maintenance level, whether its maintenance CapEx, however you would like to characterize it for your existing fleet, given the lower utilization of your overall fleet?

Yes Bill, this is Andy. The ongoing - if an aircraft is not being utilized, the ongoing maintenance commitment is very low, and the fixed charges associated with that aircraft are actually very low. We get rebates for insurance for example, if the aircraft aren’t flying. And most of the maintenance is hour based, and so to the extent that they are not being used, the maintenance requirements and the ongoing CapEx related to that’s very limited.

So should we be thinking about $20 million a year? I mean, what might that number be?

It would be something less than that. We don't really want to get into that Bill, but I’ll just say that it's very minimal.

Just to clarify, Bill, was your question about $20 million, was that a question on a per aircraft basis, or were you talking about our overall R&M expenses?

Overall fleet. Yes, your overall fleet.

We don't provide financial guidance, so won't comment on what R&M expense maybe on a go-forward basis, but Andy's comments hold about the characteristics of aircraft that aren’t being utilized.

Okay. Thank you.

And we'll take our next question from Adam Ritzer with Pressprich.

Good morning guys. Thanks for taking my call. Could you explain exactly why you decided to consolidate Aeróleo at this point in time, like what are the benefits of that, and why now?

Well, Adam, this is Andy again. It’s really a function of the accounting rules. Aeróleo, what’s known as a variable interest entity, and once we are determined to essentially control that entity, we are required to consolidate it. And based on some changes in ownership that occurred during the quarter, we are now required to consolidate it. So it wasn't so much a choice, it's just a function of our relationship with Aeróleo and the other partner in the joint-venture.

Okay. Do you guys own a 100% of it now?

No, we own 50%.

Okay. Got it. And the - right now you said you had, I guess, three heavies role off with Petrobras in Brazil. What exactly do you have left with Petrobras at this point in time?

So we've previously disclosed that we have seven AW139s on contracts with Petrobras. Those have not been impacted and those aircraft are still on long-term multiyear contracts with Petrobras.

Okay. So that's - and there is no heavies, there is no EC225s, it's just the seven 139s?

With Petrobras specifically. We also have other aircrafts in the country, other 139s that are working for other customers. And in the past as you know well, Adam, we had previously provided enhanced disclosure regarding Aeróleo’s fleet and the utilization of their fleet in the context of the significant transition that was occurring at Aeróleo related to the pending partner transaction that Andy spoke about and the prior financial difficulties at Aeróleo. Today, we not only have a more viable business in Brazil, but with the confirmation of that partnership transaction and the resulting consolidation of Aeróleo’s results into Era’s financial statements, consistent with the Era’s overall disclosure policy, we won't be discussing the utilization at that level of granularity with respect to the fleet in Brazil. But the seven 139 contracts with Petrobras that we’ve previously talked about remain in force.

Got it. And I think you said in your comments that you thought the challenging conditions would last several or more quarters. I know Bristow is talking about this lasting through 2017. Are you more bullish than them for certain reason? Do you guys have you some things going on in your fleet that lends you to be a little more positive than them?

Well, what we are seeing in the market today, Adam, is what has been a continued deterioration of the conditions, and we expect that those will persist for some time. Whether things improve in Q4 of 2017 or Q1 of 2018? Frankly I'm not that smart. But we are prepared for a protracted downturn. I think that's an important thing that we want to note is we believe we've taken the steps to put the company in a position from a credit metrics standpoint, from a liquidity position, from managing our firm capital commitments that we are prepared to withstand even a more prolonged downturn, should that prove to be the case.

Okay. So several quarters is by far any kind of prediction from you?

Correct, I'm not calling a specific quarter in which the market is going to turn around.

Got it, okay. Just want to make sure. And I guess one question in terms of the EBITDA differential for your loans. I guess what you said is the big differential between $105 million or so or reported EBITDA in the low 60s, is what you said was cash proceeds of aircraft, which last year was about $35 million. So I guess that's the big differential?

Yes, that's the big - that's the primary difference there, Adam.

Okay. What if you did not sell any aircraft, what are the covenants - what kind of EBITDA coverage are you required? I'm just wondering if without aircraft sales, is there an issue there?

Well, the way I answer that is to say that we are very comfortable with where we are today and we expect to continue to remain comfortable with our credit profile going forward. Our interest coverage, the minimum is 3x, and our funded debt to EBITDA maximum is 5x. And under the calculations in the facility, as I mentioned, the interest coverage is currently 8.4x and our funded debt to EBITDA is 2.6x.

Right, but if you did not sell any aircraft, you would have had $63 million of EBITDA. It doesn’t sound like 2016 is going to get much better. How does it - it seems like you'd be pretty close.

Adam, as you know, as part of our long-standing disclosure policy, we don't provide forward-looking guidance. So I can't give you the EBITDA number to show what the calculation is going to be, but I very much would reiterate what Andy said. We remain comfortable with our credit metrics, with our balance sheet, and we believe that we are positioned to withstand what could be a more prolonged downturn in the market.

Got it. And then last question just a follow-up from the previous question about sale/leasebacks. Does a sale/leaseback have the same effect on the EBITDA calculation than actually selling aircraft for cash proceeds?

Yes, we would receive cash in a sale/leaseback transaction, and any sales of assets are included in that calculation of our EBITDA under the credit facility.

Got it. Okay. Thanks very much for taking the call.

Yes. Thanks Adam.

And we’ll take our next question from DeForest Hinman with Walthausen & Company.

Thank you. I had a couple of questions. You gave some disclosures on the headcount reductions. Are those net of the addition of the Brazilian operations, or are those just in the legacy operations?

Those are just our U.S. business. So there is obviously a bit of an apples-to-oranges comparison given the consolidation of Aeróleo in the Q4. So what we wanted to do was show them on an apples-to-apples basis for the legacy U.S. operations to highlight what those reductions have been.

Can you give us the net reductions in headcount with the Brazilian operation?

There is roughly 200 employees in our Brazilian operations today.

Okay. And then when we look at the personnel costs in the fourth quarter, my math is that they were $19.1 million versus $17.8 million in the fourth quarter of last year. My numbers could be off. But was there any one-time items in there in terms of severance, or is that a pretty clean number?

There is some other things running through there, but it's relatively clean number, DeForest.

We had some severance cost both in Q4 of last year and in Q4 of this year. But if you look at the - you asked a question about headcount earlier, the legacy U.S. business, the personnel costs were actually down about $2.3 million quarter-over-quarter, but that was obviously offset by the addition of $3.6 million in expense related to Aeróleo.

Okay. That's helpful. And other costs were $8.6 million versus $6.8 million in the fourth quarter of last year. Is that the same thing, the addition of the Brazilian operation, or is there anything else going on there one-time basis?

Primarily the consolidation of the Brazilian operations there.

Okay. And then in your presentation, you went back and put the disclosure of the NAV. Stock is up a little bit today, but significant discount. You bought a little nibble of stock in the third quarter of ‘15. You're commenting on the call you have a decent liquidity position. Do you continue to try to pick only at the stock versus the NAV? My math is where the stock today is $0.26 on the dollar of the NAV?

Well, we continue to believe that Era’s share price represents an attractive investment opportunity. I purchased about 14,000 shares for my personal account before the current blackout period began. From the company's perspective though, it's not simply a question of whether it's a good investment but whether it represents the optimal use of a limited resource, namely capital. And that must be evaluated in the context of are there opportunities available to the company and importantly in the context of the negative impact it would have on our leverage profile. Given the uncertainty about the ultimate depth and duration of the current downturn, we believe the company is not underleveraged and we believe this is the type of macro environment in which you want to maintain prudent balance sheet management. There will come a time when we have more visibility on the turnaround in the oil and gas market, and we will continue to evaluate both share repurchases and bond repurchases on an opportunistic basis. But for the time being, we are placing a priority on protecting our balance sheet and liquidity position.

Does the board evaluate or discuss whether strategic alternatives makes sense with the share price this low? If we see an ability to sell some helicopters, you could make the argument - you just made one yourself here not really that levered. Is there a financial buyer out there that will come in and pay $0.50 on a dollar for the stock or $0.75 on a dollar for a stock and help your shareholders?

Yes, our Board has always evaluated and will continue to evaluate all of the alternatives that are available for the company, very much with the mindset as with all things at looking to maximize the value for shareholders. We believe that in the current industry downturn, there are some companies who we compete with who are not positioned as strongly and may suffer some weakness during the downtown. That could present opportunities for us, if such acquisitions become available. But of course to your question, we can't comment on specific strategic alternatives, if something is presented to the Board, they will evaluate it pursuant to their fiduciary responsibility.

Has the phone rung at all?

Well, as I said, we can't comment on specific opportunities, and to deny them or recognize them is not something that we would ever do. So we are focused on running the business. We think in the context of what was a very difficult environment for the oil and gas industry in 2015, we feel good about the execution. We do believe that 2016 presents continued challenges, but we believe that we've taken the steps necessary to position the company, to withstand even a more prolonged downturn, and we'll - at the same time, believe we've taken steps to improve our competitive position, so when the market does turnaround, which it always does in a commodity business like oil and gas, we'll try to take advantage of those opportunities.

Okay. Thank you.

And we'll take our next question from Steve O’Hara with Sidoti & Company. Steve O’Hara: Hi, good morning. Thanks for taking the question. I don’t know if you’ve put a number on the underutilization, but is there - can you quantify how many aircraft are underutilized right now, and then maybe your appetite for selling some of those aircraft and while, I guess, trying to maintain the fleet size and profile for an eventual turnaround, I guess, as well?

Sure. What we have stated in terms of trends is that we have seen for the last several periods higher than normal excess capacity in our medium helicopters, and then in the more recent couple of quarters, higher the normal excess capacity of our heavy helicopters. We don't discuss specifics of utilization for competitive reasons, as you can appreciate if our competitors have information on where we have tighter utilization or not as tight utilization that may impact how we bid on projects. So for competitive reasons, we won't be more specific than that trends that we've already identified. In terms of selling aircraft, that's always been part of our core strategy for all of the helicopters on our fleet and we are going to evaluate the alternatives to generate value. One of those is to operate for our own end-customers and we'll project the cash flow possibilities there and discount them back today. And we also have a leasing business, as you know, which provides us opportunities to capitalize demand from markets in which we don't operate. So we'll evaluate those opportunities and discount the cash flows. And then, as always, we’ll evaluate cash that can be realized by selling aircraft and all of these obviously involve a view, not just on the opportunity but the residual value of the aircraft. And we will take the highest net present value alternative of those three options, and in some cases, as it has here recently, that will result in us selling aircraft if that is the best of opportunity that's available for that particular helicopter. Steve O’Hara: Okay. And then just maybe on the residual value you mentioned, typically how long does it take for - I assume that the NAV held up pretty well and I assume that's kind of an updated number with kind of year-end estimates on the valuation, but how long does it typically take in a downturn for more of a meaningful reduction in book values for the fleet? I know there are operating assets, but in terms of book values and impacting NAV, how long does that usually take in a downturn? Thank you.

Sure. Thanks Steve. In terms of book value, our accounting policy remains the same, which is that we depreciate our helicopters over 15 years down to a 40% salvage value. In terms of the downturn and its impact on aircraft values, I would note that the NAV presentation which is available on our 8-K and online, is based upon the fair market values of our helicopters as estimated by an independent third-party, who conducts this analysis once a year for us. It's actually requirement under our credit facility. They just completed the analysis as of December 31, 2015. So the numbers that are presented are current estimations of their view on the value of the aircrafts, so reflective of the conditions that existed as of December 31, 2015. In terms of how long it takes? So what I would probably point everyone to is the fact that we have continued to monetize on underutilized aircraft. We sold 20 aircraft last year, our most active year in terms of the number of aircrafts sold, realized about $37 million in proceeds, including a gain over book value of $6 million. So that's, I think the most tangible data point that we can point to, to tell you where the market is today. Steve O’Hara: Okay. Thank you very much.

We'll take our next question from Christopher Hagedorn with Redwood Capital.

Hey guys, thanks for taking my question. Actually I want to ask maybe one or two follow-ups on what we just discussed on the sales. I think you realized sales proceeds from the fleet around $35 million selling 20 helicopters. I guess, that's a little less than $2 million apiece. Am I fair in assuming that those were largely light than sort of medium-light helicopters?

It's a mix of light aircraft and medium aircraft, predominantly aircraft that have been in our fleet for a longer period of time, but also includes at least one relatively newer model.

Got it. Are you at liberty in saying what type the newer model was?

We view asset sales and trading in the secondary market as a core component of how we generate value. So we don't discuss individual asset sales and value recognized in particular helicopters. We think that's competitively sensitive information.

Got it. Okay. I guess, maybe more at a high level, if the majority of those were sort of towards the older and lighter end of the spectrum of the fleet that you operate, what - I guess how would you think about conceptually putting - I think you mentioned that you have some overcapacity in the mediums and now in the heavies. How would you think about asset sales in those categories versus sort of the low end of the fleet, or like what the parameters you evaluating or sort of optionality with keeping them on versus monetizing, if possible at this point?

Sure. Our methodology is really the same. So nothing about the design of our strategy in this regard has changed. When we think about our fleet management and opportunities for individual aircraft, we look at the three opportunities that we discussed before; operating it, leasing it or selling it. And we always have as part of that analysis a view on the residual value of the individual helicopter. And whichever of those three opportunities represents the best NPV proposition, is the one that we’ll pursue and that has in recent periods resulted in a higher frequency of assets sales than we've seen in other years and those asset sales could include more current and recent model helicopters.

Got it. Understood. Okay. And you - but you general think - if you wanted to you think sort of the secondary market for larger aircraft is available to you if you wanted to pursue that. Is that your current thinking?

Well, there is a difference by asset class and that's an important distinction to make. So as you increase the size of the helicopter, the number of end markets that are typically serviced by the helicopter decreases. So starting on one end of the spectrum with light aircraft, these helicopters can serve a number of different end missions. It could be oil and gas, it could be VIP, it could be firefighting, it could be flight-seeing like we do in Alaska. There are really a myriad of missions. When you step into the medium helicopters, you still have a number of different markets that those helicopters can serve outside of oil and gas. So it's also VIP market, an emergency medical services market, search and rescue, firefighting, other utility missions. When you do get up to the heavier helicopters, those heavy aircraft have a more finite number of end markets that they can serve. For those particular models, the end markets are more dominated by the oil and gas market. They can also serve a search and rescue missions, can also serve high-end VIP clientele like heads of state or large corporations. But that market is more dependent upon the oil and gas industry and that's why you’ve more difficult to do more those aircraft today.

Got it. And you would include the AW139 sort of in the more medium or more on the heavy side, sort of in that previous characterization?

The 139 is in the medium category.

Got it. Okay. Maybe one or two more question I want to quickly get there. In terms of fee, I think you have a little bit more than, looks like $12 million or from capital commitments for this year and I think sort of around the same for ‘17. Is there any more room in sort of negotiating that down, or is that sort of - are you getting to the end of the rope there?

I think that represents the net results of the productive conversations that we had with our partners at the OEMs and we believe these levels are quite manageable.

Got it. Understood. And lastly in terms of, I think you sort of talked about a little bit but just to confirm. You don't expect to be a cash tax payer in the next - in 2016. Is that - am I right in concluding that?

Well, we don't really give guidance. And so we don't comment on kind of our tax situation either. What we said there is we would expect our tax rate to be more normal, more what you’ve seen historically. We don't expect to be a cash tax payer in 2015, we will say that and we do, in fact, received a refund for the taxes that we paid in 2015.

Got it. Okay. Thank you very much guys.

Thanks Chris.

And we'll take our next question from Oscar Olivas with Wells Capital Management.

Good morning, and a good quarter guys. For Aeróleo, I believe you have about $42 million in deferred revenue at the end of third quarter of last year. I view that as an AR. Can you walk me through how that now runs through your financials, and if it is an AR, how you would account for that when it's paid?

Yes. So now that we consolidated Aeróleo, that balance between Aeróleo and Era is eliminated in consolidation. So from an Era consolidated perspective, it essentially just goes away. So now going forward, we recognize cash - sorry, we recognize revenue, Aeróleo’s revenues as Aeróleo recognizes them from the third-party customer, just like we do any other revenues anywhere else.

But is that a catch-up payment that we could expect to see, or whatever revenue you generate this quarter will be recognized as any normal subsidiary?

Whatever revenue Aeróleo recognizes, we will include - from end-customers, we'll include in our consolidated financials. In terms of the historical balance of deferred revenue, as I mentioned, that is now eliminated in consolidation and that goes away. Now to the extent that Aeróleo generates free cash flow, we would certainly continue to have them spend that or repatriate that back to the U.S., but in terms of the repayment of that deferred revenue is - again it just goes away in consolidation.

Yes. So the inter-company receivables obviously continue to exist. And those obligations haven't gone away, but as Andy pointed out, that's given the consolidation on our financials no longer report - part of our reported financial statements.

Okay. Because I know they were delayed in making some of those payments, and was wondering if there was any catch-up from that entity that would run through your financials at any point in the future?

No, not on the cash payments going forward that we received from Aeróleo. Well, you’ll see that in our financials. You won't see any impact there.

Okay. And then in regards to bad debt expense, I think it's trending a little bit higher. Can you give me a percentage of your client base that’s rated IG?

Percentage of our client base that’s rated IG. I mean, I don't have that percentage. What I would say is that the bulk of our clients around the world are large oil and gas company, international oil and gas companies with fairly strong credits, people like Anadarko, Exxon, Shell, those types of customers that represents the large majority of our customer base.

Okay. Thank you.

And we'll take our next question from Taylor Finch with Century Management.

Good morning, Chris, Andy.

Good morning, Taylor.

Could you guys provide an update on your bonds repurchase year-to-date?

Sure. In 2015, we repurchased $50 million of our 7.75% senior notes.

And in 2016?

Well, as of our record date, that's disclosed in the K which we filed today, we had not purchased any additional bonds. I would point out that we've been in a blackout period since December, so really not in an open trading environment.

Okay, great. Thank you.

Sure. Thank you.

And gentlemen, we have no further questions at this time. I'll turn the call back to you for any additional or closing remarks.

All right. Thank you, Dana. I appreciate everyone's participation on the call today and look forward to speaking again next quarter.

Thank you. And that does conclude today's conference. Thank you for your participation.