BASIS OF PRESENTATION, CONSOLIDATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements include the accounts of Bristow Group Inc. and its consolidated entities (“Bristow Group”, the “Company”, “we”, “us”, or “our”) after elimination of all significant intercompany accounts and transactions. Our fiscal year ends March 31, and we refer to fiscal years based on the end of such period. Therefore, the fiscal year ending March 31, 2016 is referred to as “fiscal year 2016”. Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, the information contained in the following notes to condensed consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and related notes thereto contained in our fiscal year 2015 Annual Report (the “fiscal year 2015 Financial Statements”). Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the entire fiscal year.

The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair presentation of the consolidated balance sheet of the Company as of December 31, 2015, the consolidated statements of operations and comprehensive income for the three and nine months ended December 31, 2015 and 2014, and the consolidated cash flows for the nine months ended December 31, 2015 and 2014.

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

Foreign Currency

During the three and nine months ended December 31, 2015 and 2014, our primary foreign currency exposure was to the British pound sterling, the euro, the Australian dollar, the Norwegian kroner and the Nigerian naira. The value of these currencies has fluctuated relative to the U.S. dollar as indicated in the following table:



	Three Months Ended December 31,		Nine Months Ended December 31,
	2015	2014	2015	2014
One British pound sterling into U.S. dollars
High	1.55	1.62	1.59	1.72
Average	1.52	1.58	1.53	1.64
Low	1.47	1.55	1.46	1.55
At period-end	1.47	1.56	1.47	1.56
One euro into U.S. dollars
High	1.14	1.28	1.16	1.39
Average	1.10	1.25	1.10	1.31
Low	1.06	1.21	1.06	1.21
At period-end	1.09	1.21	1.09	1.21
One Australian dollar into U.S. dollars
High	0.74	0.89	0.81	0.95
Average	0.72	0.85	0.74	0.90
Low	0.70	0.81	0.69	0.81
At period-end	0.73	0.82	0.73	0.82
One Norwegian kroner into U.S. dollars
High	0.1240	0.1554	0.1367	0.1698
Average	0.1174	0.1458	0.1227	0.1577
Low	0.1130	0.1336	0.1130	0.1336
At period-end	0.1130	0.1345	0.1130	0.1345
One Nigerian naira into U.S. dollars
High	0.0050	0.0062	0.0050	0.0063
Average	0.0050	0.0059	0.0050	0.0061
Low	0.0050	0.0054	0.0050	0.0054
At period-end	0.0050	0.0055	0.0050	0.0055

______

Source: Bank of England, FactSet and Oanda.com

Other income (expense), net, in our condensed consolidated statements of operations includes foreign currency transaction gains of $0.6 million and foreign currency transaction losses of $4.6 million for the three months ended December 31, 2015 and 2014, respectively, and foreign currency transaction losses of $7.0 million and $6.7 million for the nine months ended December 31, 2015 and 2014, respectively.

Our earnings from unconsolidated affiliates, net of losses, are also affected by the impact of changes in foreign currency exchange rates on the reported results of our unconsolidated affiliates. During the three months ended December 31, 2015 and 2014, earnings from unconsolidated affiliates, net of losses, increased by $1.0 million and decreased by $7.7 million, respectively, and during the nine months ended December 31, 2015 and 2014, earnings from unconsolidated affiliates, net of losses, decreased by $17.2 million and $16.1 million, respectively, as a result of the impact of changes in foreign currency exchange rates on the earnings of our unconsolidated affiliates, primarily the impact of changes in the Brazilian real to U.S. dollar exchange rate on earnings for our affiliate in Brazil. The value of the Brazilian real has fluctuated relative to the U.S. dollar as indicated in the following table:



	Three Months Ended December 31,		Nine Months Ended December 31,
	2015	2014	2015	2014
One Brazilian real into U.S. dollars
High	0.2694	0.4204	0.3437	0.4572
Average	0.2602	0.3944	0.2899	0.4284
Low	0.2479	0.3673	0.2378	0.3673
At period-end	0.2528	0.3731	0.2528	0.3731

______

Source: FactSet and Oanda.com

We estimate that the fluctuation of currencies versus the same period in the prior fiscal year had the following effect on our financial condition and results of operations (in thousands):



	Three Months Ended December 31, 2015			Nine Months Ended December 31, 2015
Revenue	$	(14,920	)	$	(83,892	)
Operating expense	16,971			87,393
Earnings from unconsolidated affiliates, net of losses	8,694			(1,146		)
Non-operating expense	5,194			(262		)
Income before provision for income taxes	15,939			2,093
Provision for income taxes	(2,200		)	(349		)
Net income	13,739			1,744
Cumulative translation adjustment	(4,244		)	(8,015		)
Total stockholders’ investment	$	9,495		$	(6,271	)

Revenue Recognition

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

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

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

Interest Expense, Net

During the three and nine months ended December 31, 2015 and 2014, interest expense, net consisted of the following (in thousands):



	Three Months Ended December 31,						Nine Months Ended December 31,
	2015			2014			2015			2014
Interest income	$	181		$	118		$	619		$	740
Interest expense	(9,717		)	(7,094		)	(25,003		)	(22,415		)
Interest expense, net	$	(9,536	)	$	(6,976	)	$	(24,384	)	$	(21,675	)

Interest expense for the three and nine months ended December 31, 2014, respectively, includes the write-off of deferred financing fees of $0.2 million and $0.7 million related to the repurchase of $17.2 million and $48.5 million principal amount of our 6 ¼% Senior Notes due 2022 (the “6 ¼% Senior Notes”). For further details on the repurchase of the 6 ¼% Senior Notes, see Note 5 to the fiscal year 2015 Financial Statements.

Gain on Sale of Unconsolidated Affiliates

On November 21, 2014, we sold our 50% interest in the Helideck Certification Agency (“HCA”) for £2.7 million, or approximately $4.2 million. We recorded a pre-tax gain on the sale of an unconsolidated affiliate of $3.9 million during the three and nine months ended December 31, 2014 on our condensed consolidated statements of income.

Other Income (Expense), Net

In addition to foreign currency transaction gains (losses) discussed above, other income (expense), net includes expense of $0.7 million and $2.6 million related to premiums paid for the repurchase of a portion of the 6 ¼% Senior Notes during the three and nine months ended December 31, 2014, respectively.

Accretion of Redeemable Noncontrolling Interests

Accretion of redeemable noncontrolling interests of zero and $1.5 million for the three and nine months ended December 31, 2015, respectively, relates to put arrangements whereby the noncontrolling interest holders may require us to redeem the remaining shares of Airnorth and Eastern Airways at a formula-based amount that is not considered fair value (the “redemption amount”). Redeemable noncontrolling interest is adjusted each period for comprehensive income, dividends attributable to the noncontrolling interest and changes in ownership interest, if any, such that the noncontrolling interest represents the proportionate share of Airnorth’s and Eastern Airways’ equity (the “carrying value”). Additionally, at each period end we are required to compare the redemption amount to the carrying value of the redeemable noncontrolling interest and record the redeemable noncontrolling interest at the higher of the two amounts, with a corresponding charge or credit directly to retained earnings. While this charge or credit does not impact net income (loss), it does result in a reduction or increase of income (loss) available to common shareholders in the calculation of diluted earnings (loss) per share (see Note 8). In November 2015, we purchased the remaining 15% of the outstanding shares of Airnorth for A$7.3 million ($5.3 million) resulting in a reduction of $5.5 million to redeemable noncontrolling interests and an increase of $0.2 million to additional paid-in capital on our condensed consolidated balance sheet.

Accounts Receivable

As of December 31 and March 31, 2015, the allowance for doubtful accounts for non-affiliates was $6.5 million and $0.9 million, respectively. There were no allowances for doubtful accounts related to accounts receivable due from affiliates as of December 31 and March 31, 2015. The increase in the allowance for doubtful accounts for non-affiliates related to $5.7 million due from two clients in Nigeria and two clients in Australia where we no longer believed collection was probable as of December 31, 2015.

Inventories

As of December 31 and March 31, 2015, inventories were net of allowances of $36.8 million and $45.4 million, respectively. During the nine months ended December 31, 2015, we decreased our inventory allowance by $14.0 million due to the sale of inventory and increased our inventory allowance by $5.4 million as a result of our review of excess inventory on aircraft model types we plan to exit by the end of the fiscal year. During the three and nine months ended December 31, 2014, we increased our inventory allowance by $3.8 million and $7.2 million, respectively, related to excess inventory identified for an older large aircraft model we planned to remove from our operational fleet. The inventory allowance is reduced by sales of inventory and adjusted for foreign exchange effects.

Prepaid Expenses and Other Current Assets

As of December 31 and March 31, 2015, prepaid expenses and other current assets included the short-term portion of contract acquisition and pre-operating costs totaling $12.5 million and $8.9 million, respectively, related to the search and rescue (“SAR”) contracts in the U.K. and a client contract in Norway, which are recoverable under the contracts and will be expensed over the terms of the contracts. For the three and nine months ended December 31, 2015, we have expensed $2.7 million and $6.6 million, respectively, due to the start-up of some of these contracts.

Goodwill

Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill has an indefinite useful life and is not amortized, but is assessed for impairment annually or when events or changes in circumstances indicate that a potential impairment exists. Goodwill related to our regions were as follows (in thousands):



	Europe			Bristow Academy			Australia			West Africa			Total
March 31, 2015	$	35,701		$	10,190		$	23,791		$	5,946		$	75,628
Impairments ⁽¹⁾	(12,051		)	(10,223		)	—			—			(22,274		)
Foreign currency translation	278			33			(1,134		)	(1		)	(824		)
December 31, 2015	$	23,928		$	—		$	22,657		$	5,945		$	52,530

______


⁽¹⁾	During the nine months ended December 31, 2015, we recorded impairments in some of our reporting units. For further details on goodwill impairments, see Loss on Impairment discussed below.

Other Intangible Assets

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



	Client contracts			Client relationships			Trade name and trademarks			Internally developed software			Licenses			Total
March 31, 2015	$	8,165		$	13,056		$	5,148		$	1,179		$	758		$	28,306
Foreign currency translation	(36		)	(214		)	(48		)	(7		)	(22		)	(327		)
December 31, 2015	$	8,129		$	12,842		$	5,100		$	1,172		$	736		$	27,979

March 31, 2015	$	(7,399	)	$	(1,583	)	$	(323	)	$	(244	)	$	(542	)	$	(10,091	)
Amortization expense	(610		)	(658		)	(241		)	(182		)	(39		)	(1,730		)
December 31, 2015	$	(8,009	)	$	(2,241	)	$	(564	)	$	(426	)	$	(581	)	$	(11,821	)

Weighted average remaining contractual life, in years	0.1			12.1			14.1			3.1			3.0			7.0

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



2016	$	374
2017	1,410
2018	1,533
2019	1,173
2020	971
Thereafter	10,697
	$	16,158

The Bristow Norway and Eastern Airways acquisitions, included in our Europe Caspian regions, resulted in intangible assets for client contracts, client relationships, trade names and trademarks, internally developed software and licenses. The Airnorth acquisition, included in our Asia Pacific region, resulted in intangible assets for client contracts, client relationships and trade name and trademarks.

Other Assets

As of December 31 and March 31, 2015, other assets included the long-term portion of contract acquisition and pre-operating costs totaling $55.3 million and $42.4 million, respectively, related to the SAR contracts in the U.K. and a client contract in Norway, which are recoverable under the contract and will be expensed over the terms of the contracts.

Property and Equipment and Assets Held for Sale

During the three and nine months ended December 31, 2015 and 2014, we made capital expenditures as follows:



	Three Months Ended December 31,				Nine Months Ended December 31,
	2015		2014		2015		2014
Number of aircraft delivered:
Medium	—		2		1		5
Large	8		4		10		12
Total aircraft	8		6		11		17
Capital expenditures (in thousands):
Aircraft and related equipment ⁽¹⁾	$	165,394	$	165,269	$	276,547	$	402,753
Other	30,982		31,897		66,818		96,532
Total capital expenditures	$	196,376	$	197,166	$	343,365	$	499,285

_____________


⁽¹⁾	During the three months ended December 31, 2015 and 2014, we spent $136.8 million and $159.2 million, respectively, and during the nine months ended December 31, 2015 and 2014, we spent $201.1 million and $383.4 million, respectively, on aircraft progress payments to be delivered in future periods.

The following table presents details on the aircraft sold or disposed of and impairments on assets held for sale during the three and nine months ended December 31, 2015 and 2014:



	Three Months Ended December 31,						Nine Months Ended December 31,
	2015			2014			2015			2014

	(In thousands, except for number of aircraft)

Number of aircraft sold or disposed of ⁽¹⁾	3			3			16			26
Proceeds from sale or disposal of assets ⁽¹⁾	$	3,045		$	6,717		$	19,152		$	404,361
Gain (loss) from sale or disposal of assets	$	(2,154	)	$	(717	)	$	(1,825	)	$	3,157

Number of aircraft impaired	—			12			11			18
Impairment charges on aircraft held for sale	$	—		$	25,614		$	22,031		$	28,751

_____________


⁽¹⁾	During the nine months ended December 31, 2014, 14 of these aircraft were leased back, and we received $380.7 million in proceeds for these aircraft. We did not enter into any sale leaseback transactions during the nine months ended December 31, 2015.

During the three and nine months ended December 31, 2015, we recorded accelerated depreciation of $5.0 million and $22.4 million, respectively, on 16 medium, four large and one fixed wing aircraft operating in our Americas, Africa and Asia Pacific regions as management made the decision to exit these model types earlier than originally anticipated. In certain instances the salvage values of aircraft were also adjusted to reflect our expectation of sales values in the current market. We expect to record an additional $3.1 million in depreciation expense over the remainder of fiscal year 2016 relating to changes in fleet exit timing and changes in expected salvage values.

As of December 31, 2015, we noted that our equity market capitalization was below our carrying value triggering a review of our property and equipment for potential impairment. In accordance with Accounting Standard Codification 360-10-35, we estimated future cash flows to test the recoverability of our property and equipment, which largely consists of our held for use aircraft. The determination of estimated future cash flows required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to projected demand for services and rates. We determined that the estimated future cash flows were above the carrying value as of December 31, 2015 and no impairment was recorded. Future declines in operating performance or anticipated business outlook may reduce our estimated fair value and result in impairment.

Loss on Impairment

Goodwill — Our business consists of one segment: Helicopter Services, with five reporting units within that segment: Europe Caspian region, Africa region, Americas region, Asia Pacific region, and Corporate and other. For the purposes of performing an analysis of goodwill, we evaluate whether there are reporting units below the reporting units we disclose for segment reporting purposes by assessing whether our regional management typically reviews results and whether discrete financial information exists at a lower level. Based on this review, we performed our analysis of goodwill for the following reporting units as of September 30, 2015, with goodwill as reflected below prior to any impairment recorded:

•The Africa region, which included $5.9 million of goodwill;

•Bristow Academy, within Corporate and other, which included $10.2 million of goodwill;

•Bristow Norway, within our Europe Caspian region, which included $12.1 million of goodwill;


•	Eastern Airways, within our Europe Caspian region, which included $24.6 million of goodwill; and

•Airnorth, within our Asia Pacific region, which included $21.9 million of goodwill.

We test goodwill for impairment on an annual basis or when events or changes in circumstances indicate that a potential impairment exists. During the three months ended September 30, 2015, we noted rapid and significant declines in the market value of our stock and an overall reduction in expected operating results resulting from the downturn in the oil and gas market driven by reduced crude oil prices. The impact on our results is reflected in an increase in the number of idle aircraft and reduction in forecasted results across our global oil and gas helicopter operations, and is reflected in reduced operating revenue for our business for the three months ended September 30, 2015, when excluding growth from the U.K. SAR contract and the addition of Airnorth. The reduction in demand for aircraft in the offshore energy market led to further impairment of older model aircraft as discussed under Property and Equipment and Assets Held for Sale above. Based on these factors, we concluded that the fair value of our goodwill could have fallen below its carrying value and that an interim period analysis of goodwill was required.

We performed the interim impairment test of goodwill across the reporting units discussed above, noting that the estimated fair values of the Africa region, Eastern Airways and Airnorth exceeded the carrying values. The estimated fair values of Bristow Academy and Bristow Norway were below their carrying values, resulting in an impairment of all of the goodwill for those reporting units and a loss of $22.3 million reflected in our results for the nine months ended December 31, 2015. We updated this impairment analysis as of December 31, 2015 for the Africa region, Eastern Airways and Airnorth, noting that the estimated fair values of these reporting units still exceeded the carrying values. The estimated fair value of our Africa region was approximately 8% more than the carrying value for the Africa region.

We estimated the implied fair value of the reporting units using a variety of valuation methods, including the income and market approaches. The determination of estimated fair value required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of the reporting units, such as projected demand for our services and rates.

The income approach was based on a discounted cash flow model, which utilized present values of cash flows to estimate fair value. The future cash flows were projected based on our estimates of future rates for our services, utilization, operating costs, capital requirements, growth rates and terminal values. Forecasted rates and utilization take into account current market conditions and our anticipated business outlook, both of which have been impacted by the adverse changes in the offshore energy business environment from the current downturn. Operating costs were forecasted using a combination of our historical average operating costs and expected future costs, including ongoing cost reduction initiatives. Capital requirements in the discounted cash flow model were based on management's estimates of future capital costs driven by expected market demand in future periods. The estimated capital requirements included cash outflows for new aircraft, infrastructure and improvements. A terminal period was used to reflect our estimate of stable, perpetual growth. The future cash flows were discounted using a market-participant risk-adjusted weighted average cost of capital (“WACC”) for each of the reporting units and in total. These assumptions were derived from unobservable inputs and reflect management's judgments and assumptions.

The market approach was based upon the application of price-to-earnings multiples to management's estimates of future earnings adjusted for a control premium. Management's earnings estimates were derived from unobservable inputs that require significant estimates, judgments and assumptions as described in the income approach.

For purposes of the goodwill impairment test, we calculated the reporting units’ estimated fair values as the average of the values calculated under the income approach and the market approach.

We evaluated the estimated fair value of our reporting units compared to our market capitalization. The aggregate fair values of our reporting units exceeded our market capitalization, and we believe the resulting implied control premium was reasonable based on recent market transactions within our industry or other relevant benchmark data.

The estimates used to determine the fair value of the reporting units discussed above reflect management's best estimates, and we believe they are reasonable. Future declines in the reporting units’ operating performance or our anticipated business outlook may reduce the estimated fair value of these reporting units and result in additional impairments. Factors that could have a negative impact on the fair value include, but are not limited to:


•	decreases in estimated rates and utilization due to greater-than-expected market pressures, downtime and other risks associated with offshore energy operations;

•sustained declines in our stock price;

•decreases in revenue due to our inability to attract and retain skilled personnel;


•	changes in worldwide offshore energy transportation supply and demand, competition or technology;


•	changes in future levels of drilling activity and expenditures, whether as a result of global capital markets and liquidity, prices of oil and natural gas or otherwise, which may cause our clients to further reduce offshore production and drilling activities;


•	possible cancellation or suspension of contracts as a result of mechanical difficulties, performance or other reasons;


•	inability to manage cost during the current downturn and in future periods;


•	increases in the market-participant risk-adjusted WACC; and

•declines in anticipated growth rates.

Adverse changes in one or more of these factors could result in additional goodwill impairments in future periods.

Other impairment charges — Additionally, included in loss on impairment are impairment charges for inventory of $5.4 million during the nine months ended December 31, 2015 and $3.8 million and $7.2 million during the three and nine months ended December 31, 2014, respectively. For further details on inventory impairments, see Inventory discussed above.

Deferred Sale Leaseback Advance

As of March 31, 2015, we had a total deferred sale leaseback advance asset of $55.9 million, which was included in deferred sale leaseback advance on our condensed consolidated balance sheet. During fiscal year 2014, we received payment of approximately $106.1 million for progress payments we had made on seven aircraft under construction, and we assigned any future payments due on these construction agreements to the purchaser. As we had the obligation and intent to lease the aircraft back from the purchaser upon completion, we recorded a liability equal to the cash received and additional payments made by the purchaser totaling $147.4 million, with a corresponding increase to construction in progress. During fiscal year 2015, we took delivery and entered into leases for five of the aircraft and removed a total of $183.7 million and $182.6 million, respectively, from construction in progress and deferred sale leaseback advance on our condensed consolidated balance sheet. During the three months ended June 30, 2015, we took delivery and entered into leases for the remaining two aircraft and removed a total of $75.8 million and $74.3 million, respectively, from construction in progress and deferred sale leaseback advance on our consolidated balance sheet. As of June 30, 2015, the construction in progress and deferred sale leaseback advance liability related to these deferred sale leaseback transactions were removed from our condensed consolidated balance sheet.

Recent Accounting Pronouncements

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

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued accounting guidance on revenue recognition for revenue from contracts with customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance when it becomes effective. This new standard is effective for annual reporting periods beginning after December 15, 2016. However, in July 2015, the FASB approved the deferral of the effective date of the revenue recognition standard permitting public entities to apply the new revenue standard to annual reporting periods beginning after December 15, 2017. Early application is permitted, but not before the original effective date of December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this standard will have on our financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

In August 2014, the FASB issued accounting guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within a year of the date the financial statements are issued. The standard applies to all entities and is effective for annual and interim periods beginning after December 15, 2016 with early adoption permitted. We are evaluating the effect this standard will have on our financial statements and related disclosures.

In February 2015, the FASB issued accounting guidance which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance amends the criteria for determining which entities are considered VIEs and amends the criteria for determining if a service provider possesses a variable interest in a VIE. This pronouncement is effective for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application. We have not yet determined the effect, if any, of the standard on our consolidated financial statements.

In April 2015, the FASB issued accounting guidance relating to the presentation of debt issuance costs. The intent is to simplify the presentation of debt issuance costs by requiring entities to record debt issuance costs on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to debt discounts or premiums. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and early adoption is permitted. As of December 31 and March 31, 2015, we had debt issuance costs of $13.8 million and $10.0 million, respectively, which are included in other assets on the condensed consolidated balance sheets. We have not yet adopted this accounting guidance but we believe the adoption of this guidance would reduce other assets and long-term debt by such amounts.

In November 2015, the FASB issued a new standard which changes how deferred taxes are classified on an entity’s balance sheet. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The new guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 with early adoption permitted. The guidance may be applied either prospectively, for all deferred tax assets and liabilities, or retrospectively. If applied prospectively, entities are required to include a statement that prior periods were not retrospectively adjusted. If applied retrospectively, entities are also required to include quantitative information about the effects of the change on prior periods. We have not yet adopted this accounting guidance but we believe the adoption of this guidance would reduce current assets and current liabilities and increase long-term assets and long-term liabilities by such amounts.