Commitments and Contingencies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company is subject to the various legal proceedings and claims discussed below as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. The Company cannot reasonably estimate the potential loss for certain legal proceedings due to the uncertain nature of such disputes. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, management believes that the resolution of these matters will not have a material adverse effect on our consolidated financial statements. Legal Matters Arizona Environmental Matter In August 2012, EHI received a request for information from the State of Arizona and has been served various petitions regarding the Broadway-Pantano Site in Tucson, Arizona, which is comprised of two landfills at which the State of Arizona has been conducting soil and groundwater investigations and cleanups. According to these documents, the State has identified approximately 101 parties that are potentially responsible for the contamination. It is possible that the State or other liable parties may assert that EHI is liable for the alleged contamination at the site. World Fuel Claim In December 2013, World Fuel, a former fuel supplier of Evergreen International Aviation (‘‘EIA’’) and Evergreen Airlines (‘‘EA’’), filed suit in the Circuit Court of Yamhill County, Oregon against EIA, EA and other named parties claiming approximately $9.0 million of accounts payable due and owing to World Fuel for fuel purchases made by EIA and EA. Evergreen Helicopters, Inc. (Erickson’s wholly-owned subsidiary, ‘‘EHI’’) was a named party in the lawsuit since it was alleged that EHI signed a joint and several guaranty of payment in favor of World Fuel in 2012. In April 2014, the Company filed an answer, which included certain counterclaims against World Fuel and certain cross claims against Mr. Delford Smith. Although the Company is unable to predict the final outcome the proceeding, the Company believes the allegations lack merit and intend to vigorously defend against them. Stockholder Action In August 2013, a stockholder class and derivative action was filed in the Court of Chancery for the State of Delaware against the Company, members of our board of directors, EAC Acquisition Corp., and entities associated with ZM Equity Partners, LLC and certain of their affiliates. The plaintiff asserted claims for breach of fiduciary duty and unjust enrichment ing connection with the EHI acquisition and requested an award of unspecified monetary damages, disgorgement and restitution, certain other equitable relief, and an award of plaintiff’s costs and disbursements, including legal fees. Although we are unable to predict the final outcome of the proceeding, we believe the allegations lack merit and intend to vigorously defend against them. Operating Leases The Company owns substantially all of its property, periodically leases certain premises on a short term basis, and leases a minor amount of its facilities and certain other property under non-cancelable operating lease agreements that expire on various dates through August of 2064. Certain leases have renewal options. Facilities rent expense was $1.9 million, $2.3 million and $1.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company has certain operating leases for aircraft that expire on various dates through December 2019. Aircraft rent expense was $17.0 million, $20.2 million and $14.0 million during the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, future minimum lease payments are as follows (in thousands):
Royalty Agreement The Company has a license agreement whereby the Company is obligated to pay a royalty based on the net sales of certain aircraft support parts. During the year ended December 31, 2015, royalty expense was $0.1 million, which is classified as cost of revenues on the consolidated statement of operations. |
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