February 2012

Helicopter values: Which models are doing what?

David Crick, ASA, Lloyds Asset Services

Phil Seymour, IBA Group

Sharon Desfor, ASA, MRICS, & Barry Desfor, HeliValue$, Inc.

Market segment highlight: Search and Rescue

Helicopter values: Which models are doing what?

February 2013

Phil Seymour

IBA Group

February 2013

EMS, 1993

SAR, 693

Fire Fighting, 464

World Search and Rescue Fleet

February 2013

1546

740

438

17183 79 41 26 11 6 3 2 1 1 1 1

0

200

400

600

800

1000

1200

1400

1600

1800

World SAR Fleet - Manufacturers

February 2013

0

50

100

150

200

250

300

350

400

450

500

EC1

35

AS3

50

Be

ll 2

06

BK

11

7

AS3

65

Be

ll 4

12

AW

10

9

EC1

45

Bo

10

5

Be

ll 4

07

Be

ll 2

12

AW

13

9

S-7

6

Be

ll 2

05

Sea

Kin

g

AS3

32

Su

per

Pu

ma

AW

11

9

MD

Exp

lore

r

EC1

30

AS3

55

S-6

4

Be

ll 2

22

AW

10

1

Alo

ue

tte

3

MD

50

0

S-7

0

S-6

1

EC2

25

Be

ll 4

30

EC1

55

Be

ll 2

30

20

5

Be

ll 2

04

BV

10

7

Dh

ruv

Be

ll 2

14

Be

ll 4

29

S-9

2

SA3

15

B L

ama

Be

ll 4

27

BV

23

4

EC1

20

Co

libri

MD

52

0N

Alo

ue

tte

2

SA3

30

Pu

ma

FH-1

10

0

NH

-90

S-3

30

World SAR Fleet - Helicopter Models

February 2013

11 5

6538

852

755

3

368

291

3

394

120

8 1

83

148

444

155

0

100

200

300

400

500

600

700

800

900

0 3 4 5 6 7 8 10 12 13 14 15 16 18 19 20 21 23 24 25 30

Number of Seats

World SAR helicopter Fleet by Seat capacity

February 2013

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1 - 7 8 - 16 17 - 22 23 - 30

Seat category

World SAR Fleet - Split by Seat category and Configuration

SAR

FF

EMS

February 2013

46

295

126

1010

11660

1497

0

200

400

600

800

1000

1200

1400

1600

Africa Asia Australasia Europe South America Middle East North America

World SAR Fleet - Regional Breakdown

February 2013

Model Capacity Weight Price New IBA lower IBA Mid IBA

Higher

AS350 2+4/5 2.25 2.53 0.25 - 0.55 1.0 - 1.2 2.0 - 2.2

Alouette 3 2+4/5 2.2 N/A 1.2 - 1.5 2.0 - 2.5 3.0 - 3.5

AS355 1+4/5 2.6 3.75 0.85 - 1.5 1.65 - 2.1 2.5 - 3.6

AW109 1+5/6 2.85 6.1 - 6.2 1.85 - 2.2 2.45 - 3.3 3.8 - 4.6

Bell 206 2+3/5 1.5/1.8 N/A 0.2 - 0.4 0.5 - 0.6 0.8 - 1.0

Bo105 2+3/5 2.5 N/A 0.3 - 0.4 0.50 - 0.55 0.65 - 0.75

EC135 1+4/7 2.91 5.6 - 5.8 1.65 - 1.95 2.3 - 3.15 3.3 - 4.75

MD 500 2+3/5 1.16 N/A 0.15 - 0.2 0.5 - 0.6 1.0 - 1.1

MD 520N 2+3/5 1.52 N/A 0.35 - 0.45 0.6 - 0.7 0.8 - 0.9

MD Explorer 1+6/2+6 2.95 6.5 1.7 - 1.8 2 - 2.7 3.0 - 4.0

Bell 204/205 2+8/9 4.3 N/A 0.75 - 1.0 1.6 - 1.8 2.2 - 2.4

EC145/BK117 1/2+9 3.59 7.8 4.6 5.15 6 - 6.5

S-76 1+12 5.3 11.85 2.0 - 2.2 4.2 - 4.4 9.6 - 9.8

HAL Dhruv 1+4/2+12 5.5 8.5 N/A N/A N/A

Bell 412 1+7/13 5.4 10.75 1.4 - 1.6 3.8 - 4.0 6.7 - 7.0

Bell 212 2+12/13 5.1 N/A 1.3 - 1.5 2.2 - 2.5 3.2 - 3.5

EC155/AS365 2+14 4.9 11.25 0.9 - 1.2 2.15 - 2.5 4 - 7.3

AW139 2+15/18 6.4 14.65 7.65 9.75 11.8

S-92 2+19/24 11.86 20.0 11.2 14.5 18.5

AS332 Super Puma 2+19/25 9.2 N/A 4.3 - 4.5 10.3 - 10.5 13.5 - 14.0

EC225 2+19 11 20 N/A N/A N/A

AW101 2+30 14.6 N/A N/A N/A N/A

S-61 2+26/28 9.3 N/A 2.5 - 2.7 3.5 - 3.7 4.1 - 4.3

February 2013

8

1

7

15

27

4

8

2

7

1

18

1

19

41

19

8

8

4

0 10 20 30 40 50

AS350

AS365

AW109

AW119

AW139

AW169

Bell 206

Bell 407

Bell 412

Bell 429

Dhruv

EC130

EC135

EC145

EC225

NH-90

S-76

S-92

Backlog by Helicopter Type

February 2013

89

47

36

20

6

0

10

20

30

40

50

60

70

80

90

100

2012 2013 2014 2015 2016

Backlog by Delivery Schedule

Exit strategy values & considerations

Helicopter values: Which models are doing what?

February 2013

David Crick, ASA

Lloyds Asset Services

Basis of Value - Expectations

OLV – Orderly Liquidation Value

FSV – Forced Sale Value

ARV – Auction Realisable Value

The chosen disposal method has a direct effect on:

Disposal Timeframe

Marketing Approach

Ultimate value placed on helicopter

February 2013

Residual Values

Projected Market Value

Not a “get out of jail quickly at the end of term” value

February 2013

Highest & Best Use

Helicopters are multi-configurable

How best to move a specifically configured helicopter?

Know whether it has options, for instance

Remove air conditioning

Change out EMS interior

Account for likely deductions due to configuration

$150,000 needed to remove the heavy VVIP configuration prior to reconfig for utility, SAR

or EMS use

VVIP configured helicopter may have reduced offers

February 2013

Supply/Demand

In a “hot” market the bidding is high as supply is reduced

Not the case in most rotary segments today

Exceptions include some low-time utility helicopters

AS-350B2

Heavy ME

Bell 407’s

February 2013

Regional Effects

Premiums may still be paid in today’s market

For instance, 206L already located in Australia, ready for work

No costs for regulatory compliance

No costs for overseas inspections or shipment

No costs for waiting time

February 2013

Contract Effects

A premium may be paid at contract renewals, for instance:

Fire contracts being awarded

Energy companies changing policy on leasehold v. cross hiring

Seasonal effects on values:

Fire season

Meteorological events

Direct or indirect cost to move helicopter

However, will increase the net return

February 2013

Current and upcoming value events

Airworthiness Directives and Service Bulletins:

Robinson R44 fuel bladder

Eurocopter AS350B3e laminated half-bearings (VNE limit)

AgustaWestland 139 tail rotor TBO reduction

Eurocopter EC225 grounding

February 2013

What’s up, what’s down, and what’s coming?

Helicopter values: Which models are doing what?

February 2013

Sharon Desfor, ASA, MRICS, President

Barry Desfor, Managing Director

HeliValue$, Inc.

AgustaWestland values

109A

Values have fallen around 10% in the past quarter

Values are holding at this level only because buyers are parting them out

109C

No resale market to speak of

Values have fallen around 5% in the past quarter

109S

Values have fallen around 4%-7% in the past quarter

AW139

Only VVIPs are available

Demand for new machines still outstrips used

February 2012

Bell values

212

Many are available but sellers are holding tight on price

All are asking US $2MM to $3.6MM

230

Those on market have been available forever

Values have fallen around 3% to 5%

427

Values have fallen around 10% to 15%

Demand is non-existent

February 2013

Eurocopter values

EC135, all variants

Values have fallen around 6% to 8% in the past quarter

EC145

Values have fallen around 5% in the past quarter

Options values are falling as well, compounding the loss

AS365N

Values have fallen around 15% in the past quarter

AS365N1

Values have fallen around 15% in the past quarter

AS365N3

Higher-end values have fallen around 5% to 7%

narrowing the spread between higher- and lower-time helicopters

February 2013

Other makes

902

Values have fallen around 20% in the past quarter

February 2013

Any good news?

S76C++

Several have recently sold for $10MM-$11MM but values are falling due to forthcoming

S76D deliveries

Will likely go back up after initial shock to the market

S92s are super hot!

Their gearbox problems appear to be fixed and the backlog exceeds two years

Only one used S92 is on the market but it’s a VVIP and has been sitting for about 4 years

If the price were dropped it would sell easily – proves that $25MM is not a viable price

for a 2004 VVIP S92, regardless of low total time

February 2013

Super Pumas – What on earth is going on?

EC225 Worldwide Grounding

Eurocopter has isolated the problem as being between the bevel gear and the vertical

shaft (from the top of the transmission to the rotor head)

Few have confidence the repair will be completed in February as planned

Even Eurocopter is hoping April will mark it’s return

Helicopter industry insiders believe it will take into the second half of 2013

In response, the AS332-series models, especially -L1s, will very likely go up in value

Due to higher prices on the AS332L1e and C1e

Their gearbox problem was resolved by using an earlier-generation vertical shaft

Will any of this impact demand for the upcoming EC175?

Is likely to be released at the same price point as the 332L1e

Smaller than the EC225

February 2013

Additional resource

The Helicopter Association International (HAI) has a Finance & Leasing Committee. Our

committee has an outreach program to help other associations, societies and trade groups

educate their members about the finance, leasing, valuation, taxation, and accounting

associated with helicopter acquisitions and operations. We periodically publish a handbook

of helicopter funding.

Our committee members and panelists are long-time specialists in helicopter transactions –

from big banks to independent equipment financiers, from simple mortgages to complex

lease facilities, from originate-to-own CSAs to multi-corporation syndications. We also have

ASA-accredited appraisers, world-renowned helicopter brokers, specialists in aircraft law,

accounting, insurance and taxes.

If you would ever like a group of our panelists to address your company or group, please just

let us know and we will be happy to put together a speaking proposal for you. You can

contract the group through myself (sharon.desfor@helivalues.com) or David

(david@lloydsassetservices.com.au), through our current Chairman Chuck McGuire

(cmcguire@avstarfinance.com), or through our liaison at the Helicopter Association

International, Kevin Cooper (kevin.cooper@rotor.com).

February 2013