2017
Louisiana | 72-0395707 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
2001 SE Evangeline Thruway | ||
Lafayette, Louisiana | 70508 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer: | ☐ | Accelerated filer: ☒ | Smaller reporting company: | ||||
Non-accelerated filer: | ☐ (Do not check if a smaller reporting company) | ☐ |
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PHI, INC.
| Outstanding at July 31, 2017 | |||||||
Voting Common Stock | 2,905,757 shares | |||||||
Non-Voting Common Stock | 12,892,321 shares |
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
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Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 5. | ||||||||
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September 30, | December 31, | |||||||
2016 | 2015 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 2,639 | $ | 2,407 | ||||
Short-term investments | 289,520 | 284,523 | ||||||
Accounts receivable – net | ||||||||
Trade | 131,295 | 138,309 | ||||||
Other | 11,180 | 6,469 | ||||||
Inventories of spare parts – net | 69,409 | 69,491 | ||||||
Prepaid expenses | 6,976 | 8,951 | ||||||
Deferred income taxes | 10,379 | 10,379 | ||||||
Income taxes receivable | 863 | 761 | ||||||
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Total current assets | 522,261 | 521,290 | ||||||
Property and equipment – net | 916,560 | 883,529 | ||||||
Restricted cash and investments | 13,038 | 15,336 | ||||||
Other assets | 7,334 | 6,178 | ||||||
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Total assets | $ | 1,459,193 | $ | 1,426,333 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 20,843 | $ | 31,373 | ||||
Accrued and other current liabilities | 32,178 | 44,759 | ||||||
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Total current liabilities | 53,021 | 76,132 | ||||||
Long-term debt: | ||||||||
Revolving credit facility | 132,400 | 57,500 | ||||||
Senior Notes issued March 17, 2014, net of debt issuance costs of $3,064 and $3,999, respectively | 496,936 | 496,001 | ||||||
Deferred income taxes | 147,058 | 153,645 | ||||||
Other long-term liabilities | 8,291 | 16,057 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Shareholders’ Equity: | ||||||||
Voting common stock – par value of $0.10; 12,500,000 shares authorized, 2,905,757 shares issued and outstanding | 291 | 291 | ||||||
Non-voting common stock – par value of $0.10; 25,000,000 shares authorized, 12,777,358 and 12,685,725 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 1,278 | 1,269 | ||||||
Additional paid-in capital | 308,690 | 304,884 | ||||||
Accumulated other comprehensive loss | (271 | ) | (567 | ) | ||||
Retained earnings | 311,499 | 321,121 | ||||||
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Total shareholders’ equity | 621,487 | 626,998 | ||||||
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Total liabilities and shareholders’ equity | $ | 1,459,193 | $ | 1,426,333 | ||||
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June 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 2,323 | $ | 2,596 | ||||
Short-term investments | 237,433 | 289,806 | ||||||
Accounts receivable – net | ||||||||
Trade | 133,934 | 128,662 | ||||||
Other | 13,570 | 9,603 | ||||||
Inventories of spare parts – net | 76,155 | 70,402 | ||||||
Prepaid expenses | 13,131 | 9,259 | ||||||
Deferred income taxes | 10,798 | 10,798 | ||||||
Income taxes receivable | 414 | 540 | ||||||
Total current assets | 487,758 | 521,666 | ||||||
Property and equipment – net | 918,134 | 903,977 | ||||||
Restricted cash and investments | 12,396 | 13,038 | ||||||
Other assets | 10,172 | 9,759 | ||||||
Total assets | $ | 1,428,460 | $ | 1,448,440 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 27,791 | $ | 28,704 | ||||
Accrued and other current liabilities | 33,384 | 28,346 | ||||||
Total current liabilities | 61,175 | 57,050 | ||||||
Long-term debt: | ||||||||
Revolving credit facility | 133,225 | 134,000 | ||||||
Senior Notes issued March 17, 2014, net of debt issuance costs of $2,129 and $2,753, respectively | 497,871 | 497,247 | ||||||
Deferred income taxes | 143,030 | 151,713 | ||||||
Other long-term liabilities | 9,098 | 8,652 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Shareholders’ Equity: | ||||||||
Voting common stock – par value of $0.10; 12,500,000 shares authorized, 2,905,757 shares issued and outstanding | 291 | 291 | ||||||
Non-voting common stock – par value of $0.10; 37,500,000 shares authorized, 12,892,321 and 12,779,646 issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 1,289 | 1,278 | ||||||
Additional paid-in capital | 305,787 | 304,246 | ||||||
Accumulated other comprehensive loss | (254 | ) | (478 | ) | ||||
Retained earnings | 276,948 | 294,441 | ||||||
Total shareholders’ equity | 584,061 | 599,778 | ||||||
Total liabilities and shareholders’ equity | $ | 1,428,460 | $ | 1,448,440 |
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating revenues, net | $ | 158,093 | $ | 214,733 | $ | 489,245 | $ | 617,477 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 144,938 | 182,064 | 449,909 | 520,099 | ||||||||||||
Selling, general and administrative expenses | 13,381 | 11,575 | 36,832 | 34,859 | ||||||||||||
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Total operating expenses | 158,319 | 193,639 | 486,741 | 554,958 | ||||||||||||
Loss (gain) on disposal of assets | 85 | (165 | ) | (3,854 | ) | (238 | ) | |||||||||
Equity in loss of unconsolidated affiliate | 198 | 75 | 274 | 249 | ||||||||||||
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Operating (loss) income | (509 | ) | 21,184 | 6,084 | 62,508 | |||||||||||
Interest expense | 7,719 | 7,366 | 22,792 | 21,691 | ||||||||||||
Other income, net | (462 | ) | (472 | ) | (1,571 | ) | (1,501 | ) | ||||||||
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7,257 | 6,894 | 21,221 | 20,190 | |||||||||||||
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(Loss) earnings before income taxes | (7,766 | ) | 14,290 | (15,137 | ) | 42,318 | ||||||||||
Income tax (benefit) expense | (2,799 | ) | 6,621 | (5,515 | ) | 17,832 | ||||||||||
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Net (loss) earnings | $ | (4,967 | ) | $ | 7,669 | $ | (9,622 | ) | $ | 24,486 | ||||||
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Weighted average shares outstanding: | ||||||||||||||||
Basic | 15,683 | 15,587 | 15,655 | 15,558 | ||||||||||||
Diluted | 15,683 | 15,652 | 15,655 | 15,640 | ||||||||||||
Net (loss) earnings per share: | ||||||||||||||||
Basic | $ | (0.32 | ) | $ | 0.49 | $ | (0.61 | ) | $ | 1.57 | ||||||
Diluted | $ | (0.32 | ) | $ | 0.49 | $ | (0.61 | ) | $ | 1.57 |
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Operating revenues, net | $ | 146,424 | $ | 167,136 | $ | 281,042 | $ | 331,152 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 126,951 | 152,417 | 263,464 | 304,971 | ||||||||||||
Selling, general and administrative expenses | 14,247 | 11,778 | 27,290 | 23,451 | ||||||||||||
Total operating expenses | 141,198 | 164,195 | 290,754 | 328,422 | ||||||||||||
Loss (gain) on disposal of assets | 7 | (4,298 | ) | 7 | (3,939 | ) | ||||||||||
Equity in loss of unconsolidated affiliates, net | 991 | 76 | 1,994 | 76 | ||||||||||||
Operating income (loss) | 4,228 | 7,163 | (11,713 | ) | 6,593 | |||||||||||
Interest expense | 8,083 | 7,540 | 16,278 | 15,073 | ||||||||||||
Other income – net | (705 | ) | (494 | ) | (1,768 | ) | (1,109 | ) | ||||||||
7,378 | 7,046 | 14,510 | 13,964 | |||||||||||||
(Loss) earnings before income taxes | (3,150 | ) | 117 | (26,223 | ) | (7,371 | ) | |||||||||
Income tax expense (benefit) | 123 | (4,160 | ) | (7,702 | ) | (2,716 | ) | |||||||||
Net (loss) earnings | $ | (3,273 | ) | $ | 4,277 | $ | (18,521 | ) | $ | (4,655 | ) | |||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 15,716 | 15,677 | 15,716 | 15,650 | ||||||||||||
Diluted | 15,716 | 15,718 | 15,716 | 15,650 | ||||||||||||
Net (loss) earnings per share: | ||||||||||||||||
Basic | $ | (0.21 | ) | $ | 0.27 | $ | (1.18 | ) | $ | (0.30 | ) | |||||
Diluted | $ | (0.21 | ) | $ | 0.27 | $ | (1.18 | ) | $ | (0.30 | ) |
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net (loss) earnings | $ | (4,967 | ) | $ | 7,669 | $ | (9,622 | ) | $ | 24,486 | ||||||
Unrealized (loss) gain on short-term investments | (494 | ) | 12 | 523 | (7 | ) | ||||||||||
Other unrealized gain | — | — | — | 24 | ||||||||||||
Changes in pension plan assets and benefit obligations | 1 | 4 | 3 | 4 | ||||||||||||
Tax effect of adjustments | 178 | (6 | ) | (229 | ) | 3 | ||||||||||
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Total comprehensive (loss) income | $ | (5,282 | ) | $ | 7,679 | $ | (9,325 | ) | $ | 24,510 | ||||||
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Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net (loss) earnings | $ | (3,273 | ) | $ | 4,277 | $ | (18,521 | ) | $ | (4,655 | ) | |||||
Unrealized gain on short-term investments | 167 | 210 | 329 | 1,017 | ||||||||||||
Changes in pension plan assets and benefit obligations | 23 | 1 | 22 | 2 | ||||||||||||
Tax effect of the above-listed adjustments | (68 | ) | (75 | ) | (127 | ) | (407 | ) | ||||||||
Total comprehensive (loss) income | $ | (3,151 | ) | $ | 4,413 | $ | (18,297 | ) | $ | (4,043 | ) |
Accumulated | Total | |||||||||||||||||||||||||||||||||||
Voting | Non-Voting | Additional | Other Com- | Share- | ||||||||||||||||||||||||||||||||
Common Stock | Common Stock | Paid-in | Treasury | prehensive | Retained | Holders’ | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Stock | Income (Loss) | Earnings | Equity | ||||||||||||||||||||||||||||
Balance at December 31, 2014 | 2,906 | $ | 291 | 12,576 | $ | 1,258 | $ | 301,533 | $ | — | $ | (211 | ) | $ | 294,197 | $ | 597,068 | |||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | 24,486 | 24,486 | |||||||||||||||||||||||||||
Unrealized loss on short-term investments | — | — | — | — | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||||||||||
Changes in pension plan assets and benefit obligations | — | — | — | — | — | — | 2 | — | 2 | |||||||||||||||||||||||||||
Amortization of unearned stock- based compensation | — | — | — | — | 5,059 | — | — | — | 5,059 | |||||||||||||||||||||||||||
Issuance of non-voting common stock (upon vesting of restricted stock units) | — | — | 177 | 18 | — | — | — | — | 18 | |||||||||||||||||||||||||||
Cancellation of restricted non- voting stock units for tax withholdings on vested shares | — | — | (69 | ) | (7 | ) | (2,200 | ) | — | — | — | (2,207 | ) | |||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | (252 | ) | — | — | (252 | ) | |||||||||||||||||||||||||
Other | — | — | — | — | — | — | 24 | — | 24 | |||||||||||||||||||||||||||
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Balance at September 30, 2015 | 2,906 | $ | 291 | 12,684 | $ | 1,269 | $ | 304,392 | $ | (252 | ) | $ | (188 | ) | $ | 318,683 | $ | 624,195 | ||||||||||||||||||
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Accumulated | Total | |||||||||||||||||||||||||||||||
Voting | Non-Voting | Additional | Other Com- | Share- | ||||||||||||||||||||||||||||
Common Stock | Common Stock | Paid-in | prehensive | Retained | Holders’ | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Earnings | Equity | |||||||||||||||||||||||||
Balance at December 31, 2015 | 2,906 | $ | 291 | 12,685 | $ | 1,269 | $ | 304,884 | $ | (567 | ) | $ | 321,121 | $ | 626,998 | |||||||||||||||||
Net loss | — | — | — | — | — | — | (9,622 | ) | (9,622 | ) | ||||||||||||||||||||||
Unrealized gain on short-term investments | — | — | — | — | — | 294 | — | 294 | ||||||||||||||||||||||||
Changes in pension plan assets and benefit obligations | — | — | — | — | — | 2 | — | 2 | ||||||||||||||||||||||||
Amortization of unearned stock-based compensation | — | — | — | — | 4,334 | — | — | 4,334 | ||||||||||||||||||||||||
Issuance of non-voting common stock (upon vesting of restricted stock units) | — | — | 128 | 12 | — | — | — | 12 | ||||||||||||||||||||||||
Cancellation of restricted non-voting stock units for tax withholdings on vested shares | — | — | (28 | ) | (3 | ) | (528 | ) | — | — | (531 | ) | ||||||||||||||||||||
Retirement of treasury stock | — | — | (8 | ) | — | — | — | — | — | |||||||||||||||||||||||
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Balance at September 30, 2016 | 2,906 | $ | 291 | 12,777 | $ | 1,278 | $ | 308,690 | $ | (271 | ) | $ | 311,499 | $ | 621,487 | |||||||||||||||||
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Voting Common Stock | Non-Voting Common Stock | Additional Paid-in Capital | Accumulated Other Com-prehensive (Loss) Income | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Retained Earnings | ShareHolders' Equity | |||||||||||||||||||||||||
Balance at December 31, 2015 | 2,906 | $ | 291 | 12,685 | $ | 1,269 | $ | 304,884 | $ | (567 | ) | $ | 321,121 | $ | 626,998 | |||||||||||||||
Net loss | — | — | — | — | — | — | (4,655 | ) | (4,655 | ) | ||||||||||||||||||||
Unrealized gain on short-term investments | — | — | — | — | — | 611 | — | 611 | ||||||||||||||||||||||
Changes in pension plan assets and benefit obligations | — | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||
Amortization of unearned stock-based compensation | — | — | — | — | 2,882 | — | — | 2,882 | ||||||||||||||||||||||
Issuance of non-voting common stock (upon vesting of restricted stock units) | — | — | 121 | 12 | — | — | — | 12 | ||||||||||||||||||||||
Cancellation of restricted non-voting stock units for tax withholdings on vested shares | — | — | (27 | ) | (3 | ) | (500 | ) | — | — | (503 | ) | ||||||||||||||||||
Retirement of treasury stock | — | — | (8 | ) | — | — | — | — | — | |||||||||||||||||||||
Balance at June 30, 2016 | 2,906 | $ | 291 | 12,771 | $ | 1,278 | $ | 307,266 | $ | 45 | $ | 316,466 | $ | 625,346 | ||||||||||||||||
Voting Common Stock | Non-Voting Common Stock | Additional Paid-in Capital | Accumulated Other Com-prehensive (Loss) Income | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Retained Earnings | ShareHolders' Equity | |||||||||||||||||||||||||
Balance at December 31, 2016 | 2,906 | $ | 291 | 12,779 | $ | 1,278 | $ | 304,246 | $ | (478 | ) | $ | 294,441 | $ | 599,778 | |||||||||||||||
Net loss | — | — | — | — | — | — | (18,521 | ) | (18,521 | ) | ||||||||||||||||||||
Unrealized gain on short-term investments | — | — | — | — | — | 210 | — | 210 | ||||||||||||||||||||||
Changes in pension plan assets and benefit obligations | — | — | — | — | — | 14 | — | 14 | ||||||||||||||||||||||
Amortization of unearned stock-based compensation | — | — | — | — | 1,816 | — | — | 1,816 | ||||||||||||||||||||||
Issuance of non-voting common stock (upon vesting of restricted stock units) | — | — | 134 | 13 | — | — | — | 13 | ||||||||||||||||||||||
Cancellation of restricted non-voting stock units for tax withholdings on vested shares | — | — | (21 | ) | (2 | ) | (275 | ) | — | — | (277 | ) | ||||||||||||||||||
Cumulative effect adjustment of unrecognized tax benefits | — | — | — | — | — | — | 1,028 | 1,028 | ||||||||||||||||||||||
Balance at June 30, 2017 | 2,906 | $ | 291 | 12,892 | $ | 1,289 | $ | 305,787 | $ | (254 | ) | $ | 276,948 | $ | 584,061 |
Nine Months Ended | ||||||||
September 30, | ||||||||
2016 | 2015 | |||||||
Operating activities: | ||||||||
Net (loss) earnings | $ | (9,622 | ) | $ | 24,486 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 53,054 | 54,312 | ||||||
Deferred income taxes | (6,775 | ) | 15,983 | |||||
Gain on asset dispositions | (3,854 | ) | (238 | ) | ||||
Equity in loss of unconsolidated affiliate | 274 | 249 | ||||||
Inventory valuation reserves | 3,766 | 1,576 | ||||||
Changes in operating assets and liabilities | (43,991 | ) | 11,787 | |||||
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Net cash (used in) provided by operating activities | (7,148 | ) | 108,155 | |||||
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Investing activities: | ||||||||
Purchase of property and equipment | (74,950 | ) | (48,244 | ) | ||||
Proceeds from asset dispositions | 13,233 | 3,469 | ||||||
Purchase of short-term investments | (263,204 | ) | (560,148 | ) | ||||
Proceeds from sale of short-term investments | 259,322 | 458,468 | ||||||
Refund of deposits on aircraft | — | 6,010 | ||||||
Payment of deposits on aircraft | (197 | ) | (1,207 | ) | ||||
Loan to unconsolidated affiliate | (1,200 | ) | — | |||||
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Net cash used in investing activities | (66,996 | ) | (141,652 | ) | ||||
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Financing activities: | ||||||||
Proceeds from line of credit | 213,900 | 206,660 | ||||||
Payments on line of credit | (139,000 | ) | (171,440 | ) | ||||
Repurchase of common stock | (524 | ) | (2,441 | ) | ||||
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Net cash provided by financing activities | 74,376 | 32,779 | ||||||
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Increase (decrease) in cash | 232 | (718 | ) | |||||
Cash, beginning of period | 2,407 | 6,270 | ||||||
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Cash, end of period | $ | 2,639 | $ | 5,552 | ||||
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Supplemental Disclosures Cash Flow Information | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 28,258 | $ | 27,161 | ||||
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Income taxes | $ | 2,856 | $ | 3,061 | ||||
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Noncash investing activities: | ||||||||
Other current liabilities and accrued payables related to purchase of property and equipment | $ | 3,717 | $ | 45 | ||||
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Six Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Operating activities: | ||||||||
Net loss | $ | (18,521 | ) | $ | (4,655 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 34,011 | 34,761 | ||||||
Deferred income taxes | (7,791 | ) | (3,572 | ) | ||||
Loss (gain) on asset dispositions | 7 | (3,939 | ) | |||||
Equity in loss of unconsolidated affiliate, net | 1,994 | 76 | ||||||
Inventory valuation reserves | 2,214 | 2,613 | ||||||
Changes in operating assets and liabilities | (19,863 | ) | (24,485 | ) | ||||
Net cash (used in) provided by operating activities | (7,949 | ) | 799 | |||||
Investing activities: | ||||||||
Purchase of property and equipment | (43,892 | ) | (39,908 | ) | ||||
Proceeds from asset dispositions | 17 | 10,998 | ||||||
Purchase of short-term investments | (134,518 | ) | (151,436 | ) | ||||
Proceeds from sale of short-term investments | 187,217 | 148,838 | ||||||
Payment of deposits on aircraft | (110 | ) | (131 | ) | ||||
Net cash provided by (used in) investing activities | 8,714 | (31,639 | ) | |||||
Financing activities: | ||||||||
Proceeds from line of credit | 66,525 | 150,800 | ||||||
Payments on line of credit | (67,300 | ) | (113,300 | ) | ||||
Repurchase of common stock | (263 | ) | (500 | ) | ||||
Net cash (used in) provided by financing activities | (1,038 | ) | 37,000 | |||||
(Decrease) increase in cash | (273 | ) | 6,160 | |||||
Cash, beginning of period | 2,596 | 2,407 | ||||||
Cash, end of period | $ | 2,323 | $ | 8,567 | ||||
Supplemental Disclosures Cash Flow Information | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 15,250 | $ | 14,329 | ||||
Income taxes | $ | 1,131 | $ | 1,879 | ||||
Noncash investing activities: | ||||||||
Other current liabilities and accrued payables related to purchase of property and equipment | $ | 15 | $ | 64 |
2016.
New
In August 2014, the FASB issued ASU 2014-15Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to assess the entity’s ability to continue as a going concern and to provide related disclosures in certain circumstances. ASU 2014-15 is effective for annual periodsthe Company beginning after December 15, 2016,on January 1, 2018. Revenues from our Oil and annualGas segment and interim periods thereafter. Early adoption is permitted.Air Medical segment hospital contracts are primarily comprised of a fixed monthly fee for a particular model of aircraft, plus a variable component based on flight time. Under the independent provider programs of our Air Medical segment, our revenues are based on a flat rate plus a variable charge per patient-loaded mile, and are recorded net of contractual allowances. We do not believe that the impact of the implementation of this new guidancealso generate revenue on a cost-plus basis in our Technical Services segment. Based on our consolidated financial statements and disclosures will be significant.
In November 2015,initial assessment, the FASB issued ASU 2015-17,Balance Sheet Classification of Deferred Taxes, which amends existing guidance on income taxes to require the classification of all deferred tax assets and liabilities as non-current on the balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016, with early adoption permitted, and the guidance may be applied either prospectively or retrospectively. We doCompany does not expect the adoption of this ASU to have a material impact on ourits condensed consolidated financial statements.
Remaining implementation matters include establishing new policies, procedures, and controls and quantifying any adoption date adjustments. The Company will adopt this standard on January 1, 2018 utilizing the modified retrospective method.
In March 2016,expect the FASB issued ASU 2016-09,Compensation – Stock Compensation (Topic 718); Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The ASU is effective for public companies in annual periods beginning after December 15, 2016, and interim periods within those years. The effectsadoption of this standard will result in a material change to our consolidated assets and liabilities based on our financial position, resultslease portfolio as of operations, and cash flows are not yet known.
June 30, 2017. We plan to adopt this standard no later than January 1, 2019.
We plan to adopt this standard beginning January 1, 2018.
Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Investments: | ||||||||||||||||
Money market mutual funds | $ | 17,608 | $ | — | $ | — | $ | 17,608 | ||||||||
Commercial paper | 32,820 | — | (75 | ) | 32,745 | |||||||||||
U.S. Government agencies | 16,296 | 5 | (3 | ) | 16,298 | |||||||||||
Corporate bonds and notes | 236,215 | 33 | (355 | ) | 235,893 | |||||||||||
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Subtotal | 302,939 | 38 | (433 | ) | 302,544 | |||||||||||
Deferred compensation plan assets included in other assets | 2,392 | — | — | 2,392 | ||||||||||||
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Total | $ | 305,331 | $ | 38 | $ | (433 | ) | $ | 304,936 | |||||||
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2017:
Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Investments: | ||||||||||||||||
Money market mutual funds | $ | 18,079 | $ | — | $ | — | $ | 18,079 | ||||||||
Commercial paper | 17,008 | — | (10 | ) | 16,998 | |||||||||||
U.S. Government agencies | 15,301 | — | (19 | ) | 15,282 | |||||||||||
Corporate bonds and notes | 199,772 | 1 | (318 | ) | 199,455 | |||||||||||
Subtotal | 250,160 | 1 | (347 | ) | 249,814 | |||||||||||
Deferred compensation plan assets included in other assets | 2,562 | — | — | 2,562 | ||||||||||||
Total | $ | 252,722 | $ | 1 | $ | (347 | ) | $ | 252,376 |
Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Investments: | ||||||||||||||||
Money market mutual funds | $ | 18,181 | $ | — | $ | — | $ | 18,181 | ||||||||
Commercial paper | 5,986 | — | (5 | ) | 5,981 | |||||||||||
U.S. Government agencies | 11,499 | — | (30 | ) | 11,469 | |||||||||||
Corporate bonds and notes | 265,069 | — | (841 | ) | 264,228 | |||||||||||
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Subtotal | 300,735 | — | (876 | ) | 299,859 | |||||||||||
Deferred compensation plan assets included in other assets | 2,294 | — | — | 2,294 | ||||||||||||
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Total | $ | 303,029 | $ | — | $ | (876 | ) | $ | 302,153 | |||||||
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2016:
Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Investments: | ||||||||||||||||
Money market mutual funds | $ | 18,118 | $ | — | $ | — | $ | 18,118 | ||||||||
Commercial paper | 27,906 | — | (39 | ) | 27,867 | |||||||||||
U.S. government agencies | 13,295 | — | (32 | ) | 13,263 | |||||||||||
Corporate bonds and notes | 244,202 | 2 | (622 | ) | 243,582 | |||||||||||
Subtotal | 303,521 | 2 | (693 | ) | 302,830 | |||||||||||
Deferred compensation plan assets included in other assets | 2,394 | — | — | 2,394 | ||||||||||||
Total | $ | 305,915 | $ | 2 | $ | (693 | ) | $ | 305,224 |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Amortized | Fair | Amortized | Fair | |||||||||||||
Costs | Value | Costs | Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Due in one year or less | $ | 171,336 | $ | 171,152 | $ | 152,444 | $ | 152,212 | ||||||||
Due within two years | 113,995 | 113,784 | 130,110 | 129,466 | ||||||||||||
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Total | $ | 285,331 | $ | 284,936 | $ | 282,554 | $ | 281,678 | ||||||||
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June 30, 2017 | December 31, 2016 | |||||||||||||||
Amortized Costs | Fair Value | Amortized Costs | Fair Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Due in one year or less | $ | 175,910 | $ | 175,682 | $ | 184,587 | $ | 184,334 | ||||||||
Due within two years | 56,171 | 56,053 | 100,816 | 100,378 | ||||||||||||
Total | $ | 232,081 | $ | 231,735 | $ | 285,403 | $ | 284,712 |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Average | Average | Average | Average | |||||||||||||
Coupon | Days To | Coupon | Days To | |||||||||||||
Rate (%) | Maturity | Rate (%) | Maturity | |||||||||||||
Commercial paper | 0.978 | 253 | 0.553 | 154 | ||||||||||||
U.S. Government agencies | 0.979 | 512 | 0.865 | 599 | ||||||||||||
Corporate bonds and notes | 1.643 | 330 | 1.757 | 331 |
June 30, 2017 | December 31, 2016 | |||||||||
Average Coupon Rate (%) | Average Days To Maturity | Average Coupon Rate (%) | Average Days To Maturity | |||||||
Commercial paper | 0.985 | 83 | 1.001 | 184 | ||||||
U.S. Government agencies | 1.056 | 264 | 0.970 | 400 | ||||||
Corporate bonds and notes | 1.720 | 246 | 1.745 | 318 |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Unrealized | Unrealized | |||||||||||||||
Fair Value | Losses | Fair Value | Losses | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Commercial paper | $ | 31,753 | $ | (75 | ) | $ | 5,981 | $ | (5 | ) | ||||||
U.S. Government agencies | 7,001 | (2 | ) | 8,969 | (30 | ) | ||||||||||
Corporate bonds and notes | 169,833 | (320 | ) | 232,347 | (793 | ) | ||||||||||
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Total | $ | 208,587 | $ | (397 | ) | $ | 247,297 | $ | (828 | ) | ||||||
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June 30, 2017 | December 31, 2016 | |||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Commercial paper | $ | 16,998 | $ | (10 | ) | $ | 27,867 | $ | (39 | ) | ||||||
U.S. Government agencies | 13,287 | (15 | ) | 13,263 | (32 | ) | ||||||||||
Corporate bonds and notes | 172,179 | (286 | ) | 210,836 | (602 | ) | ||||||||||
Total | $ | 202,464 | $ | (311 | ) | $ | 251,966 | $ | (673 | ) |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Unrealized | Unrealized | |||||||||||||||
Fair Value | Losses | Fair Value | Losses | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Corporate bonds and notes | $ | 34,002 | $ | (36 | ) | $ | 28,866 | $ | (48 | ) | ||||||
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Total | $ | 34,002 | $ | (36 | ) | $ | 28,866 | $ | (48 | ) | ||||||
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June 30, 2017 | December 31, 2016 | |||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
U.S. Government agencies | $ | 1,996 | $ | (4 | ) | $ | — | $ | — | |||||||
Corporate bonds and notes | 19,064 | (32 | ) | 24,196 | (20 | ) | ||||||||||
Total | $ | 21,060 | $ | (36 | ) | $ | 24,196 | $ | (20 | ) |
2016.
2016.
As of | ||||||||
September 30, 2016 | December 31, 2015 | |||||||
Allowance for Contractual Discounts | 60 | % | 56 | % | ||||
Allowance for Uncompensated Care | 18 | % | 23 | % |
June 30, 2017 | December 31, 2016 | |||||
Allowance for Contractual Discounts | 56 | % | 56 | % | ||
Allowance for Uncompensated Care | 23 | % | 23 | % |
September 30, 2016 | ||||||||||||
Total | (Level 1) | (Level 2) | ||||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Money market mutual funds | $ | 17,608 | $ | 17,608 | $ | — | ||||||
Commercial paper | 32,745 | — | 32,745 | |||||||||
U.S. Government agencies | 16,298 | — | 16,298 | |||||||||
Corporate bonds and notes | 235,893 | — | 235,893 | |||||||||
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302,544 | 17,608 | 284,936 | ||||||||||
Deferred compensation plan assets | 2,392 | 2,392 | — | |||||||||
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Total | $ | 304,936 | $ | 20,000 | $ | 284,936 | ||||||
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Investments: Money market mutual funds Commercial paper U.S. Government agencies Corporate bonds and notes Deferred compensation plan assets Total December 31, 2015 Total (Level 1) (Level 2) (Thousands of dollars) $ 18,181 $ 18,181 $ — 5,981 — 5,981 11,469 — 11,469 264,228 — 264,228 299,859 18,181 281,678 2,294 2,294 — $ 302,153 $ 20,475 $ 281,678
June 30, 2017 | ||||||||||||
Total | (Level 1) | (Level 2) | ||||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Money market mutual funds | $ | 18,079 | $ | 18,079 | $ | — | ||||||
Commercial paper | 16,998 | — | 16,998 | |||||||||
U.S. Government agencies | 15,282 | — | 15,282 | |||||||||
Corporate bonds and notes | 199,455 | — | 199,455 | |||||||||
249,814 | 18,079 | 231,735 | ||||||||||
Deferred compensation plan assets | 2,562 | 2,562 | — | |||||||||
Total | $ | 252,376 | $ | 20,641 | $ | 231,735 | ||||||
December 31, 2016 | ||||||||||||
Total | (Level 1) | (Level 2) | ||||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Money market mutual funds | $ | 18,118 | $ | 18,118 | $ | — | ||||||
Commercial paper | 27,867 | — | 27,867 | |||||||||
U.S. government agencies | 13,263 | — | 13,263 | |||||||||
Corporate bonds and notes | 243,582 | — | 243,582 | |||||||||
302,830 | 18,118 | 284,712 | ||||||||||
Deferred compensation plan assets | 2,394 | 2,394 | — | |||||||||
Total | $ | 305,224 | $ | 20,512 | $ | 284,712 |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Principal | Unamortized Debt Issuance Debt Cost | Principal | Unamortized Debt Issuance Debt Cost | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Senior Notes issued March 17, 2014, interest only payable semi-annually at 5.25%, maturing March 15, 2019 | $ | 500,000 | $ | 3,064 | $ | 500,000 | $ | 3,999 | ||||||||
Revolving Credit Facility due October 1, 2017 with a group of commercial banks, interest payable at variable rates | 132,400 | — | 57,500 | — | ||||||||||||
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Total long-term debt | $ | 632,400 | $ | 3,064 | $ | 557,500 | $ | 3,999 | ||||||||
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In April 2015, the FASB issued ASU No. 2015-03,Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in the financial statements. These costs are now presented as a direct deduction from the debt liability, rather than as an asset. We adopted the new standard effective January 1, 2016. As a result, we reclassified unamortized debt issuances cost in the amount of $3.1 million and $4.0 million as of September 30, 2016 and December 31, 2015, respectively, and reduced the carrying value of long-term debt by the same amounts.
June 30, 2017 | December 31, 2016 | |||||||||||||||
Principal | Unamortized Debt Issuance Debt Cost | Principal | Unamortized Debt Issuance Debt Cost | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Senior Notes issued March 17, 2014, interest only payable semi-annually at 5.25%, maturing March 15, 2019 | $ | 500,000 | $ | 2,129 | $ | 500,000 | $ | 2,753 | ||||||||
Revolving Credit Facility due October 1, 2018 with a group of commercial banks, interest payable at variable rates | 133,225 | — | 134,000 | — | ||||||||||||
Total long-term debt | $ | 633,225 | $ | 2,129 | $ | 634,000 | $ | 2,753 |
2016.
contract, and a bond relating to foreign operations.
Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Weighted average outstanding shares of common stock, basic | 15,683 | 15,587 | 15,655 | 15,558 | ||||||||||||
Dilutive effect of unvested restricted stock units | — | 65 | — | 82 | ||||||||||||
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Weighted average outstanding shares of common stock, diluted(1) | 15,683 | 15,652 | 15,655 | 15,640 | ||||||||||||
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Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
(Thousands of dollars) | ||||||||||||
Weighted average outstanding shares of common stock, basic | 15,716 | 15,677 | 15,716 | 15,650 | ||||||||
Dilutive effect of unvested restricted stock units | — | 41 | — | — | ||||||||
Weighted average outstanding shares of common stock, diluted (1) | 15,716 | 15,718 | 15,716 | 15,650 |
(1) | For the |
Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Stock-based compensation expense: | ||||||||||||||||
Time-based restricted stock units | $ | 631 | $ | 619 | $ | 1,847 | $ | 1,827 | ||||||||
Performance-based restricted stock units | 823 | 1,081 | 2,502 | 3,232 | ||||||||||||
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Total stock-based compensation expense | $ | 1,454 | $ | 1,700 | $ | 4,349 | $ | 5,059 | ||||||||
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2016.
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Stock-based compensation expense: | ||||||||||||||||
Time-based restricted stock units | $ | 556 | $ | 597 | $ | 1,111 | $ | 1,216 | ||||||||
Performance-based restricted stock units | 705 | 809 | 705 | 1,680 | ||||||||||||
Total stock-based compensation expense | $ | 1,261 | $ | 1,406 | $ | 1,816 | $ | 2,896 |
During the quarter and nine months ended September 30, 2016, 2,3185,102 and 310,481308,163 performance-based restricted stock units were awarded to managerial employees, respectively.
During the quarter and nine months ended September 30, 2015, 13,545 and 33,593 time-based restricted stock units were awarded to managerial employees, respectively.
During the quarter and nine months ended September 30, 2015, 765 and 152,331 performance-based restricted stock units were awarded to managerial employees, respectively.
During the third quarter of 2015, we sold or disposed of six light aircraft previously utilized in the Oil and Gas segment. Cash proceeds totaled $2.3 million, resulting in a gain on the sale of these assets of $0.2 million. These aircraft no longer met our strategic needs.
commitments.
payments.
During the thirdsecond quarter of 2016,2017, we purchased one heavy aircraft previously leased by usfrom a lessor for $26.7$17.0 million. This aircraftUnder current conditions, we believe it is unlikely that we will exercise the remaining 2017 purchase was made available for sale by the lessor prior to its early buy out option date and is not one of the above-mentioned aircraft available for purchase in 2016. We intend to use this aircraft in our international operations.
Subsequent to September 30, 2016, we entered into a contract to purchase two medium aircraft for use in our Oil and Gas segment. We expect to take delivery of the aircraft in the first quarter of 2017. The total purchase commitment is $19.9 million.
options, unless opportunistic conditions arise.
Each
In January 2016, we offered a Voluntary Employee Retirement Package (“VERP”) to all pilots who had attained age 64. Fifteen employees accepted this VERP, resulting in severance costs of $1.6 million recorded in the first quarter of 2016. At September 30, 2016, the severance costs from these offerings had been paid.
During the quarter ended March 31, 2016, we also offered a voluntary furlough program to our operating costs.
Oil and Gas Segment.Segment -
contracted customers.
As of September 30, 2016, 104 aircraft were available for use by our
segment.
Revenue | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Provision for contractual discounts | 65 | % | 63 | % | 67 | % | 65 | % | ||||||||
Provision for uncompensated care | 9 | % | 11 | % | 6 | % | 9 | % |
Quarter Ended June 30, | Quarter Ended June 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Provision for contractual discounts | 63 | % | 65 | % | 66 | % | 69 | % | ||||
Provision for uncompensated care | 10 | % | 7 | % | 7 | % | 4 | % |
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Insurance | 75 | % | 74 | % | 72 | % | 74 | % | ||||||||
Medicare | 17 | % | 17 | % | 18 | % | 17 | % | ||||||||
Medicaid | 8 | % | 8 | % | 9 | % | 8 | % | ||||||||
Self-Pay | 0 | % | 1 | % | 1 | % | 1 | % |
Quarter Ended June 30, | Quarter Ended June 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Insurance | 72 | % | 69 | % | 71 | % | 70 | % | ||||
Medicare | 18 | % | 18 | % | 18 | % | 18 | % | ||||
Medicaid | 8 | % | 9 | % | 9 | % | 10 | % | ||||
Self-Pay | 2 | % | 4 | % | 2 | % | 2 | % |
segment's revenues.
Approximately 4%
our total operating revenues were generated by our Technical Services segment.
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(Thousands of dollars) | (Thousands of dollars) | |||||||||||||||
Segment operating revenues, net | ||||||||||||||||
Oil and Gas | $ | 77,551 | $ | 121,190 | $ | 249,173 | $ | 354,425 | ||||||||
Air Medical | 74,482 | 85,516 | 220,089 | 239,543 | ||||||||||||
Technical Services | 6,060 | 8,027 | 19,983 | 23,509 | ||||||||||||
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Total operating revenues, net | 158,093 | 214,733 | 489,245 | 617,477 | ||||||||||||
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Segment direct expenses(1) | ||||||||||||||||
Oil and Gas(2) | 82,832 | 109,500 | 262,148 | 310,093 | ||||||||||||
Air Medical | 56,562 | 65,474 | 172,603 | 189,089 | ||||||||||||
Technical Services | 5,742 | 7,165 | 15,432 | 21,166 | ||||||||||||
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Total direct expenses | 145,136 | 182,139 | 450,183 | 520,348 | ||||||||||||
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Segment selling, general and administrative expenses | ||||||||||||||||
Oil and Gas | 1,705 | 1,397 | 4,838 | 3,831 | ||||||||||||
Air Medical | 3,056 | 2,302 | 8,293 | 7,458 | ||||||||||||
Technical Services | 266 | 230 | 763 | 552 | ||||||||||||
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Total segment selling, general and administrative expenses | 5,027 | 3,929 | 13,894 | 11,841 | ||||||||||||
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Total segment expenses | 150,163 | 186,068 | 464,077 | 532,189 | ||||||||||||
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Net segment (loss) profit | ||||||||||||||||
Oil and Gas | (6,986 | ) | 10,293 | (17,813 | ) | 40,501 | ||||||||||
Air Medical | 14,864 | 17,740 | 39,193 | 42,996 | ||||||||||||
Technical Services | 52 | 632 | 3,788 | 1,791 | ||||||||||||
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Total | 7,930 | 28,665 | 25,168 | 85,288 | ||||||||||||
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Other, net(3) | 377 | 637 | 5,425 | 1,739 | ||||||||||||
Unallocated selling, general and administrative costs(1) | (8,354 | ) | (7,646 | ) | (22,938 | ) | (23,018 | ) | ||||||||
Interest expense | (7,719 | ) | (7,366 | ) | (22,792 | ) | (21,691 | ) | ||||||||
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(Loss) earnings before income taxes | $ | (7,766 | ) | $ | 14,290 | $ | (15,137 | ) | $ | 42,318 | ||||||
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Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Segment operating revenues | ||||||||||||||||
Oil and Gas | $ | 74,668 | $ | 83,185 | $ | 146,399 | $ | 171,622 | ||||||||
Air Medical | 67,222 | 75,547 | 122,559 | 145,607 | ||||||||||||
Technical Services | 4,534 | 8,404 | 12,084 | 13,923 | ||||||||||||
Total operating revenues, net | 146,424 | 167,136 | 281,042 | 331,152 | ||||||||||||
Segment direct expenses (1) | ||||||||||||||||
Oil and Gas (2) | 73,681 | 87,400 | 155,410 | 179,316 | ||||||||||||
Air Medical | 50,402 | 58,997 | 101,243 | 116,041 | ||||||||||||
Technical Services | 3,858 | 6,096 | 8,804 | 9,690 | ||||||||||||
Total segment direct expenses | 127,941 | 152,493 | 265,457 | 305,047 | ||||||||||||
Segment selling, general and administrative expenses | ||||||||||||||||
Oil and Gas | 1,635 | 1,605 | 3,354 | 3,132 | ||||||||||||
Air Medical | 3,263 | 2,642 | 6,144 | 5,237 | ||||||||||||
Technical Services | 356 | 273 | 694 | 497 | ||||||||||||
Total segment selling, general and administrative expenses | 5,254 | 4,520 | 10,192 | 8,866 | ||||||||||||
Total segment expenses | 133,195 | 157,013 | 275,649 | 313,913 | ||||||||||||
Net segment (loss) profit | ||||||||||||||||
Oil and Gas | (648 | ) | (5,820 | ) | (12,365 | ) | (10,826 | ) | ||||||||
Air Medical | 13,557 | 13,908 | 15,172 | 24,329 | ||||||||||||
Technical Services | 320 | 2,035 | 2,586 | 3,736 | ||||||||||||
Total net segment profit | 13,229 | 10,123 | 5,393 | 17,239 | ||||||||||||
Other, net (3) | 697 | 4,792 | 1,761 | 5,048 | ||||||||||||
Unallocated selling, general and administrative costs (1) | (8,993 | ) | (7,258 | ) | (17,099 | ) | (14,585 | ) | ||||||||
Interest expense | (8,083 | ) | (7,540 | ) | (16,278 | ) | (15,073 | ) | ||||||||
(Loss) earnings before income taxes | $ | (3,150 | ) | $ | 117 | $ | (26,223 | ) | $ | (7,371 | ) |
(1) | Included in direct expenses and unallocated selling, general, and administrative costs are the depreciation and amortization expense amounts below: |
Depreciation and Amortization Expense | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Segment Direct Expense: | ||||||||||||||||
Oil and Gas | $ | 10,616 | $ | 11,194 | $ | 30,558 | $ | 32,797 | ||||||||
Air Medical | 5,267 | 4,100 | 14,654 | 12,948 | ||||||||||||
Technical Services | 141 | 130 | 426 | 390 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 16,024 | $ | 15,424 | $ | 45,638 | $ | 46,135 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Unallocated SG&A | $ | 2,269 | $ | 2,376 | $ | 7,416 | $ | 8,177 | ||||||||
|
|
|
|
|
|
|
|
Depreciation and Amortization Expense | ||||||||||||||||
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Segment Direct Expense: | ||||||||||||||||
Oil and Gas | $ | 9,824 | $ | 10,024 | $ | 19,686 | $ | 19,942 | ||||||||
Air Medical | 5,219 | 5,132 | 10,696 | 9,387 | ||||||||||||
Technical Services | 148 | 157 | 294 | 285 | ||||||||||||
Total | $ | 15,191 | $ | 15,313 | $ | 30,676 | $ | 29,614 | ||||||||
Unallocated SG&A | $ | 622 | $ | 2,476 | $ | 3,335 | $ | 5,147 |
(2) | Includes Equity in loss of unconsolidated |
(3) | Consists of gains on disposition of property and equipment and other income. |
AND OTHER INVESTMENTS AND AFFILIATES
September 30, 2016 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash | $ | 36 | $ | 2,603 | $ | — | $ | 2,639 | ||||||||
Short-term investments | 289,520 | — | — | 289,520 | ||||||||||||
Accounts receivable – net | 64,564 | 77,911 | — | 142,475 | ||||||||||||
Intercompany receivable | — | 41,796 | (41,796 | ) | — | |||||||||||
Inventories of spare parts – net | 60,416 | 8,993 | — | 69,409 | ||||||||||||
Prepaid expenses | 4,412 | 2,564 | — | 6,976 | ||||||||||||
Deferred income taxes | 10,379 | — | — | 10,379 | ||||||||||||
Income taxes receivable | 950 | (87 | ) | — | 863 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total current assets | 430,277 | 133,780 | (41,796 | ) | 522,261 | |||||||||||
Investment in subsidiaries | 351,440 | — | (351,440 | ) | — | |||||||||||
Property and equipment – net | 602,296 | 314,264 | — | 916,560 | ||||||||||||
Restricted cash and investments | 13,023 | 15 | — | 13,038 | ||||||||||||
Other assets | 6,181 | 1,153 | — | 7,334 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | $ | 1,403,217 | $ | 449,212 | $ | (393,236 | ) | $ | 1,459,193 | |||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 17,232 | $ | 3,611 | $ | — | $ | 20,843 | ||||||||
Accrued and other current liabilities | 21,894 | 10,284 | — | 32,178 | ||||||||||||
Intercompany payable | 41,796 | — | (41,796 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total current liabilities | 80,922 | 13,895 | (41,796 | ) | 53,021 | |||||||||||
Long-term debt: | ||||||||||||||||
Revolving credit facility | 132,400 | — | — | 132,400 | ||||||||||||
Senior Notes dated March 17, 2014, net of debt issuance costs of $3,064 | 496,936 | — | — | 496,936 | ||||||||||||
Deferred income taxes and other long-term liabilities | 71,472 | 83,877 | — | 155,349 | ||||||||||||
Shareholders’ Equity: | ||||||||||||||||
Common stock and paid-in capital | 310,259 | 79,191 | (79,191 | ) | 310,259 | |||||||||||
Accumulated other comprehensive income | (271 | ) | — | — | (271 | ) | ||||||||||
Retained earnings | 311,499 | 272,249 | (272,249 | ) | 311,499 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total shareholders’ equity | 621,487 | 351,440 | (351,440 | ) | 621,487 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities and shareholders’ equity | $ | 1,403,217 | $ | 449,212 | $ | (393,236 | ) | $ | 1,459,193 | |||||||
|
|
|
|
|
|
|
|
June 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash | $ | 48 | $ | 1,328 | $ | 947 | $ | — | $ | 2,323 | ||||||||||
Short-term investments | 237,433 | — | — | — | 237,433 | |||||||||||||||
Accounts receivable – net | 78,334 | 63,020 | 8,969 | (2,819 | ) | 147,504 | ||||||||||||||
Intercompany receivable | — | 105,938 | — | (105,938 | ) | — | ||||||||||||||
Inventories of spare parts – net | 67,148 | 9,007 | — | — | 76,155 | |||||||||||||||
Prepaid expenses | 10,554 | 2,394 | 183 | — | 13,131 | |||||||||||||||
Deferred income taxes | 10,798 | — | — | — | 10,798 | |||||||||||||||
Income taxes receivable | 418 | (4 | ) | — | — | 414 | ||||||||||||||
Total current assets | 404,733 | 181,683 | 10,099 | (108,757 | ) | 487,758 | ||||||||||||||
Investment in subsidiaries | 376,032 | — | — | (376,032 | ) | — | ||||||||||||||
Property and equipment – net | 626,402 | 291,118 | 614 | — | 918,134 | |||||||||||||||
Restricted cash and investments | 12,382 | — | 14 | — | 12,396 | |||||||||||||||
Other assets | 9,168 | 1,004 | — | — | 10,172 | |||||||||||||||
Total assets | $ | 1,428,717 | $ | 473,805 | $ | 10,727 | $ | (484,789 | ) | $ | 1,428,460 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Accounts payable | $ | 24,177 | $ | 3,200 | $ | 3,233 | $ | (2,819 | ) | $ | 27,791 | |||||||||
Accrued and other current liabilities | 24,508 | 7,836 | 1,040 | — | 33,384 | |||||||||||||||
Intercompany payable | 97,739 | — | 8,199 | (105,938 | ) | — | ||||||||||||||
Total current liabilities | 146,424 | 11,036 | 12,472 | (108,757 | ) | 61,175 | ||||||||||||||
Long-term debt | 631,096 | — | — | — | 631,096 | |||||||||||||||
Deferred income taxes and other long-term liabilities | 67,136 | 83,926 | 1,066 | — | 152,128 | |||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||||
Common stock and paid-in capital | 307,367 | 77,951 | 1,375 | (79,326 | ) | 307,367 | ||||||||||||||
Accumulated other comprehensive loss | (254 | ) | — | — | — | (254 | ) | |||||||||||||
Retained earnings | 276,948 | 300,892 | (4,186 | ) | (296,706 | ) | 276,948 | |||||||||||||
Total shareholders’ equity | 584,061 | 378,843 | (2,811 | ) | (376,032 | ) | 584,061 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 1,428,717 | $ | 473,805 | $ | 10,727 | $ | (484,789 | ) | $ | 1,428,460 |
December 31, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash | $ | 36 | $ | 2,560 | $ | — | $ | 2,596 | ||||||||
Short-term investments | 289,806 | — | — | 289,806 | ||||||||||||
Accounts receivable – net | 71,458 | 66,807 | — | 138,265 | ||||||||||||
Intercompany receivable | — | 57,904 | (57,904 | ) | — | |||||||||||
Inventories of spare parts – net | 61,834 | 8,568 | — | 70,402 | ||||||||||||
Prepaid expenses | 6,990 | 2,269 | — | 9,259 | ||||||||||||
Deferred income taxes | 10,798 | — | — | 10,798 | ||||||||||||
Income taxes receivable | 558 | (18 | ) | — | 540 | |||||||||||
Total current assets | 441,480 | 138,090 | (57,904 | ) | 521,666 | |||||||||||
Investment in subsidiaries and others | 353,160 | — | (353,160 | ) | — | |||||||||||
Property and equipment – net | 589,104 | 314,873 | — | 903,977 | ||||||||||||
Restricted investments | 13,023 | 15 | — | 13,038 | ||||||||||||
Other assets | 8,660 | 1,099 | — | 9,759 | ||||||||||||
Total assets | $ | 1,405,427 | $ | 454,077 | $ | (411,064 | ) | $ | 1,448,440 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 22,744 | $ | 5,960 | $ | — | $ | 28,704 | ||||||||
Accrued and other current liabilities | 18,725 | 9,621 | — | 28,346 | ||||||||||||
Intercompany payable | 57,904 | — | (57,904 | ) | — | |||||||||||
Total current liabilities | 99,373 | 15,581 | (57,904 | ) | 57,050 | |||||||||||
Long-term debt | 631,247 | — | — | 631,247 | ||||||||||||
Deferred income taxes and other long-term liabilities | 75,029 | 85,336 | — | 160,365 | ||||||||||||
Shareholders’ Equity: | ||||||||||||||||
Common stock and paid-in capital | 305,815 | 79,191 | (79,191 | ) | 305,815 | |||||||||||
Accumulated other comprehensive loss | (478 | ) | — | — | (478 | ) | ||||||||||
Retained earnings | 294,441 | 273,969 | (273,969 | ) | 294,441 | |||||||||||
Total shareholders’ equity | 599,778 | 353,160 | (353,160 | ) | 599,778 | |||||||||||
Total liabilities and shareholders’ equity | $ | 1,405,427 | $ | 454,077 | $ | (411,064 | ) | $ | 1,448,440 |
(1) | Foreign subsidiaries represent minor subsidiaries and are included in the |
STATEMENTS OF OPERATIONS
December 31, 2015 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash | $ | 46 | $ | 2,361 | $ | — | $ | 2,407 | ||||||||
Short-term investments | 284,523 | — | — | 284,523 | ||||||||||||
Accounts receivable – net | 70,336 | 74,442 | — | 144,778 | ||||||||||||
Intercompany receivable | — | 90,943 | (90,943 | ) | — | |||||||||||
Inventories of spare parts – net | 60,060 | 9,431 | — | 69,491 | ||||||||||||
Prepaid expenses | 7,162 | 1,789 | — | 8,951 | ||||||||||||
Deferred income taxes | 10,379 | — | — | 10,379 | ||||||||||||
Income taxes receivable | 1,002 | (241 | ) | — | 761 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total current assets | 433,508 | 178,725 | (90,943 | ) | 521,290 | |||||||||||
Investment in subsidiaries | 330,848 | — | (330,848 | ) | — | |||||||||||
Property and equipment – net | 632,759 | 250,770 | — | 883,529 | ||||||||||||
Restricted investments | 15,336 | — | — | 15,336 | ||||||||||||
Other assets | 5,975 | 203 | — | 6,178 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | $ | 1,418,426 | $ | 429,698 | $ | (421,791 | ) | $ | 1,426,333 | |||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 25,512 | $ | 5,861 | $ | — | $ | 31,373 | ||||||||
Accrued liabilities | 29,138 | 15,621 | — | 44,759 | ||||||||||||
Intercompany payable | 90,943 | — | (90,943 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total current liabilities | 145,593 | 21,482 | (90,943 | ) | 76,132 | |||||||||||
Long-term debt: | ||||||||||||||||
Revolving credit facility | 57,500 | — | — | 57,500 | ||||||||||||
Senior Notes dated March 17, 2014, net of debt issuance costs of $3,999 | 496,001 | — | — | 496,001 | ||||||||||||
Deferred income taxes and other long-term liabilities | 92,334 | 77,368 | — | 169,702 | ||||||||||||
Shareholders’ Equity: | ||||||||||||||||
Common stock and paid-in capital | 306,444 | 79,061 | (79,061 | ) | 306,444 | |||||||||||
Accumulated other comprehensive loss | (567 | ) | — | — | (567 | ) | ||||||||||
Retained earnings | 321,121 | 251,787 | (251,787 | ) | 321,121 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total shareholders’ equity | 626,998 | 330,848 | (330,848 | ) | 626,998 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities and shareholders’ equity | $ | 1,418,426 | $ | 429,698 | $ | (421,791 | ) | $ | 1,426,333 | |||||||
|
|
|
|
|
|
|
|
For the quarter ended June 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Operating revenues, net | $ | 75,045 | $ | 68,857 | $ | 5,341 | $ | (2,819 | ) | $ | 146,424 | |||||||||
Expenses: | ||||||||||||||||||||
Direct expenses | 72,598 | 51,806 | 5,366 | (2,819 | ) | 126,951 | ||||||||||||||
Selling, general and administrative expenses | 10,916 | 3,269 | 66 | (4 | ) | 14,247 | ||||||||||||||
Total operating expenses | 83,514 | 55,075 | 5,432 | (2,823 | ) | 141,198 | ||||||||||||||
Loss (gain) on disposal of assets, net | 8 | (1 | ) | — | — | 7 | ||||||||||||||
Equity in (income) loss of unconsolidated affiliates, net | (75 | ) | — | 1,066 | — | 991 | ||||||||||||||
Operating (loss) income | (8,402 | ) | 13,783 | (1,157 | ) | 4 | 4,228 | |||||||||||||
Equity in net income of consolidated subsidiaries | (14,613 | ) | — | — | 14,613 | — | ||||||||||||||
Interest expense | 8,082 | 1 | — | — | 8,083 | |||||||||||||||
Other income, net | (708 | ) | (1 | ) | — | 4 | (705 | ) | ||||||||||||
(7,239 | ) | — | — | 14,617 | 7,378 | |||||||||||||||
(Loss) earnings before income taxes | (1,163 | ) | 13,783 | (1,157 | ) | (14,613 | ) | (3,150 | ) | |||||||||||
Income tax expense (benefit) | 2,110 | (1,987 | ) | — | — | 123 | ||||||||||||||
Net (loss) earnings | $ | (3,273 | ) | $ | 15,770 | $ | (1,157 | ) | $ | (14,613 | ) | $ | (3,273 | ) |
For the quarter ended June 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Operating revenues, net | $ | 89,365 | $ | 77,771 | $ | — | $ | 167,136 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 89,535 | 62,882 | — | 152,417 | ||||||||||||
Selling, general and administrative expenses | 9,232 | 2,871 | (325 | ) | 11,778 | |||||||||||
Total operating expenses | 98,767 | 65,753 | (325 | ) | 164,195 | |||||||||||
Gain on disposal of assets, net | (4,298 | ) | — | — | (4,298 | ) | ||||||||||
Equity in loss of consolidated affiliates, net | 76 | — | — | 76 | ||||||||||||
Operating (loss) income | (5,180 | ) | 12,018 | 325 | 7,163 | |||||||||||
Equity in net income of consolidated subsidiaries | (7,035 | ) | — | 7,035 | — | |||||||||||
Interest expense | 7,534 | 6 | — | 7,540 | ||||||||||||
Other income, net | (819 | ) | — | 325 | (494 | ) | ||||||||||
(320 | ) | 6 | 7,360 | 7,046 | ||||||||||||
(Loss) earnings before income taxes | (4,860 | ) | 12,012 | (7,035 | ) | 117 | ||||||||||
Income tax (benefit) expense | (9,137 | ) | 4,977 | — | (4,160 | ) | ||||||||||
Net earnings | $ | 4,277 | $ | 7,035 | $ | (7,035 | ) | $ | 4,277 |
(1) | Foreign subsidiaries represent minor subsidiaries and are included in the |
PHI, INC. AND SUBSIDIARIES
For the quarter ended September 30, 2016 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Operating revenues, net | $ | 79,532 | $ | 78,561 | $ | — | $ | 158,093 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 83,188 | 61,750 | — | 144,938 | ||||||||||||
Selling, general and administrative expenses | 10,639 | 3,092 | (350 | ) | 13,381 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 93,827 | 64,842 | (350 | ) | 158,319 | |||||||||||
Loss on disposal of assets, net | 85 | — | — | 85 | ||||||||||||
Equity in loss of unconsolidated affiliate | 198 | — | — | 198 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | (14,578 | ) | 13,719 | 350 | (509 | ) | ||||||||||
Equity in net income of consolidated subsidiaries | (8,372 | ) | — | 8,372 | — | |||||||||||
Interest expense | 7,716 | 3 | — | 7,719 | ||||||||||||
Other income, net | (812 | ) | — | 350 | (462 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
(1,468 | ) | 3 | 8,722 | 7,257 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(Loss) earnings before income taxes | (13,110 | ) | 13,716 | (8,372 | ) | (7,766 | ) | |||||||||
Income tax (benefit) expense | (8,143 | ) | 5,344 | — | (2,799 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss) earnings | $ | (4,967 | ) | $ | 8,372 | $ | (8,372 | ) | $ | (4,967 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
For the quarter ended September 30, 2015 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries(1) | Eliminations | Consolidated | |||||||||||||
Operating revenues, net | $ | 124,505 | $ | 90,228 | $ | — | $ | 214,733 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 111,876 | 70,192 | (4 | ) | 182,064 | |||||||||||
Selling, general and administrative expenses | 9,219 | 2,356 | — | 11,575 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 121,095 | 72,548 | (4 | ) | 193,639 | |||||||||||
Gain on disposal of assets, net | (165 | ) | — | — | (165 | ) | ||||||||||
Equity in loss of unconsolidated affiliate | 75 | — | — | 75 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 3,500 | 17,680 | 4 | 21,184 | ||||||||||||
Equity in net income of consolidated subsidiaries | (10,682 | ) | — | 10,682 | — | |||||||||||
Interest expense | 7,274 | 92 | — | 7,366 | ||||||||||||
Other income, net | (474 | ) | (2 | ) | 4 | (472 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
(3,882 | ) | 90 | 10,686 | 6,894 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings before income taxes | 7,382 | 17,590 | (10,682 | ) | 14,290 | |||||||||||
Income tax (benefit) expense | (287 | ) | 6,908 | — | 6,621 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net earnings | $ | 7,669 | $ | 10,682 | $ | (10,682 | ) | $ | 7,669 | |||||||
|
|
|
|
|
|
|
|
For the six months ended June 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Operating revenues, net | $ | 149,329 | $ | 126,330 | $ | 8,202 | $ | (2,819 | ) | $ | 281,042 | |||||||||
Expenses: | ||||||||||||||||||||
Direct expenses | 154,942 | 104,187 | 7,154 | (2,819 | ) | 263,464 | ||||||||||||||
Selling, general and administrative expenses | 21,024 | 6,155 | 120 | (9 | ) | 27,290 | ||||||||||||||
Total operating expenses | 175,966 | 110,342 | 7,274 | (2,828 | ) | 290,754 | ||||||||||||||
Loss (gain) on disposal of assets, net | 8 | (1 | ) | — | — | 7 | ||||||||||||||
Equity in loss (income) of unconsolidated affiliates, net | 928 | — | 1,066 | — | 1,994 | |||||||||||||||
Operating income (loss) | (27,573 | ) | 15,989 | (138 | ) | 9 | (11,713 | ) | ||||||||||||
Equity in net income of consolidated subsidiaries | (17,243 | ) | — | — | 17,243 | — | ||||||||||||||
Interest expense | 16,256 | 22 | — | — | 16,278 | |||||||||||||||
Other income, net | (1,776 | ) | (1 | ) | — | 9 | (1,768 | ) | ||||||||||||
(2,763 | ) | 21 | — | 17,252 | 14,510 | |||||||||||||||
(Loss) earnings before income taxes | (24,810 | ) | 15,968 | (138 | ) | (17,243 | ) | (26,223 | ) | |||||||||||
Income tax (benefit) expense | (6,289 | ) | (1,413 | ) | — | — | (7,702 | ) | ||||||||||||
Net (loss) earnings | $ | (18,521 | ) | $ | 17,381 | $ | (138 | ) | $ | (17,243 | ) | $ | (18,521 | ) |
For the six months ended June 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Operating revenues, net | $ | 181,234 | $ | 149,918 | $ | — | $ | 331,152 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 181,572 | 123,399 | — | 304,971 | ||||||||||||
Selling, general and administrative expenses | 18,275 | 5,674 | (498 | ) | 23,451 | |||||||||||
Total operating expenses | 199,847 | 129,073 | (498 | ) | 328,422 | |||||||||||
Gain on disposal of assets, net | (3,939 | ) | — | — | (3,939 | ) | ||||||||||
Equity in loss of unconsolidated affiliate | 76 | — | — | 76 | ||||||||||||
Operating (loss) income | (14,750 | ) | 20,845 | 498 | 6,593 | |||||||||||
Equity in net income of consolidated subsidiaries | (12,090 | ) | — | 12,090 | — | |||||||||||
Interest expense | 15,047 | 26 | — | 15,073 | ||||||||||||
Other income, net | (1,603 | ) | (4 | ) | 498 | (1,109 | ) | |||||||||
1,354 | 22 | 12,588 | 13,964 | |||||||||||||
(Loss) earnings before income taxes | (16,104 | ) | 20,823 | (12,090 | ) | (7,371 | ) | |||||||||
Income tax (benefit) expense | (11,449 | ) | 8,733 | — | (2,716 | ) | ||||||||||
Net (loss) earnings | $ | (4,655 | ) | $ | 12,090 | $ | (12,090 | ) | $ | (4,655 | ) |
(1) | Foreign subsidiaries represent minor subsidiaries and are included in the |
COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 30, 2016 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Operating revenues, net | $ | 260,766 | $ | 228,479 | $ | — | $ | 489,245 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 264,761 | 185,148 | — | 449,909 | ||||||||||||
Selling, general and administrative expenses | 28,914 | 8,766 | (848 | ) | 36,832 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 293,675 | 193,914 | (848 | ) | 486,741 | |||||||||||
Gain on disposal of assets, net | (3,854 | ) | — | — | (3,854 | ) | ||||||||||
Equity in loss of unconsolidated affiliate | 274 | — | — | 274 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | (29,329 | ) | 34,565 | 848 | 6,084 | |||||||||||
Equity in net income of consolidated subsidiaries | (20,462 | ) | — | 20,462 | — | |||||||||||
Interest expense | 22,762 | 30 | — | 22,792 | ||||||||||||
Other income, net | (2,415 | ) | (4 | ) | 848 | (1,571 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
(115 | ) | 26 | 21,310 | 21,221 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(Loss) earnings before income taxes | (29,214 | ) | 34,539 | (20,462 | ) | (15,137 | ) | |||||||||
Income tax (benefit) expense | (19,592 | ) | 14,077 | — | (5,515 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss) earnings | $ | (9,622 | ) | $ | 20,462 | $ | (20,462 | ) | $ | (9,622 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
For the nine months ended September 30, 2015 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries(1) | Eliminations | Consolidated | |||||||||||||
Operating revenues, net | $ | 368,202 | $ | 249,275 | $ | — | $ | 617,477 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 321,841 | 198,271 | (13 | ) | 520,099 | |||||||||||
Selling, general and administrative expenses | 27,198 | 7,661 | — | 34,859 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 349,039 | 205,932 | (13 | ) | 554,958 | |||||||||||
Gain on disposal of assets, net | (238 | ) | — | — | (238 | ) | ||||||||||
Equity in loss of unconsolidated affiliate | 249 | — | — | 249 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 19,152 | 43,343 | 13 | 62,508 | ||||||||||||
Equity in net income of consolidated subsidiaries | (26,044 | ) | — | 26,044 | — | |||||||||||
Interest expense | 21,599 | 92 | — | 21,691 | ||||||||||||
Other income, net | (1,508 | ) | (6 | ) | 13 | (1,501 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
(5,953 | ) | 86 | 26,057 | 20,190 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings before income taxes | 25,105 | 43,257 | (26,044 | ) | 42,318 | |||||||||||
Income tax expense | 619 | 17,213 | — | 17,832 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net earnings | $ | 24,486 | $ | 26,044 | $ | (26,044 | ) | $ | 24,486 | |||||||
|
|
|
|
|
|
|
|
For the quarter ended June 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net (loss) earnings | $ | (3,273 | ) | $ | 15,770 | $ | (1,157 | ) | $ | (14,613 | ) | $ | (3,273 | ) | ||||||
Unrealized gain on short-term investments | 167 | — | — | — | 167 | |||||||||||||||
Changes in pension plan asset and benefit obligation | 23 | — | — | — | 23 | |||||||||||||||
Tax effect of the above-listed adjustments | (68 | ) | — | — | — | (68 | ) | |||||||||||||
Total comprehensive (loss) income | $ | (3,151 | ) | $ | 15,770 | $ | (1,157 | ) | $ | (14,613 | ) | $ | (3,151 | ) |
For the quarter ended June 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Net earnings | $ | 4,277 | $ | 7,035 | $ | (7,035 | ) | $ | 4,277 | |||||||
Unrealized gain on short-term investments | 210 | — | — | 210 | ||||||||||||
Changes in pension plan asset and benefit obligations | 1 | — | — | 1 | ||||||||||||
Tax effect of the above-listed adjustments | (75 | ) | — | — | (75 | ) | ||||||||||
Total comprehensive (loss) income | $ | 4,413 | $ | 7,035 | $ | (7,035 | ) | $ | 4,413 |
(1) | Foreign subsidiaries represent minor subsidiaries and are included in the |
(LOSS)
For the quarter ended September 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Net (loss) earnings | $ | (4,967 | ) | $ | 8,372 | $ | (8,372 | ) | $ | (4,967 | ) | |||||
Unrealized loss on short-term investments | (494 | ) | — | — | (494 | ) | ||||||||||
Changes in pension plan assets and benefit obligations | 1 | — | — | 1 | ||||||||||||
Tax effect | 178 | — | — | 178 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive (loss) income | $ | (5,282 | ) | $ | 8,372 | $ | (8,372 | ) | $ | (5,282 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
For the quarter ended September 30, 2015 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries(1) | Eliminations | Consolidated | |||||||||||||
Net earnings | $ | 7,669 | $ | 10,682 | $ | (10,682 | ) | $ | 7,669 | |||||||
Unrealized gain on short-term investments | 12 | — | — | 12 | ||||||||||||
Changes in pension plan assets and benefit obligations | 4 | — | — | 4 | ||||||||||||
Tax effect | (6 | ) | — | — | (6 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income | $ | 7,679 | $ | 10,682 | $ | (10,682 | ) | $ | 7,679 | |||||||
|
|
|
|
|
|
|
|
For the six months ended June 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net (loss) earnings | $ | (18,521 | ) | $ | 17,381 | $ | (138 | ) | $ | (17,243 | ) | $ | (18,521 | ) | ||||||
Unrealized gain on short-term investments | 329 | — | — | — | 329 | |||||||||||||||
Changes in pension plan asset and benefit obligation | 22 | — | — | — | 22 | |||||||||||||||
Tax effect of the above-listed adjustments | (127 | ) | — | — | — | (127 | ) | |||||||||||||
Total comprehensive (loss) income | $ | (18,297 | ) | $ | 17,381 | $ | (138 | ) | $ | (17,243 | ) | $ | (18,297 | ) |
For the six months ended June 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Net (loss) earnings | $ | (4,655 | ) | $ | 12,090 | $ | (12,090 | ) | $ | (4,655 | ) | |||||
Unrealized gain on short-term investments | 1,017 | — | — | 1,017 | ||||||||||||
Changes in pension plan asset and benefit obligations | 2 | — | — | 2 | ||||||||||||
Tax effect of the above-listed adjustments | (407 | ) | — | — | (407 | ) | ||||||||||
Total comprehensive (loss) income | $ | (4,043 | ) | $ | 12,090 | $ | (12,090 | ) | $ | (4,043 | ) |
(1) | Foreign subsidiaries represent minor subsidiaries and are included in the |
CASH FLOWS
For the nine months ended September 30, 2016 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Net (loss) earnings | $ | (9,622 | ) | $ | 20,462 | $ | (20,462 | ) | $ | (9,622 | ) | |||||
Unrealized gain on short-term investments | 523 | — | — | 523 | ||||||||||||
Changes in pension plan assets and benefit obligations | 3 | — | — | 3 | ||||||||||||
Tax effect | (229 | ) | — | — | (229 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive (loss) income | $ | (9,325 | ) | $ | 20,462 | $ | (20,462 | ) | $ | (9,325 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
For the nine months ended September 30, 2015 | ||||||||||||||||
Parent | ||||||||||||||||
Company | Guarantor | |||||||||||||||
Only (issuer) | Subsidiaries(1) | Eliminations | Consolidated | |||||||||||||
Net earnings | $ | 24,486 | $ | 26,044 | $ | (26,044 | ) | $ | 24,486 | |||||||
Unrealized loss on short-term investments | (7 | ) | — | — | (7 | ) | ||||||||||
Unrealized realized gain | 24 | — | — | 24 | ||||||||||||
Changes in pension plan assets and benefit obligations | 4 | — | — | 4 | ||||||||||||
Tax effect | 3 | — | — | 3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income | $ | 24,510 | $ | 26,044 | $ | (26,044 | ) | $ | 24,510 | |||||||
|
|
|
|
|
|
|
|
For the six months ended June 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (34,236 | ) | $ | 18,916 | $ | 7,371 | $ | — | $ | (7,949 | ) | ||||||||
Investing activities: | ||||||||||||||||||||
Purchase of property and equipment | (43,892 | ) | — | — | — | (43,892 | ) | |||||||||||||
Proceeds from asset dispositions | 17 | — | — | — | 17 | |||||||||||||||
Purchase of short-term investments | (134,518 | ) | — | — | — | (134,518 | ) | |||||||||||||
Proceeds from sale of short-term investments | 187,217 | — | — | — | 187,217 | |||||||||||||||
Payments of deposits on aircraft | (110 | ) | — | — | — | (110 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 8,714 | — | — | — | 8,714 | |||||||||||||||
Financing activities: | ||||||||||||||||||||
Proceeds from line of credit | 66,525 | — | — | — | 66,525 | |||||||||||||||
Payments on line of credit | (67,300 | ) | — | — | — | (67,300 | ) | |||||||||||||
Repurchase of common stock | (263 | ) | — | — | — | (263 | ) | |||||||||||||
Due to/from affiliate, net | 26,572 | (19,688 | ) | (6,884 | ) | — | — | |||||||||||||
Net cash provided by (used in) financing activities | 25,534 | (19,688 | ) | (6,884 | ) | — | (1,038 | ) | ||||||||||||
Increase (decrease) in cash | 12 | (772 | ) | 487 | — | (273 | ) | |||||||||||||
Cash, beginning of period | 36 | 2,100 | 460 | — | 2,596 | |||||||||||||||
Cash, end of period | $ | 48 | $ | 1,328 | $ | 947 | $ | — | $ | 2,323 |
For the six months ended June 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Net cash (used in) provided by operating activities | $ | (12,954 | ) | $ | 13,753 | $ | — | $ | 799 | |||||||
Investing activities: | ||||||||||||||||
Purchase of property and equipment | (39,535 | ) | (373 | ) | — | (39,908 | ) | |||||||||
Proceeds from asset dispositions | 10,998 | — | — | 10,998 | ||||||||||||
Purchase of short-term investments | (151,436 | ) | — | — | (151,436 | ) | ||||||||||
Proceeds from sale of short-term investments | 148,838 | — | — | 148,838 | ||||||||||||
Payments of deposits on aircraft | (131 | ) | — | — | (131 | ) | ||||||||||
Net cash used in investing activities | (31,266 | ) | (373 | ) | — | (31,639 | ) | |||||||||
Financing activities: | ||||||||||||||||
Proceeds from line of credit | 150,800 | — | — | 150,800 | ||||||||||||
Payments on line of credit | (113,300 | ) | — | — | (113,300 | ) | ||||||||||
Repurchase of common stock | (500 | ) | — | — | (500 | ) | ||||||||||
Due to/from affiliate, net | 7,214 | (7,214 | ) | — | — | |||||||||||
Net cash provided by (used in) financing activities | 44,214 | (7,214 | ) | — | 37,000 | |||||||||||
(Decrease) increase in cash | (6 | ) | 6,166 | — | 6,160 | |||||||||||
Cash, beginning of period | 46 | 2,361 | — | 2,407 | ||||||||||||
Cash, end of period | $ | 40 | $ | 8,527 | $ | — | $ | 8,567 |
(1) | Foreign subsidiaries represent minor subsidiaries and are included in the |
PHI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
For the nine months ended September 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Net cash (used in) provided by operating activities | $ | (32,467 | ) | $ | 25,319 | $ | — | $ | (7,148 | ) | ||||||
Investing activities: | ||||||||||||||||
Purchase of property and equipment | (74,647 | ) | (303 | ) | — | (74,950 | ) | |||||||||
Proceeds from asset dispositions | 13,233 | — | — | 13,233 | ||||||||||||
Purchase of short-term investments | (263,204 | ) | — | — | (263,204 | ) | ||||||||||
Proceeds from sale of short-term investments | 259,322 | — | — | 259,322 | ||||||||||||
Payments of deposits on aircraft | (197 | ) | — | — | (197 | ) | ||||||||||
Loan to unconsolidated affiliate | (1,200 | ) | — | — | (1,200 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash used in investing activities | (66,693 | ) | (303 | ) | — | (66,996 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financing activities: | ||||||||||||||||
Proceeds from line of credit | 213,900 | — | — | 213,900 | ||||||||||||
Payments on line of credit | (139,000 | ) | — | — | (139,000 | ) | ||||||||||
Repurchase of common stock | (524 | ) | — | — | (524 | ) | ||||||||||
Due to/from affiliate, net | 24,774 | (24,774 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash provided by (used in) financing activities | 99,150 | (24,774 | ) | — | 74,376 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
(Decrease) increase in cash | (10 | ) | 242 | — | 232 | |||||||||||
Cash, beginning of period | 46 | 2,361 | — | 2,407 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash, end of period | $ | 36 | $ | 2,603 | $ | — | $ | 2,639 | ||||||||
|
|
|
|
|
|
|
|
PHI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
For the nine months ended September 30, 2015 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries (1) | Eliminations | Consolidated | |||||||||||||
Net cash provided by operating activities | $ | 39,490 | $ | 68,665 | $ | — | $ | 108,155 | ||||||||
Investing activities: | ||||||||||||||||
Purchase of property and equipment | (48,244 | ) | — | — | (48,244 | ) | ||||||||||
Proceeds from asset dispositions | 3,469 | — | — | 3,469 | ||||||||||||
Purchase of short-term investments | (560,148 | ) | — | — | (560,148 | ) | ||||||||||
Proceeds from sale of short-term investments | 458,468 | — | — | 458,468 | ||||||||||||
Refund of deposits on aircraft | 6,010 | — | — | 6,010 | ||||||||||||
Payments of deposits on aircraft | (1,207 | ) | — | — | (1,207 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash used in investing activities | (141,652 | ) | — | — | (141,652 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Financing activities: | ||||||||||||||||
Proceeds from line of credit | 206,660 | — | — | 206,660 | ||||||||||||
Payments on line of credit | (171,440 | ) | — | — | (171,440 | ) | ||||||||||
Repurchase of common stock for payroll tax withholding requirements | (2,441 | ) | — | — | (2,441 | ) | ||||||||||
Due to/from affiliate, net | 70,792 | (70,792 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash provided by (used in) financing activities | 103,571 | (70,792 | ) | — | 32,779 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Increase (decrease) in cash | 1,409 | (2,127 | ) | — | (718 | ) | ||||||||||
Cash, beginning of period | 51 | 6,219 | — | 6,270 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash, end of period | $ | 1,460 | $ | 4,092 | $ | — | $ | 5,552 | ||||||||
|
|
|
|
|
|
|
|
prices.future. Although we can neither control nor predict with any reasonable degree of certainty the length or impact of current weak market in conditions, we currently expect further reductions in the operating revenues and net profit of our Oil and Gas segment in future periods2017, as compared to amounts previously reported.2016. These reductions could be quite substantial. For information on the impact of the market downturn on our liquidity, see “- Liquidity and Capital Resources – Historical Cash and- Cash Flow Information –- Liquidity” below.
Note 3.
Quarter Ended | Favorable | |||||||||||
September 30, | (Unfavorable) | |||||||||||
2016 | 2015 | |||||||||||
(Thousands of dollars, except flight hours, patient transports, and aircraft) | ||||||||||||
Segment operating revenues, net | ||||||||||||
Oil and Gas | $ | 77,551 | $ | 121,190 | $ | (43,639 | ) | |||||
Air Medical | 74,482 | 85,516 | (11,034 | ) | ||||||||
Technical Services | 6,060 | 8,027 | (1,967 | ) | ||||||||
|
|
|
|
|
| |||||||
Total operating revenues, net | 158,093 | 214,733 | (56,640 | ) | ||||||||
Segment direct expenses | ||||||||||||
Oil and Gas(1) | 82,832 | 109,500 | 26,668 | |||||||||
Air Medical | 56,562 | 65,474 | 8,912 | |||||||||
Technical Services | 5,742 | 7,165 | 1,423 | |||||||||
|
|
|
|
|
| |||||||
Total segment direct expenses | 145,136 | 182,139 | 37,003 | |||||||||
Segment selling, general and administrative expenses | ||||||||||||
Oil and Gas | 1,705 | 1,397 | (308 | ) | ||||||||
Air Medical | 3,056 | 2,302 | (754 | ) | ||||||||
Technical Services | 266 | 230 | (36 | ) | ||||||||
|
|
|
|
|
| |||||||
Total segment selling, general and administrative expenses | 5,027 | 3,929 | (1,098 | ) | ||||||||
|
|
|
|
|
| |||||||
Total segment expenses | 150,163 | 186,068 | 35,905 | |||||||||
|
|
|
|
|
| |||||||
Net segment (loss) profit | ||||||||||||
Oil and Gas | (6,986 | ) | 10,293 | (17,279 | ) | |||||||
Air Medical | 14,864 | 17,740 | (2,876 | ) | ||||||||
Technical Services | 52 | 632 | (580 | ) | ||||||||
|
|
|
|
|
| |||||||
Total net segment profit(2) | 7,930 | 28,665 | (20,735 | ) | ||||||||
Other, net(3) | 377 | 637 | (260 | ) | ||||||||
Unallocated selling, general and administrative costs(4) | (8,354 | ) | (7,646 | ) | (708 | ) | ||||||
Interest expense | (7,719 | ) | (7,366 | ) | (353 | ) | ||||||
|
|
|
|
|
| |||||||
(Loss) earnings before income taxes | (7,766 | ) | 14,290 | (22,056 | ) | |||||||
Income tax (benefit) expense | (2,799 | ) | 6,621 | 9,420 | ||||||||
|
|
|
|
|
| |||||||
Net (loss) earnings | $ | (4,967 | ) | $ | 7,669 | $ | (12,636 | ) | ||||
|
|
|
|
|
| |||||||
Flight hours: | ||||||||||||
Oil and Gas | 19,583 | 25,985 | (6,402 | ) | ||||||||
Air Medical(5) | 9,681 | 10,261 | (580 | ) | ||||||||
Technical Services | 14 | 50 | (36 | ) | ||||||||
|
|
|
|
|
| |||||||
Total | 29,278 | 36,296 | (7,018 | ) | ||||||||
|
|
|
|
|
| |||||||
Air Medical Transports(6) | 5,156 | 5,440 | (284 | ) | ||||||||
|
|
|
|
|
|
2016.
Quarter Ended June 30, | Favorable (Unfavorable) | |||||||||||
2017 | 2016 | |||||||||||
(Thousands of dollars, except flight hours, patient transports, and aircraft) | ||||||||||||
Segment operating revenues | ||||||||||||
Oil and Gas | $ | 74,668 | $ | 83,185 | $ | (8,517 | ) | |||||
Air Medical | 67,222 | 75,547 | (8,325 | ) | ||||||||
Technical Services | 4,534 | 8,404 | (3,870 | ) | ||||||||
Total operating revenues | 146,424 | 167,136 | (20,712 | ) | ||||||||
Segment direct expenses | ||||||||||||
Oil and Gas (1) | 73,681 | 87,400 | 13,719 | |||||||||
Air Medical | 50,402 | 58,997 | 8,595 | |||||||||
Technical Services | 3,858 | 6,096 | 2,238 | |||||||||
Total segment direct expenses | 127,941 | 152,493 | 24,552 | |||||||||
Segment selling, general and administrative expenses | ||||||||||||
Oil and Gas | 1,635 | 1,605 | (30 | ) | ||||||||
Air Medical | 3,263 | 2,642 | (621 | ) | ||||||||
Technical Services | 356 | 273 | (83 | ) | ||||||||
Total segment selling, general and administrative expenses | 5,254 | 4,520 | (734 | ) | ||||||||
Total segment expenses | 133,195 | 157,013 | 23,818 | |||||||||
Net segment (loss) profit | ||||||||||||
Oil and Gas | (648 | ) | (5,820 | ) | 5,172 | |||||||
Air Medical | 13,557 | 13,908 | (351 | ) | ||||||||
Technical Services | 320 | 2,035 | (1,715 | ) | ||||||||
Total net segment profit (2) | 13,229 | 10,123 | 3,106 | |||||||||
Other, net (3) | 697 | 4,792 | (4,095 | ) | ||||||||
Unallocated selling, general and administrative costs (4) | (8,993 | ) | (7,258 | ) | (1,735 | ) | ||||||
Interest expense | (8,083 | ) | (7,540 | ) | (543 | ) | ||||||
(Loss) earnings before income taxes | (3,150 | ) | 117 | (3,267 | ) | |||||||
Income tax expense (benefit) | 123 | (4,160 | ) | (4,283 | ) | |||||||
Net (loss) earnings | $ | (3,273 | ) | $ | 4,277 | $ | (7,550 | ) | ||||
Flight hours: | ||||||||||||
Oil and Gas | 19,683 | 20,724 | (1,041 | ) | ||||||||
Air Medical (5) | 9,652 | 9,519 | 133 | |||||||||
Technical Services | — | 9 | (9 | ) | ||||||||
Total | 29,335 | 30,252 | (917 | ) | ||||||||
Air Medical Transports (6) | 5,121 | 4,823 | 298 |
(1) | Includes Equity in loss of unconsolidated |
(2) |
Quarter Ended September 30, | ||||||||
2016 | 2015 | |||||||
Total net segment profit | $ | 7,930 | $ | 28,665 | ||||
Other, net | 377 | 637 | ||||||
Unallocated selling, general and administrative costs | (8,354 | ) | (7,646 | ) | ||||
Interest expense | (7,719 | ) | (7,366 | ) | ||||
|
|
|
| |||||
Earnings before income taxes | $ | (7,766 | ) | $ | 14,290 | |||
|
|
|
|
Quarter Ended June 30, | ||||||||
2017 | 2016 | |||||||
Total net segment profit | $ | 13,229 | $ | 10,123 | ||||
Other, net | 697 | 4,792 | ||||||
Unallocated selling, general and administrative costs | (8,993 | ) | (7,258 | ) | ||||
Interest expense | (8,083 | ) | (7,540 | ) | ||||
(Loss) earnings before income taxes | $ | (3,150 | ) | $ | 117 |
(3) | Consists of gains on disposition of property and equipment, and other income. |
(4) | Represents corporate overhead expenses not allocable to segments. |
(5) | Flight hours include |
(6) | Represents individual patient transports for the period. |
The following table presents operating revenues, expenses, and earnings, along with certain non-financial operational statistics, for the nine months ended September 30, 2016 and 2015.
Nine Months Ended | Favorable | |||||||||||
September 30, | (Unfavorable) | |||||||||||
2016 | 2015 | |||||||||||
(Thousands of dollars, except flight hours, patient transports, and aircraft) | ||||||||||||
Segment operating revenues, net | ||||||||||||
Oil and Gas | $ | 249,173 | $ | 354,425 | $ | (105,252 | ) | |||||
Air Medical | 220,089 | 239,543 | (19,454 | ) | ||||||||
Technical Services | 19,983 | 23,509 | (3,526 | ) | ||||||||
|
|
|
|
|
| |||||||
Total operating revenues, net | 489,245 | 617,477 | (128,232 | ) | ||||||||
Segment direct expenses | ||||||||||||
Oil and Gas(1) | 262,148 | 310,093 | 47,945 | |||||||||
Air Medical | 172,603 | 189,089 | 16,486 | |||||||||
Technical Services | 15,432 | 21,166 | 5,734 | |||||||||
|
|
|
|
|
| |||||||
Total segment direct expenses | 450,183 | 520,348 | 70,165 | |||||||||
Segment selling, general and administrative expenses | ||||||||||||
Oil and Gas | 4,838 | 3,831 | (1,007 | ) | ||||||||
Air Medical | 8,293 | 7,458 | (835 | ) | ||||||||
Technical Services | 763 | 552 | (211 | ) | ||||||||
|
|
|
|
|
| |||||||
Total segment selling, general and administrative expenses | 13,894 | 11,841 | (2,053 | ) | ||||||||
|
|
|
|
|
| |||||||
Total segment expenses | 464,077 | 532,189 | 68,112 | |||||||||
|
|
|
|
|
| |||||||
Net segment (loss) profit | ||||||||||||
Oil and Gas | (17,813 | ) | 40,501 | (58,314 | ) | |||||||
Air Medical | 39,193 | 42,996 | (3,803 | ) | ||||||||
Technical Services | 3,788 | 1,791 | 1,997 | |||||||||
|
|
|
|
|
| |||||||
Total net segment profit(2) | 25,168 | 85,288 | (60,120 | ) | ||||||||
Other, net(3) | 5,425 | 1,739 | 3,686 | |||||||||
Unallocated selling, general and administrative costs(4) | (22,938 | ) | (23,018 | ) | 80 | |||||||
Interest expense | (22,792 | ) | (21,691 | ) | (1,101 | ) | ||||||
|
|
|
|
|
| |||||||
(Loss) earnings before income taxes | (15,137 | ) | 42,318 | (57,455 | ) | |||||||
Income tax (benefit) expense | (5,515 | ) | 17,832 | 23,347 | ||||||||
|
|
|
|
|
| |||||||
Net (loss) earnings | $ | (9,622 | ) | $ | 24,486 | $ | (34,108 | ) | ||||
|
|
|
|
|
| |||||||
Flight hours: | ||||||||||||
Oil and Gas | 61,043 | 76,864 | (15,821 | ) | ||||||||
Air Medical(5) | 27,889 | 27,081 | 808 | |||||||||
Technical Services | 546 | 529 | 17 | |||||||||
|
|
|
|
|
| |||||||
Total | 89,478 | 104,474 | (14,996 | ) | ||||||||
|
|
|
|
|
| |||||||
Air Medical Transports(6) | 14,482 | 14,142 | 340 | |||||||||
|
|
|
|
|
| |||||||
Aircraft operated at period end:(7) | ||||||||||||
Oil and Gas(8) | 139 | 161 | ||||||||||
Air Medical (9) | 104 | 106 | ||||||||||
Technical Services | 6 | 6 | ||||||||||
|
|
|
| |||||||||
Total | 249 | 273 | ||||||||||
|
|
|
|
Six Months Ended June 30, | Favorable (Unfavorable) | |||||||||||
2017 | 2016 | |||||||||||
(Thousands of dollars, except flight hours, patient transports, and aircraft) | ||||||||||||
Segment operating revenues | ||||||||||||
Oil and Gas | $ | 146,399 | $ | 171,622 | $ | (25,223 | ) | |||||
Air Medical | 122,559 | 145,607 | (23,048 | ) | ||||||||
Technical Services | 12,084 | 13,923 | (1,839 | ) | ||||||||
Total operating revenues | 281,042 | 331,152 | (50,110 | ) | ||||||||
Segment direct expenses | ||||||||||||
Oil and Gas (1) | 155,410 | 179,316 | 23,906 | |||||||||
Air Medical | 101,243 | 116,041 | 14,798 | |||||||||
Technical Services | 8,804 | 9,690 | 886 | |||||||||
Total segment direct expenses | 265,457 | 305,047 | 39,590 | |||||||||
Segment selling, general and administrative expenses | ||||||||||||
Oil and Gas | 3,354 | 3,132 | (222 | ) | ||||||||
Air Medical | 6,144 | 5,237 | (907 | ) | ||||||||
Technical Services | 694 | 497 | (197 | ) | ||||||||
Total segment selling, general and administrative expenses | 10,192 | 8,866 | (1,326 | ) | ||||||||
Total segment expenses | 275,649 | 313,913 | 38,264 | |||||||||
Net segment (loss) profit | ||||||||||||
Oil and Gas | (12,365 | ) | (10,826 | ) | (1,539 | ) | ||||||
Air Medical | 15,172 | 24,329 | (9,157 | ) | ||||||||
Technical Services | 2,586 | 3,736 | (1,150 | ) | ||||||||
Total net segment profit (2) | 5,393 | 17,239 | (11,846 | ) | ||||||||
Other, net (3) | 1,761 | 5,048 | (3,287 | ) | ||||||||
Unallocated selling, general and administrative costs (4) | (17,099 | ) | (14,585 | ) | (2,514 | ) | ||||||
Interest expense | (16,278 | ) | (15,073 | ) | (1,205 | ) | ||||||
Loss before income taxes | (26,223 | ) | (7,371 | ) | (18,852 | ) | ||||||
Income tax benefit | (7,702 | ) | (2,716 | ) | 4,986 | |||||||
Net loss | $ | (18,521 | ) | $ | (4,655 | ) | $ | (13,866 | ) | |||
Flight hours: | ||||||||||||
Oil and Gas | 37,157 | 41,461 | (4,304 | ) | ||||||||
Air Medical (5) | 18,045 | 18,208 | (163 | ) | ||||||||
Technical Services | 511 | 532 | (21 | ) | ||||||||
Total | 55,713 | 60,201 | (4,488 | ) | ||||||||
Air Medical Transports (6) | 9,418 | 9,326 | 92 | |||||||||
Aircraft operated at period end: (7) | ||||||||||||
Oil and Gas | 128 | 145 | ||||||||||
Air Medical (8) | 104 | 105 | ||||||||||
Technical Services | 6 | 6 | ||||||||||
Total | 238 | 256 |
(1) | Includes Equity in loss of unconsolidated |
(2) |
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
Total net segment profit | $ | 25,168 | $ | 85,288 | ||||
Other, net | 5,425 | 1,739 | ||||||
Unallocated selling, general and administrative costs | (22,938 | ) | (23,018 | ) | ||||
Interest expense | (22,792 | ) | (21,691 | ) | ||||
|
|
|
| |||||
(Loss) earnings before income taxes | $ | (15,137 | ) | $ | 42,318 | |||
|
|
|
|
Six Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Total net segment profit | $ | 5,393 | $ | 17,239 | ||||
Other, net | 1,761 | 5,048 | ||||||
Unallocated selling, general and administrative costs | (17,099 | ) | (14,585 | ) | ||||
Interest expense | (16,278 | ) | (15,073 | ) | ||||
Loss before income taxes | $ | (26,223 | ) | $ | (7,371 | ) |
(3) | Consists of gains on disposition of property and equipment, and other income. |
(4) | Represents corporate overhead expenses not allocable to segments. |
(5) | Flight hours include |
(6) | Represents individual patient transports for the period. |
(7) | Represents the total number of aircraft available for use, not all of which were deployed in service as of the date indicated. |
(8) | Includes |
2016 2016. net. $0.4 million, net. April, 2017. this adjustment was less than $0.1 million. 2016. Partially offsetting the decrease in revenue and flight hours from our heavy and medium model types were increased revenues and flight hours from our light model types due to increased activity in the shallow waters of the Gulf of Mexico. net. 2016. revenues discussed above. decreased $0.4 million, net. employee incentive compensation costs. 2016. 2016 2016. $0.6 million, net. We also had equity in the loss of our unconsolidated Australian affiliate of $1.1 million for the six months ended June 30, 2017 related to the startup of operations on a contract which began in April 2017. 2017 and June 30, 2016, respectively. 2016. bonus accruals. warranty and other costs discussed above. such date. Change in customer-owned aircraft and transfers between segments account for the remainder. decreased $0.1 million, net. higher employee incentive compensation costs. 2016. prolonged period. Part I of this report. We also have outstanding a letter of credit for $7.6 million issued under our $150.0 million credit facility that reduces the amount we can borrow under that facility. 2017 and December 31, 2016, respectively. Aircraft lease obligations Other lease obligations Long-term debt(2) Senior notes interest(2) SeptemberJune 30, 20162017 compared with Quarter Ended SeptemberJune 30, 2015— -Operating revenues for the quarterthree months ended SeptemberJune 30, 20162017 were $158.1$146.4 million, compared to $214.7$167.1 million for the quarterthree months ended SeptemberJune 30, 2015,2016, a decrease of $56.6$20.7 million. Oil and Gas segment operating revenues decreased $43.6$8.5 million for the quarterthree months ended SeptemberJune 30, 2016,2017, related primarily to decreased aircraft flight revenues for allheavy and medium model types resulting predominately from fewer aircraft on contract and decreased flight hours. Air Medical segment operating revenues decreased $11.0$8.3 million due principally to decreased traditional provider program revenues resulting from reducedthe termination of our overseas operations.operations in late 2016. Technical Services segment operating revenues decreased $2.0$3.9 million due primarily to a decrease in technical services provided to a third party customer.quarterthree months ended SeptemberJune 30, 20162017 were 29,27829,335 compared to 36,29630,252 for the quarterthree months ended SeptemberJune 30, 2015.2016. Oil and Gas segment flight hours decreased 6,4021,041 hours, due to decreases in flight hours for allheavy and medium model types. Air Medical segment flight hours decreased 580increased 133 hours fromfor the quarterthree months ended SeptemberJune 30, 2015,2016, due to decreasedincreased flight hours in our traditional provider and independent provider operations. IndividualAs discussed further below, individual patient transports in the Air Medical segment were 5,1565,121 for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to transports of 5,4404,823 for the quarterthree months ended SeptemberJune 30, 2015. – -Direct operating expense was $145.1$127.9 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $182.1$152.5 million for the quarterthree months ended SeptemberJune 30, 2015,2016, a decrease of $37.0$24.6 million, or 20%16.1%. Employee compensation expense decreased $18.1$7.4 million primarily due to a reduction in employees in our Oil and Gas segment resulting from implementation of voluntary early retirement programs (“VERPs”) in the second half of 2015 and the first quarter of 2016, and a reduction in the number of employees in our Air Medical segment’s Middle East operations. Employee compensation expense represented approximately 46%48% and 45% of total direct expense for the quarters ended SeptemberJune 30, 2017 and 2016, and 2015.respectively. We also experienced decreasesa decrease in aircraft fuel of $2.8 million, aircraft insurance of $0.9 million, and aircraft warranty costs of $2.5$10.5 million (which expenses represent 3%, 1%, and 6% of total direct expense, respectively) as a result of the reduction incancellation of a warranty program on some of our fleet of medium aircraft and decreased flight hours. Aircraft parts expense decreased $0.5The cancellation of the warranty program resulted in a non-recurring credit of $9.8 million and componentfrom the warranty provider, which is attributable to unused accumulated warranty payments for repair expense decreased $4.0 million. Other decreases included contract services expense of $2.8 million, pilot training expense of $1.0 million, travel expenses of $0.6 million, and costthat will not be utilized in the future. Costs of goods sold decreased $5.2 million due to the termination of $3.2 million.our above-referenced contract in the Middle East and due to reduction in services for a third party technical services customer. Aircraft lease expense and aircraft repairs decreased $1.5 million and $1.2 million, respectively. Other direct costsitems increased $0.6$1.2 million, on a net basis. – -Selling, general and administrative expenses were $13.4$14.2 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $11.6$11.8 million for the quarterthree months ended SeptemberJune 30, 2015.2016. The $1.8$2.4 million increase was primarily attributable to $1.3 million of severance costs associated with the final lease settlement for two aircraft returnedrelated to the lessor,a reductions in force and $0.7 million of legal and consulting fees related to a special project. Other items increased fees for contract services in our Oil and Gas segment, and higher promotional and rent expense in our Air Medical segment.net – LossNet -The loss on asset dispositions was $0.1 million for the quarterthree months ended SeptemberJune 30, 2017 was less than $0.1 million. For the three months ended June 30, 2016, compared towe recorded a gain of $0.2$4.3 million forresulting from the quarter ended September 30, 2015. This decrease was primarily due to the sale or disposition of four light aircraft that no longer met our strategic needs.and three medium aircraft. See Note 8. – -Equity in the lossgain of our unconsolidated affiliate attributable to our mid-2011 investment in a Ghanaian entity was $0.2$0.1 million forand equity in the quarter ended September 30, 2016, compared toloss of $0.1 million for the quarterthree months ended SeptemberJune 30, 2015, resulting from increases expenses2017 and 2016, respectively. See Note 11. We also had equity in the loss of our unconsolidated Australian affiliate of $1.1 million for the three months ended June 30, 2017, related to increased production activitythe startup of operations which commenced in the region. See Note 11. – -Interest expense was $7.7$8.1 million for the quarterthree months ended SeptemberJune 30, 20162017 and $7.4$7.5 million for the quarterthree months ended SeptemberJune 30, 2015,2016. The $0.6 million increase is principally due to higher average outstanding debt balances.net – Net -Other income was $0.7 million for the three months ended June 30, 2017 compared to $0.5 million for the quarters ended September 30,same period in 2016, and September 30, 2015, and represents primarily interest income. – - Income tax benefitexpense for the quarterthree months ended SeptemberJune 30, 20162017 was $2.8$0.1 million compared to income tax expensebenefit of $6.6$4.2 million for the quarterthree months ended SeptemberJune 30, 2015.2016. Our $2.8$0.1 million income tax expense for the three months ended June 30, 2017 includes a non-cash $1.2 million income tax deficit related to the permanent difference resulting from the difference between the book and tax deductions for equity-based compensation. The $4.2 million income tax benefit forrecorded in the quarterthree months ended SeptemberJune 30, 2016 is attributablereflects a $4.2 million tax benefit related to our net loss from operationsthe impact of $7.8 million. Oura change in Louisiana tax law which amends the manner in which profits are apportioned to the state of Louisiana for income tax reporting purposes. Excluding these discrete adjustments, our effective tax rate was 36%35.0% and 46%10% for the quarterthree months ended SeptemberJune 30, 2017 and June 30, 2016, and September 30, 2015, respectively. The higher10% effective rate for the quarter ended SeptemberJune 30, 20152016 reflects a cumulative year to date true up of the effective tax rate from 36.2% to 36.0%. The impact of recording during that quarter a one-time increase in the valuation allowance on our foreign tax credits.– -Net loss for the quarterthree months ended SeptemberJune 30, 20162017 was $5.0$3.3 million compared to net earnings of $7.7$4.3 million for the quarterthree months ended SeptemberJune 30, 2015.2016. Loss before income taxes for the quarterthree months ended SeptemberJune 30, 20162017 was $7.8$3.2 million compared to earnings before income taxtaxes of $14.3$0.1 million for the same period in 2015. Losses2016. Loss per diluted share were $0.32was $0.21 for the thirdcurrent quarter of 2016 compared to earnings per diluted share of $0.49$0.27 for the prior year quarter. The decreaseincrease in earningsloss before taxes for the quarter ended SeptemberJune 30, 20162017 is attributable principally to higher corporate overhead expense and an unfavorable comparison to the decreased profits in all segments.second quarter of 2016, when we recognized a $4.3 million gain on the disposal of assets. We had 15.7 and 15.6 million weighted average diluted common shares outstanding during the quarter ended SeptemberJune 30, 20162017 and 2015, respectively.– -Oil and Gas segment revenues were $77.6$74.7 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $121.2$83.2 million for the quarterthree months ended SeptemberJune 30, 2015,2016, a decrease of $43.6$8.5 million. Our Oil and Gas segment revenues are primarily driven by the amount of contracted aircraft and flight hours. Costs are primarily fixed based on the number of aircraft operated, with a variable portion that is driven by flight hours.19,58319,683 for the most recent quarter compared to 25,98520,724 for the same quarter in the prior year, a decrease of 6,4021,041 flight hours. The decline in revenues and flight hours is attributable to fewer aircraft on contract and lower utilization rates for allheavy and medium model types due to reduced oil and gas exploration and production activities in response to lower prevailing oilcommodity prices.139128 at SeptemberJune 30, 2016,2017, compared to 161145 at SeptemberJune 30, 2015. We added one new heavy aircraft to our Oil and Gas segment since September 30, 2015.2016. We have sold or disposed of tenseven light and eightnine medium aircraft in the Oil and Gas segment since SeptemberJune 30, 2015. Changes2016. We also purchased two light aircraft in customer-owned aircraftthe Oil and transfersGas segment since June 30, 2016. Transfers between segments account for the remainder.$82.8$73.7 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $109.5$87.4 million for the quarterthree months ended SeptemberJune 30, 2015,2016, a decrease of $26.7$13.7 million. Employee compensation expense decreased $14.2$4.4 million due to a reduction in employees resulting from implementation of our VERPs. See Note 10.employees. There were also decreaseswas a decrease in aircraft fuel expenses of $2.5 million, aircraft warranty costs of $2.4$9.5 million, and aircraft insurance of $0.7 million, eachprimarily due to a credit related to the cancellation a warranty program on some our medium aircraft fleet, and due to a reduction in flight hours. Other decreases included contractThe cancellation of the warranty program resulted in a non-recurring credit of $8.9 million from the warranty provider, which is attributable to unused accumulated warranty payments for repair services that will not be utilized in the future. Aircraft lease expense decreased $1.2 million due to fewer aircraft on lease. Losses in the equity of $2.5our unconsolidated affiliates increased $0.9 million pilot training expense of $0.8 million, travel expense of $0.4 million, and property taxes of $1.1 million.for the reasons discussed above. Other items decreased $2.1increased $0.5 million, on a net basis.$1.7$1.6 million for the quarterthree months ended SeptemberJune 30, 20162017 and $1.4$1.6 million for the quarterthree months ended SeptemberJune 30, 2015. The $0.3 million increase is primarily attributable to increased fees for contract services of $0.3 million.$7.0$0.6 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to segment profita loss of $10.3$5.8 million for the quarterthree months ended SeptemberJune 30, 2015.2016. The decrease in segment profit wasloss is primarily due to decreased revenues,the warranty credit discussed above, which were onlywas partially offset by decreased expenses attributable to the above-described factors.– -Air Medical segment revenues were $74.5$67.2 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $85.5$75.5 million for the quarterthree months ended SeptemberJune 30, 2015.2016. This decrease of $11.0$8.3 million is primarily attributable to decreased traditional provider program revenues resulting from the reduction in the scopetermination of our overseas operations (as discussed further below under “- Other Matters”)below). We also experienced decreased revenues from our independent provider programs primarily resulting from decreased patient transports. Patient transports were 5,1565,121 for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to 5,4404,823 for the same period in the prior year.SeptemberJune 30, 20162017 was 104 compared to 106105 at SeptemberJune 30, 2015.2016. Since SeptemberJune 30, 2015,2016, we added threetwo light aircraft to our Air Medical segment. We have soldsegment, which were offset by our sale or disposeddisposition of one light and two medium aircraft in the Air Medical segment since September 30, 2015. Transferssuch date. Changes in customer-owned aircraft and transfers between segments account for the remainder.$56.6$50.4 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $65.5$59.0 million for the quarterthree months ended SeptemberJune 30, 2015,2016, a decrease of $8.9$8.6 million. Employee compensation costs decreased $3.7$3.4 million due to a reduction in personnel primarily relating to the termination of our 2012 Middle East project.contract. Component repair costs also decreased $3.3$1.1 million as a result of a reduction in scheduled maintenance for certain aircraft. Cost of goods sold decreased $2.0$2.6 million related to certain items that were previously billed on a cost plus basis onunder our former Middle East project.contract. There was a decrease in aircraft warranty costs of $1.1 million, primarily due to a credit related to the above-described cancellation of theincreased, net $0.1 million.$3.1$3.3 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $2.3$2.6 million for the quarterthree months ended SeptemberJune 30, 2015.2016. The $0.8$0.7 million increase is primarily due to increased promotional and rent expense.$14.9$13.6 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to a segment profit of $17.7$13.9 million for the quarterthree months ended SeptemberJune 30, 2015.2016. The $2.8$0.3 million decrease in profit is attributable to the decreased operating revenues described above, partially offset by decreased expenses.– -Technical Services segment revenues were $6.1$4.5 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to $8.0$8.4 million for the quarterthree months ended SeptemberJune 30, 2015.2016. The decrease in revenue is due primarily to a decrease of technical services provided to a third party customer whose service requirements typically vary from period to period. We currently have one ongoing project for this customer, which is expected to be completed in the fourth quarter of 2016. At this time, we have no future projects booked for this customer Direct expenses decreased $1.4$2.2 million compared to the prior year quarter,three months, principally due to the decreased operations. Technical Services segment earnings was less than $0.1were $0.3 million for the quarterthree months ended SeptemberJune 30, 2016,2017, compared to segment profit of $0.6$2.0 million for the quarterthree months ended SeptemberJune 30, 2015.NineSeptemberJune 30, 20162017 compared with NineSix Months Ended SeptemberJune 30, 2015— -Operating revenues for the ninesix months ended SeptemberJune 30, 20162017 were $489.2$281.0 million, compared to $617.5$331.1 million for the ninesix months ended SeptemberJune 30, 2015,2016, a decrease of $128.3$50.1 million. Oil and Gas segment operating revenues decreased $105.3$25.2 million for the ninesix months ended SeptemberJune 30, 2016,2017, related primarily to decreased aircraft flight revenues for all model types resulting predominately from fewer aircraft on contract and decreased flight hours for these aircraft. Air Medical segment operating revenues decreased $19.5$23.0 million due principally to decreased traditional provider program revenues resulting from reduced overseas operations.operations and reduced revenues from our independent provider programs. This decrease was partially offset by increased revenues attributable to our independentU.S.-based traditional provider programs, driven principally by increased transports.programs. Technical Services segment operating revenues decreased $3.5$1.8 million due to fewervariations in the level of services provided to a third party customer under projects discussed further below.ninesix months ended SeptemberJune 30, 20162017 were 89,47855,713 compared to 104,47460,201 for the ninesix months ended SeptemberJune 30, 2015.2016. Oil and Gas segment flight hours decreased 15,8214,304 hours, due to decreases in flight hours for all model types. Air Medical segment flight hours increased 808decreased 163 hours from the ninesix months ended SeptemberJune 30, 2015,2016, due to increaseddecreased flight hours in our independentoverseas traditional provider programs.program. Individual patient transports in the Air Medical segment were 14,4829,418 for the ninesix months ended SeptemberJune 30, 2016,2017, compared to 14,1429,326 transports for the ninesix months ended SeptemberJune 30, 2015. – -Direct operating expense was $450.2$265.4 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $520.3$305.0 million for the ninesix months ended SeptemberJune 30, 2015,2016, a decrease of $70.2$39.6 million, or 13.5%13.0%. Employee compensation expense decreased $33.7$16.4 million due to a reduction in employees in our Oil and Gas segment resulting from implementation of voluntary early retirement programs (“VERPs”) in the second half of 2015 and the first quarter of 2016.Air Medical segments . Employee compensation expense represented approximately 46%47% of total direct expense for the ninesix months ended SeptemberJune 30, 20162017 and 2015.46% for the six months ended June 30, 2016. In addition, we experienced decreases in aircraft fuel expenses of $6.7 million, aircraft warranty costs of $5.7$11.7 million aircraft insuranceprimarily due to a credit received for the cancellation of $2.5a warranty program on some of the medium fleet, and decreased flight hours. The cancellation of the warranty program resulted in a non-recurring credit of $9.8 million componentfrom the warranty provider, which is attributable to unused accumulated warranty payments for repair costsservices that will not be utilized in the future. We also had decreases in cost of $4.5goods sold of $7.2 million, repair cost of $2.5 million and aircraft parts costs of $1.8$2.6 million (representing 3%, 7%, 1%2%, 6% and 4% of total direct expense, respectively), as a result of the reduction in flight hours. Other decreases include contract services expense of $5.6 million, pilot training expense of $2.6 million, travel expenses of $1.0 million, and property taxes of $1.4 million. Costs of goods sold decreased $7.1 million, due to decreasedfewer services provided to an external customer by our Technical Services segment, and a decrease in certain items that are billed on a cost plus basis in our Air Medical segment. Other direct costs items increased $2.5$0.8 million, net. – -Selling, general and administrative expenses were $36.8$27.3 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $34.9$23.5 million for the ninesix months ended SeptemberJune 30, 2015. The $1.92016, an increase of $3.8 million. We incurred $2.9 million increase was primarily attributableof severance costs related to costs associated with the final lease settlement for two aircraft returnedreductions in force and $1.3 million of legal and consulting fees related to the lessor,a special project. Partially offsetting these increases were decreases in equity-based compensation of $1.0 million. Other items increased fees for contract services in our Oil and Gas segment, and higher promotional and rent expense in our Air Medical segment.net – GainNet -Loss on asset dispositions was $3.9less than $0.1 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to a gain of $0.2$3.9 million for the ninesix months ended SeptemberJune 30, 2015. During2016. In the nine monthsfirst half of 2017, we disposed of five medium aircraft and related parts inventory utilized in the Oil and Gas segment that no longer met our strategic needs. In the first half of 2016, we sold ninefive light and three medium aircraft, along with spare parts inventory that no longer met our strategic needs. See Note 8. – -Equity in the loss of our unconsolidated affiliate attributable to our mid-2011 investment in a Ghanaian entity was $0.3$0.9 million and $0.2$0.1 million for the ninesix months ended SeptemberJune 30, 20162017 and 2015,2016, respectively. See Note 11. – -Interest expense was $22.8$16.3 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $21.7$15.1 million for the ninesix months ended SeptemberJune 30, 2015,2016, principally due to higher average outstanding debt balances.net – Net -Other income was $1.6$1.8 million for the ninesix months ended SeptemberJune 30, 20162017 compared to $1.5$1.1 million for the ninesix months ended SeptemberJune 30, 20152016 and represents primarily interest income. The $0.1$0.7 million increase is primarily attributable to an increase in the amount and rate of return of our short-term investments. – -Income tax benefit for the ninesix months ended SeptemberJune 30, 20162017 was $5.5$7.7 million compared to income tax expensebenefit of $17.8$2.7 million for the ninesix months ended SeptemberJune 30, 2015.2016. Our effective tax rate was 36%29.4% and 41%36.8% for the ninesix months ended SeptemberJune 30, 2017 and June 30, 2016, and September 30, 2015, respectively. The $5.5$7.7 million income tax benefit recorded in the ninesix months ended SeptemberJune 30, 2017 includes a non-cash $1.4 million income tax deficit related to the permanent difference resulting from the difference between the book and tax deductions for equity-based compensation. The $2.7 million tax benefit recorded during the six months ended June 30, 2016 is comprised of a valuation allowance on certain state tax benefits related to net operating loss carryforwards of $4.1 million, a $4.2 million tax benefit related to the impact of a change in Louisiana tax law which amends the manner in which profits are apportioned to the state of Louisiana for income tax reporting purposes, and a $5.4$2.6 million tax benefit on our loss before income taxes, which were partially offset by recording a valuation allowance on certain statetaxes. Absent these discrete adjustments, our effective tax benefits related to net operating loss carryforwards of $4.1 million. The valuation allowance recordedrate was solely attributable to a change in the Louisiana tax law which limits our ability to fully realize the tax benefit of our existing net operating loss carryforwards in this state. The higher rate34.9% and 36% for the ninesix months ended SeptemberJune 30, 2015 reflects the impact of recording during that period a one-time increase in the valuation allowance on our foreign tax credits.(Loss) Earnings – Loss -Net loss for the ninesix months ended SeptemberJune 30, 20162017 was $9.6$18.5 million compared to net earningsloss of $24.5$4.7 million for the ninesix months ended SeptemberJune 30, 2015.2016. Loss before income taxes for the ninesix months ended SeptemberJune 30, 20162017 was $15.1$26.2 million compared to earningsa loss before income taxtaxes of $42.3$7.4 million for the same period in 2015.2016. Loss per diluted share was $0.61$1.18 for the ninesix months ended SeptemberJune 30, 20162017 compared to earningsa loss per diluted share of $1.57$0.30 for the prior year ninesix months. The decrease in earnings before taxes for the ninesix months ended SeptemberJune 30, 20162017 is principally attributable to the decreased profits in all of our Oil and Gas and Air Medical segments, partially offset by a small increase in the profits from our Technical Services segment.segments. We had 15.7 and 15.5 million weighted average diluted common shares outstanding during the ninesix months ended SeptemberJune 30, 20162017 and 2015, respectively.– -Oil and Gas segment revenues were $249.2$146.4 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $354.4$171.6 million for the ninesix months ended SeptemberJune 30, 2015,2016, a decrease of $105.2$25.2 million. Our Oil and Gas segment revenues are primarily driven by the amount of contracted aircraft and flight hours. Costs are primarily fixed based on the number of aircraft operated, with a variable portion that is driven by flight hours.61,04337,157 for the past ninesix months compared to 76,86441,461 for the same ninesix months in the prior year, a decrease of 15,8214,304 flight hours. The decline in revenues and flight hours is attributable to fewer aircraft on contract and lower utilization rates for all model types due to reduced oil and gas exploration and production activities in response to lower prevailing oil prices.139128 at SeptemberJune 30, 2016,2017, compared to 161145 at SeptemberJune 30, 2015. We added one new heavy aircraft to our Oil and Gas segment since September 30, 2015.2016. We have sold or disposed of tenseven light and eightnine medium aircraft in the Oil and Gas segment since SeptemberJune 30, 2015. Changes2016. We also purchased two medium aircraft in customer-owned aircraftthe Oil and transfersGas segment since June 30, 2016. Transfers between segments accountaccounted for the remainder.$262.1$155.4 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $310.1$179.3 million for the ninesix months ended SeptemberJune 30, 2015,2016, a decrease of $48.0$23.9 million. Employee compensation expenses decreased $25.1$10.8 millionemployees primarily resulting from implementation of our VERPs. See Note 10.employees. There were also decreases in aircraft fuel expenses of $6.6 million, aircraft insurance of $1.8 million, aircraft warranty costs of $5.7$10.7 million and aircraft parts costs of $1.8 million, eachrelated to the credit due to the cancellation of a warranty program on some our medium aircraft fleet and reduction in flight hours. Other decreases included contractThe cancellation of this warranty program resulted in a non-recurring credit of $8.9 million from the warranty provider, which is attributable to unused accumulated warranty payments for repair services that will not be utilized in the future. Aircraft lease expense decreased $2.1 million due to fewer leased aircraft and spare parts decreased $2.5 million. Partially offsetting these decreased were increases in the losses from our unconsolidated affiliates of $4.7$1.9 million and pilot training expense of $2.4 million. Otherother items increased $0.1increase $0.3 million, net.$4.8$3.4 million for the ninesix months ended SeptemberJune 30, 20162017 and $3.8$3.1 million for the ninesix months ended SeptemberJune 30, 2015.2016. The $1.0$0.3 million increase was primarily due to increased legal feesemployee compensation costs associated with newly-added positions and bad debt expense.$17.8$12.4 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to segment profitloss of $40.5$10.8 million for the ninesix months ended SeptemberJune 30, 2015.2016. The decrease in segment profit was due to the decreased revenues detailed above, which were only partially offset by decreased expenses.– -Air Medical segment revenues were $220.1$122.6 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $239.5$145.6 million for the ninesix months ended SeptemberJune 30, 2015,2016, a decrease of $19.4$23.0 million. Operating revenues in our traditional provider programs decreased $24.8$21.4 million due to a reduction in the scope of our overseas operations, (as discussed further below under “- Other Matters”). Operatingpartially offset by a $2.4 million increase in revenues infrom our U.S.-based traditional provider programs. Revenues from our independent provider programs increased $2.9decreased $1.6 million primarily due to an increase in patienta less favorable payor mix, partially offset by increased transports. Patient transports were 14,4829,418 for the ninesix months ended SeptemberJune 30, 2016,2017, compared to 14,1429,326 for the same period in the prior year. Other segment revenue increased $2.5 million.SeptemberJune 30, 20162017 was 104 compared to 106105 at SeptemberJune 30, 2015.2016. Since SeptemberJune 30, 2015,2016, we added threetwo light aircraft to our Air Medical segment. We have soldsegment, which were offset by our sale or disposeddisposition of one light and fivetwo medium aircraft in the Air MedicalMedial segment since September 30, 2015.$172.6$101.2 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $189.1$116.0 million for the ninesix months ended SeptemberJune 30, 2015,2016, a decrease of $16.5$14.8 million. Employee compensation expenses decreased $8.3$5.7 million due to a reduction in personnel. There were also decreases in spare parts and component repair costs of $0.1$2.1 million and $6.3 million, respectively, due to a decrease in scheduled maintenance for certain model types. Costtypes, and a decrease of $5.8 million in cost of goods sold decreased $4.0 million duerelated to a decrease in certain items that were previously billed to our Middle East customer on a cost plus basis. Aircraft depreciation increased $1.3basis under our former Middle East contract. There was a decrease in aircraft warranty costs of $1.1 million, primarily due to an increasea credit related to the cancellation of the above-described warranty program on some our medium aircraft fleet. The cancellation of this warranty program resulted in a credit of $1.0 million from the warranty provider, which is attributable to unused accumulated warranty payments for repair services that will not be utilized in the number of owned aircraft.future. Other direct expense items increased by a net of $0.9 million.$8.3$6.1 million for the ninesix months ended SeptemberJune 30, 2016, compared to $7.52017 and $5.3 million for the ninesix months ended SeptemberJune 30, 2015.2016. The $0.8 million increase is primarily attributablerelated to increased expenses for contract services.$39.2$15.2 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to a segment profit of $43.0$24.3 million for the ninesix months ended SeptemberJune 30, 2015.2016. The decrease in profit is primarily attributable to the decreased revenues described above, which were only partially offset by the decreased aircraft operating expenses described above.– -Technical Services segment revenues were $20.0$12.1 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $23.5$13.9 million for the ninesix months ended SeptemberJune 30, 2015.2016, a decrease of $1.8 million. Direct expense decreased $5.8$0.9 million compared to the prior year nine-month period.six months. The decrease in revenue is due primarily to a decrease of technical services provided to a third party customer whose service requirements typically vary from period to period.customer. Technical Services segment profit was $3.8$2.6 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $1.8$3.7 million for the ninesix months ended SeptemberJune 30, 2015.Other MattersFor several years our Air Medical affiliate received substantial benefits under its three-year service contract with a Middle East customer dated September 29, 2012. Following the expiration of the initial agreement with this customer in late September 2015, we extended the service relationship three times for three-, six- and three-month periods, respectively, on terms that caused our overseas air medical revenues and operating costs to decline significantly compared to prior periods. Our service relationship with this customer reached its contractual end date on September 30, 2016, which will place a commensurate reduction on our Air Medical segment revenues and profit in future periods. We believe that we have remained in good standing with this customer and are in discussions regarding future work. Even if we are ultimately successful in obtaining additional work from this customer, we currently do not expect the arrangement to be effective until 2017.$2.6$2.3 million at SeptemberJune 30, 2016,2017, compared to $2.4$2.6 million at December 31, 2015.2016. Short-term investments were $289.5$237.4 million at SeptemberJune 30, 2016,2017, compared to $284.5$289.8 million at December 31, 2015.2016. We also had $13.0$12.4 million and $15.3$13.0 million in restricted investments at SeptemberJune 30, 20162017 and December 31, 2015,2016, respectively, securing outstanding letters of credit and a bond for foreign operations.periods. Through September 30, 2016, these negative variances did not materially impactperiods as compared to 2016. These reductions have caused us to use a portion of our financial position reportedshort-term investments to fund operations, including an 18% decrease in our consolidated balance sheets, as described inshort-term investments over the first six months of 2017. Nonetheless, we continue to hold substantial short-term investments and have no debt coming due within one year. For these reasons, we expect to be able to fund operations beyond next year even if the oil and gas industry remains challenged over that period. We further detail below. Nonetheless,expect, however, that our liquidity may ultimately be negatively impacted if the current weakness of the energyoil and gas industry persists we expect that it will ultimately havefor a negative impact on our consolidated operating cash flow and liquidity.activities—Activities -Net cash used in operating activities was $7.1$7.9 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to net cash provided of $108.2$0.8 million for the same period in 2015,2016, a decrease of $115.3$8.7 million. Cash receipts from customers were down $152.7$49.8 million primarilywhen compared to the first six months of last year. This decrease in cash receipts was due to a $105.2$24.1 million decrease in revenues from our Oil and Gas segment revenues, relateddue to the downturn in the industry. We hadindustry, and a $57.3$25.2 million decrease in collections relatedrevenues from our Air Medical segment due to ourthe termination of the Middle East contract due in part to timing of payments and in part to alate 2016. The decrease in revenue. Thiscash receipts was partially offset by a $14.3 million decrease in cash required for net payroll, primarily due to a reduction in bonuses paid and staffing levels. The remaining offset was due to a decrease in payments to vendors of $41.3 million, due to the decreased scope of our operations.activities—Activities -Net cash used inprovided by investing activities was $67.0$8.7 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $141.6cash used of $31.6 million for the same period in 2015.2016. Net purchasessales of short-term investments used $3.9provided $52.7 million of cash during the ninesix months ended SeptemberJune 30, 2016,2017, compared to $101.7$2.6 million used in the comparable prior year period. Gross proceeds from asset dispositions were less than $0.1 million during the ninesix months of 2016 were $13.2 million,2017, compared to $3.5$11.0 million for the same period in 2015.2016. Capital expenditures were $75.0$43.9 million for the ninesix months ended SeptemberJune 30, 2016,2017, compared to $48.2$39.9 million for the same period in 2015.2016. Capital expenditures for aircraft and aircraft improvements accounted for $72.4$42.8 million and $45.5$38.1 million of these totals for the ninesix months ended 20162017 and 2015,2016, respectively. During the firstsecond quarter of 2017, we purchased a heavy aircraft from a lessor and two medium aircraft. During the same period of 2016, we took delivery of one heavy aircraft that we purchased in the second quarter with borrowings under our revolving credit line. During the third quarter of 2016, we purchased a heavy aircraft pursuant to a lease purchase option, purchased one light aircraft, and took delivery of one light aircraft to be purchased in the fourth quarter. During the first nine months of 2015, we (i) exercised a purchase option on one heavy aircraft, (ii) took delivery of another heavy aircraft that we paid for in the third quarter of 2015, and then completed a sale/leaseback following the purchase, and (iii) purchased six light aircraft.activities– Activities -Financing activities during the ninesix months of 2017 included net payments of $0.8 million on our revolving credit facility and $0.3 million used to repurchase shares of our non-voting common stock to satisfy withholding tax obligations of employees. Financing activities during the first half of 2016 included net borrowings of $74.9$30.2 million on our revolving credit facility and $0.5 million used to repurchase shares of our non-voting common stock to satisfy withholding tax obligations of employees.Financing activities during the first nine months of 2015 included net borrowings of $35.2 millionrevolving credit facility and $2.5 million used to repurchase sharescash flows, see our condensed consolidated statements of our non-voting common stock to satisfy withholding tax obligationscash flows included in Item 1 of employees.SeptemberJune 30, 2016,2017, we owed $632.4$633.2 million under our total long-term debt, consisting of $500.0 million principal amount of 5.25% Senior Notes due 2019 (excluding debt issuance costs) and $132.4$133.2 million borrowed under our revolving credit facility.– On September 30, 2016, we -We have an amended ourand restated revolving credit facility to, among other things, (a) extend the maturity date to(our “credit facility”) that matures on October 1, 2018 and (b) modify the fixed charge coverage ratio such that it will only be tested when the total of2018. Under our short term investments are less than $150.0 million at the end of any fiscal quarter. Under thiscredit facility, we can borrow up to $150.0 million at floating interest rates based on either the Londonamended and restated revolving credit facility), at our option. Our revolving credit facility includes usual and customary covenants and events of default for credit facilities of its type. Our ability to borrow under the credit facility is conditioned upon our continued compliance with such covenants, including, among others, (i) covenants that restrict our ability to engage in certain asset sales, mergers or other fundamental changes, to incur liens or to engage in certain other transactions or activities and (ii) financial covenants that stipulate that PHI will maintain a consolidated working capital ratio of at least 2 to 1, a net funded debt to consolidated net worth ratio not greater than 1.5 to 1, a fixed charge coverage ratio of at least 1.1 to 1 if our short-term investments fall below $150.0 million, and consolidated net worth of at least $450.0 million (with all such terms or amounts as defined in or determined under the amended and restated revolvingour credit facility).SeptemberJune 30, 2016,2017, we had $132.4$133.2 million in borrowings under our credit facility. At the same date in 2015,2016, we had $78.2$95.0 million in borrowings under our credit facility.– -We maintain a separate letter of credit facility described in Note 5 that had $12.4 million and $13.0 million letters of credit outstanding at SeptemberJune 30, 2016.SeptemberJune 30, 2016,2017, related to our aircraft and other operating lease obligations, revolving credit facility, and 5.25% Senior Notes due 2019. Our obligations under the operating leases are not recorded as liabilities on our balance sheet.sheets included in this report. Each contractual obligation included in the table contains various terms, conditions, and covenants that, if violated, accelerate the payment of that obligation under certain specified circumstances. We believe we were in compliance with the covenants applicable to these contractual obligations as of SeptemberJune 30, 2016.2017. As of SeptemberJune 30, 2016,2017, we leased 2519 aircraft included in the lease obligations below. Payment Due by Year Beyond Total 2016(1) 2017 2018 2019 2020 2020 (Thousands of dollars) $ 226,242 $ 10,607 $ 40,560 $ 36,879 $ 30,226 $ 26,387 $ 81,583 12,842 1,396 3,917 2,863 2,288 1,595 783 632,400 — — 132,400 500,000 — — 65,625 — 26,250 26,250 13,125 — — $ 937,109 $ 12,003 $ 70,727 $ 198,392 $ 545,639 $ 27,982 $ 82,366 Payment Due by Year Total 2018 2019 2020 2021 (Thousands of dollars) Aircraft lease obligations $ 191,401 $ 18,500 $ 34,705 $ 30,226 $ 26,387 $ 26,253 $ 55,330 Other lease obligations 13,788 3,144 4,129 3,088 2,189 1,181 57 633,225 — 133,225 500,000 — — — 52,500 13,125 26,250 13,125 — — — $ 890,914 $ 34,769 $ 198,309 $ 546,439 $ 28,576 $ 27,434 $ 55,387 (1) Payments due during the last threesix months of 20162017 only.(2) “Long-term debt” reflects the principal amount of debt due under our outstanding senior notes and our revolving credit facility, whereas “senior notes interest” reflects interest accrued under our senior notes only. The actual amount of principal and interest paid in all years may differ from the amounts presented above due to the possible future payment or refinancing of outstanding debt or the issuance of new debt.
orders and (vi) other long-term liabilities, such as accruals for litigation or taxes, that are not contractual in nature.
On January 15, 2016, we took initial delivery ofpurchased one heavy aircraft. We fundedaircraft from a lessor for $17.0 million. Under current conditions, we believe it is unlikely that we will exercise the payment for this aircraft with borrowing from our credit facility in June 2016.
remaining 2017 purchase options, unless opportunistic conditions arise.
2016.
See Note 4.
Total Number of | Average Price | |||||||
Period | Shares Purchased | Paid per Share | ||||||
August 1, 2016 – August 31, 2016 | 1,031 | $ | 19.22 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | |||||
April 1, 2017 – June 30, 2017 | 12,151 | $ | 10.28 |
3.1 | (i) | Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit | ||||||||
(ii) | Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3(ii) to PHI’s Report on Form 10-Q for the quarterly period ended September 30, 2015, filed November 6, 2015). | |||||||||
4.1 | Second Amended and Restated Loan Agreement dated as of September 18, 2013, by and among PHI, Inc., PHI Air Medical, L.L.C, successor to Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive, Inc.), International Helicopter Transport, Inc. and Whitney National Bank (incorporated by reference to Exhibit 4.1 to PHI’s Report on Form 10-Q for the quarterly period ended September 30, 2013, filed on November 8, 2013). | |||||||||
4.2 | First Amendment to Second Amended and Restated Loan Agreement, dated as of March 5, 2014, by and among PHI, Inc., PHI Air Medical, L.L.C., PHI Tech Services, Inc., International Helicopter Transport, Inc. and Whitney National Bank (incorporated by reference to Exhibit 4.1 to PHI’s Report on Form 8-K filed March 6, 2014). | |||||||||
4.3 | Second Amendment to Second Amended and Restated Loan Agreement, dated as of September 26, 2014, by and among PHI, Inc., PHI Air Medical, L.L.C., PHI Tech Services, Inc., International Helicopter Transport, Inc. and Whitney National Bank (incorporated by reference to Exhibit 4.3 to PHI’s Report on Form 10-Q for the quarterly period ended September 30, 2014, filed November 7, 2014). | |||||||||
4.4 | Third Amendment to Second Amended and Restated Loan Agreement, dated as of September 25, 2015, by and among PHI, Inc., PHI Air Medical, L.L.C., PHI Tech Services, Inc., International Helicopter Transport, Inc. and Whitney National Bank (incorporated by reference to Exhibit 4.4 to PHI’s Report on Form 10-Q for the quarterly period ended September 30, 2015, filed November 6, 2015). | |||||||||
Fourth Amendment to Second Amended and Restated Loan Agreement, dated as of September 30, 2016, by and among PHI, Inc., PHI Air Medical, L.L.C., PHI Tech Services, Inc., International Helicopter Transport, Inc. and Whitney National Bank. (incorporated by reference to Exhibit 4.5 to PHI’s Report on Form 10-Q for the quarterly period ended September 30, 2016, filed November 7, 2016). | ||||||||||
4.6 | Indenture, dated as of March 17, 2014, by and among PHI, Inc., the subsidiary guarantors and U.S. Bank National Association, relating to the issuance by PHI, Inc. of its 5.25% Senior Notes due 2019 (incorporated by reference to Exhibit 4.2 to PHI’s Report on Form 8-K filed March 17, 2014). | |||||||||
4.7 | Form of 5.25% Senior Note due 2019 (incorporated by reference to Exhibit 4.2 to PHI’s Report on Form 8-K filed on March 6, 2014). | |||||||||
10.1† | Second Amended and Restated PHI Inc. Long-Term Incentive Plan (incorporated by reference to Appendix |
31.1* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Al A. Gonsoulin, Chairman and Chief Executive Officer. | |||||||
31.2* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Trudy P. McConnaughhay, Chief Financial Officer. | |||||||
32.1* | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Al A. Gonsoulin, Chairman and Chief Executive Officer. | |||||||
32.2* | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Trudy P. McConnaughhay, Chief Financial Officer. | |||||||
101.INS* | XBRL Instance Document | |||||||
101.SCH* | XBRL Taxonomy Extension Schema | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase |
PHI, Inc. | ||||||||
August 4, 2017 | By: | /s/ Al A. Gonsoulin | ||||||
Al A. Gonsoulin | ||||||||
Chairman and Chief Executive Officer | ||||||||
August 4, 2017 | By: | /s/ Trudy P. McConnaughhay | ||||||
Trudy P. McConnaughhay | ||||||||
Chief Financial Officer |
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