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 October 31, 2017 | |||||||
Voting Common Stock | 2,905,757 shares | |||||||
Non-Voting Common Stock | 12,893,895 shares |
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
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Item 1. | ||||||||
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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September 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 2,991 | $ | 2,596 | ||||
Short-term investments | 204,036 | 289,806 | ||||||
Accounts receivable – net | ||||||||
Trade | 140,434 | 128,662 | ||||||
Other | 12,303 | 9,603 | ||||||
Inventories of spare parts – net | 79,245 | 70,402 | ||||||
Prepaid expenses | 12,006 | 9,259 | ||||||
Deferred income taxes | 10,798 | 10,798 | ||||||
Income taxes receivable | 509 | 540 | ||||||
Total current assets | 462,322 | 521,666 | ||||||
Property and equipment – net | 910,327 | 903,977 | ||||||
Restricted cash and investments | 12,396 | 13,038 | ||||||
Other assets | 9,032 | 9,759 | ||||||
Total assets | $ | 1,394,077 | $ | 1,448,440 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 30,607 | $ | 28,704 | ||||
Accrued and other current liabilities | 33,703 | 28,346 | ||||||
Total current liabilities | 64,310 | 57,050 | ||||||
Long-term debt: | ||||||||
Revolving credit facility | 100,000 | 134,000 | ||||||
Senior Notes issued March 17, 2014, net of debt issuance costs of $1,818 and $2,753, respectively | 498,182 | 497,247 | ||||||
Deferred income taxes | 141,420 | 151,713 | ||||||
Other long-term liabilities | 8,104 | 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, 12,893,895 and 12,779,646 issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 1,289 | 1,278 | ||||||
Additional paid-in capital | 307,054 | 304,246 | ||||||
Accumulated other comprehensive loss | (244 | ) | (478 | ) | ||||
Retained earnings | 273,671 | 294,441 | ||||||
Total shareholders’ equity | 582,061 | 599,778 | ||||||
Total liabilities and shareholders’ equity | $ | 1,394,077 | $ | 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 September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Operating revenues, net | $ | 150,167 | $ | 158,093 | $ | 431,209 | $ | 489,245 | ||||||||
Expenses: | ||||||||||||||||
Direct expenses | 136,786 | 144,938 | 400,250 | 449,909 | ||||||||||||
Selling, general and administrative expenses | 11,401 | 13,381 | 38,691 | 36,832 | ||||||||||||
Total operating expenses | 148,187 | 158,319 | 438,941 | 486,741 | ||||||||||||
Gain (loss) on disposal of assets | (4 | ) | 85 | 3 | (3,854 | ) | ||||||||||
Equity in (earnings) loss of unconsolidated affiliates, net | (438 | ) | 198 | 1,556 | 274 | |||||||||||
Operating income (loss) | 2,422 | (509 | ) | (9,291 | ) | 6,084 | ||||||||||
Interest expense | 8,027 | 7,719 | 24,305 | 22,792 | ||||||||||||
Other income – net | (706 | ) | (462 | ) | (2,474 | ) | (1,571 | ) | ||||||||
7,321 | 7,257 | 21,831 | 21,221 | |||||||||||||
Loss before income taxes | (4,899 | ) | (7,766 | ) | (31,122 | ) | (15,137 | ) | ||||||||
Income tax benefit | (1,622 | ) | (2,799 | ) | (9,324 | ) | (5,515 | ) | ||||||||
Net loss | $ | (3,277 | ) | $ | (4,967 | ) | $ | (21,798 | ) | $ | (9,622 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 15,799 | 15,683 | 15,750 | 15,655 | ||||||||||||
Diluted | 15,799 | 15,683 | 15,750 | 15,655 | ||||||||||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.21 | ) | $ | (0.32 | ) | $ | (1.38 | ) | $ | (0.61 | ) | ||||
Diluted | $ | (0.21 | ) | $ | (0.32 | ) | $ | (1.38 | ) | $ | (0.61 | ) |
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net (loss) earnings | $ | (3,277 | ) | $ | (4,967 | ) | $ | (21,798 | ) | $ | (9,622 | ) | ||||
Unrealized gain (loss) on short-term investments | 41 | (494 | ) | 370 | 523 | |||||||||||
Changes in pension plan assets and benefit obligations | (24 | ) | 1 | (2 | ) | 3 | ||||||||||
Tax effect of the above-listed adjustments | (8 | ) | 178 | (134 | ) | (229 | ) | |||||||||
Total comprehensive (loss) income | $ | (3,268 | ) | $ | (5,282 | ) | $ | (21,564 | ) | $ | (9,325 | ) |
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 | — | — | — | — | — | — | (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 | ) | — | — | — | — | — | |||||||||||||||||||||
Balance at September 30, 2016 | 2,906 | $ | 291 | 12,777 | $ | 1,278 | $ | 308,690 | $ | (271 | ) | $ | 311,499 | $ | 621,487 | |||||||||||||||
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 | — | — | — | — | — | — | (21,798 | ) | (21,798 | ) | ||||||||||||||||||||
Unrealized gain on short-term investments | — | — | — | — | — | 235 | — | 235 | ||||||||||||||||||||||
Changes in pension plan assets and benefit obligations | — | — | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||||||
Amortization of unearned stock-based compensation | — | — | — | — | 3,074 | — | — | 3,074 | ||||||||||||||||||||||
Issuance of non-voting common stock (upon vesting of restricted stock units) | — | — | 136 | 13 | (10 | ) | — | — | 3 | |||||||||||||||||||||
Cancellation of restricted non-voting stock units for tax withholdings on vested shares | — | — | (22 | ) | (2 | ) | (256 | ) | — | — | (258 | ) | ||||||||||||||||||
Cumulative effect adjustment of unrecognized tax benefits | — | — | — | — | — | — | 1,028 | 1,028 | ||||||||||||||||||||||
Balance at September 30, 2017 | 2,906 | $ | 291 | 12,893 | $ | 1,289 | $ | 307,054 | $ | (244 | ) | $ | 273,671 | $ | 582,061 |
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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Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Operating activities: | ||||||||
Net loss | $ | (21,798 | ) | $ | (9,622 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 50,593 | 53,054 | ||||||
Deferred income taxes | (9,416 | ) | (6,775 | ) | ||||
Loss (gain) on asset dispositions | 3 | (3,854 | ) | |||||
Equity in loss of unconsolidated affiliate, net | 1,556 | 274 | ||||||
Inventory valuation reserves | (3 | ) | 3,766 | |||||
Changes in operating assets and liabilities | (22,803 | ) | (43,991 | ) | ||||
Net cash (used in) provided by operating activities | (1,868 | ) | (7,148 | ) | ||||
Investing activities: | ||||||||
Purchase of property and equipment | (49,227 | ) | (74,950 | ) | ||||
Proceeds from asset dispositions | 21 | 13,233 | ||||||
Purchase of short-term investments | (268,525 | ) | (263,204 | ) | ||||
Proceeds from sale of short-term investments | 354,250 | 259,322 | ||||||
Payment of deposits on aircraft | — | (197 | ) | |||||
Loan to unconsolidated affiliate | — | (1,200 | ) | |||||
Net cash provided by (used in) investing activities | 36,519 | (66,996 | ) | |||||
Financing activities: | ||||||||
Proceeds from line of credit | 99,150 | 213,900 | ||||||
Payments on line of credit | (133,150 | ) | (139,000 | ) | ||||
Repurchase of common stock | (256 | ) | (524 | ) | ||||
Net cash (used in) provided by financing activities | (34,256 | ) | 74,376 | |||||
Decrease in cash | 395 | 232 | ||||||
Cash, beginning of period | 2,596 | 2,407 | ||||||
Cash, end of period | $ | 2,991 | $ | 2,639 | ||||
Supplemental Disclosures Cash Flow Information | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 29,536 | $ | 28,258 | ||||
Income taxes | $ | 1,213 | $ | 2,856 | ||||
Noncash investing activities: | ||||||||
Other current liabilities and accrued payables related to purchase of property and equipment | $ | 21 | $ | 3,717 |
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 periods beginning after December 15, 2016, and annual and interim periods thereafter. Early adoption is permitted. Weinitial assessment, we do not believe thatexpect the impactadoption of the implementation of this new guidance on our consolidated financial statements and disclosures will be significant.
In November 2015, 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 do not expect this ASU to have a material impact on our condensed consolidated financial statements.
Remaining implementation matters include establishing new policies, procedures, and controls and quantifying any adoption date adjustments. We plan to 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.
September 30, 2017. We plan to adopt this standard beginning 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 | $ | 5,278 | $ | — | $ | — | $ | 5,278 | ||||||||
Commercial paper | 9,423 | — | (10 | ) | 9,413 | |||||||||||
U.S. Government agencies | 13,505 | — | (14 | ) | 13,491 | |||||||||||
Corporate bonds and notes | 188,515 | 3 | (283 | ) | 188,235 | |||||||||||
Subtotal | 216,721 | 3 | (307 | ) | 216,417 | |||||||||||
Deferred compensation plan assets included in other assets | 2,630 | — | — | 2,630 | ||||||||||||
Total | $ | 219,351 | $ | 3 | $ | (307 | ) | $ | 219,047 |
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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September 30, 2017 | December 31, 2016 | |||||||||||||||
Amortized Costs | Fair Value | Amortized Costs | Fair Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Due in one year or less | $ | 133,633 | $ | 133,481 | $ | 184,587 | $ | 184,334 | ||||||||
Due within two years | 77,810 | 77,658 | 100,816 | 100,378 | ||||||||||||
Total | $ | 211,443 | $ | 211,139 | $ | 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 |
September 30, 2017 | December 31, 2016 | |||||||||
Average Coupon Rate (%) | Average Days To Maturity | Average Coupon Rate (%) | Average Days To Maturity | |||||||
Commercial paper | 1.236 | 228 | 1.001 | 184 | ||||||
U.S. Government agencies | 1.213 | 325 | 0.970 | 400 | ||||||
Corporate bonds and notes | 1.715 | 295 | 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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September 30, 2017 | December 31, 2016 | |||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Commercial paper | $ | 9,413 | $ | (10 | ) | $ | 27,867 | $ | (39 | ) | ||||||
U.S. Government agencies | 9,495 | (10 | ) | 13,263 | (32 | ) | ||||||||||
Corporate bonds and notes | 102,767 | (173 | ) | 210,836 | (602 | ) | ||||||||||
Total | $ | 121,675 | $ | (193 | ) | $ | 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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September 30, 2017 | December 31, 2016 | |||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
U.S. Government agencies | $ | 3,996 | $ | (4 | ) | $ | — | $ | — | |||||||
Corporate bonds and notes | 77,187 | (110 | ) | 24,196 | (20 | ) | ||||||||||
Total | $ | 81,183 | $ | (114 | ) | $ | 24,196 | $ | (20 | ) |
2016.
2016, respectively.
As of | ||||||||
September 30, 2016 | December 31, 2015 | |||||||
Allowance for Contractual Discounts | 60 | % | 56 | % | ||||
Allowance for Uncompensated Care | 18 | % | 23 | % |
September 30, 2017 | December 31, 2016 | |||||
Allowance for Contractual Discounts | 58 | % | 56 | % | ||
Allowance for Uncompensated Care | 21 | % | 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
September 30, 2017 | ||||||||||||
Total | (Level 1) | (Level 2) | ||||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Money market mutual funds | $ | 5,278 | $ | 5,278 | $ | — | ||||||
Commercial paper | 9,413 | — | 9,413 | |||||||||
U.S. Government agencies | 13,491 | — | 13,491 | |||||||||
Corporate bonds and notes | 188,235 | — | 188,235 | |||||||||
216,417 | 5,278 | 211,139 | ||||||||||
Deferred compensation plan assets | 2,630 | 2,630 | — | |||||||||
Total | $ | 219,047 | $ | 7,908 | $ | 211,139 | ||||||
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.
September 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 | $ | 1,818 | $ | 500,000 | $ | 2,753 | ||||||||
Revolving Credit Facility due October 1, 2018 with a group of commercial banks, interest payable at variable rates | 100,000 | — | 134,000 | — | ||||||||||||
Total long-term debt | $ | 600,000 | $ | 1,818 | $ | 634,000 | $ | 2,753 |
Cash paid to fund interest expense was $13.9 million for the quarter ended September 30, 2016 and $13.5 million for the quarter ended September 30, 2015. Cash paid to fund interest expense was $28.3 million for the nine months ended September 30, 2016 and $27.2 million for the nine months ended September 30, 2015.
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 September 30, | Nine Months Ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
(Thousands of dollars) | ||||||||||||
Weighted average outstanding shares of common stock, basic | 15,799 | 15,683 | 15,750 | 15,655 | ||||||||
Dilutive effect of unvested restricted stock units | — | — | — | — | ||||||||
Weighted average outstanding shares of common stock, diluted (1) | 15,799 | 15,683 | 15,750 | 15,655 |
(1) | For the three months ended September 30, 2017 and 2016, 0 and 52,126 unvested restricted stock units were excluded from the weighted average outstanding shares of common stock, diluted, respectively as they were anti-dilutive to earnings per share. For the nine months ended September 30, 2017 and 2016, 0 and 22,221 unvested restricted stock units were excluded from the weighted average outstanding shares of common stock, diluted, respectively as they were anti-dilutive to earnings per share. |
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Stock-based compensation expense: | ||||||||||||||||
Time-based restricted stock units | $ | 582 | $ | 631 | $ | 1,678 | $ | 1,847 | ||||||||
Performance-based restricted stock units | 689 | 823 | 1,396 | 2,502 | ||||||||||||
Total stock-based compensation expense | $ | 1,271 | $ | 1,454 | $ | 3,074 | $ | 4,349 |
During the quarter and nine months ended September 30, 2016, 2,318 and 310,481 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 third quarter of 2016, we purchased one heavy aircraft previously leased by us for $26.7 million. This aircraft 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.
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 -
Gas segment, with approximately 90% and 92% of these revenues from fixed-term customer contracts. The remaining 10% and 8% of these revenues were attributable to work in the spot market and ad hoc flights for 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 September 30, | Nine Months Ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Provision for contractual discounts | 65 | % | 65 | % | 66 | % | 67 | % | ||||
Provision for uncompensated care | 6 | % | 9 | % | 7 | % | 6 | % |
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 September 30, | Nine Months Ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Insurance | 73 | % | 75 | % | 72 | % | 72 | % | ||||
Medicare | 17 | % | 17 | % | 18 | % | 18 | % | ||||
Medicaid | 9 | % | 8 | % | 9 | % | 9 | % | ||||
Self-Pay | 1 | % | — | % | 1 | % | 1 | % |
Approximately
approximately 4%, respectively, of 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 September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Segment operating revenues, net | ||||||||||||||||
Oil and Gas | $ | 75,700 | $ | 77,551 | $ | 222,098 | $ | 249,173 | ||||||||
Air Medical | 70,280 | 74,482 | 192,840 | 220,089 | ||||||||||||
Technical Services | 4,187 | 6,060 | 16,271 | 19,983 | ||||||||||||
Total operating revenues, net | 150,167 | 158,093 | 431,209 | 489,245 | ||||||||||||
Segment direct expenses (1) | ||||||||||||||||
Oil and Gas (2) | 81,467 | 82,832 | 236,878 | 262,148 | ||||||||||||
Air Medical | 51,120 | 56,562 | 152,363 | 172,603 | ||||||||||||
Technical Services | 3,761 | 5,742 | 12,565 | 15,432 | ||||||||||||
Total segment direct expenses | 136,348 | 145,136 | 401,806 | 450,183 | ||||||||||||
Segment selling, general and administrative expenses | ||||||||||||||||
Oil and Gas | 1,148 | 1,705 | 4,501 | 4,838 | ||||||||||||
Air Medical | 3,136 | 3,056 | 9,280 | 8,293 | ||||||||||||
Technical Services | 338 | 266 | 1,032 | 763 | ||||||||||||
Total segment selling, general and administrative expenses | 4,622 | 5,027 | 14,813 | 13,894 | ||||||||||||
Total segment expenses | 140,970 | 150,163 | 416,619 | 464,077 | ||||||||||||
Net segment (loss) profit | ||||||||||||||||
Oil and Gas | (6,915 | ) | (6,986 | ) | (19,281 | ) | (17,813 | ) | ||||||||
Air Medical | 16,024 | 14,864 | 31,197 | 39,193 | ||||||||||||
Technical Services | 88 | 52 | 2,674 | 3,788 | ||||||||||||
Total net segment profit | 9,197 | 7,930 | 14,590 | 25,168 | ||||||||||||
Other, net (3) | 710 | 377 | 2,471 | 5,425 | ||||||||||||
Unallocated selling, general and administrative costs (1) | (6,779 | ) | (8,354 | ) | (23,878 | ) | (22,938 | ) | ||||||||
Interest expense | (8,027 | ) | (7,719 | ) | (24,305 | ) | (22,792 | ) | ||||||||
(Loss) earnings before income taxes | $ | (4,899 | ) | $ | (7,766 | ) | $ | (31,122 | ) | $ | (15,137 | ) |
(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 September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Segment Direct Expense: | ||||||||||||||||
Oil and Gas | $ | 9,615 | $ | 10,616 | $ | 29,301 | $ | 30,558 | ||||||||
Air Medical | 4,885 | 5,267 | 15,581 | 14,654 | ||||||||||||
Technical Services | 146 | 141 | 440 | 426 | ||||||||||||
Total | $ | 14,646 | $ | 16,024 | $ | 45,322 | $ | 45,638 | ||||||||
Unallocated SG&A | $ | 1,936 | $ | 2,269 | $ | 5,271 | $ | 7,416 |
(2) | Includes Equity in |
(3) | Consists of |
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 | |||||||
|
|
|
|
|
|
|
|
September 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash | $ | 50 | $ | 1,071 | $ | 1,870 | $ | — | $ | 2,991 | ||||||||||
Short-term investments | 204,036 | — | — | — | 204,036 | |||||||||||||||
Accounts receivable – net | 77,061 | 71,727 | 14,721 | (10,772 | ) | 152,737 | ||||||||||||||
Intercompany receivable | — | 120,376 | — | (120,376 | ) | — | ||||||||||||||
Inventories of spare parts – net | 70,617 | 8,628 | — | — | 79,245 | |||||||||||||||
Prepaid expenses | 9,916 | 1,948 | 142 | — | 12,006 | |||||||||||||||
Deferred income taxes | 10,798 | — | — | — | 10,798 | |||||||||||||||
Income taxes receivable | 500 | 9 | — | — | 509 | |||||||||||||||
Total current assets | 372,978 | 203,759 | 16,733 | (131,148 | ) | 462,322 | ||||||||||||||
Investment in subsidiaries | 390,840 | — | — | (390,840 | ) | — | ||||||||||||||
Property and equipment – net | 621,885 | 287,841 | 601 | — | 910,327 | |||||||||||||||
Restricted cash and investments | 12,381 | — | 15 | — | 12,396 | |||||||||||||||
Other assets | 8,076 | 956 | — | — | 9,032 | |||||||||||||||
Total assets | $ | 1,406,160 | $ | 492,556 | $ | 17,349 | $ | (521,988 | ) | $ | 1,394,077 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Accounts payable | $ | 26,587 | $ | 3,557 | $ | 11,235 | $ | (10,772 | ) | $ | 30,607 | |||||||||
Accrued and other current liabilities | 22,198 | 9,961 | 1,544 | — | 33,703 | |||||||||||||||
Intercompany payable | 112,015 | — | 8,361 | (120,376 | ) | — | ||||||||||||||
Total current liabilities | 160,800 | 13,518 | 21,140 | (131,148 | ) | 64,310 | ||||||||||||||
Long-term debt | 598,182 | — | — | — | 598,182 | |||||||||||||||
Deferred income taxes and other long-term liabilities | 65,117 | 83,891 | 516 | — | 149,524 | |||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||||
Common stock and paid-in capital | 308,634 | 77,951 | 1,375 | (79,326 | ) | 308,634 | ||||||||||||||
Accumulated other comprehensive loss | (244 | ) | — | — | — | (244 | ) | |||||||||||||
Retained earnings | 273,671 | 317,196 | (5,682 | ) | (311,514 | ) | 273,671 | |||||||||||||
Total shareholders’ equity | 582,061 | 395,147 | (4,307 | ) | (390,840 | ) | 582,061 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 1,406,160 | $ | 492,556 | $ | 17,349 | $ | (521,988 | ) | $ | 1,394,077 |
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 September 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Operating revenues, net | $ | 79,644 | $ | 70,692 | $ | 7,784 | $ | (7,953 | ) | $ | 150,167 | |||||||||
Expenses: | ||||||||||||||||||||
Direct expenses | 83,727 | 51,247 | 9,765 | (7,953 | ) | 136,786 | ||||||||||||||
Selling, general and administrative expenses | 8,240 | 3,141 | 24 | (4 | ) | 11,401 | ||||||||||||||
Total operating expenses | 91,967 | 54,388 | 9,789 | (7,957 | ) | 148,187 | ||||||||||||||
(Gain) Loss on disposal of assets, net | (4 | ) | — | — | — | (4 | ) | |||||||||||||
Equity in (income) loss of unconsolidated affiliates, net | 112 | — | (550 | ) | — | (438 | ) | |||||||||||||
Operating (loss) income | (12,431 | ) | 16,304 | (1,455 | ) | 4 | 2,422 | |||||||||||||
Equity in net income of consolidated subsidiaries | (14,850 | ) | — | — | 14,850 | — | ||||||||||||||
Interest expense | 8,027 | — | — | — | 8,027 | |||||||||||||||
Other income, net | (709 | ) | (1 | ) | — | 4 | (706 | ) | ||||||||||||
(7,532 | ) | (1 | ) | — | 14,854 | 7,321 | ||||||||||||||
(Loss) earnings before income taxes | (4,899 | ) | 16,305 | (1,455 | ) | (14,850 | ) | (4,899 | ) | |||||||||||
Income tax (benefit) expense | (1,622 | ) | — | — | — | (1,622 | ) | |||||||||||||
Net (loss) earnings | $ | (3,277 | ) | $ | 16,305 | $ | (1,455 | ) | $ | (14,850 | ) | $ | (3,277 | ) |
For the Quarter Ended September 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor 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 consolidated affiliate | 198 | — | — | 198 | ||||||||||||
Operating (loss) 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 | ) |
(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 Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Operating revenues, net | $ | 228,973 | $ | 197,022 | $ | 15,987 | $ | (10,773 | ) | $ | 431,209 | |||||||||
Expenses: | ||||||||||||||||||||
Direct expenses | 238,669 | 155,434 | 16,920 | (10,773 | ) | 400,250 | ||||||||||||||
Selling, general and administrative expenses | 29,265 | 9,296 | 144 | (14 | ) | 38,691 | ||||||||||||||
Total operating expenses | 267,934 | 164,730 | 17,064 | (10,787 | ) | 438,941 | ||||||||||||||
Loss (gain) on disposal of assets, net | 4 | (1 | ) | — | — | 3 | ||||||||||||||
Equity in loss (income) of unconsolidated affiliates, net | 1,040 | — | 516 | — | 1,556 | |||||||||||||||
Operating (loss) income | (40,005 | ) | 32,293 | (1,593 | ) | 14 | (9,291 | ) | ||||||||||||
Equity in net income of consolidated subsidiaries | (32,093 | ) | — | — | 32,093 | — | ||||||||||||||
Interest expense | 24,283 | 22 | — | — | 24,305 | |||||||||||||||
Other income, net | (2,486 | ) | (2 | ) | — | 14 | (2,474 | ) | ||||||||||||
(10,296 | ) | 20 | — | 32,107 | 21,831 | |||||||||||||||
(Loss) earnings before income taxes | (29,709 | ) | 32,273 | (1,593 | ) | (32,093 | ) | (31,122 | ) | |||||||||||
Income tax (benefit) expense | (7,911 | ) | (1,413 | ) | — | — | (9,324 | ) | ||||||||||||
Net (loss) earnings | $ | (21,798 | ) | $ | 33,686 | $ | (1,593 | ) | $ | (32,093 | ) | $ | (21,798 | ) |
For the Nine Months Ended September 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor 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 (loss) 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 | ) |
(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 September 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net (loss) earnings | $ | (3,277 | ) | $ | 16,305 | $ | (1,455 | ) | $ | (14,850 | ) | $ | (3,277 | ) | ||||||
Unrealized gain on short-term investments | 41 | — | — | — | 41 | |||||||||||||||
Changes in pension plan asset and benefit obligation | (24 | ) | — | — | — | (24 | ) | |||||||||||||
Tax effect of the above-listed adjustments | (8 | ) | — | — | — | (8 | ) | |||||||||||||
Total comprehensive (loss) income | $ | (3,268 | ) | $ | 16,305 | $ | (1,455 | ) | $ | (14,850 | ) | $ | (3,268 | ) |
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 gain on short-term investments | (494 | ) | — | — | (494 | ) | ||||||||||
Changes in pension plan asset and benefit obligations | 1 | — | — | 1 | ||||||||||||
Tax effect of the above-listed adjustments | 178 | — | — | 178 | ||||||||||||
Total comprehensive (loss) income | $ | (5,282 | ) | $ | 8,372 | $ | (8,372 | ) | $ | (5,282 | ) |
(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 Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net (loss) earnings | $ | (21,798 | ) | $ | 33,686 | $ | (1,593 | ) | $ | (32,093 | ) | $ | (21,798 | ) | ||||||
Unrealized gain on short-term investments | 370 | — | — | — | 370 | |||||||||||||||
Changes in pension plan asset and benefit obligation | (2 | ) | — | — | — | (2 | ) | |||||||||||||
Tax effect of the above-listed adjustments | (134 | ) | — | — | — | (134 | ) | |||||||||||||
Total comprehensive (loss) income | $ | (21,564 | ) | $ | 33,686 | $ | (1,593 | ) | $ | (32,093 | ) | $ | (21,564 | ) |
For the Quarter Ended September 30, 2016 | ||||||||||||||||
Parent Company Only (issuer) | Guarantor 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 asset and benefit obligations | 3 | — | — | 3 | ||||||||||||
Tax effect of the above-listed adjustments | (229 | ) | — | — | (229 | ) | ||||||||||
Total comprehensive (loss) income | $ | (9,325 | ) | $ | 20,462 | $ | (20,462 | ) | $ | (9,325 | ) |
(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 Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Parent Company Only (issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (43,328 | ) | $ | 33,670 | $ | 7,790 | $ | — | $ | (1,868 | ) | ||||||||
Investing activities: | ||||||||||||||||||||
Purchase of property and equipment | (49,227 | ) | — | — | — | (49,227 | ) | |||||||||||||
Proceeds from asset dispositions | 21 | — | — | — | 21 | |||||||||||||||
Purchase of short-term investments | (268,525 | ) | — | — | — | (268,525 | ) | |||||||||||||
Proceeds from sale of short-term investments | 354,250 | — | — | — | 354,250 | |||||||||||||||
Net cash provided by (used in) investing activities | 36,519 | — | — | — | 36,519 | |||||||||||||||
Financing activities: | ||||||||||||||||||||
Proceeds from line of credit | 99,150 | — | — | — | 99,150 | |||||||||||||||
Payments on line of credit | (133,150 | ) | — | — | — | (133,150 | ) | |||||||||||||
Repurchase of common stock | (256 | ) | — | — | — | (256 | ) | |||||||||||||
Due to/from affiliate, net | 41,079 | (34,699 | ) | (6,380 | ) | — | — | |||||||||||||
Net cash provided by (used in) financing activities | 6,823 | (34,699 | ) | (6,380 | ) | — | (34,256 | ) | ||||||||||||
Increase (decrease) in cash | 14 | (1,029 | ) | 1,410 | — | 395 | ||||||||||||||
Cash, beginning of period | 36 | 2,100 | 460 | — | 2,596 | |||||||||||||||
Cash, end of period | $ | 50 | $ | 1,071 | $ | 1,870 | $ | — | $ | 2,991 |
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 |
(1) | Foreign subsidiaries represent minor subsidiaries and are included in the |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(ThousandsLoan. The balance 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
(ThousandsLoan is expected to be repaid on or prior to December 31, 2019 or at such other time as mutually agreed between us and the Canadian Purchaser.
(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 | ||||||||
|
|
|
|
|
|
|
|
the transactions contemplated under the arrangement agreement is subject to various closing conditions, including receipt of HNZ shareholder approval and certain court approvals. Subject to these conditions, we currently anticipate acquiring the Offshore Business by the end of January 2018.
prices. 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 periods compared to amounts previously reported.future. 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 September 30, | Favorable (Unfavorable) | |||||||||||
2017 | 2016 | |||||||||||
(Thousands of dollars, except flight hours, patient transports, and aircraft) | ||||||||||||
Segment operating revenues, net | ||||||||||||
Oil and Gas | $ | 75,700 | $ | 77,551 | $ | (1,851 | ) | |||||
Air Medical | 70,280 | 74,482 | (4,202 | ) | ||||||||
Technical Services | 4,187 | 6,060 | (1,873 | ) | ||||||||
Total operating revenues, net | 150,167 | 158,093 | (7,926 | ) | ||||||||
Segment direct expenses (1) | ||||||||||||
Oil and Gas (2) | 81,467 | 82,832 | 1,365 | |||||||||
Air Medical | 51,120 | 56,562 | 5,442 | |||||||||
Technical Services | 3,761 | 5,742 | 1,981 | |||||||||
Total segment direct expenses | 136,348 | 145,136 | 8,788 | |||||||||
Segment selling, general and administrative expenses | ||||||||||||
Oil and Gas | 1,148 | 1,705 | 557 | |||||||||
Air Medical | 3,136 | 3,056 | (80 | ) | ||||||||
Technical Services | 338 | 266 | (72 | ) | ||||||||
Total segment selling, general and administrative expenses | 4,622 | 5,027 | 405 | |||||||||
Total segment expenses | 140,970 | 150,163 | 9,193 | |||||||||
Net segment (loss) profit | ||||||||||||
Oil and Gas | (6,915 | ) | (6,986 | ) | 71 | |||||||
Air Medical | 16,024 | 14,864 | 1,160 | |||||||||
Technical Services | 88 | 52 | 36 | |||||||||
Total net segment profit (2) | 9,197 | 7,930 | 1,267 | |||||||||
Other, net (3) | 710 | 377 | 333 | |||||||||
Unallocated selling, general and administrative costs (4) | (6,779 | ) | (8,354 | ) | 1,575 | |||||||
Interest expense | (8,027 | ) | (7,719 | ) | (308 | ) | ||||||
(Loss) earnings before income taxes | (4,899 | ) | (7,766 | ) | 2,867 | |||||||
Income tax benefit | (1,622 | ) | (2,799 | ) | (1,177 | ) | ||||||
Net loss | $ | (3,277 | ) | $ | (4,967 | ) | $ | 1,690 | ||||
Flight hours: | ||||||||||||
Oil and Gas | 21,178 | 19,583 | 1,595 | |||||||||
Air Medical (5) | 9,743 | 9,681 | 62 | |||||||||
Technical Services | — | 14 | (14 | ) | ||||||||
Total | 30,921 | 29,278 | 1,643 | |||||||||
Air Medical Transports (6) | 5,162 | 5,156 | 6 |
(1) | Includes Equity in |
(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 September 30, | ||||||||
2017 | 2016 | |||||||
Total net segment profit | $ | 9,197 | $ | 7,930 | ||||
Other, net | 710 | 377 | ||||||
Unallocated selling, general and administrative costs | (6,779 | ) | (8,354 | ) | ||||
Interest expense | (8,027 | ) | (7,719 | ) | ||||
(Loss) before income taxes | $ | (4,899 | ) | $ | (7,766 | ) |
(3) | Consists of |
(4) | Represents corporate overhead expenses not allocable to segments. |
(5) | Flight hours include |
(6) | Represents individual patient transports for the period. |
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 | ||||||||||
|
|
|
|
2016.
Nine Months Ended September 30, | Favorable (Unfavorable) | |||||||||||
2017 | 2016 | |||||||||||
(Thousands of dollars, except flight hours, patient transports, and aircraft) | ||||||||||||
Segment operating revenues, net | ||||||||||||
Oil and Gas | $ | 222,098 | $ | 249,173 | $ | (27,075 | ) | |||||
Air Medical | 192,840 | 220,089 | (27,249 | ) | ||||||||
Technical Services | 16,271 | 19,983 | (3,712 | ) | ||||||||
Total operating revenues, net | 431,209 | 489,245 | (58,036 | ) | ||||||||
Segment direct expenses (1) | ||||||||||||
Oil and Gas (2) | 236,878 | 262,148 | 25,270 | |||||||||
Air Medical | 152,363 | 172,603 | 20,240 | |||||||||
Technical Services | 12,565 | 15,432 | 2,867 | |||||||||
Total segment direct expenses | 401,806 | 450,183 | 48,377 | |||||||||
Segment selling, general and administrative expenses | ||||||||||||
Oil and Gas | 4,501 | 4,838 | 337 | |||||||||
Air Medical | 9,280 | 8,293 | (987 | ) | ||||||||
Technical Services | 1,032 | 763 | (269 | ) | ||||||||
Total segment selling, general and administrative expenses | 14,813 | 13,894 | (919 | ) | ||||||||
Total segment expenses | 416,619 | 464,077 | 47,458 | |||||||||
Net segment (loss) profit | ||||||||||||
Oil and Gas | (19,281 | ) | (17,813 | ) | (1,468 | ) | ||||||
Air Medical | 31,197 | 39,193 | (7,996 | ) | ||||||||
Technical Services | 2,674 | 3,788 | (1,114 | ) | ||||||||
Total net segment profit | 14,590 | 25,168 | (10,578 | ) | ||||||||
Other, net (3) | 2,471 | 5,425 | (2,954 | ) | ||||||||
Unallocated selling, general and administrative costs (4) | (23,878 | ) | (22,938 | ) | (940 | ) | ||||||
Interest expense | (24,305 | ) | (22,792 | ) | (1,513 | ) | ||||||
(Loss) earnings before income taxes | (31,122 | ) | (15,137 | ) | (15,985 | ) | ||||||
Income tax benefit | (9,324 | ) | (5,515 | ) | 3,809 | |||||||
Net loss | $ | (21,798 | ) | $ | (9,622 | ) | $ | (12,176 | ) | |||
Flight hours: | ||||||||||||
Oil and Gas | 58,335 | 61,043 | (2,708 | ) | ||||||||
Air Medical (5) | 27,787 | 27,889 | (102 | ) | ||||||||
Technical Services | 511 | 546 | (35 | ) | ||||||||
Total | 86,633 | 89,478 | (2,845 | ) | ||||||||
Air Medical Transports (6) | 14,580 | 14,482 | 98 | |||||||||
Aircraft operated at period end: (7) | ||||||||||||
Oil and Gas | 126 | 139 | ||||||||||
Air Medical (8) | 105 | 104 | ||||||||||
Technical Services | 6 | 6 | ||||||||||
Total | 237 | 249 |
(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 | |||
|
|
|
|
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Total net segment profit | $ | 14,590 | $ | 25,168 | ||||
Other, net | 2,471 | 5,425 | ||||||
Unallocated selling, general and administrative costs | (23,878 | ) | (22,938 | ) | ||||
Interest expense | (24,305 | ) | (22,792 | ) | ||||
Loss before income taxes | $ | (31,122 | ) | $ | (15,137 | ) |
(3) | Consists of |
(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 net. equity-based compensation expense. Other items decreased $0.1 million, net. less than $0.1 million. Partially offsetting the decrease in revenue 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. $1.9 million decrease in revenues. such date. 2016. revenues and profits from our traditional provider programs. 2016, respectively. 2016. 2017 and 2016, respectively. warranty and other costs discussed above. revenues decreased $0.4 million, net. such date. decreased $0.6 million, net. 2016. current conditions to be able to fund operations over the next four quarters, although we can provide no assurances to this effect. Part I of this report. We also have outstanding letters of credit for $7.8 million issued under our 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) 20162017 compared with Quarter Ended September 30, 2015— -Operating revenues for the quarterthree months ended September 30, 2017 were $150.2 million, compared to $158.1 million for the three months ended September 30, 2016, were $158.1 million, compared to $214.7 million for the quarter ended September 30, 2015, a decrease of $56.6$7.9 million. Oil and Gas segment operating revenues decreased $43.6$1.9 million for the quarterthree months ended September 30, 2016,2017, related primarily to decreased aircraft flight revenues for all model types resultingmedium and heavy aircraft models. These decreases resulted predominately from fewer aircraft on contract, decreased flight hours for our medium aircraft models and decreased flight hours.rates for our heavy aircraft models. Air Medical segment operating revenues decreased $11.0$4.2 million due principally to decreased traditional provider program revenues resulting from reducedthe termination of our overseas operations.operations in late 2016, offset by an increase in revenue from our independent provider operations related to improve cash collections and lower allowances for doubtful accounts. Technical Services segment operating revenues decreased $2.0$1.9 million due primarily to a decrease in technical services provided to a third party customer.quarterthree months ended September 30, 20162017 were 29,27830,921 compared to 36,29629,278 for the quarterthree months ended September 30, 2015.2016. Oil and Gas segment flight hours decreased 6,402increased 1,595 hours, due to decreasesan increase in flight hours for all model types.light and heavy aircraft models, partially offset by a decrease in flight hours for our medium aircraft model. Air Medical segment flight hours decreased 580increased 62 hours fromfor the quarterthree months ended September 30, 2015,2017, due to decreasedincreased flight hours in our traditional provider and independent provider operations, partially offset by the decrease in flight hours due to the termination of our overseas operations. IndividualAs discussed further below, individual patient transports in the Air Medical segment were 5,162 for the three months ended September 30, 2017, compared to transports of 5,156 for the quarterthree months ended September 30, 2016.compared to transports of 5,440 for the quarter ended September 30, 2015.Direct Expenses – Direct operating expense was $145.1 million for the quarter ended September 30, 2016, compared to $182.1 million for the quarter ended September 30, 2015, a decrease of $37.0$8.8 million, or 20%6.0%. Employee compensation expense decreased $18.1$5.8 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 44% and 46% of total direct expense for the quarters ended September 30, 2017 and 2016, and 2015.respectively. We also experienced decreasesan increase in aircraft fuel of $2.8 million, aircraft insurance of $0.9 million, and aircraft warranty costs of $2.5 million (which expenses represent 3%, 1%, and 6% of total direct expense, respectively) as a result of increased flight hours for our heavy aircraft in our international operations. Costs of goods sold decreased $4.9 million due to the termination of our above-referenced Middle East operations and due to a reduction in flight hours.services for a third party technical services customer. Aircraft lease expense decreased $1.0 million, spare parts expense decreased $0.5$1.4 million and aircraft component repair expense decreased $4.0increased $1.6 million. Other decreases included contract services expense of $2.8items increased $0.2 million, pilot training expense of $1.0 million, travel expenses of $0.6 million, and cost of goods sold of $3.2 million. Other direct costs increased $0.6 million on a net basis. – -Selling, general and administrative expenses were $11.4 million for the three months ended September 30, 2017, compared to $13.4 million for the quarterthree months ended September 30, 2016, compared to $11.62016. The $2.0 million for the quarter ended September 30, 2015. The $1.8 million increasedecrease was primarilyprincipally attributable to costs associated with the finala $1.5 million of savings related to 2016 charges for aircraft lease settlement for two aircraft returnedreturns that did not recur in 2017. The $2.0 is further attributable to the lessor, increased fees for contract servicesa $0.2 million decrease in our Oilbad debt reserves and Gas segment, and higher promotional and rent expensea $0.2 million decrease in our Air Medical segment.net – LossNet -The gain on asset dispositions was $0.1 million for the quarterthree months ended September 30, 2017 was less than $0.1 million. For the three months ended September 30, 2016, compared towe recorded a gainloss of $0.2 million for 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. See Note 8.Affiliate – Affiliates -Equity in the loss of our unconsolidated affiliate attributable to our mid-2011 investment in a Ghanaian entity was $0.1 million and $0.2 million for the quarterthree months ended September 30, 2017 and 2016, compared to $0.1respectively. We also had equity in the income of our unconsolidated Australian affiliate of $0.5 million for the quarterthree months ended September 30, 2015, resulting from increases expenses related to increased production activity2017. Our Australia affiliate commenced operations in the region.April, 2017. See Note 11. – -Interest expense was $8.0 million for the three months ended September 30, 2017 and $7.7 million for the quarterthree months ended September 30, 2016 and $7.42016. The $0.3 million for the quarter ended September 30, 2015,increase is principally due to higher average outstanding debt balances.net – Net -Other income was $0.7 million for the three months ended September 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 benefit for the quarterthree months ended September 30, 20162017 was $2.8$1.6 million compared to income tax expensebenefit of $6.6$2.8 million for the quarterthree months ended September 30, 2015.2016. Our $2.8$1.6 million income tax benefit for the quarter ended September 30, 20162017 is attributable to our net loss from operations of $7.8$4.9 million. Our effective tax rate was 36%33% and 46%36% for the quarter ended September 30, 20162017 and September 30, 2015,2016, respectively. The higher ratethe quarterthree months ended September 30, 2015 reflects the impact of recording during that quarter a one-time increase in the valuation allowance on our foreign tax credits.Net (Loss) Earnings– Net loss for the quarter ended September 30, 20162017 was $5.0$3.3 million compared to net earningsloss of $7.7$5.0 million for the quarterthree months ended September 30, 2015.2016. Loss before income taxes for the quarterthree months ended September 30, 20162017 was $7.8$4.9 million compared to earningsloss before income taxtaxes of $14.3$7.8 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 earningsloss per diluted share of $0.49$0.32 for the prior year quarter. The decrease in earningsloss before taxes for the quarter ended September 30, 20162017 is attributable to a reduction in expenses in comparison to the decreased profits in all segments.third quarter of 2016, mentioned above. We had 15.715.8 million, and 15.615.7 million weighted average diluted common shares outstanding duringfor the quarter ended September 30, 2017 and 2016, and 2015, respectively.– -Oil and Gas segment revenues were $75.7 million for the three months ended September 30, 2017, compared to $77.6 million for the quarterthree months ended September 30, 2016, compared to $121.2 million for the quarter ended September 30, 2015, a decrease of $43.6$1.9 million. Our Oil and Gas segment revenues are primarily driven by the amount of contracted aircraft flight hours and flight hours.prevailing rates. Costs are primarily fixed based on the number of aircraft operated, with a variable portion that is driven by flight hours.19,58321,178 for the most recent quarter compared to 25,98519,583 for the same quarter in the prior year, a decreasean increase of 6,4021,595 flight hours. The decline in revenues and flight hours is attributable to fewer aircraft on contract, and lower utilization rates for all model typesmedium aircraft models and a decrease in the number of heavy aircraft on contract, in each case due to reduced oil and gas exploration and production activities in response to lower prevailing oilcommodity prices.2016, compared to 161 at September 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 September 30, 2015. Changes2016. We also purchased two light aircraft in customer-owned aircraftthe Oil and transfersGas segment since September 30, 2016. Transfers between segments account for the remainder.quarterthree months ended September 30, 2016, compared to $109.5 million for the quarter ended September 30, 2015, a decrease of $26.7$1.3 million. Employee compensation expense decreased $14.2$3.0 million due to a reduction in employees resulting from implementationemployees. Aircraft lease expense decreased $.8 million due to fewer aircraft on lease. Gains or losses in the equity of our VERPs. See Note 10. There were also decreasesunconsolidated affiliates improved $0.6 million due to the April commencement of our Australian operations. We experienced an increase in aircraft fuel expenses of $2.5 million, aircraft warranty costs of $2.4$2.2 million andas a result of increased flight hours for our heavy aircraft insurance of $0.7 million, each due to the reduction in flight hours. Other decreases included contract services expense of $2.5 million, pilot training expense of $0.8 million, travel expense of $0.4 million, and property taxes offor our international operations. Aircraft component repairs increased $1.1 million. Other items decreased $2.1$0.2 million, on a net basis.quarterthree months ended September 30, 2016 and $1.4 million for the quarter ended September 30, 2015. The $0.3 million increase is primarily attributable to increased fees for contract services of $0.3 million.quarterthree months ended September 30, 2016, compared to segment profit of $10.32016. The $0.1 million for the quarter ended September 30, 2015. The decrease in segment profit was dueloss is attributable to decreased revenues, which were onlya $2.0 million decrease in expenses, partially offset by decreased expenses attributable to the above-described factors.– -Air Medical segment revenues were $70.2 million for the three months ended September 30, 2017, compared to $74.5 million for the quarterthree months ended September 30, 2016, compared to $85.5 million for the quarter ended September 30, 2015.2016. This decrease of $11.0$4.3 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”). We also experienced decreased revenuesbelow), partially offset by an increase in revenue from our independent provider programs primarily resulting from decreased patient transports.operations related to improved cash collections and lower allowances for doubtful accounts. Patient transports were 5,1565,162 for the quarterthree months ended September 30, 2016,2017, compared to 5,4405,156 for the same period in the prior year.2016 was 104 compared to 106 at2017 and September 30, 2015.2016. Since September 30, 2015, we added three light aircraft to2016 our Air Medical segment has received two light aircraft transferred from our Oil & Gas segment. We have soldThese additions were offset by our sale or disposeddisposition of one light and two medium aircraft in the Air Medical segment since September 30, 2015. Transfers between segments account for the remainder.quarterthree months ended September 30, 2016, compared to $65.5 million for the quarter ended September 30, 2015, a decrease of $8.9$5.5 million. Employee compensation costs decreased $3.7$3.0 million due to a reduction in personnel primarily relating to the termination of our 2012 Middle East project. Component repair costs also decreased $3.3 million as a result of a reduction in scheduled maintenance for certain aircraft.contract. Cost of goods sold decreased $2.0$1.4 million related to certain items that were previously billed on a cost plus basis onunder our former Middle East project. Other items increased, netcontract. Helicopter rent decreased $0.1 million due to fewer aircraft on lease, aircraft parts cost decreased $0.8 million, and aircraft warranty costs decreased $0.1 million.quarterthree months ended September 30, 2016, compared to $2.3 million for2017 and the quarterthree months ended September 30, 2015. The $0.8 million increase is primarily due to increased promotional and rent expense.$14.9$16.0 million for the quarterthree months ended September 30, 2016,2017, compared to a segment profit of $17.7$14.9 million for the quarterthree months ended September 30, 2015.2016. The $2.8$1.1 million decreaseincrease in profit is primarily attributable to the decreased operatingincreased revenues described above,and profit from our independent provider programs, partially offset by decreased expenses.– -Technical Services segment revenues were $4.1 million for the three months ended September 30, 2017, compared to $6.1 million for the quarterthree months ended September 30, 2016, compared to $8.0 million for the quarter ended September 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$2.0 million compared to the prior year quarter,three months, principally due to the decreased operations. Technical Services segment earnings waswere less than $0.1 million for the quarterthree months ended September 30, 2016, compared to segment profit of $0.6 million for the quarter ended2017, and September 30, 2015. compared with Nine Months Ended September 30, 2015— -Operating revenues for the nine months ended September 30, 20162017 were $489.2$431.2 million, compared to $617.5$489.2 million for the nine months ended September 30, 2015,2016, a decrease of $128.3$58.0 million. Oil and Gas segment operating revenues decreased $105.3$27.1 million for the nine months ended September 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.our medium and heavy aircraft, and decreased rates. Air Medical segment operating revenues decreased $19.5$27.2 million due principally to decreased traditional provider program revenues resulting from reduced overseas operations. This decrease was partially offset by increased revenues attributable to our independent provider programs driven principally by increased transports.and our U.S.-based traditional provider programs. Technical Services segment operating revenues decreased $3.5$3.7 million due to fewervariations in the level of services provided to a third party customer under projects discussed further below.20162017 were 89,47886,633 compared to 104,47489,478 for the nine months ended September 30, 2015.2016. Oil and Gas segment flight hours decreased 15,8212,708 hours, due to decreases in flight hours for all model types.medium and heavy aircraft models. Air Medical segment flight hours increased 808decreased 102 hours fromcompared to the nine months ended September 30, 2015,same period in the prior year, primarily due to increaseddecreased flight hours in our independentoverseas traditional provider programs.program. Individual patient transports in the Air Medical segment were 14,48214,580 for the nine months ended September 30, 2016,2017, compared to 14,14214,482 transports for the nine months ended September 30, 2015. – -Direct operating expense was $401.8 million for the nine months ended September 30, 2017, compared to $450.2 million for the nine months ended September 30, 2016, compared to $520.3 million for the nine months ended September 30, 2015, a decrease of $70.2$48.4 million, or 13.5%10.8%. Employee compensation expense decreased $33.7$22.2 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% of total direct expense for the nine months ended September 30, 20162017 and 2015.September 30, 2016. In addition, we experienced decreases in aircraft fuel expenses of $6.7 million, aircraft warranty costs of $5.7$9.3 million primarily due to a credit related to the cancellation of a warranty program on some of the medium aircraft insurancefleet, and decreased flight hours. The cancellation of $2.5the warranty program resulted in a non-recurring credit of $9.8 million from the warranty provider, which is attributable to unused accumulated warranty payments for repair services that will not be utilized in the future. We also had decreases in component repair costscost of $4.5$1.0 million and aircraft parts costs of $1.8$4.0 million (representing 3%, 7%, 1%, 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$12.1 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 MedicalTechnical Services segment. Other direct costs items increased $2.5$0.2 million, net. – -Selling, general and administrative expenses were $38.7 million for the nine months ended September 30, 2017, compared to $36.8 million for the nine months ended September 30, 2016, comparedan increase of $1.9$34.9reductions in force and $1.5 million of legal and consulting fees related to a special project. Partially offsetting these increases were decreases in equity-based compensation of $1.3 million and a decrease in bad debt reserve of $0.6 million, as well as a decrease of $1.5 million related to 2016 costs associated with aircraft lease returns. Other items increased $0.7 million, net.2015. The $1.9 million increase was primarily attributable2017, compared to costs associated with the final lease settlement for two aircraft returned to the lessor, increased fees for contract services in our Oil and Gas segment, and higher promotional and rent expense in our Air Medical segment.Gain on Disposala gain of Assets, net – Gain on asset dispositions was $3.9 million for the nine months ended September 30, 2016, compared to a gain of $0.2 million for2016. In the nine months ended September 30, 2015. During2017, we disposed of six medium aircraft and related parts inventory utilized in the Oil and Gas segment that no longer met our strategic needs. In the nine months ofended September 30, 2016, we sold nine light and three medium aircraft, along with spare parts inventory, that no longer met our strategic needs. See Note 8.Affiliate – Affiliates -Equity in the loss of our unconsolidated affiliate attributable to our mid-2011 investment in a Ghanaian entity was $1.0 million and $0.3 million for the nine months ended September 30, 2017 and $0.22016, respectively. See Note 11. We also had equity in the income of our unconsolidated Australian affiliate of $0.5 million for the nine months ended September 30, 2017 primarily related to the startup of operations on a contract which began in April 2017. See Note 11.2015, respectively. See Note 11.Interest Expense – Interest expense was $22.8 million for the nine months ended September 30, 2016, compared to $21.7 million for the nine months ended September 30, 2015, principally due to higher average outstanding debt balances.Other Income, net – Other income was $1.6 million for the nine months ended September 30, 2016 compared to $1.5 million for the nine months ended September 30, 2015 and represents primarily interest income. The $0.1$0.9 million increase is primarily attributable to an increase in the amount and rate of return ofrelated to interest earned on our short-term investments. – -Income tax benefit for the nine months ended September 30, 20162017 was $5.5$9.3 million compared to income tax expensebenefit of $17.8$5.5 million for the nine months ended September 30, 2015.2016. Our effective tax rate was 36%29.9% and 41%36.4% for the nine months ended September 30, 20162017 and September 30, 2015,2016, respectively. The $5.5$9.3 million income tax benefit recorded infor the nine months ended September 30, 2017 includes a non-cash $1.5 million income tax deficit related to the permanent difference resulting from the difference between the book and tax deductions for equity-based compensation. The $5.5 million tax benefit recorded during the nine months ended September 30, 2016 is comprised of 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 million tax benefit onrelating our loss before income taxes, which were partially offset by recording a $4.1 million valuation allowance on certain state tax benefits related to net operating loss carryforwards of $4.1 million. The valuation allowance recordedcarryforwards. Absent these discrete adjustments, our effective tax rate 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 35.6% for the nine months ended September 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 nine months ended September 30, 20162017 was $9.6$21.8 million compared to net earningsloss of $24.5$9.6 million for the nine months ended September 30, 2015.2016. Loss before income taxes for the nine months ended September 30, 20162017 was $15.1$31.1 million compared to earningsa loss before income taxtaxes of $42.3$15.1 million for the same period in 2015.2016. Loss per diluted share was $0.61$1.38 for the nine months ended September 30, 20162017 compared to earningsa loss per diluted share of $1.57$0.61 for the prior year nine months. The decrease in earnings before taxes for the nine months ended September 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 15.715.8 million and 15.515.7 million weighted average diluted common shares outstanding during the nine months ended September 30, 2017 and 2016, and 2015, respectively.– -Oil and Gas segment revenues were $222.1 million for the nine months ended September 30, 2017, compared to $249.2 million for the nine months ended September 30, 2016, compared to $354.4 million for the nine months ended September 30, 2015, a decrease of $105.2$27.1 million. Our Oil and Gas segment revenues are primarily driven by the amount of contracted aircraft, flight hours and flight hours.prevailing rates. Costs are primarily fixed based on the number of aircraft operated, with a variable portion that is driven by flight hours.61,04358,335 for the past nine months compared to 76,86461,043 for the same nine months in the prior year, a decrease of 15,8212,708 flight hours. The decline in revenues and flight hours is attributable to fewer aircraft on contract, and lower utilization rates for all model types and decreased rates for our heavy aircraft models, in each case due to reduced oil and gas exploration and production activities in response to lower prevailing oil prices.2016, compared to 161 at September 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 tenthree light and eightten medium aircraft in the Oil and Gas segment since September 30, 2015. Changes2016. We also purchased two medium aircraft in customer-owned aircraftthe Oil and transfersGas segment since September 30, 2016. Transfers between segments accountaccounted for the remainder.compareda decrease of $25.2 million. Employee compensation expenses decreased $9.3 million due to $310.1a reduction in employees. There were also decreases in aircraft warranty costs of $8.5 million related to a credit due to the cancellation of a warranty program on some our medium aircraft fleet and a reduction in flight hours. The 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 $3.0 million due to fewer leased aircraft, insurance expense decreased $0.5 million, and spare parts decreased $3.7 million. Partially offsetting these decreased were increases in the losses from our unconsolidated affiliates of $1.3 million. Other items decreased $1.5 million, net.2015, a decrease of $48.0 million. Employee compensation expenses decreased $25.1 million due to a reduction in employees primarily resulting from implementation of our VERPs. See Note 10. There were decreases in aircraft fuel expenses of $6.6 million, aircraft insurance of $1.8 million, aircraft warranty costs of $5.7 million,2017 and aircraft parts costs of $1.8 million, each due to the reduction in flight hours. Other decreases included contract services expense of $4.7 million and pilot training expense of $2.4 million. Other items increased $0.1 million, net.Selling, general and administrative segment expenses were $4.8 million for the nine months ended September 30, 20162016. The $0.3 million increase was primarily due to increased due to a $0.6 million decrease in bad debt reserves. Other items increased $0.3 million, net.$3.8Gas segment loss was $19.3 million for the nine months ended September 30, 2015. The $1.0 million increase was primarily due2017, compared to increased legal fees and bad debt expense.Oil and Gas segment loss wasof $17.8 million for the nine months ended September 30, 2016, compared to segment profit of $40.5 million for the nine months ended September 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 $192.8 million for the nine months ended September 30, 2017, compared to $220.1 million for the nine months ended September 30, 2016, compared to $239.5 million for the nine months ended September 30, 2015, a decrease of $19.4$27.3 million. Operating revenues in our traditional provider programs decreased $24.8$30.8 million due to a $34.1 million reduction in the scope ofrevenue from our overseas operations, (as discussed further below under “- Other Matters”). Operatingpartially offset by a $3.3 million increase in revenues infrom our U.S.-based traditional provider programs. Revenues from our independent provider programs increased $2.9$4.0 million primarily due to an increaseincreases in patient transports.cash collections. Patient transports were 14,48214,580 for the nine months ended September 30, 2016,2017, compared to 14,14214,482 for the same period in the prior year. Other segment revenue increased $2.5 million.104 compared to 106 at September 30, 2015.104. Since September 30, 2015, we added three light aircraft to2016, our Air Medical segment. We have soldsegment received two light aircraft transferred from our Oil and Gas segment, which were offset by our sale or disposeddisposition of one light and fivetwo medium aircraft in the Air MedicalMedial segment since September 30, 2015.compared to $189.1 million for the nine months ended September 30, 2015, a decrease of $16.5$20.2 million. Employee compensation expenses decreased $8.3$8.8 million due to a reduction in personnel. There were also decreases in spare parts and component repair costs of $0.1$1.7 million and $6.3 million, respectively, due to a decrease in scheduled maintenance for certain model types. Costtypes, and a decrease of $7.2 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 $1.2 million, primarily due to an increasea credit related to the cancellation of the above-described warranty program on some of our medium aircraft fleet. The cancellation of this warranty program resulted in a non-recurring 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. Helicopter rent decreased $0.7 million. Other direct expense items increased by a net of $0.9 million.2016, compared2016. The $0.9 million increase is primarily related to $7.5higher employee incentive compensation costs and increased legal fees.2015. The $0.8 million increase is primarily attributable2017, compared to increased expenses for contract services.Air Medicala segment profit wasof $39.2 million for the nine months ended September 30, 2016, compared to a segment profit of $43.0 million for the nine months ended September 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 $16.3 million for the nine months ended September 30, 2017, compared to $20.0 million for the nine months ended September 30, 2016, compared to $23.5 million for the nine months ended September 30, 2015. Direct expense decreased $5.8 million compared to the prior year nine-month period.a decrease of $3.7 million. 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. Direct expense decreased $2.9 million compared to the prior year nine months, principally due to the decreased operations. Technical Services segment profit was $2.7 million for the nine months ended September 30, 2017, compared to $3.8 million for the nine months ended September 30, 2016, compared to $1.8 million for the nine months ended September 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$3.0 million at September 30, 2016,2017, compared to $2.4$2.6 million at December 31, 2015.2016. Short-term investments were $289.5$204.0 million at September 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 September 30, 20162017 and December 31, 2015,2016, respectively, securing outstanding letters of credit and a bond for foreign operations.2015, and we expect further2015. These reductions in the operating revenues and net profithave caused us to use a portion of our Oilcash and Gas segment in future periods. Through September 30, 2016, these negative variances did not materially impact our financial position reportedcash equivalents (collectively, “cash assets”) to fund operations, including a 30% decrease in our consolidated balance sheets, as described in further detail below. Nonetheless, ifshort-term investments over the current weaknessfirst nine months of 2017. Moreover, we intend to use some of our cash assets to finance our obligations under the HNZ acquisition transaction summarized below under the heading “- Impact of Pending HNZ Acquisition.” After accounting for the recent and anticipated depletion of our cash assets, we nonetheless believe we will continue to hold sufficient cash assets to support operations, especially since we continue to hold no debt coming due within one year of the energy industry persists,date of this report. For these reasons, while we expect that itour liquidity will ultimately have a negative impactbe negatively impacted if the oil and gas industry further deteriorates, we expect based on our consolidated operating cash flow and liquidity.activities—Activities -Net cash used in operating activities was $7.1$1.9 million for the nine months ended September 30, 2016,2017, compared to net cash providedused of $108.2$7.1 million for the same period in 2015, a decrease2016, an improvement of $115.3$5.2 million. Cash receipts from customers were down $152.7$73.0 million primarilywhen compared to the first nine months of last year. This decrease in cash receipts was due to a $105.2$27.1 million decrease in revenues from our Oil and Gas segment revenues, relateddue to the downturn in the industry. We hadindustry, and a $57.3$27.2 million decrease in collections relatedrevenues from our Air Medical segment due to ourthe termination of the Middle East contract due in partlate 2016, with the remaining variance attributable to timing of payments and in part to areceived for accounts receivable. The decrease in revenue. Thiscash receipts was partially offset by a $14.3 million decreasereduction in cash required for net payroll primarilyof $18.8 million due in part to a reduction in bonuses paid and staffing levels.staff. The remaining offset was dueof $54.2 million is attributable to a decrease in payments to vendors duerelated to the decreased scope of our operations.activities—Activities -Net cash used inprovided by investing activities was $67.0$36.5 million for the nine months ended September 30, 2016,2017, compared to $141.6cash used by investing activities of $67.0 million for the same period in 2015.2016. Net purchasessales of short-term investments used $3.9provided $85.7 million of cash during the nine months ended September 30, 2016,2017, compared to $101.7$3.9 million used in the comparable prior year period. Gross proceeds from asset dispositions were less than $0.1 million during the nine months of 2016 were $13.2 million,2017, compared to $3.5$13.2 million for the same period in 2015.2016. Capital expenditures were $75.0$49.2 million for the nine months ended September 30, 2016,2017, compared to $48.2$75.0 million for the same period in 2015.2016. Capital expenditures for aircraft and aircraft improvements accounted for $72.4$45.1 million and $45.5$72.4 million of these totals for the nine months ended 20162017 and 2015,2016, respectively. During the second quarter of 2017, we purchased a heavy aircraft from a lessor and two medium aircraft. During the second quarter of 2016, we purchased a heavy aircraft that we took delivery of in the first quarter of 2016, we took delivery of one heavy aircraft that we purchased in the second quarter with borrowings under our revolving credit line.2016. 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 bethat we purchased in the fourth quarter. During first nine months of 2015, we (i) exercised a purchase option2017 included net payments of $34.0 million on one heavy aircraft, (ii) took deliveryour revolving credit facility and $0.3 million used to repurchase shares of another heavy aircraft that we paid for in the third quarterour non-voting common stock to satisfy withholding tax obligations of 2015, and then completed a sale/leaseback following the purchase, and (iii) purchased six light aircraft.Financing activities–employees. Financing activities during the first nine months of 2016 included net borrowings of $74.9 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.2016,2017, we owed $632.4$600.0 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$100.0 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 London Interbank Offered Rate plus 225 basis points or the prime rate (each as defined in our amended 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).2016,2017, we had $132.4$100.0 million in borrowings under our credit facility. At the same date in 2015,2016, we had $78.2$132.4 million in borrowings under our credit facility.– -We maintain a separate letter of credit facility described in Note 5 that had $12.3 million and $13.0 million letters of credit outstanding at September 30, 2016.2016,2017, 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 September 30, 2016.2017. As of September 30, 2016,2017, we leased 2519 aircraft included in the lease obligations data 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 $ 182,062 $ 9,161 $ 34,705 $ 30,226 $ 26,387 $ 26,253 $ 55,330 Other lease obligations $ 12,866 1,509 4,452 3,240 2,324 1,284 57 $ 600,000 — $ 100,000 $ 500,000 — — — 39,375 — 26,250 13,125 — — — $ 834,303 $ 10,670 $ 165,407 $ 546,591 $ 28,711 $ 27,537 $ 55,387 (1) Payments due during the last three 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 of one heavy aircraft. We funded the payment for this aircraft with borrowing from our credit facility in June 2016.
arise.
2016.
See Note 4.
During the third quarter of 2016, we withheld from employees and canceled 1,031 shares of our non-voting common stock in connection with the vesting of their stock-based awards to satisfy the related minimum tax withholding obligation. The following table provides additional information about these transactions.
Total Number of | Average Price | |||||||
Period | Shares Purchased | Paid per Share | ||||||
August 1, 2016 – August 31, 2016 | 1,031 | $ | 19.22 |
None.
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Al A. Gonsoulin, Chairman and Chief Executive Officer. | ||||||||
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Trudy P. McConnaughhay, Chief Financial Officer. | ||||||||
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Al A. Gonsoulin, Chairman and Chief Executive Officer. | ||||||||
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. | ||||||||
November | 3, 2017 | By: | /s/ Al A. Gonsoulin | |||||
Al A. Gonsoulin | ||||||||
Chairman and Chief Executive Officer | ||||||||
November | 3, 2017 | By: | /s/ Trudy P. McConnaughhay | |||||
Trudy P. McConnaughhay | ||||||||
Chief Financial Officer |
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