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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ....... to .......
Commission File No. 0-9827
PETROLEUM HELICOPTERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5728 Jefferson Highway
P.O. Box 23502, New Orleans, Louisiana 70183
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (504) 733-6790
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Voting Common Stock, $.08-1/3 Par Value
Non-Voting Common Stock, $.08-1/3 Par Value
(Title of Each Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. *
State the aggregate market value of the voting stock held
by non-affiliates of the registrant.
Date Amount
June 22, 1994 $12,405,000
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
Voting Common stock, $.08-1/3 par value ....3,278,068 shares
outstanding as of July 19, 1994.
Non-Voting Common Stock, $.08-1/3 par value ...2,200,000 shares
outstanding as of July 19, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement to
be used in connection with its 1994 Annual Meeting of
Stockholders will be, upon filing with the Commission,
incorporated by reference into Part III of this Form 10-K.
PART I
Item 1. Business.
General
The Company was incorporated as a Delaware corporation in
1949 and since that time its primary business has been to
transport personnel, and to a lesser extent parts and equipment,
to, from, and among offshore platforms for customers engaged in
the oil and gas exploration, development and production industry.
During the most recent fiscal year approximately 73% of the
Company's operating revenues was generated by oil and gas
transportation services in federal and state waters offshore of
the States of Louisiana, Texas, Florida, Alabama, Mississippi and
California (the "domestic Gulf"). Approximately 77% and 82% of
operating revenues were derived from these services in the
domestic Gulf in fiscal 1993 and 1992, respectively.
The Company's aeromedical transportation services for
hospitals and medical programs accounted for 13% of operating
revenues in fiscal 1994. Aeromedical transportation services
generated 10% and 8% of operating revenues in fiscal 1993 and
1992, respectively.
The remaining 14% of 1994 operating revenues was generated
primarily from aircraft maintenance services provided to outside
parties and the Company's international business. The
international business consists of onshore and offshore
helicopter transportation services and fixed-wing services for
the international oil and gas industry.
Demand for the Company's helicopter services is strongly
influenced by offshore oil and gas exploration, development and
production activities in the areas in which it operates, which in
turn is influenced primarily by oil and gas prices. In general,
helicopters perform a useful service when their expense can be
justified by the labor and other cost savings resulting from
their faster transportation times. Each of the Company's ten
principal types of helicopters is available on an hourly, daily
or monthly basis.
The Company maintains master operating agreements with each
of its major customers, which set forth general rights and duties
of the Company and the customer. Although the Company is a party
to a limited number of contracts with a term of one year,
services to the domestic Gulf are generally provided pursuant to
monthly extensions of these operating agreements, and prices are
fixed for each contract extension. Contracts for aeromedical and
foreign business are generally entered into for longer terms.
Charges under operating agreements are generally based on
fixed monthly fees and additional hourly charges for actual
flight time. Because the Company is compensated in part by
flight hour, prolonged adverse weather conditions that result in
reduced flight hours can adversely affect results of operations.
See "- Weather and Seasonal Aspects."
The Company has historically realized substantial gains
from the sales of its helicopters.
Weather and Seasonal Aspects
Poor visibility, high winds and heavy precipitation can
affect the safe use of helicopters and result in a reduced number
of flight hours. Since a significant portion of the Company's
revenues is dependent on actual flight hours and a substantial
portion of the Company's costs is fixed, prolonged periods of
adverse weather can materially and adversely affect the Company's
operating revenues and net earnings.
In the domestic Gulf, the months of December through
February have more days of adverse weather conditions and fewer
hours of daylight than the other months of the year.
Consequently, flight hours are generally lower than at other
times of the year, which typically results in a reduction in
revenues from operations during those months.
The Company currently operates 44 aircraft equipped to fly
pursuant to instrument flight rules (IFR) in the domestic Gulf,
which enables these aircraft, when manned by IFR rated pilots and
co-pilots, to make flights at times when poor visibility prevents
flights by aircraft that can fly only by visual flight rules
(VFR). Poor visibility is the most common of the adverse weather
conditions that affect the Company's operations.
Hazards and Insurance
The operation of helicopters inherently involves a degree
of risk. Hazards, such as aircraft accidents, collisions, fire
and adverse weather, are inherent in the business of providing
helicopter services to the offshore oil and gas industry and
others and may result in losses of equipment and revenues. The
Company's safety record is favorable in comparison to the record
for all United States operators as reflected in industry
publications.
The Company maintains hull and liability insurance on its
helicopters, which generally insures the Company against physical
loss of, or damage to, its helicopters and against certain legal
liabilities to others. In addition, the Company carries war
risk, expropriation, confiscation and nationalization insurance
for helicopters involved in international operations. In some
limited instances the Company is covered by indemnity agreements
from large oil companies in lieu of or in addition to its
insurance. The Company's helicopters are not insured for loss of
use. While the Company believes it is adequately covered by
insurance and indemnification arrangements, the loss,
expropriation or confiscation of, or severe damage to, a material
number of its helicopters could adversely affect revenues and
profits.
Government Regulation
As a commercial operator of helicopters, the Company's
flight and maintenance operations are subject to regulation by
the Federal Aviation Administration (the "FAA") pursuant to the
Federal Aviation Act of 1958 (the "Federal Aviation Act"). The
FAA has authority to exercise jurisdiction over personnel,
aircraft, ground facilities and other aspects of the Company's
business.
The Company transports personnel and property in its
helicopters pursuant to an FAR 135 Air Taxi certificate granted
by the FAA. This certificate contains operating specifications
that allow the Company to conduct its present operations but are
subject to amendment, suspension and revocation in accordance
with procedures set forth in the Federal Aviation Act. The
Company is not required to file tariffs showing rates, fares and
other charges with the FAA. The FAA's regulations, as currently
in effect, also require that not less than 75% of the Company's
voting securities be owned or controlled by citizens of the
United States or one of its possessions, and that the president
and at least two-thirds of the directors of the Company are
United States citizens. The Company's chief executive officer
and all of its directors are United States citizens and its
organizational documents provide for the automatic reduction in
voting power of each share of voting common stock owned or
controlled by a non-United States citizen if necessary to comply
with these regulations.
The National Transportation Safety Board is authorized to
investigate aircraft accidents and to recommend improved safety
standards. The Company is also subject to the Communications Act
of 1934 because of its ownership and operation of a radio
communications flight following network throughout the domestic
Gulf.
Numerous federal statutes and rules regulate the offshore
operations of the Company and the Company's customers, pursuant
to which the federal government has the ability to suspend,
curtail or modify certain or all offshore operations. A
suspension or substantial curtailment of offshore oil and gas
operations for any prolonged period would have an immediate and
materially adverse effect on the Company. A substantial
modification of current offshore operations could adversely
affect the economics of such operations and also result in
reduced demand for helicopter services.
Competition
The Company's business is highly competitive. Many of the
Company's contracts are awarded after competitive bidding, and
the principal methods of competition are price, reliability,
availability, and safety.
The Company believes it operates one of the largest
commercial helicopter fleets in the world. At April 30, 1994,
the Company had 266 aircraft in operation. The Company operated
240 helicopters in the United States, of which 181 were operated
in the domestic Gulf, 26 were operated in the Company's
aeromedical program, 16 were in the hangar for maintenance, 13
were parked for sale and 4 were used for training. The Company
is the largest operator of helicopters in the domestic Gulf and
believes there are approximately 6 competitors operating in the
Gulf market.
Certain of the Company's customers and potential customers
in the oil industry operate their own helicopter fleets; however,
oil companies traditionally contract for most specialty services
associated with offshore operations, including helicopter
services.
Employees
As of April 30, 1994, the Company employed a total of 1,697
people including 552 pilots, 727 mechanics and 418 in flight
operations and administration.
The Company believes its employee relations to be
excellent, and it has never experienced a work stoppage. None of
the Company's employees is covered by union contracts. Union
organization campaigns in 1970, 1974 and 1980 failed.
Unionization of some or all of the Company's employees could have
a material adverse effect on its business.
Customers
The Company's principal customers are major oil companies.
The Company also serves smaller exploration and production
concerns, oil and gas service companies, hospitals and medical
programs. The Company's largest customer, Shell Oil Company,
accounted for approximately 10% of the Company's operating
revenues in fiscal 1994. The Company's five largest customers
were oil and gas related and accounted for 34% of operating
revenues in fiscal 1994, and each of 38 customers including 8
aeromedical customers, accounted for more than $1 million in
operating revenues during fiscal 1994.
Division managers of customer oil companies, who are
responsible for a majority of contract services in connection
with offshore oil activities, generally contract for helicopter
services. Many oil companies also employ directors of aviation
to evaluate the capabilities and safety performance of companies
providing helicopter services and make recommendations to
division managers. Company management, along with customer
relations specialists, are in frequent contact with division
managers and directors of aviation in connection with both
existing service contracts and potential new business.
Environmental and Safety Matters
General. The Company is subject to federal, state and
local environmental laws and regulations that impose limitations
on the discharge of pollutants into the environment and establish
standards for the treatment, storage and disposal of toxic and
hazardous wastes.
The Company is also subject to the federal Occupational
Safety and Health Act ("OSHA") and similar state statutes. The
Company has an extensive health and safety program and employs a
safety staff, including a certified safety professional in the
field of comprehensive practice, who is also a registered
environmental professional. The primary functions of the safety
staff are to develop Company policies that meet or exceed the
safety standards set by OSHA, train Company personnel and make
daily inspections of safety procedures to insure their compliance
with Company policies on safety. All personnel are required to
attend safety training meetings at which the importance of full
compliance with safety procedures is emphasized. The Company
believes that it meets or exceeds all OSHA requirements and that
its operations do not expose its employees to unusual health
hazards.
Waste Disposal. The Company's operations produce a limited
amount of industrial waste products and certain hazardous
materials. The Company's industrial waste products, which
consist principally of residual petroleum and metal refinishing
waste, are shipped to third party disposal sites that are
licensed to handle such materials.
Item 2. Properties
Fleet Utilization
As of April 30, 1994 76% of the Company's aircraft were
actively assigned as compared with 76% and 71% as of April 30,
1993 and 1992, respectively.
Equipment
Certain information as of April 30, 1994 regarding the
Company's fleet is set forth in the following table:
Number Cruise Appr.
Manufacturer Type in Fleet Engine Passengers Speed Range
(mph) (miles)
Bell 206L 105 Turbine 6 130 310
206B 32 Turbine 4 120 300
212 9 Twin Turbine 13 115 300
214ST 1 Twin Turbine 18 155 450
230 1 Twin Turbine 8 160 370
412 17 Twin Turbine 13 135 335
Boelkow BK-117 8 Twin Turbine 6 135 255
BO-105 39 Twin Turbine 4 135 270
Aerospatiale
AS355F Twin Star 20 Twin Turbine 5 135 385
AS350 B2 3 Twin Turbine 5 140 385
Sikorsky S-76 20 Twin Turbine 12 150 400
255
______________
Equipped to fly under instrument flight rules (IFR).
All other types listed can only fly under visual flight
rules (VFR). See Item 1. "Business - Weather and
Seasonal Aspects."
______________________
The following tables set forth additional information
regarding the helicopters owned and leased by the Company (in
thousands, except the number of helicopters):
Number of
Company Owned Net Book
Helicopters Cost Value
183 $ 159,375 $ 73,994
Number of Total Rents
Company Leased Over Life Remaining
Helicopters of Leases Rents
72 $ 103,450 $ 66,281
_____________
Information regarding the Company's depreciation policy is
set forth under Item 8. "Financial Statements and
Supplementary Data - Notes to Consolidated Financial
Statements, Note 1(c)."
____________________
The Company operates eleven helicopters that are owned
or leased by customers which are not reflected in the
information set forth above. The Company also owns four
fixed-wing aircraft two of which are currently under
contract to customers.
As of April 30, 1994, the Company's commitment for
principal payments and lease payments for its present
helicopter fleet averaged $16 million each year for the next
five years and an aggregate of $28 million thereafter.
Under most leases the Company is responsible for all
insurance, taxes and maintenance expenses associated with
the helicopters, and within certain limitations, the Company
can either substitute equipment or terminate the leases in
the event the leased equipment becomes obsolete or is no
longer suited for the Company's needs. All of the foregoing
leases are considered operating leases for accounting and
tax purposes.
The Company also maintains an inventory of fuel and an
inventory of spare parts and components for use in repair
and maintenance of the Company's fleet. This inventory had
a book value of approximately $25 million on April 30, 1994.
The Company is a distributor or dealer for many of these
parts and components, thereby allowing it to realize
significant cost savings for its purchases. However, the
Company has no long-term contractual rights to continue such
relationships.
Equipment on Order
The Company has agreed to purchase two helicopters in
1995 for $5 million. The Company also plans to lease five
helicopters with a lease value of $9 million. The lease
term is 60 months with monthly payments of $67,000 or $0.8
million per year. At the end of the lease term, the Company
may purchase the aircraft for 88% of the original lease, or
$7.9 million, or return the aircraft and pay the lessor 13%
of the original lease amount, or $1.2 million. The Company
also has non-binding agreements to purchase 15 additional
aircraft none of which are expected to be purchased in 1995.
Equipment Sales
The Company sells aircraft whenever they (i) become
obsolete, (ii) do not fit into future fleet plans, (iii) are
subject to unusually strong and specific demand in the
resale market, or (iv) are surplus to the Company's needs.
The Company typically sells its helicopters for more
than their book value. The Company cannot predict, however,
whether these results will continue or whether such prices
would be realized if the Company were to sell large numbers
of helicopters in a short period of time.
Facilities
The Company leases 4,362 square feet of office space
in a building owned by Offshore Navigation, Inc., (owner of
12.6% of the Company's voting common stock), in Jefferson
Parish (Metropolitan New Orleans), Louisiana, on a
month-to-month basis, for the Company's executive offices.
The Company believes that it will be able to occupy this
space for as long as necessary because of its relationship
with Offshore Navigation, Inc.
The Company's principal operational facility is
located on property leased from The Lafayette Airport
Commission at the Lafayette Regional Airport in Lafayette
Parish, Louisiana. The leases cover approximately 28.2
acres and 17 buildings, with an aggregate of approximately
135,000 square feet, housing the Company's main operational
and administrative office and main repair and maintenance
facility. The Company has options to extend this lease
until 2006.
In addition, the Company leases property for 18
additional bases to service the oil and gas industry
throughout the domestic Gulf and two bases in California.
Those bases that represent a significant investment by the
Company in leasehold improvements or which are particularly
important to the Company's operations are:
A. Morgan City Base (Louisiana) - containing
approximately 53 acres, is under a lease that expired on
June 30, 1994 and was extended by the Company through June
30, 1998. The Company has built a variety of operational
and maintenance facilities on this property, including
landing pads for 46 helicopters. The Company believes that
this facility is the largest commercial heliport in the
world.
B. Intracoastal City Base (Louisiana) - containing
approximately 22.5 acres under several leases in Vermillion
Parish, all with options to extend through 2001. The
Company has built a variety of operational and maintenance
facilities on this property, including landing pads for 45
helicopters.
C. Houma-Terrebonne Airport (Louisiana) -
containing approximately 13.6 acres and certain buildings
leased under four leases from the Houma-Terrebonne Airport
Commission, which have options allowing extension of the
lease through 1999. The Company has landing pads for 30
helicopters on this property.
D. Sabine Pass (Texas) - containing approximately
22 acres under two leases, one of which, for 1.6 acres, will
expire February 28, 1995, and the other of which will expire
September 30, 1997 with an option to extend through
September 30, 2002. The Company has built a variety of
operational and maintenance facilities on this property,
including landing pads for 24 helicopters.
E. New Orleans (Louisiana) - containing
approximately 1.5 acres, is under a lease through April 30,
2004. The location contains significant leasehold
improvements including landing pads for 14 helicopters.
F. Venice (Louisiana) - containing approximately 8
acres, is under a lease expiring March 31, 1995. The
original lease was executed April 1, 1973 for one year and
has been extended annually since that time. The location
contains landing pads for 27 helicopters.
G. Fourchon (Louisiana) - containing approximately
8 acres, is under original lease expiring April 30, 1996.
The property has 10 landing pads.
The Company's other operations related bases in the
United States are located along the domestic Gulf in
Louisiana at Cameron, Grand Isle, Lake Charles and
Schriever; in Texas at Bay City, Brazoria, Corpus Christi,
Galveston, Port O'Connor and Rockport; in Mississippi at
Pascagoula; and in California at Huntington Beach and Santa
Barbara.
The Company operates from offshore platforms which are
provided free of charge by the owners of the platforms,
although in certain instances the Company is required to
indemnify the owners against loss in connection with the
Company's use.
Bases of operations for the Company's foreign and
aeromedical operations are generally furnished by the
customer. The Company's foreign operations are currently
conducted in Angola, Argentina, Canada, Colombia, Kenya,
Philippines, Portugal, Trinidad, Venezuela and Zaire.
Aeromedical operations are currently conducted in Arizona,
Arkansas, California, Florida, Illinois, Kentucky,
Louisiana, North Carolina, Ohio and Texas.
Item 3. Legal Proceedings
The Company is named as a defendant in various legal
actions arising out of incidents related to its helicopter
operations. The amount, if any, of ultimate liability with
respect to such matters cannot be determined; however, after
consulting with legal counsel, the Company believes any such
liability will not have a material effect on the Company's
financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security
holders during the fourth quarter of the fiscal year ended
April 30, 1994.
Item 4. (a) Executive Officers of the Registrant
Certain information about the executive officers of
PHI is set forth in the following table and accompanying
text:
Name Age Position
Carroll W. Suggs 55 Chairman of the Board of Directors and
Chief Executive Officer
Vernon E. Albert 52 Vice President and Chief Pilot
Robert D. Cummiskey, Jr. 52 Vice President - Risk Management
and Secretary
Gerald T. Golden 51 Vice President and
Director of Operations
David P. Milling 50 Vice President and General Manager of IHTI
Ben Schrick 53 Vice President and General Manager
Harold L. Summers 56 Vice President - Engineering/Quality
Assurance and Materiels
John H. Untereker 44 Vice President, Chief Financial
Officer and Treasurer
Gary J. Weber 47 Vice President -
International Operations
Mrs. Suggs became Chairman of the Board in March 1990 and Chief
Executive Officer in July 1992. From 1989 until March 1990, she served as
Vice Chairman of the Board.
Mr. Albert has served as the Vice President and Chief Pilot since
1984.
Mr. Cummiskey has served as Secretary since June 1992 and as Vice
President of Risk Management since October 1991. Prior to that time, Mr.
Cummiskey was a Vice President/Account Executive of Johnson & Higgins
(insurance brokers and consultants).
Mr. Golden was named Vice President and Director of Operations in
March 1993. Prior to that time he served as Vice President of Corporate
Development since 1991 and as Director of Training since 1982.
Mr. Milling has served as Vice President since September 1989,
General Manager of International Helicopter Transport, Inc. (IHTI), a
wholly-owned subsidiary, since 1988, and as Facility Security Officer since
1990. From 1979 until 1988, Mr. Milling served as marketing representative
and administrative assistant to the Chief Executive Officer.
Mr. Schrick has served as Vice President and General Manager since
January 1993 and as Vice President of Maintenance since 1990. Prior to
that time he served as Superintendent of Maintenance. Since 1984 Mr.
Schrick has also served as Vice President of Evangeline Airmotive, Inc., a
wholly-owned subsidiary.
Mr. Summers has served as Vice President of Engineering/Quality
Assurance since 1990 and Vice President of Materiels since 1994. Prior to
that time he served as Vice President of Maintenance.
Mr. Untereker has served as Vice President, Chief Financial Officer
and Treasurer since July 1992. From December 1987 until July 1992, he
served as Executive Vice President and Chief Financial Officer of Lend
Lease Trucks, Inc. (truck leasing, rental and finance)/Bastion Industries
(manufacturer and distributor of packaging materials). Prior to that time,
Mr. Untereker served as controller of NL Industries, Inc. and Vice
President-Finance of NL Baroid (petroleum services and products).
Mr. Weber has served as Vice President of International Operations
since September 1989. From July 1987 until September 1989, he served as
Director of International Operations.
PART II
Item 5. Market Price for Registrant's Common Equity and
Related Stockholder Matters
The Company's voting and non-voting common stock trades on the NASDAQ
System ("NASDAQ Small Cap Issuers") under the symbols PHEL and PHELK,
respectively. The following table sets forth the range of high and low per
share bid prices, as reported by NASDAQ, and dividend information for the
Company's voting and non-voting common stock for the fiscal quarters
indicated. The quotations represent prices in the over the counter market
between dealers in securities, do not include retail markup, markdown or
commission and may not necessarily represent actual transactions:
Voting Common Stock Non-Voting Common Stock Dividends
Fiscal Quarter High Low High Low Per Share
1992-93
1st Quarter 12 10 11 1/2 10 .01
2nd Quarter 13 10 1/8 12 1/2 10 -
3rd Quarter 13 3/4 10 3/4 13 3/4 10 1/2 -
4th Quarter 16 11 1/4 16 11 -
1993-94
1st Quarter 18 15 1/2 18 15 1/2 -
2nd Quarter 17 3/4 15 3/4 17 3/4 15 1/2 -
3rd Quarter 17 8 3/4 16 3/4 9 -
4th Quarter 12 3/4 9 1/2 13 9 3/4 -
The declaration and payment of dividends is at the discretion of the
Board of Directors, which evaluates the Company's dividend policy
quarterly. Future dividends are dependent upon, among other things, the
Company's results of operations, financial condition, cash requirements,
future prospects and other factors deemed relevant by the Board. A credit
agreement to which the Company is a party generally restricts the
declaration or payment of dividends to 20% of net earnings for the previous
four fiscal quarters. See Item 8. "Financial Statements and Supplementary
Data - Notes to Consolidated Financial Statements, Note 2."
As of July 19, 1994 there were approximately 1,576 holders of record
of the Company's voting common stock and 133 holders of record of the
Company's non-voting common stock.
Item 6. Selected Financial Data
1994 1993 1992 1991 1990
(Thousands of Dollars, Except Per Share Amounts)
Year Ended April 30:
Operating revenues $ 172,069 $ 171,865 $ 191,867 $ 200,313 $ 184,178
Net earnings $ 3,333 $ 2,049 $ 1,290 $ 9,106 $ 9,549
Net earnings
per share $ .61 $ .37 $ .24 $ 1.58 $ 1.57
Cash dividends paid
per share $ - $ .01 $ .08 $ .08 $ .08
At April 30:
Total assets $ 146,312 $ 141,100 $ 142,173 $ 146,359 $ 139,272
Long-term debt $ 31,849 $ 30,950 $ 38,000 $ 40,000 $ 30,000
Working capital $ 30,572 $ 31,419 $ 38,590 $ 46,439 $ 47,964
Stockholders'
equity $ 75,309 $ 71,976 $ 69,982 $ 68,915 $ 78,041
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Operating results for the three years ended April 30, 1994 are as
follows (in thousands of dollars, except flight hours):
Years Ended April 30
1994 1993 1992
Revenues
Operating revenues $172,069 $171,865 $191,867
Gain (loss) on equipment
disposals 475 2,064 (1,112)
Gain on sale of investments - - 521
Equity in net earnings
(losses) of investee
companies - (18) 95
172,544 173,911 191,371
Expenses
Direct expenses 155,599 156,698 176,958
Selling, general and
administrative expenses 8,715 11,601 7,819
Interest expense 2,676 2,271 3,804
166,990 170,570 188,581
Earnings before income taxes 5,554 3,341 2,790
Income taxes 2,221 1,292 1,500
Net earnings $ 3,333 $ 2,049 $ 1,290
Flight Hours 207,000 207,000 242,000
Demand for the Company's offshore oil and gas transportation
services began to decline during fiscal 1991 due to reduced exploration
and production activity in the U.S. Gulf. This trend continued in fiscal
1992 and into the first quarter of fiscal 1993 before reversing in the
second quarter of fiscal 1993 due in part to rising natural gas prices.
The offshore drilling rig count is summarized in the following table:
May May June June
1994 1993 1992 1991
Active Rigs in U.S. Gulf 125 102 60 119
While the rig count has recovered since June 1992, the Company's
management believes the rig count could trend downward as a reflection of
the oil and gas industry's concerns over unstable domestic oil, and to a
lesser extent, gas prices combined with strict U.S. environmental
legislation. These concerns have caused exploration companies to shift
much of their activities from the U.S. market to the international market
where less strict environmental policies make drilling for minerals more
economically viable. Although the active rig count in the Gulf increased
during this past fiscal year, the Company's domestic Gulf revenues
declined by 5% from $132.7 million to $126.1 million. This decline
evidences that competitive pricing pressures have increased and that
customers are increasingly sharing aircraft or employing aircraft on a
shorter term hourly basis. The $20 million decline in operating revenues
between fiscal 1992 and 1993 was consistent with the slower domestic oil
and gas market.
Management has continued to respond to these conditions by expanding
marketing efforts in the domestic aeromedical and the international oil
and gas markets. This marketing emphasis increased the Company's name
recognition as a leader in both markets and currently provides more
opportunities to bid for new business. Presently there is uncertainty
related to Federal regulation of the health care industry and the
stability of the international oil and gas industry; however, management
will continue to search for new opportunities that warrant the risk in
these markets. The result of the Company's efforts is reflected in the
increase of total revenues from aeromedical and international flights of
23% to $35.6 million and 15% to $29 million in fiscal years 1994 and 1993,
respectively. The Company also made significant reductions in its
workforce and helicopter fleet which had a positive impact on expenses.
The following tables provide selected information regarding the results of
management's efforts:
Approximate Percentage of Operating Revenue
Years Ended April 30
1994 1993 1992
Domestic Gulf. . . . . . . . 73% 77% 82%
Aeromedical . . . . . . . . 13 10 8
International and Technical
Services. . . . . . . . . 14 13 10
As of April 30
1994 1993 1992
Number of helicopters
owned/leased. . . . . . . . 255 258 285
Number of employees . . . . . .1,697 1,838 2,062
____________________
Direct expenses declined $1.1 million in fiscal 1994 due to a $1
million decrease in helicopter rent, a $0.5 million reduction in
depreciation and a $0.5 million decline in taxes. Salaries were $0.8
million higher due to a 4% cost of living increase in July 1993 which was
offset by staffing reductions later in the fiscal year. Helicopter
insurance expense increased by $0.7 million due to an increase in rates.
Direct expenses in fiscal 1993 were reduced $20.3 million as payroll and
related costs declined approximately $12 million and helicopter
depreciation and rental, fuel, parts usage and outside maintenance
declined in response to reduced flight hours and helicopter fleet
reductions.
The Company's selling, general and administrative expense decreased
$2.9 million in fiscal 1994 primarily as a result of $2.1 million spent in
fiscal 1993 related to senior management transition. Reductions of $0.3
million in bad debt expense and $0.6 million in salaries were also
realized. The increase in fiscal 1993, when compared to fiscal 1992, was
also related to the senior management transition charges and increased
compensation and sales promotion expenses associated with the Company's
expanded sales and marketing programs.
Equipment disposal results in fiscal 1993 were greater than 1994 and
1992 as the Company disposed of more aircraft in 1993 than 1994 and
casualty losses charged to this account declined in 1993 as compared to
1992. The Company disposed of six, nine and ten aircraft in fiscal years
1994, 1993 and 1992, respectively.
The Company's borrowing costs increased $0.4 million in fiscal 1994
due to higher average borrowing levels incurred for the purchase of three
additional aircraft for the Company's aeromedical program. Higher
interest rates were also a factor in 1994. The Company's borrowing costs
in 1993 were $1.5 million lower than 1992 due to lower average borrowing
levels and declining interest rates.
PHI's effective tax rate was 40%, 39%, and 54% in the 1994, 1993 and
1992 fiscal years, respectively. The rate in fiscal 1992 was higher
because of certain non-deductible expenses and increased state income
taxes.
Liquidity and Capital Resources
Cash generated from operating activities in 1994 and 1993 was
essentially constant at $16.3 million and $16.1 million, respectively as
compared to $19.8 million in 1992. Cash flow generated by working capital
was $3.8 million, $5.9 million and $7.8 million for the fiscal years ended
1994, 1993 and 1992, respectively. These trends are consistent with
operating levels for the periods presented. The Company's use of cash in
1994 included a net investment in equipment, primarily helicopters, of
$12.7 million and a reduction in long-term debt of $0.2 million.
In response to reduced operating cash flow, dividends were limited
to $55,000 in 1993 and discontinued after the first quarter of fiscal
1993. See Item 5. "Market Price for Registrant's Common Equity and
Related Stockholder Matters."
In July 1993, the Company amended its agreements with its principal
lenders to, among other things, increase borrowing capacity for helicopter
purchases during the next two years. In addition, approximately $9
million of borrowings under the Company's revolving credit facility were
refinanced on a long-term basis. In April 1994, the Company further
amended its agreements to permit London Inter-bank Borrowings ("LIBOR") at
LIBOR rates plus a floating spread. The spread (currently 2.625%) will
float up or down based on the Company's performance. The Company believes
this change will result in a lower effective rate. As of June 22, 1994,
the Company had $11 million and $15 million of available credit capacity
under the term and revolving credit facilities, respectively. The Company
believes it is in full compliance with its financing agreements. See Item
8. "Financial Statements and Supplemental Data - Notes to Consolidated
Financial Statements, Note 2."
The Company currently has outstanding capital commitments of
approximately $5 million, primarily for helicopter purchases. See Item 2.
- "Properties - Equipment on Order."
In July 1994, the Company entered into an agreement (the
"Agreement") with American Eurocopter Corporation (AEC) to acquire up to
25 emergency medical service (EMS) contracts and the related helicopters
and certain other assets that service these contracts from Rocky Mountain
Helicopters (RMH). RMH is presently operating under Chapter 11 of the
U.S. Bankruptcy Code. PHI's agreement with AEC, one of the largest
creditors of RMH, is conditional upon, among other things, bankruptcy
court confirmation of AEC's plan. RMH has filed its own plan of
reorganization and is currently expected to oppose the AEC plan and the
closing of the Agreement.
Management estimates annual revenues associated with the EMS
contracts are $27 million. If these contracts and assets are ultimately
acquired, PHI would pay AEC a portion of the contract revenues received as
reimbursement of the purchase price and assume certain post closing
obligations under the EMS contracts and the helicopter leases and
financing instruments. While the acquisition of these contracts and
assets may have a material impact on future operations, management does
not believe that such event would have a materially unfavorable effect on
the Company's liquidity or capital resources.
The Company believes its cash flow from operations in conjunction
with its credit capacity is sufficient to meet its planned requirements
for the forthcoming fiscal year.
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report
The Board of Directors and Stockholders
Petroleum Helicopters, Inc.:
We have audited the consolidated balance sheets of Petroleum Helicopters,
Inc. and subsidiaries as of April 30, 1994 and 1993, and the related
consolidated statements of earnings, stockholders' equity , and cash flows
for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Petroleum Helicopters, Inc. and subsidiaries as of April 30, 1994 and
1993, and the results of their operations and their cash flows for the
years then ended in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK
New Orleans, Louisiana
June 20, 1994
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Petroleum Helicopters, Inc.
Harahan, Louisiana
We have audited the consolidated statements of earnings, stockholders'
equity and cash flows of Petroleum Helicopters, Inc. and wholly-owned
subsidiaries for the year ended April 30, 1992 (none of which are
presented herein). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the results of operations and cash flows of
Petroleum Helicopters, Inc. and wholly-owned subsidiaries for the year
ended April 30, 1992 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE
New Orleans, Louisiana
July 17, 1992
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
April 30, 1994 and 1993
(Thousands of dollars)
Assets 1994 1993
Current assets:
Cash and cash equivalents $ 5,452 $ 2,309
Accounts receivable - net of allowance:
Trade 26,174 30,182
Investee companies 513 250
Notes and other 1,072 365
Inventory of spare parts and aviation fuel -
at lower of average cost or market 24,850 24,592
Prepaid expenses 1,446 2,221
Refundable income taxes 196 789
Total current assets 59,703 60,708
Notes receivable 290 -
Investments 597 158
Property and equipment, at cost:
Flight equipment 176,300 167,461
Other 18,510 18,535
194,810 185,996
Less accumulated depreciation (109,171) (105,762)
85,639 80,234
Other 83 -
Total assets $146,312 $141,100
(Continued)
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of dollars)
Liabilities and Stockholders' Equity 1994 1993
Current liabilities:
Accounts payable - trade $ 5,319 $ 8,815
Accrued expenses 10,421 7,399
Accrued vacation pay 4,687 4,525
Current portion of long-term debt 8,704 8,550
Total current liabilities 29,131 29,289
Long-term debt 31,849 30,950
Deferred income taxes 10,023 8,885
Stockholders' equity:
Voting common stock - $.08 1/3 par value;
authorized 7,200,000 shares; issued shares
of 4,198,872 in 1994 and 1993 350 350
Less shares in treasury of 920,804 in 1994
and 1993 (77) (77)
273 273
Non-voting common stock - $.08 1/3 par value
authorized 7,200,000 shares; issued shares
of 2,200,000 in 1994 and 1993 183 183
Total common stock 456 456
Additional paid-in capital 11,027 11,027
Retained earnings 63,826 60,493
75,309 71,976
Total liabilities and stockholders'
equity $146,312 $141,100
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Statements of Earnings
Years ended April 30, 1994, 1993 and 1992
(Thousands of dollars and shares, except per share amounts)
1994 1993 1992
Revenues:
Operating revenues $ 172,069 $171,865 $191,867
Gain (loss) on equipment
disposals 475 2,064 (1,112)
Gain on sale of investment - - 521
Equity in net earnings
(losses) of
investee companies - (18) 95
172,544 173,911 191,371
Expenses:
Direct expenses 155,599 156,698 176,958
Selling, general and
administrative 8,715 11,601 7,819
Interest expense 2,676 2,271 3,804
166,990 170,570 188,581
Earnings before income taxes 5,554 3,341 2,790
Income taxes 2,221 1,292 1,500
Net earnings $ 3,333 $ 2,049 $ 1,290
Net earnings per share $ 0.61 $ 0.37 $ .24
Weighted average common
shares outstanding 5,478 5,478 5,470
Dividends paid per common share $ - $ 0.01 $ 0.08
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(Thousands of dollars and shares)
Voting Non-Voting
Voting Non-Voting Common Stock Common Stock Add.
Common Stock Common Stock Held in Treasury Held in Treasury Paid-in Retained
Shares Amount Shares Amount Shares Amount Shares Amount Capital Earnings
Balance
5/1/91 4,199 $ 350 2,200 $ 183 921 $ 77 23 $ 2 $ 10,815 $ 57,647
Sale of
treasury
stock
for $214 - - - - - - (23) (2) 212 -
Net earnings - - - - - - - - - 1,290
Dividends - - - - - - - - - (438)
Balance
4/30/92 4,199 350 2,200 183 921 77 - - 11,027 58,499
Net earnings - - - - - - - - - 2,049
Dividends - - - - - - - - - (55)
Balance
4/30/93 4,199 350 2,200 183 921 77 - - 11,027 60,493
Net earnings - - - - - - - - - 3,333
Balance
4/30/94 4,199 $ 350 2,200 $ 183 921 $ 77 - $ - $ 11,027 $ 63,826
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 1994, 1993 and 1992
(Thousands of dollars)
1994 1993 1992
Operating activities:
Net earnings $ 3,333 $ 2,049 $ 1,290
Adjustments to reconcile net
earnings to net cash
provided by operating
activities:
Depreciation 8,573 9,215 11,984
Deferred income taxes 1,138 933 (1,699)
Loss (gain) on equipment
disposals (475) (2,064) 1,112
Gain on sale of investment - - (521)
Equity in net (earnings)
losses of investee
companies - 18 (95)
Changes in operating assets
and liabilities:
Decrease in accounts receivable 3,038 554 7,674
Decrease (increase) in inventory (258) 2,533 4,783
Decrease (increase) in prepaid
expenses and refundable income
taxes 1,368 340 (3,157)
Increase (decrease) in accounts
payable -
trade and other accrued
expenses (312) 3,284 875
Decrease in income taxes
payable - (784) (2,416)
Increase in other assets (83) - -
Net cash provided by
operating activities 16,322 16,078 19,830
Investing activities:
Purchase of property and equipment (14,330) (17,328) (24,812)
Proceeds from sales of property
and equipment 1,672 7,111 6,367
Other (290) - 750
Net cash used in
investing activities (12,948) (10,217) (17,695)
Financing activities:
Proceeds from long-term debt 32,780 50,000 88,000
Payments on long-term debt (33,011) (56,500) (90,000)
Sale of treasury stock - - 214
Dividends paid - (55) (438)
Net cash used in
financing activities (231) (6,555) (2,224)
Increase (decrease) in cash and
cash equivalents 3,143 (694) (89)
Cash and cash equivalents at
beginning of year 2,309 3,003 3,092
Cash and cash equivalents at
end of year $ 5,452 $ 2,309 $ 3,003
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
April 30, 1994, 1993 and 1992
(1) Summary of Significant Accounting Policies
(a) Principles of Consolidation
The consolidated financial statements include the accounts
of Petroleum Helicopters, Inc. and its wholly-owned
subsidiaries after the elimination of all significant
intercompany accounts and transactions. Investments in 20
percent to 50 percent owned affiliates are accounted for by
the equity method and consist primarily of investments in
foreign affiliates.
(b) Cash Equivalents
The Company considers cash equivalents to include demand
deposits and investments with original maturity dates of
three months or less.
(c) Property and Equipment
Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-
line method based upon estimated useful lives of ten years
for flight equipment and four to ten years for other
equipment. A residual value of 25% of cost is used in the
calculation of depreciation of flight equipment and other
equipment. When property and equipment is sold or otherwise
disposed of, the cost and accumulated depreciation are
removed from the accounts and any resulting gain or loss is
reflected in earnings at the time of sale or other
disposition, except in the case of long-term sale and
leaseback transactions.
(d) Income Taxes
A consolidated federal income tax return is filed by the
Company and its subsidiaries. Income taxes have not been
provided on the undistributed net earnings of the investee
companies since, among other things, the amount of taxes
involved are not significant.
Income taxes are accounted for in accordance with the
provisions of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes. Under the asset and
liability method of Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those
temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax
assets and liabilities of a change in tax rates is
recognized in income in the period that included the
enactment date.
(e) Self-Insurance
The Company maintains a self-insurance program for a portion
of its health care costs. The Company is liable for claims
up to $200,000 per covered individual annually, and
aggregate claims up to $5,800,000 annually. Self-insurance
costs are accrued based upon the aggregate of the liability
for reported claims and the estimated liability for claims
incurred but not reported.
The Company does not presently have any significant
obligations for post employment benefits.
(f) Concentration of Credit Risk
The Company's financial instruments that are exposed to
concentrations of credit risk consist primarily of cash and
cash equivalents and trade accounts receivable. The Company
places its cash and temporary cash investments with high
quality financial institutions and currently invests
primarily in U.S. government obligations with maturities of
less than three months.
A majority of the Company's business is conducted with major
oil and gas exploration companies with operations in the
Gulf of Mexico. The Company continually evaluates the
financial strength of its customers but does not require
collateral to support the customer receivables. The Company
establishes an allowance for doubtful accounts based upon
factors surrounding the credit risk of specific customers,
current market conditions and other information.
(g) Reclassifications
Certain reclassifications have been made to the prior years
financial statements in order to conform with the
classifications adopted for reporting in 1994.
(2) Long-Term Debt
1994 1993
(Thousands of dollars)
Secured term loan note due in
quarterly installments of
$2,000,000 commencing
January 31, 1991, with
interest (April 30, 1994
- 7.0% and April 30, 1993
- 6.0%) fluctuating with
prime $ 29,040 $ 28,000
Secured note due October 31,
1995, under a revolving
credit agreement totaling
$15,000,000 with interest
(April 30, 1994 -
7.0% and April 30, 1993
- 6.0%) fluctuating
with prime 1,500 11,500
Secured 10 year promissory
notes due in monthly
installments of
$107,746.73 commencing
July 9, 1993 with a
fixed interest rate of
7.0% 8,729 -
Secured promissory notes due
at the earlier of
in-service date of
the helicopters or
December 31, 1994 1,284 -
40,553 39,500
Less current portion 8,704 8,550
Long-term portion $ 31,849 $ 30,950
Subsequent to year end, the Company, upon placing the related
helicopters in service, retired the promissory notes due
December 31, 1994. The debt was satisfied through
additional borrowings of $2 million under the Company's term
loan facility. The $1.3 million is not reflected in the
current portion of long-term debt.
Scheduled maturities of long-term debt are as follows:
(Thousands of
dollars)
1995 $ 8,704
1996 10,255
1997 8,810
1998 7,192
1999 931
Thereafter 4,661
$ 40,553
At April 30, 1994, the following assets and their related
book values are pledged as collateral on notes aggregating
$39.3 million:
(Thousands of
dollars)
Equipment, net of depreciation $ 54,640
Inventory 24,609
Accounts receivable, net 25,725
$104,974
The loan agreements require the Company to maintain certain levels
of working capital and stockholders' equity and contain other
provisions some of which restrict expenditures for the purchase of
the Company's stock, for capital expenditures and for payment of
dividends. Such agreements also limit the creation, incurrence or
assumption of Funded Debt (as defined, which includes long-term
debt), and the acquisition of investments. At April 30, 1994, the
Company's working capital exceeded the amount required by
approximately $8.7 million, and stockholders' equity exceeded the
required level by approximately $3.6 million. Dividends are
generally limited to 20% of net earnings.
In April 1994, the Company amended its agreements concerning the
term loan note and revolving credit agreement with its principal
lenders to, among other things, permit London Inter-bank
Borrowings ("LIBOR") at LIBOR rates plus a floating spread. The
spread for LIBOR and/or prime rate borrowings will float up or
down based on the Company's performance as determined by a
leverage ratio. There were no LIBOR borrowings at April 30, 1994.
At April 30, 1994, the Company was in compliance with the
provisions of its loan agreements.
Interest paid was $2,136,000, $2,231,000 and $3,725,000 for the
years ended April 30, 1994, 1993 and 1992, respectively.
(3) Income Taxes
Income tax expense (benefit) for the three years ended April 30,
1994, is composed of the following:
1994 1993 1992
(Thousands of dollars)
Current:
Federal $ 853 $ 150 $ 2,570
State 148 153 600
Foreign 82 56 29
Deferred - principally Federal 1,138 933 (1,699)
$ 2,221 $ 1,292 $ 1,500
Deferred income taxes (benefit) result from the following:
1994 1993 1992
(Thousands of dollars)
Accelerated depreciation $ 1,496 $ 388 $(1,200)
Accrued vacation and other
liabilities (636) (831) (762)
Effect of tax credits 278 1,376 263
$ 1,138 $ 933 $(1,699)
Income tax expense as a percentage of pre-tax earnings varies
from the effective Federal statutory rate of 34% for the
reasons explained below:
Years ended April 30
1994 1993 1992
Amount % Amount % Amount %
Income taxes at
statutory rate $ 1,888 34% $ 1,136 34% $ 949 34%
Increase (decrease)
in taxes resulting
from:
Equity in net
(earnings) loss
of consolidated
investee
companies - - 6 - (32) (1)
Effect of
state income
taxes 98 2 101 4 396 14
Other items -
net 235 4 49 1 187 7
$ 2,221 40% $ 1,292 39% $ 1,500 54%
For income tax purposes, the Company had approximately $3,383,000
of investment tax credit carryforwards. These investment tax
credit carryforwards will expire between 1995 and 2001. The
Company also has approximately $725,000 of alternative minimum tax
credit carryforwards available to reduce future Federal regular
income taxes over an indefinite period.
The tax effects of temporary differences which give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at April 30, 1994 and 1993 are presented below:
1994 1993
(Thousands of dollars)
Deferred tax assets:
Tax credits $ 4,108 $ 4,386
Vacation accrual 1,594 1,539
Self-insurance reserve 224 386
Inventory valuation 727 624
Workman's compensation reserve 455 171
Other 696 31
Total deferred tax assets 7,804 7,137
Deferred tax liabilities:
Tax depreciation in excess of book
depreciation 16,868 15,372
Other 959 650
Total deferred tax liabilities 17,827 16,022
Net deferred tax liability $10,023 $ 8,885
No valuation allowance was recorded against the net deferred tax
assets because management believes that the deferred tax assets
will be realized in full.
Income taxes paid were approximately $470,000, $1,971,000 and
$5,500,000 for the years ended April 30, 1994, 1993 and 1992,
respectively.
(4) Employee Savings Plan
The Company established, effective July 1, 1989, an Employee
Savings Plan under Section 401(k) of the Internal Revenue Code.
The Plan provides that the Company match up to 3% of employee
contributions. The Company's contribution was $1,604,000,
$1,410,000 and $1,500,000 for the years ended April 30, 1994, 1993
and 1992, respectively.
(5) Stock Option Plans
Effective May 1, 1992, the Company's Board of Directors adopted
the Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option
and Stock Appreciation Rights Plan (the "Plan"). The Plan was
approved at the Annual Meeting of Stockholders on September 30,
1992. The Company is authorized to grant non-qualified stock
options and stock appreciation rights (Sar) to selected employees
to purchase up to 100,000 shares of the Company's non-voting
common stock at an exercise price of not less than 25% of their
Fair Market Value at the date of grant. The options may be
exercised any time after one year from the date of grant until
their expiration at five years from such date.
During fiscal 1993 an officer of the Company was granted non-
qualified options to purchase 15,000 shares of voting common stock
at the fair market value of the stock at the date of grant. The
options were not granted under the 1992 Plan. The options expire
five years from the date of grant.
A summary of the Plans' activities for the years ended April 30,
1994 and 1993 is as follows:
1992 Plan
Non-Voting Voting
Total Options Sar Options
Balance outstanding at
May 1, 1992 - - - -
Options granted at
$10.00 per share 15,000 - - 15,000
Balance outstanding at
April 30, 1993 15,000 - - 15,000
Options granted at
$15.50 87,000 87,000 - -
Options canceled (6,000) (6,000) - -
Balance outstanding at
April 30, 1994 96,000 81,000 - 15,000
Shares exercisable at
April 30, 1993 - - - -
Shares exercisable at
April 30, 1994 - - - -
Shares available for
future grant at
April 30, 1994 19,000
(6) Supplemental Cash Flow Information and Financing Activities
During 1994, the Company acquired two aircraft for $1,284,000.
The purchases were financed with the seller.
Additionally in 1994, the Company entered into an agreement to
acquire up to 28% of a corporate joint venture. In 1994 the
Company acquired a 13.6% interest of the corporate joint
venture in exchange for a helicopter and equipment with net
values totaling $439,000. The Company further has a note
receivable for $290,000 from the joint venture which the
Company has the option to convert into an additional 9.3% of
the common stock of the corporate joint venture.
(7) Commitments and Contingencies
The Company leases certain aircraft used in its operations.
The Company generally pays all insurance, taxes and maintenance
expenses associated with these aircraft, and some of these
leases contain renewal and purchase options.
Aggregate rental commitments to lease aircraft under operating
leases are due in years subsequent to April 30, 1994, as
follows:
(Thousands of dollars)
1995 $ 9,672
1996 8,311
1997 8,301
1998 8,301
1999 8,256
Thereafter 23,440
$ 66,281
Rental expense consisted of the following:
Years ended April 30
1994 1993 1992
(Thousands of dollars)
Aircraft $ 12,369 $ 13,433 $ 14,680
Other 1,637 1,576 1,683
$ 14,006 $ 15,009 $ 16,363
The Company has agreed to purchase two helicopters in 1995 for $5
million. The Company also plans to lease five helicopters with a lease
value of $9 million. The lease term is 60 months with monthly payments of
$67,000 or $0.8 million per year. At the end of the lease term, the
Company may purchase the aircraft for 88% of the original lease, or $7.9
million, or return the aircraft and pay the lessor 13% of the original
lease amount, or $1.2 million. The Company also has non-binding
agreements to purchase 15 additional aircraft none of which are expected
to be purchased in 1995.
The Company is subject to certain legal proceedings which have
arisen in the ordinary course of its business and have not been finally
adjudicated. In connection with this litigation, the Company has accrued
estimated amounts which it believes adequately provide for the settlement
of such litigation.
SELECTED QUARTERLY FINANCIAL DATA
UNAUDITED
The summarized quarterly results of operations for the years ended
April 30, 1994 and 1993 (in thousands of dollars, except per share data)
are as follows:
Quarter Ended
July 31, October 31, January 31, April 30,
1993 1993 1994 1994
Revenues $ 45,552 $ 46,204 $ 41,482 $ 39,306
Gross profit $ 5,068 $ 3,393 $ 3,599 $ 4,410
Net earnings $ 1,251 $ 473 $ 412 $ 1,197
Net earnings per share $ .23 $ .08 $ .08 $ .22
Quarter Ended
July 31, October 31, January 31, April 30,
1992 1992 1993 1993
Revenues $ 44,009 $ 43,751 $ 43,858 $ 42,293
Gross profit $ 1,363 $ 6,103 $ 1,619 $ 6,082
Net earnings $ 173 $ 887 $ 263 $ 726
Net earnings per share $ .03 $ .16 $ .05 $ .13
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
During the past two years there were no disagreements between the
Company and its independent certified public accountants on accounting and
financial disclosure matters. Information regarding changes in the
Company's independent certified public accountants has been previously
reported on Commission Form 8-Ks dated March 31, 1993 and December 18,
1992.
Part III
Item 10. Directors and Executive Officers of the Registrant
Information concerning Directors required by this item will be
included in the Company's definitive proxy statement in connection with
its 1994 Annual Meeting of Shareholders and is incorporated herein by
reference. Information concerning Executive Officers is included as Item
4.(a) "Executive Officers of the Registrant."
Item 11. Executive Compensation
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1994 Annual Meeting of
Shareholders and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1994 Annual Meeting of
Shareholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1994 Annual Meeting of
Shareholders and is incorporated herein by reference.
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements
Included in Part II of this report:
Independent Auditors' Reports
Consolidated Balance Sheets at April 30, 1994 and 1993
Consolidated Statements of Earnings for each of the three years
in the period ended April 30, 1994
Consolidated Statements of Stockholders' Equity for each of the
three years in the period ended April 30, 1994
Consolidated Statements of Cash Flows for each of the three
years in the period ended April 30, 1994
Notes to Consolidated Financial Statements
(a) 2. Financial Statement Schedules
Included in Part II of this report:
Selected Quarterly Financial Data - for the years ended April
30, 1994 and 1993
Included in Part IV of this report:
Independent Auditors' Reports on Financial Statement Schedules
For each of the three years in the period ended April 30, 1994
Schedule V -- Property and Equipment
Schedule VI -- Accumulated Depreciation and
Amortization of Property and Equipment
Schedule X -- Supplementary Earnings Statement Information
Schedules other than those listed above are omitted because they are
either not required or not applicable, or because the required information
is shown in the Consolidated Financial Statements or Notes thereto.
Columns have been omitted from schedules in instances in which the
information required therein is applicable.
(a) 3. Exhibits
3.1 Restated Certificate of Incorporation of PHI dated
March 2, 1988, as amended by Certificate of
Amendment dated September 10, 1987 and by
Certificate of Amendment dated October 19, 1990
(incorporated by reference to Exhibit No. 3.1 to
PHI's Report on Form 10-K dated April 30, 1993).
3.2 Bylaws of PHI as of July 12, 1993 (incorporated by
reference to Exhibit No. 3.2 to PHI's Report on
Form 10-K dated April 30, 1993).
10.1 Master Helicopter Lease Agreement dated May 29,
1991 between AT&T Systems Leasing Corporation and
PHI (incorporated by reference to Exhibit No. 10.1
(2) to PHI's Report on Form 10-K dated April 30,
1992).
10.2 Master Helicopter Lease Agreement dated February
14, 1991 between General Electric Capital
Corporation and PHI (incorporated by reference to
Exhibit No. 10.1 (1) to PHI's Report on Form 10-K
dated April 30, 1991).
10.3 Amended and Restated Loan Agreement originally
dated as of January 31, 1986 Amended and Restated
in its entirety as of July 9, 1993 among Petroleum
Helicopters, Inc., Whitney National Bank, First
National Bank of Commerce, NationsBank of Texas,
N.A. and NationsBank of Texas, N.A., as agent
(incorporated by reference to Exhibit No. 10.3 to
PHI's Report on Form 10-K dated April 30, 1993).
10.4 Installment promissory note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,122,441.56,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc. (incorporated by reference to Exhibit No.
10.4 to PHI's Report on Form 10-K dated April 30,
1993).
10.5 Installment Promissory Note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,078,695.58,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc.
(incorporated by reference to Exhibit No. 10.5 to
PHI's Report on Form 10-K dated April 30, 1993).
10.6 Installment Promissory Note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,078,695.58,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc. (incorporated by reference to Exhibit No.
10.6 to PHI's Report on Form 10-K dated April 30,
1993).
10.7 The Petroleum Helicopters, Inc. 401(k) Retirement
Plan effective July 1, 1989 (incorporated by
reference to Exhibit No. 10.4 to PHI's Report on
Form 10-K dated April 30, 1990).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified
Stock Option and Stock Appreciation Rights Plan
adopted by PHI's Board effective May 1, 1992 and
approved by the stockholders of PHI on September
30, 1992 (incorporated by reference to Exhibit No.
10.8 to PHI's Report on Form 10-K dated April 30,
1993).
10.9 Form of Stock Option Agreement for the Grant of
Non-Qualified Stock Options Under the Petroleum
Helicopters, Inc. 1992 Non-Qualified Stock Option
and Stock Appreciation Rights Plan dated June 2,
1993 between PHI and certain of its key employees
(incorporated by reference to Exhibit No. 10.9 to
PHI's Report on Form 10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John H.
Untereker dated June 15, 1992 (incorporated by
reference to Exhibit No. 10.10 to PHI's Report on
Form 10-K dated April 30, 1993).
10.11 Stock Option Agreement between PHI and John H.
Untereker dated April 12, 1993, but effective as
of July 20, 1992 (incorporated by reference to
Exhibit No. 10.11 to PHI's Report on Form 10-K
dated April 30, 1993).
10.12 Asset Purchase Agreement by and among, among
others, Rocky Mountain Helicopters, Inc., American
Eurocopter Corporation and PHI.
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit No. 21 to PHI's Report on
Form 10-K dated April 30, 1993).
23.1 Consent of KPMG Peat Marwick
23.2 Consent of Deloitte and Touche
(b) Reports on Form 8-K
None
(d) Financial Statement Schedules
Financial statements or information regarding 50%
or less owned entities accounted for by the equity
method have been omitted because such entities,
considered in the aggregate as a single subsid-
iary, would not constitute a significant
subsidiary.
Independent Auditors' Report
The Board of Directors and Stockholders
Petroleum Helicopters, Inc.:
Under date of June 20, 1994, we reported on the consolidated balance
sheets of Petroleum Helicopters, Inc. and subsidiaries as of April 30,
1994 and 1993, and the related consolidated statements of earnings,
stockholders' equity, and cash flows for the years then ended, which are
included elsewhere in this Form 10-K. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedules as listed in Item 14(a) 2. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statement schedules based on our audit.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
KPMG PEAT MARWICK
New Orleans, Louisiana
June 20, 1994
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
Board of Directors and Stockholders
Petroleum Helicopters, Inc.
Harahan, Louisiana
We have audited the consolidated statements of earnings, stockholders'
equity and cash flows of Petroleum Helicopters, Inc. and wholly-owned
subsidiaries for the year ended April 30, 1992 (none of which are
presented herein), and have issued our report thereon dated July 17, 1992;
such report is included elsewhere in this Form 10-K. Our audit also
included the financial statement schedules listed in Item 14(a)2. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our
audit. In our opinion, such financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE
New Orleans, Louisiana
July 17, 1992
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY AND EQUIPMENT
Balance at Balance at
beginning Retirements end of
of period Additions and Sales period
(Thousands of dollars)
Year Ended April 30, 1992
Flight equipment $149,370 $ 25,740 $(13,782) $ 161,328
Other 18,552 (928)* (165) 17,459
$167,922 $ 24,812 $(13,947) $ 178,787
Year Ended April 30, 1993
Flight equipment $161,328 $ 16,143 $(10,010) $ 167,461
Other 17,459 1,185 (109) 18,535
$178,787 $ 17,328 $(10,119) $ 185,996
Year Ended April 30, 1994
Flight equipment $167,461 $ 15,132 $ (6,293) $ 176,300
Other 18,535 481 (506) 18,510
$185,996 $ 15,613 $ (6,799) $ 194,810
* Net of $1,705 of transfers from other equipment to flight equipment.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY AND EQUIPMENT
Balance at Balance at
beginning Retirements end of
of period Additions and sales period
(Thousands of Dollars)
Year Ended April 30, 1992
Flight equipment $ 83,210 $ 11,064 $(6,322) $ 87,952
Other 12,894 920 (147) 13,667
$ 96,104 $ 11,984 $(6,469) $ 101,619
Year Ended April 30, 1993
Flight equipment $ 87,952 $ 8,331 $(4,904) $ 91,379
Other 13,667 884 (168) 14,383
$101,619 $ 9,215 $(5,072) $ 105,762
Year Ended April 30, 1994
Flight equipment $ 91,379 $ 7,715 $(4,756) $ 94,338
Other 14,383 858 (408) 14,833
$105,762 $ 8,573 $(5,164) $ 109,171
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY EARNINGS STATEMENT INFORMATION
Year Ended April 30,
1994 1993 1992
(Thousands of dollars)
Charged to direct expenses:
Maintenance and repairs,
including salaries $55,982 $ 60,125 $ 75,564
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PETROLEUM HELICOPTERS, INC.
By: /s/ Carroll W. Suggs
Carroll W. Suggs
Chairman of the Board
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
/s/ Carroll W. Suggs Chairman of the Board, 07/27/94
Carroll W. Suggs Chief Executive Officer
and Director (Principal
Executive Officer)
/s/ John H. Untereker Vice President and 07/27/94
John H. Untereker Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ Robert E. Perdue Director 07/27/94
Robert E. Perdue
/s/ Leonard M. Horner Director 07/27/94
Leonard M. Horner
EXHIBITS
3.1 Restated Certificate of Incorporation of PHI dated March
2, 1988, as amended by Certificate of Amendment dated
September 10, 1987 and by Certificate of Amendment dated
October 19, 1990 (incorporated by reference to Exhibit
No. 3.1 to PHI's Report on Form 10-K dated April 30,
1993).
3.2 Bylaws of PHI as of July 12, 1993 (incorporated by
reference to Exhibit No. 3.2 to PHI's Report on Form 10-
K dated April 30, 1993).
10.1 Master Helicopter Lease Agreement dated May 29, 1991
between AT&T Systems Leasing Corporation and PHI
(incorporated by reference to Exhibit No. 10.1 (2) to
PHI's Report on Form 10-K dated April 30, 1992).
10.2 Master Helicopter Lease Agreement dated February 14,
1991 between General Electric Capital Corporation and
PHI (incorporated by reference to Exhibit No. 10.1 (1)
to PHI's Report on Form 10-K dated April 30, 1991).
10.3 Amended and Restated Loan Agreement originally dated as
of January 31, 1986 Amended and Restated in its entirety
as of July 9, 1993 among Petroleum Helicopters, Inc.,
Whitney National Bank, First National Bank of Commerce,
NationsBank of Texas, N.A. and NationsBank of Texas,
N.A., as agent (incorporated by reference to Exhibit No.
10.3 to PHI's Report on Form 10-K dated April 30, 1993).
10.4 Installment promissory note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,122,441.56, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc. (incorporated by
reference to Exhibit No. 10.4 to PHI's Report on Form
10-K dated April 30, 1993).
10.5 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc.
(incorporated by reference to Exhibit No. 10.5 to PHI's
Report on Form 10-K dated April 30, 1993).
10.6 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc. (incorporated by
reference to Exhibit No. 10.6 to PHI's Report on Form
10-K dated April 30, 1993).
10.7 The Petroleum Helicopters, Inc. 401(k) Retirement Plan
effective July 1, 1989 (incorporated by reference to
Exhibit No. 10.4 to PHI's Report on Form 10-K dated
April 30, 1990).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock
Option and Stock Appreciation Rights Plan adopted by
PHI's Board effective May 1, 1992 and approved by the
stockholders of PHI on September 30, 1992 (incorporated
by reference to Exhibit No. 10.8 to PHI's Report on Form
10-K dated April 30, 1993).
10.9 Form of Stock Option Agreement for the Grant of Non-
Qualified Stock Options Under the Petroleum Helicopters,
Inc. 1992 Non-Qualified Stock Option and Stock
Appreciation Rights Plan dated June 2, 1993 between PHI
and certain of its key employees (incorporated by
reference to Exhibit No. 10.9 to PHI's Report on Form
10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John H. Untereker
dated June 15, 1992 (incorporated by reference to
Exhibit No. 10.10 to PHI's Report on Form 10-K dated
April 30, 1993).
10.11 Stock Option Agreement between PHI and John H. Untereker
dated April 12, 1993, but effective as of July 20, 1992
(incorporated by reference to Exhibit No. 10.11 to PHI's
Report on Form 10-K dated April 30, 1993).
10.12 Asset Purchase Agreement by and among, among others,
Rocky Mountain Helicopters, Inc., American Eurocopter
Corporation and PHI.
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit No. 21 to PHI's Report on Form 10-K
dated April 30, 1993).
23.1 Consent of KPMG Peat Marwick
23.2 Consent of Deloitte and Touche