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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1996
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)
Louisiana 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2121 Airline Highway Suite 400
P.O. Box 578, Metairie, Louisiana 70001-5979
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 828-3323
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Voting Common Stock
Non-Voting Common Stock
(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 No
State the aggregate market value of the voting stock held by non-
affiliates of the registrant.
Date Amount
July 18, 1996 $22,400,000
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.......2,799,761 shares outstanding as of July 19,1996.
Non-Voting Common Stock.. 2,276,093 shares outstanding as of July 19,1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement to be used in
connection with its 1996 Annual Meeting of Shareholders will be, upon
filing with the Commission, incorporated by reference into Part III of
this Form 10-K.
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.
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PART I
Item 1. Business.
General
The Company was incorporated as a Delaware corporation in 1949 and was
reincorporated as a Louisiana corporation on October 26, 1994. Since its
inception, the Company's 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
69% of the Company's operating revenues were generated by oil and gas
transportation services in federal and state waters offshore of the States
of Louisiana, Texas, Florida, Alabama, Mississippi, and California
("Domestic Oil and Gas Programs"). Approximately 67% and 71% of operating
revenues were derived from Domestic Oil and Gas Programs in fiscal 1995 and
1994, respectively.
The Company's aeromedical transportation services for hospitals and
medical programs ("Aeromedical Services Programs") accounted for 14% of
operating revenues in fiscal 1996. Aeromedical Services Programs generated
15% and 12% of operating revenues in fiscal 1995 and 1994, respectively.
The Company's international business consists of offshore and onshore
helicopter transportation services and fixed wing services to the global oil
and gas industry ("International Oil and Gas Programs"). International Oil
and Gas Programs contributed 9% of operating revenues in fiscal 1996, as
compared to 10% and 8% in fiscal 1995 and 1994, respectively.
Aircraft maintenance services provided to outside parties ("Technical
Services Programs") constituted the majority of the remaining 8% of fiscal
1996 operating revenues.
Demand for the Company's helicopter services is strongly influenced by
oil and gas exploration, development, and production activities. These
activities are greatly affected by federal leasing policies, regulations,
oil and gas prices. The Company's helicopters provide a safe, reliable,
efficient and fast method of transportation under a broad range of
operational and environmental conditions, especially offshore and in remote
areas. All of the Company's sixteen principal types of helicopters are
available under a variety of contractual arrangements.
The Company maintains master operating agreements with each of its major
oil industry customers, which set forth general rights and duties of the
Company and the customer. Although the Company is a party to a number of
oil and gas industry contracts with a term of one year or more, services 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."
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 Gulf of Mexico, 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 54 aircraft equipped to fly pursuant to
instrument flight rules (IFR) in the Gulf of Mexico, which enables these
aircraft, when manned by IFR rated pilots and co-pilots, to operate 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.
Safety 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 very favorable in
comparison to the record for all United States operators as reflected in
industry publications.
The Company is also subject to the Federal Occupational Safety and Health
Act ("OSHA") and similar state statutes. The Company has an extensive
safety and health 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.
The Company maintains hull and liability insurance on its aircraft, 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 its aircraft involved in international
operations. In some instances the Company is covered by indemnity
agreements from oil companies and hospitals and medical programs 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 president 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 Gulf of Mexico and off the coast of California.
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 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 aspects
of competition are price, reliability, availability, safety, and service.
The Company believes it operates one of the largest commercial helicopter
fleets in the world. At April 30, 1996, the Company had 266 aircraft in
operation which includes 261 helicopters and five fixed wing aircraft. The
Company operated 233 helicopters in the United States, of which 196 were
operated in Domestic Oil and Gas Programs and 37 were operated in the
Company's Aeromedical Services Programs. The Company is the largest
operator of helicopters in the Gulf of Mexico and believes there are
approximately five competitors operating in the Gulf of Mexico 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, 1996, the Company employed a total of 1,677 people. The
Company believes its employee relations to be excellent, and it has never
experienced a work stoppage. None of the Company's employees are covered
by union contracts.
Customers
The Company's principal customers are major oil companies. The Company
also serves independent exploration and production concerns, oil and gas
service companies, hospitals and medical programs, and government agencies.
The Company's largest customer, Shell Oil Company, accounted for more than
10% of the Company's operating revenues in fiscal 1996. The Company's five
largest customers accounted for 34% of operating revenues in fiscal 1996.
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 and operations specialists are in
regular contact with division managers and directors of aviation in
connection with both existing service contracts and potential new business.
Environmental Matters
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 believes that compliance with federal, state, and local
environmental laws and regulations will not have a material effect upon the
capital expenditures, earnings and competitive position of the Company. The
Company has established reserves for environmental costs, which are
discussed under Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Environmental Matters.
Item 2. Properties
Fleet Utilization
As of April 30, 1996, 86% of the Company's aircraft were actively
assigned as compared with 84% and 76% as of April 30, 1995 and 1994,
respectively.
Equipment
Certain information as of April 30, 1996 regarding the Company's owned
and leased fleet is set forth in the following table:
Number
Manufacturer Type in Fleet Engine Passengers Cruise Appr.
Speed Range
(mph) (miles)
Bell 206B-III 29 Turbine 4 120 300
206L-I 50 Turbine 6 130 310
206L-III 54 Turbine 6 130 310
206L-IV 4 Turbine 6 130 310
407 1 Turbine 6 144 420
212(1) 9 Twin Turbine 13 115 300
214ST(1) 3 Twin Turbine 18 155 450
230(1) 1 Twin Turbine 8 160 370
412(1) 19 Twin Turbine 13 135 335
Boelkow BK-117 11 Twin Turbine 6 135 255
BO-105 36 Twin Turbine 4 135 270
Aerospatiale
AS355F Twin Star 5 Twin Turbine 5 135 385
AS350 B2 7 Turbine 5 140 385
SA315B 2 Turbine 5 115 317
Sikorsky
S-76(1) 17 Twin Turbine 12 150 400
McDonnell-Douglas
MD900 2 Twin Turbine 6 155 336
___
Total Helicopters 250
Beechcraft
King Air 200(1) 3 Turboprop 8 300 1,380
Sabreliner
80SC(1) 1 Twin Turbo Jet 8 495 1,380
Hawker HS125-700(1) 1 Twin Turbo Jet 8 483 2,185
Sidley ___
Total Fixed Wing 5
___
Total Aircraft 255
===
______________
(1) 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
188 $ 170,297 $ 78,377(1)
Number of Total Rents
Company Leased Over Life Remaining
Helicopters of Lease Rents
62 $ 112,647 $ 67,970
_____________
(1) 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(d)."
____________________
The Company operates eleven helicopters that are owned or leased by
customers which are not reflected in the foregoing tables. The Company also
owns five fixed-wing aircraft, three of which are currently under full or
part-time contract to customers.
As of April 30, 1996, the Company's commitment for principal payments and
lease payments for its present helicopter fleet averages $18 million each
year for the next five years and an aggregate of $17 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 Company's 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 the repair and maintenance of the Company's
fleet. This inventory had a book value of approximately $26 million on
April 30, 1996. 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.
Equipment on Order
Subsequent to year end, the Company purchased six aircraft for an
aggregate of $ 4 million. In addition, the Company plans to purchase
twenty-two helicopters in fiscal 1997 for a total purchase price estimated
to be $21 million. These purchases are subject to PHI obtaining customer
commitments.
Equipment Sales
The Company sells aircraft whenever they (i) become obsolete, (ii) do not
fit into future fleet plans, or (iii) 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 a large number of helicopters in a short period of time.
Facilities
The Company currently leases its executive office space in Metairie,
Louisiana (Metropolitan New Orleans). The lease covers approximately 8,107
square feet and expires on July 31, 2000.
The Company's principal operating facility is located on property
leased from The Lafayette Airport Commission at the Lafayette Regional
Airport in Lafayette, Louisiana. The lease covers 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 extended
this lease until 2006.
The Company also leases property for 17 additional bases to service the
oil and gas industry throughout the Gulf of Mexico and one base 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 expires 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. The Company will
evaluate plans to renegotiate the lease prior to its expiration.
B. Intracoastal City Base (Louisiana) - containing approximately 22.5
acres under several leases in Vermilion 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 leases through 1999. The Company will evaluate plans to renegotiate
the leases prior to their expiration. 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 in July 1996 and will be
renegotiated at that time, 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 Company has made significant
leasehold improvements on this property, including landing pads for 14
helicopters.
F. Venice (Louisiana) - containing approximately 8 acres, is under a
lease expiring March 31, 1997. The original lease was executed April 1,
1973 for one year and has been extended annually since that time. The
location has landing pads for 27 helicopters.
G. Fourchon (Louisiana) - containing approximately 8 acres, is under
original lease expiring April 30, 2001. The property has 10 landing pads.
The Company's other operations-related bases in the United States are
located along the domestic Gulf of Mexico in Louisiana at Cameron and Lake
Charles; in Texas at Brazoria, Corpus Christi, Galveston, Port O'Connor and
Rockport; in Mississippi at Pascagoula; in Alabama at Theodore; in New
Jersey at Edison; and in California at Santa Barbara.
The Company operates from offshore platforms which are provided without
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 thereof.
Bases of operations for the Company's foreign and aeromedical operations
are generally furnished by the customer. The Company's international
operations are currently conducted in Angola, Colombia, Ecuador, Ireland,
Kazakhstan, Peru, Philippines, Thailand, Uzbekistan, Venezuela, and Zaire.
Aeromedical operations are currently conducted in Arizona, Arkansas,
California, Florida, Illinois, Kentucky, Louisiana, Mississippi, North
Carolina, and Ohio.
Item 3. Legal Proceedings
The Company is not a party to, and its property is not the subject of,
any material pending legal proceedings, other than ordinary routine
litigation incidental to its business.
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, 1996.
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 57 Chairman of the Board of Directors,
President and Chief Executive Officer
Ben Schrick 55 Vice President and Chief Operating
Officer
Robert D. Cummiskey, Jr. 54 Vice President - Risk Management and
Secretary
Edward Gatza 53 Vice President - Human Resources
Gerald T. Golden 53 Vice President and Director of Operations
David P. Milling 52 Vice President and General Manager of IHTI
William P. Sorenson 46 Vice President - Aeromedical Services
Harold L. Summers 58 Vice President - Engineering/Quality
Assurance
John H. Untereker 46 Vice President, Chief Financial Officer
and Treasurer
Gary J. Weber 48 Vice President - International Operations
Mrs. Suggs became Chairman of the Board in March 1990, Chief Executive
Officer in July 1992, and President in October 1994.
Mr. Schrick has served as Chief Operating Officer since September
1994, as Vice President and General Manager since January 1993 and as Vice
President of Maintenance since 1990. Since 1984 Mr. Schrick has also served
as Vice President of Evangeline Airmotive, Inc., a wholly-owned subsidiary.
Mr. Cummiskey has served as Secretary since June 1992 and as Vice
President - Risk Management since October 1991. Prior to that time, he was
a Vice President/Account Executive of Johnson & Higgins (insurance brokers
and consultants).
Mr. Gatza was named Vice President - Human Resources in September 1994
after serving as Director of Human Resources since April 1990.
Mr. Golden was named Vice President and Director of Operations in
March 1993. Prior to that time he served as Vice President and Director of
Corporate Development since 1991 and as Director of Training since 1982.
Mr. Milling has served as Vice President since September 1989 and
General Manager of International Helicopter Transport, Inc. (IHTI), a
wholly-owned subsidiary, since 1988.
Mr. Sorenson has served as Vice President since November 30, 1995,
after serving as Director of Aeromedical Services since August 22, 1994.
From 1990 until 1994, Mr. Sorenson directed the Company's EMS Program.
Mr. Summers has served as Vice President - Engineering/Quality
Assurance since 1990.
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 - International Operations
since September 1989.
Item 5. Market Price for Registrant's Common Equity and
Related Shareholder Matters
The Company's voting and non-voting common stock trades on The NASDAQ
Stock Market ("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
1994-95
1st Quarter 12 9 1/2 12 1/4 9 3/4 -
2nd Quarter 11 1/2 10 1/4 12 9 3/4 .02
3rd Quarter 11 3/8 8 5/8 11 1/4 8 1/4 .02
4th Quarter 11 1/4 8 11 8 .02
1995-96
1st Quarter 11 1/2 9 11 8 1/2 .02
2nd Quarter 11 1/2 9 1/4 11 8 3/4 .05
3rd Quarter 14 1/4 10 1/4 14 1/4 10 1/4 .05
4th Quarter 15 12 3/4 15 12 1/2 .05
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, 1996, there were approximately 1,518 holders of record of
the Company's voting common stock and 119 holders of record of the Company's
non-voting common stock.
Item 6. Selected Financial Data
1996 1995 1994 1993 1992
(Thousands of Dollars, Except Per Share Amounts)
Year Ended April 30:
Operating revenues $ 185,865 $ 174,397 $ 178,697 $ 177,316 $ 195,190
Net earnings $ 6,466 $ 5,182 $ 3,333 $ 2,049 $ 1,290
Net earnings
per share $ 1.28 $ .96 $ .61 $ .37 $ .24
Cash dividends declared
per share $ .17 $ .06 $ - $ .01 $ .08
At April 30:
Total assets $ 161,315 $ 147,108 $ 146,312 $ 141,100 $ 142,173
Long-term debt $ 28,522 $ 27,060 $ 31,849 $ 30,950 $ 38,000
Working capital $ 26,543 $ 29,809 $ 31,601 $ 31,419 $ 38,590
Shareholders'
equity $ 81,401 $ 75,707 $ 75,309 $ 71,976 $ 69,982
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Background
The Company commenced operations forty-seven years ago on
February 11, 1949, with three helicopters. Its primary business was to
transport personnel, parts and equipment to, from, and among offshore
platforms for customers engaged in the domestic oil and gas exploration,
development, and production industry. When the oil and gas industry
expanded internationally, the Company began to focus efforts towards the
international markets.
During the early 1980's and again in the late 1980's, the
price per barrel of oil declined, which, together with increasing U.S.
environmental legislation, contributed to a decline in both the Gulf of
Mexico drilling rig count and the Company's Domestic Oil & Gas operating
revenues. In 1982 the Company operated 455 aircraft with 2,865 employees
and recorded the highest revenues in its history at $ 209 million. However,
by 1984, revenues had fallen to $ 166 million and aircraft and employees
totaled 403 and 2,482, respectively. In an effort to mitigate this impact,
the Company began dedicated aeromedical operations in 1984.
Following the death in 1989 of the Company's founder,
Robert L. Suggs, his wife, Carroll W. Suggs, assumed control of the Company
as Chairman of the Board. Since that time, the Company's focus has been
directed toward diversification of revenues within the helicopter industry.
The Company continued to maintain its leadership position in helicopter
transportation services to the domestic oil and gas industry, while
increasing its competitive position internationally in the oil and gas
industry and domestically in the aeromedical services industry.
In the past six years, as the Company broadened its
revenue base, improved accountability measures have been implemented. The
Company organized into strategic business units: Domestic Oil and Gas,
Aeromedical, International, and Technical Services. Each unit was assigned
to and managed by experienced personnel with full decision-making authority
and accountability. The accountability process was refined through improved
planning, accounting, and control systems, combined with a new reporting
process that provides management with the tools for proactive decisions
using timely and pertinent financial information. During this
implementation, the Company retained critical operational control and the
quality and safety functions centrally. The improved structure and
reporting systems have permitted management to increase the Company's net
earnings through better cost containment and higher fleet utilization.
Today the Company maintains its position as the largest
provider of helicopter transportation services in the Gulf of Mexico.
Providing approximately 51% of all the contracted aircraft in the Gulf of
Mexico, the Company has 196 aircraft dedicated to this market.
Additionally, the Company is the fastest growing provider of aeromedical
services in the U.S. and international initiatives for serving the global
oil and gas industry have shown steady growth. The Company currently
operates 266 aircraft worldwide and has 1,677 employees.
The following discussion of the Company's Results of
Operations and Financial Condition should be read in conjunction with the
Company's consolidated financial statements and the notes thereto included
elsewhere in this Form 10-K.
Results of Operations
Revenues
The Company generates revenues from both ongoing service
contracts with established customers and non-contract flights referred to
as "Specials". Domestic Oil and Gas Program contracts are generally on a
month to month basis and consist of a fixed fee plus an hourly charge for
actual flight time. Specials are customer flights, primarily domestic oil
and gas, provided on an as needed basis that are not provided pursuant to
ongoing contracts and which generally carry higher rates.
International and aeromedical contracts also provide for
fixed and hourly charges, but are generally for longer terms and impose
early cancellation fees to encourage customers to fulfill the contract term
and cover the Company's additional upfront costs in the event of early
termination.
Demand for the Company's Domestic Oil and Gas Programs is influenced
by offshore oil and gas exploration, development, and production activities
in the areas in which it operates, which in turn is affected primarily by
oil and gas prices. The following table reflects the five year trend in the
offshore drilling rig count compared to the Company's domestic oil and gas
revenues:
April April April April April
1996 1995 1994 1993 1992
Active Rigs in U.S. Gulf of Mexico 135 123 125 102 60
Domestic Oil and Gas Revenues
(millions) $128.8 $116.5 $126.1 $132.7 $157.3
Better economic conditions in the Gulf of Mexico caused oil and gas
activity to increase substantially in fiscal 1996. Active rig counts
increased to their highest level in five years. These factors coupled with
an increase in the Company's gulf coast oil & gas market share resulted in
an 11% increase in revenues and an 8% increase in domestic flight hours.
Revenues and domestic flight hours rose to $ 128.8 million and 162,377 in
fiscal 1996 from $ 116.5 million and 150,850 in fiscal 1995, respectively.
The Company's domestic market share increased to 51% from 49% in the current
year.
Management believes that these positive trends will continue and are
in large part attributable to the Company's dedication to safety and
service. Management intends to remain focused on these important aspects
of the Company's business.
The following table reflects the distribution of the Company's revenues by
market area:
Years Ended April 30
1996 1995 1994 1993
Domestic Oil & Gas. . . . 69% 67% 71% 75%
Aeromedical . . . . . . . . . 14 15 1 29
International . . . . . . . . . 9 10 8 7
Technical Services . . . . 8 8 9 9
Fiscal 1996 also saw positive trends in the Company's
Aeromedical Service Programs. Aeromedical revenues rose $ 1.4 million, or
6%, to $ 26.7 million. The increase resulted from the addition of two new
contracts and five additional aircraft bringing the total aeromedical
contracts and aircraft to 14 and 37, respectively.
International revenues decreased by $ .9 million, or 5%, to $ 16
million. International flight hours increased 6% to 21,276 due primarily
to increased oil and gas exploration activity. The flight hour increase was
produced primarily by existing contracts which utilize smaller aircraft with
moderate hourly rates. This increase in hourly revenue was offset primarily
by the cessation of one non-recurring contract with high fixed rates.
Expenses
The Company's management accountability program has resulted in a
reduction of total expense ratios, improved gross margins, and better fleet
utilization. The program has focused management's attention on cost
containment throughout the Company.
The following table highlights the results of the accountability program:
1996 1995 1994 1993
Number of helicopters
owned/leased/operated at year end 261 254 266 268
Fleet utilization . . . . . . . . . 86% 84% 76% 76%
Number of employees at year end 1,677 1,649 1,697 1,838
Operating margin. . . . . . . . . 13% 12% 9% 9%
____________________
Direct expenses increased $ 8.5 million in fiscal 1996. Human
resource costs, including salaries and benefits, increased $ 2.8 million.
Salaries, including overtime, increased $ 1.8 million, or 3%, due primarily
to increased flight activity. Additionally, the Company increased its gain
sharing contribution by $ 1.1 million. Helicopter insurance declined $ 0.5
million primarily as a result of accident free years in 1996 and 1995 which
reduced premiums. Spare parts used increased by $ 4.4 million in fiscal
1996, due primarily to the increase in flight and flight related activity
in the Company's three major market areas. In addition, a $ 1.5 million
environmental provision was recorded in fiscal 1996 versus $ .2 million in
fiscal 1995. This is discussed in further detail under "- Environmental
Matters." The Company's safety program, implemented in 1992, combined with
its health awareness program have contributed significantly to reducing
helicopter and employee insurance costs and worker's compensation claims.
The Company intends to continue these programs.
Selling, general, and administrative expenses for fiscal 1996
increased 16%, or $ 1.6 million. The increase was primarily a result of
consulting fees related to information system upgrades which will be phased
in over the next three years. The Company is upgrading its workorder
system, inventory management system, and various other systems to remain a
leader in technological advances in the industry. Legal and accounting fees
decreased $ 0.6 million to $ 0.9 million in fiscal 1996. The decrease is
due primarily to costs incurred in fiscal 1995 relating to the
reincorporation of the Company from Delaware to Louisiana and the
investigation and preliminary negotiation of strategic acquisitions which
were either not successful or which the Company ultimately determined not
to pursue.
Interest Expense
The Company's borrowing cost remained constant in fiscal 1996. The
average interest rate paid decreased slightly by .28% to 8.16 from 8.44.
The lower interest rate was offset by higher average borrowings in the
fiscal period.
Taxes
PHI's effective tax rate was 39%, 41%, and 40%, respectively, in 1996,
1995, and 1994. Current tax expense as a percent of pre-tax earnings for
the same fiscal periods was 11%, 18% and 19%, respectively. The Company
anticipates that its effective tax rate will remain at approximately 39%.
See Item 8. "Financial Statements and Supplemental Data - Notes to
Consolidated Financial Statements, Note 3."
Earnings
The Company's revenue expansion and accountability programs have
helped produce period to period increases in net earnings of 25% and 55%,
respectively, for the 1996 and 1995 fiscal years. Earnings per share for
the fiscal year ended April 30, 1996 and April 30, 1995 improved 33% and
57%, respectively, compared to the prior year periods.
The improved results are directly related to better economic
conditions in the Gulf of Mexico and expansion and growth in the aeromedical
and international markets. In addition, accountability placed on
management has permitted the Company to improve margins by lowering direct
expenses. Direct expenses as a percentage of operating revenues decreased
from 88% to 87% in fiscal 1996. The Company plans to continue its programs
of diversification and accountability and will continue to search for
opportunities to enhance earnings and shareholder value.
Liquidity and Capital Resources
The Company's 1996 year end cash position declined slightly to $ 1.9
million from $ 2.5 million at fiscal year end 1995.
Working capital in fiscal 1996 declined $ 3.3 million from $ 29.8
million in 1995 to $ 26.5 million. The decline is due primarily to the
decrease in cash on hand and an overall increase in accounts payable and
accrued liabilities.
The Company's primary credit facility consists of a $ 15 million
revolving credit facility available through October 31, 1997 (the "revolving
loan") and a capital loan facility of up to $ 40 million (subject to
compliance with certain collateral coverage ratios) designed to fund the
purchase of additional aircraft (the "term loan"). The term loan currently
functions as a capital equipment revolving line of credit, but with fixed
quarterly principal payments of $ 2 million. On October 31, 1997 it will
convert to a conventional term loan, after which no further borrowings or
reborrowings may be made. After conversion, principal will continue to be
paid in quarterly $ 2 million installments until maturity on October 31,
2002. Both the revolving and term loans bear floating interest rates tied
to the primary lender's prime rate and London InterBank Offered Rates
("LIBOR") chosen by the Company, plus an amount determined periodically
based on the Company's leverage ratio that can range from 0% to 0.5% above
such prime rate and from 1.5% to 2.25% above the applicable LIBOR rate.
Total long-term debt increased $ 1.5 million in fiscal 1996. The
Company's current debt obligations for fiscal 1997 total $ 8.8 million, due
in equal quarterly installments, which the Company intends to pay with cash
flow from operations. Total debt obligation at year end was $37.3 million,
which the Company also plans to satisfy with future cash flow from
operations. As of July 1, 1996, the Company had $ 10.7 million and $ 6.6
million of credit capacity available under its term and revolving credit
facilities, respectively, reflecting the purchase, subsequent to year end,
of six aircraft for $ 4 million. In addition, the Company plans to purchase
a total of twenty- two helicopters in 1997 for a purchase price estimated
to be $ 21 million. These planned purchases are subject to PHI obtaining
customer commitments. Funds available under the Company's term facility
will be utilized to finance these purchases. At April 30, 1996, the Company
was in compliance with the provisions of its loan agreements.
Cash generated from operating activities in 1996 was $ 19.3 million
as compared to $ 14.7 million and $ 16.4 million in fiscal 1995 and 1994,
respectively. The $ 4.6 million increase in fiscal 1996 is primarily
attributable to the decrease in accounts receivable of $ 1.2 million and
increased net earnings of $ 1.3 million. Days sales outstanding decreased
to 55 days in fiscal 1996 from 58 days in fiscal 1995, and receivables
decreased with improved collections.
During fiscal 1996, the Company used its cash flow from operating
activities for $ 21 million in investing activities, primarily for the
purchase of nineteen aircraft for $ 15.2 million, $ 5.1 million in aircraft
capital improvements, and $ 3 million for the purchase of a 49% interest in
Irish Helicopters Limited. Additional cash of $ 1.5 million was provided
through financing activities primarily by term debt to fund the investing
activities and $ 0.6 million in dividend payments.
In response to increased earnings and improved operating cash flow
during the past three years, the Company resumed payment of quarterly
dividends beginning with the second quarter of fiscal 1995. The Board
declared dividends of $ 0.06 per share during fiscal 1995 and $0.17 per
share in fiscal 1996. Three dividends totaling $ 0.12 per share and one
dividend of $0.05 per share were distributed during fiscal 1996 and fiscal
1997, respectively. The Company anticipates that future dividend payments
will be declared provided that the current earnings trend continues and as
allowed by the Company's agreement with its lenders.
The Company believes its cash flow from operations in conjunction with
its credit capacity is sufficient to meet its planned requirements for the
forthcoming year.
New Accounting Pronouncements
The Financial Accounting Standards Board (the FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 121. "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." This statement is effective for fiscal years beginning after December
15, 1995. Management does not believe that this pronouncement will have a
material impact on its fiscal 1997 consolidated financial statements.
The FASB also issued SFAS No. 123. "Accounting for Stock Based
Compensation," effective also for fiscal years beginning after December 15,
1995. The new statement encourages, but does not require, companies to
measure stock-based compensation cost using a fair value method, rather than
the intrinsic value method prescribed by Accounting Principles Board (APB)
opinion No. 25. Companies choosing to continue to measure stock-based
compensation using the intrinsic value method must disclose on a pro forma
basis net earnings and net earnings per share as if the fair value method
were used. Management is currently evaluating the requirements of SFAS No.
123.
Environmental Matters
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.
In the first quarter of fiscal 1996 the Company began an environmental
review at selected domestic bases. Based on this review, known or suspected
fuel contamination has been identified at eight of its bases. Management
now believes it is possible that similar fuel contamination will be found
at additional bases.
During fiscal 1996, initial assessments of the costs to remediate this
contamination were commenced and preliminary estimates of the costs
expected to be incurred at three of the Company's bases were received. The
Company is seeking additional information regarding these preliminary
estimates and further assessments are planned at all other bases at which
known or suspected fuel contamination has been identified. Depending in
part upon the results of these assessments, the Company also anticipates
that it will conduct additional studies at its other bases. Based on the
information currently available to management, an additional provision of
$1,500,000 has been made in the current year. The Company has expensed,
including reserve provisions for environmental costs, $ 1,797,000 for the
current year. The aggregate reserve for environmental related costs, at
April 30, 1996, is $1.7 million. The Company will make additional provisions
in future periods to the extent appropriate as further information regarding
these costs becomes available.
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report
The Board of Directors and Shareholders
Petroleum Helicopters, Inc.:
We have audited the consolidated balance sheets of Petroleum Helicopters,
Inc. and subsidiaries as of April 30, 1996 and 1995, and the related
consolidated statements of earnings, shareholders' equity, and cash flows
for each of the years in the three-year period ended April 30, 1996. 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, 1996 and 1995,
and the results of their operations and their cash flows for each of the
years in the three-year period ended April 30, 1996, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
June 12, 1996
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
April 30, 1996 and 1995
(Thousands of dollars)
Assets 1996 1995
Current assets:
Cash and cash equivalents $ 1,899 $2,506
Accounts receivable - net of allowance:
Trade 27,305 28,655
Investee companies 298 950
Notes and other 1,122 888
Inventory of spare parts and aviation fuel -
at lower of average cost or market 25,947 25,560
Prepaid expenses 1,159 989
Refundable income taxes 737 -
Notes receivable - investee companies 1,166 -
Assets held for sale - 215
______ ______
Total current assets 59,633 59,763
______ ______
Notes receivable 358 -
______ ______
Investments 4,890 1,002
______ ______
Property and equipment, at cost:
Flight equipment 189,956 180,064
Other 22,845 19,752
_______ _______
212,801 199,816
Less accumulated depreciation (116,469) (113,568)
________ ________
96,332 86,248
________ ________
Other 102 95
________ ________
Total assets $ 161,315 $ 147,108
======== ========
(Continued)
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of dollars)
Liabilities and Shareholders' Equity 1996 1995
Current liabilities:
Accounts payable - trade $ 8,209 $5,805
Accrued expenses 10,869 9,419
Accrued vacation pay 4,813 4,897
Income taxes payable - 331
Current portion of long-term debt 8,810 8,755
Other 389 747
______ ______
Total current liabilities 33,090 29,954
______ ______
Long-term debt 28,522 27,060
______ ______
Deferred income taxes 14,966 12,066
______ ______
Other long-term liabilities 3,336 2,321
______ ______
Shareholders' equity:
Voting common stock - par value of $.10;
authorized 12,500,000; issued shares of
2,799,761 and 2,864,760 in 1996 and 1995 280 286
Non-voting common stock - par value of $.10;
authorized 12,500,000; issued shares of 2,276,093
and 2,200,830 in 1996 and 1995 227 220
______ ______
Total common stock 507 506
Additional paid-in capital 10,220 10,118
Retained earnings 70,674 65,083
______ ______
81,401 75,707
Total liabilities and shareholders' ______ ______
equity $ 161,315 $ 147,108
======= =======
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Statements of Earnings
Years ended April 30, 1996, 1995 and 1994
(Thousands of dollars and shares, except per share amounts)
1996 1995 1994
Revenues:
Operating revenues $ 185,865 $ 174,397 $ 178,697
Gain on equipment disposals 1,067 1,091 475
Equity in net earnings (losses) of
investee companies 397 (83) -
_______ _______ _______
187,329 175,405 179,172
_______ _______ _______
Expenses:
Direct expenses 161,807 153,282 162,227
Selling, general and administrative 11,871 10,237 8,715
Interest expense 3,098 3,098 2,676
_______ _______ _______
176,776 166,617 173,618
_______ _______ _______
Earnings before income taxes 10,553 8,788 5,554
Income taxes 4,087 3,606 2,221
_______ _______ _______
Net earnings $ 6,466 $ 5,182 $ 3,333
======= ======= =======
Net earnings per share $ 1.28 $ 0.96 $ 0.61
======= ======= =======
Weighted average common shares
outstanding 5,066 5,409 5,478
======= ======= =======
Dividends declared per common share $ 0.17 $ 0.06 $ -
======= ======= =======
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Thousands of dollars and shares)
Voting
Voting Non-Voting Common Stock Additional
Common Stock Common Stock Held in Treasury Paid-in Retained
Shares Amount Shares Amount Shares Amount Capital Earnings
Balance
April 30, 1993 4,199 $ 350 2,200 $ 183 921 $ 77 $ 11,027 $ 60,493
Net earnings - - - - - - - 3,333
_____ _____ _____ _____ _____ _____ _____ _____
Balance
April 30, 1994 4,199 350 2,200 183 921 77 11,027 63,826
Change in par value - 70 - 37 - 15 (92) -
Purchase ONI shares - - - - 413 42 (824) (3,605)
Retire treasury
stock (1,334) (134) - - (1,334) (134) - -
Other - - 1 - - - 7 -
Net earnings - - - - - - - 5,182
Dividends - - - - - - - (320)
_____ _____ _____ _____ _____ _____ _____ _____
Balance
April 30, 1995 2,865 286 2,201 220 - - 10,118 65,083
Equity adjustment
on translation - - - - - - - (13)
Stock Options
Exercised 10 1 - - - - 99 -
Other (75) (7) 75 7 - - 3 -
Net Earnings - - - - - - - 6,466
Dividends - - - - - - - (862)
_____ _____ _____ _____ _____ _____ _____ _____
Balance
April 30, 1996 2,800 $ 280 2,276 $ 227 - - 10,220 $ 70,674
===== ===== ===== ===== ===== ===== ====== ======
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 1996, 1995 and 1994
(Thousands of dollars)
1996 1995 1994
Operating activities:
Net earnings $ 6,466 $ 5,182 $ 3,333
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation 8,344 8,413 8,573
Deferred income taxes 2,900 2,043 1,138
Gain on equipment disposals (1,067) (1,091) (475)
Equity in net (earnings) losses of
investee companies (397) 83 -
Changes in operating assets
and liabilities:
Decrease (increase)
in accounts receivable 1,217 (3,043) 3,156
Increase in inventory (387) (710) (258)
Decrease (increase) in
prepaid expenses and
refundable income taxes,
and notes receivable (2,080) 653 1,368
Increase (decrease) in
accounts payable -
trade and other accrued expenses 2,646 2,746 (312)
Increase (decrease) in
income taxes payable (325) 331 -
Other 2,032 59 (83)
______ ______ ______
Net cash provided by
operating activities 19,349 14,666 16,440
Investing activities:
Investments (3,303) - -
Purchase of property and equipment (23,808) (20,326) (14,330)
Proceeds from sales of property
and equipment 6,147 12,125 1,672
Other - - (290)
______ ______ ______
Net cash used in investing activities (20,964) (8,201) (12,948)
______ ______ ______
Financing activities:
Proceeds from long-term debt 23,303 13,000 32,780
Payments on long-term debt (21,787) (17,738) (33,011)
Issuance of common stock 100 - -
Purchase of treasury stock - (4,471) -
Dividends paid (608) (320) -
______ ______ ______
Net cash provided (used) in
financing activities 1,008 (9,529) (231)
______ ______ ______
Increase (decrease) in cash and
cash equivalents (607) (3,064) 3,261
Cash and cash equivalents at
beginning of year 2,506 5,570 2,309
______ ______ ______
Cash and cash equivalents at end of year $ 1,899 $ 2,506 $ 5,570
====== ====== ======
See accompanying notes to consolidated financial statements.
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
April 30, 1996, 1995 and 1994
(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
(the Company) after the elimination of all significant
intercompany accounts and transactions. Investments in 20 to
50 percent owned affiliates are accounted for by the equity
method and consist primarily of investments in foreign
affiliates.
(b)Use of Estimates
In preparing the company's financial statements management
makes informed estimates and assumptions that affect the
amounts reported in the financial statements and related
disclosures. Actual results may differ from these estimates.
(c)Cash Equivalents
The Company considers cash equivalents to include demand
deposits and investments with original maturity dates of three
months or less.
(d)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 three 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.
(e) 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.
(f)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 $4,135,000 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.
(g) 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.
(h)Earnings per Common and Common Equivalent Share
Primary earnings per share are computed based on the weighted
average number of shares and dilutive equivalent shares of
common stock (stock options) outstanding during each year
using the treasury stock method.
(i)Reclassifications
Certain reclassifications have been made to the prior years
financial statements in order to conform with the
classifications adopted for reporting in 1996.
(j)Fair Value of Financial Instruments
Fair value of cash, cash equivalents, accounts receivable,
accounts payable and debt approximates book value at April 30,
1996.
(k)New Accounting Pronouncements
The Financial Accounting Standards Board (the FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 121.
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." This statement is
effective for fiscal years beginning after December 15, 1995.
Management does not believe that this pronouncement will have
a material impact on its fiscal 1997 consolidated financial
statements.
The FASB also issued SFAS No. 123. "Accounting for Stock Based
Compensation," effective also for fiscal years beginning after
December 15, 1995. The new statement encourages, but does
not require, companies to measure stock-based compensation
cost using a fair value method, rather than the intrinsic
value method prescribed by Accounting Principles Board (APB)
opinion No. 25. Companies choosing to continue to measure
stock-based compensation using the intrinsic value method must
disclose on a pro forma basis net earnings and net earnings
per share as if the fair value method were used. Management
is currently evaluating the requirements of SFAS No. 123.
(2) Long-Term Debt
1996 1995
(Thousands of dollars)
Secured term loan note due in quarterly
installments of $2,000,000 commencing
January 31, 1991, with interest (April 30,
1996 - 8.2% and April 30, 1995 - 8.4%)
fluctuating with libor and prime $ 25,562 $ 27,790
Secured note due October 31, 1997, under a
revolving credit facility totaling
$15,000,000 with interest (April 30, 1996 -
8.2% and April 30, 1995 - 8.4%) fluctuating
with libor and prime 4,500 -
Secured 10 year promissory notes due in
monthly installments of $107,747
commencing July 9, 1993 with a fixed
interest rate of 7.0% 7,270 8,025
______ ______
37,332 35,815
Less current portion 8,810 8,755
______ ______
Long-term portion $ 28,522 $ 27,060
====== ======
Scheduled maturities of long-term debt are as follows:
(Thousands of dollars)
1997 $ 8,810
1998 8,868
1999 8,931
2000 7,060
2001 1,070
Thereafter 2,593
______
$ 37,332
======
At April 30, 1996, the following assets and their related book
values are pledged as collateral on notes aggregating $37.3 million:
(Thousands of dollars)
Equipment, net of depreciation $ 46,865
Inventory 25,595
Accounts receivable, net 26,144
______
$ 98,604
======
The secured term and revolving loan agreements require the Company
to maintain certain levels of working capital and shareholders'
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, 1996, the Company's working capital
exceeded the amount required by approximately $ .7 million, and
shareholders' equity exceeded the required level by approximately $
5.9 million. Dividends are generally limited to 20% of net
earnings.
At April 30, 1996, the Company was in compliance with the provisions
of its loan agreements.
The secured term and revolving loan agreement permit both prime
rate based and London InterBank Offered Rate ("LIBOR") borrowings at
LIBOR rates plus a floating spread. The spread for LIBOR and prime
rate borrowings will float up or down based on the Company's
performance as determined by a leverage ratio. The spread can range
from 0% to 0.5% above the applicable prime rate and from 1.5% to
2.25% above LIBOR.
Interest paid was $3,351,000, $2,970,000, and $2,136,000 for the
years ended April 30, 1996, 1995 and 1994, respectively.
(3) Income Taxes
Income tax expense for the three years ended April 30, 1996, is
composed of the following:
1996 1995 1994
(Thousands of dollars)
Current:
Federal $ 757 $ 1,234 $ 853
State 344 270 148
Foreign 85 59 82
Deferred - principally Federal 2,901 2,043 1,138
______ ______ ______
$ 4,087 $ 3,606 $ 2,221
====== ====== ======
Deferred income tax expense (benefit) results from the following:
1996 1995 1994
(Thousands of dollars)
Accelerated depreciation $ 1,408 $ 2,564 $ 1,496
Accrued expenses and other liabilities (138) (2,353) (636)
Effect of tax credits 1,631 1,832 278
______ ______ ______
$ 2,901 $ 2,043 $ 1,138
====== ====== ======
Income tax expense as a percentage of pre-tax earnings varies from
the effective Federal statutory rate of 34% as a result of the
following:
Years ended April 30
1996 1995 1994
Amount % Amount % Amount %
(Thousands of dollars, except percentages)
Income taxes at
statutory rate $ 3,588 34 $ 2,988 34 $ 1,888 34
Increase (decrease) in taxes
resulting from:
Equity in net (earnings) losses
of consolidated
investee companies (134) (1) 28 - - -
Effect of state income
taxes 227 2 178 2 98 2
Other items - net 406 4 412 5 235 4
______ ___ ______ ___ ______ ___
$ 4,087 39 $ 3,606 41 $ 2,221 40
====== === ====== === ====== ===
For income tax purposes, the Company had approximately $ 81,000 of
general business tax credit carryforwards. These general business
tax credit carryforwards will expire between 1998 and 2001. The
Company also has approximately $ 564,000 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, 1996 and 1995 are presented below:
1996 1995
(Thousands of dollars)
Deferred tax assets:
Tax credits $ 645 $ 2,276
Vacation accrual 1,774 1,812
Inventory valuation 881 792
Workman's compensation reserve 381 518
Other 2,678 2,423
_____ _____
Total deferred tax assets 6,359 7,821
_____ _____
Deferred tax liabilities:
Tax depreciation in excess of book
depreciation 20,840 19,432
Other 485 455
______ ______
Total deferred tax liabilities 21,325 19,887
______ ______
Net deferred tax liability $ 14,966 $ 12,066
====== ======
No valuation allowance was recorded against the net deferred tax
assets because management believes that the deferred tax assets will
more than likely be realized in full through future operating
results and the reversal of taxable temporary differences.
Income taxes paid were approximately $2,267,000, $1,168,000, and
$470,000 for the years ended April 30, 1996, 1995 and 1994,
respectively.
(4) Employee Benefit Plans
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 $1,616,000, $1,586,000, and
$1,604,000 for the years ended April 30, 1996, 1995 and 1994,
respectively.
Effective September 1, 1994, the Company adopted a Supplemental
Executive Retirement Plan ("SERP"). The nonqualified and unfunded
plan provides senior management with supplemental retirement and
death benefits at age 65. Life insurance policies, of which the
Company is the sole owner and beneficiary, were purchased on
the lives of each of the participants. Supplemental retirement
benefits were based on one-third (1/3) of the participants'
monthly income at the time of adoption. Currently, there are
no SERP provisions for an increase in benefits, partial vesting
or early retirement. The assumed discount rate was 7.5%.
Expenses related to the plan were $ 308,000 for 1996 and $
197,000 for 1995.
During fiscal 1996, the Board of Directors approved an Officer
Deferred Compensation Plan and a Director Deferred Compensation
Plan. Both plans were effective May 31, 1995. The plans permit key
officers and all directors to defer a portion of their compensation.
The plans are nonqualified and unfunded.
(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 Shareholders 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.
Effective May, 1995 the Company's Board of Directors adopted the PHI
1995 Incentive Plan (the "1995 Plan"). The plan was approved at the
Annual Meeting of Shareholders on September 22, 1995. The Company
is authorized to issue a total of 175,000 shares of voting common
stock and 325,000 shares of non-voting common stock under the 1995
Plan. The Compensation Committee of the Board of Directors is
authorized under the 1995 Plan to grant stock options, restricted
stock, stock appreciation rights, performance shares, stock awards
and cash awards. During fiscal 1996, 23,200 and 58,000 non-
qualified stock options for voting and non-voting common stock,
respectively, were granted under the 1995 Plan. The exercise price
of the grants is equal to the fair market value of the underlying
stock at the date of grant. These options will vest on July 31,
1996 only to the extent certain 1996 performance targets are met.
In the event any of the stock options become vested, one-half become
exercisable on July 31, 1996 and one-half become exercisable on July
31, 1997. The stock options expire on May 31, 2005.
A summary of the Plans' activities for the years ended April 30, 1996, 1995,
and 1994 is as follows:
(CAPTION>
1992 Plan Other 1995 Plan
Options Options Options
Total Non-Voting Voting Voting Non-Voting
Balance outstanding at
April 30, 1993 15,000 - 15,000 - -
Options granted at $15.50 87,000 87,000 - - -
Options cancelled (6,000) (6,000) - - -
_______ _______ _______ _______ _______
Balance outstanding at
April 30, 1994 96,000 81,000 15,000 - -
Options cancelled (6,000) (6,000) - - -
_______ _______ _______ _______ _______
Balance outstanding at
April 30, 1995 90,000 75,000 15,000 - -
_______ _______ _______ _______ _______
Options granted at $9.75
(voting) and $8.50
(non-voting) 81,200 - - 23,200 58,000
Options exercised (10,000) - (10,000) - -
_______ _______ _______ _______ _______
Balance outstanding at
April 30, 1996 161,200 75,000 5,000 23,200 58,000
======= ======= ======= ======= =======
Shares exercisable at
April 30, 1994 - - - - -
======= ======= ======= ======= =======
Shares exercisable at
April 30, 1995 30,000 25,000 5,000 - -
======= ======= ======= ======= =======
Shares exercisable at
April 30, 1996 50,000 50,000 - - -
======= ======= ======= ======= =======
Shares available for
future grant at
April 30, 1996 443,800 25,000 - 151,800 267,000
======== ======= ======= ======= =======
(6) Supplemental Cash Flow Information and Financing Activities
In 1996, the Company entered into agreements for the sale and
leaseback of two helicopters. The book values of the equipment
totalling $ 3.5 million were removed from the balance sheet, and the
gains realized on the sale transactions totalling $ 0.3 million were
deferred and are being credited to income as rent expense
adjustments over the lease term. Rentals on these transactions
average $ 0.4 million annually.
In 1994, the Company entered into an agreement to acquire up to 28%
of a corporate joint venture. In 1994 the Company acquired a 13.7%
interest in the corporate joint venture in exchange for a helicopter
and equipment with net values totalling $519,000. At April 30,
1994, the Company had a note receivable from the joint venture which
the Company had the option to convert into an additional 9.3% of
common stock of the corporate joint venture. In 1995 the Company
exercised the option and contributed equipment valued at $191,000 to
acquire an additional 5% of the corporate joint venture.
On July 13, 1995 the Company purchased 49% of Irish Helicopters
Limited (IHL) based in Dublin Ireland for $3 million. IHL operates
five aircraft which are engaged primarily in search and rescue
missions off the Irish Coast.
(7) Shareholders' Equity
In connection with the Company's reincorporation, which was approved
by the shareholders at the Company's September 28, 1994 annual
meeting of shareholders, the par value of the voting common stock
and non-voting common stock was changed from $ .08 1/3 per share to
$ .10 per share.
On February 28, 1995 the Company purchased 413,308 shares of the
Company's common voting stock at market value for $ 4.5 million from
Offshore Navigation, Inc. ("ONI"), an affiliate of the Company.
Prior to the acquisition, these shares represented approximately
12.6% of the Company's outstanding voting common stock. The shares
were placed in the Company's treasury.
Subsequent to the purchase of the ONI shares, all shares of voting
common stock held in treasury were retired.
(8) 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, 1996, as follows:
(Thousands of dollars)
1997 $ 11,079
1998 10,742
1999 10,641
2000 10,425
2001 10,181
Thereafter 14,903
______
$ 67,971
======
Rental expense consisted of the following:
(Thousands of dollars)
(Years ended April 30)
1996 1995 1994
Aircraft $ 12,145 $ 11,364 $ 12,369
Other 1,690 1,745 1,637
______ ______ ______
$ 13,835 $ 13,109 $ 14,006
====== ====== ======
Subsequent to year end, the Company purchased six aircraft for an
aggregate of $ 4 million. In addition, the Company plans to
purchase twenty-two helicopters in 1997. The total purchase price is
estimated to be $ 21 million. These purchases are subject to
obtaining customer commitments.
In the first quarter of fiscal 1996 the Company began an
environmental review at selected domestic bases. Based on this
review, known or suspected fuel contamination has been identified at
eight of its bases. Management now believes it is possible that
similar fuel contamination will be found at additional bases.
During the prior year, initial assessments of the costs to remediate
this contamination were commenced and a preliminary estimate of the
costs expected to be incurred at three of the Company's bases was
received. The Company is seeking additional information regarding
this preliminary estimate, and further assessments are planned at
all other bases at which known or suspected fuel contamination has
been identified. Depending in part upon the results of these
assessments, the Company also anticipates that it will conduct
additional studies at its other bases. Based on the information
currently available to management, an additional provision of
$1,500,000 has been made in the current year. The Company has
expensed, including reserve provisions for environmental costs,
$1,797,000 for the current year. The aggregate reserve for
environmental related costs, at April 30, 1996, is $1.7 million.
The Company will make additional provisions in future periods to the
extent appropriate as further information regarding these costs
becomes available.
A director of the Company serves as Chairman of the Board of Aviall,
Inc., a supplier of parts to the Company. During fiscal 1996, total
purchases from Aviall were $ 6 million. The Company believes that
the prices paid for such parts were representative of that which
would have been paid in an arms length transaction.
The Company is named as a defendant in various legal actions which
have arisen in the ordinary course of its business and have not been
finally adjudicated. The amount, if any, of ultimate liability with
respect to such matters cannot be determined; however, after
consulting with legal counsel, the Company has established accruals
which it believes adequately provide for the settlement of such
litigation which have not had a material effect on the Company's
financial condition.
(9) Supplementary Data - Quarterly Financial Data (Unaudited)
The summarized quarterly results of operations for the years ended
April 30,1996 and 1995 (in thousands of dollars, except per share data)
are as follows:
Quarter Ended
July 31, October 31, January 31, April 30,
1995 1995 1996 1996
Revenues $ 46,710 $ 48,418 $ 45,712 $ 46,489
Gross profit $ 5,307 $ 6,406 $ 5,644 $ 6,701
Net earnings $ 1,391 $ 1,934 $ 1,339 $ 1,802
Net earnings per share $ .27 $ .39 $ .26 $ .36
Quarter Ended
July 31, October 31, January 31, April 30,
1994 1994 1995 1995
Revenues $ 44,390 $ 45,045 $ 41,903 $ 44,067
Gross profit $ 4,307 $ 5,574 $ 5,131 $ 6,103
Net earnings $ 1,161 $ 1,455 $ 810 $ 1,756
Net earnings per share $ .21 $ .27 $ .15 $ .33
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
There were no disagreements between the Company and its independent
certified public accountants on accounting and financial disclosure matters.
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
1996 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 1996 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 1996 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 1996 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' Report
Consolidated Balance Sheets at April 30, 1996 and 1995
Consolidated Statements of Earnings for each of the years in
the three year period ended April 30, 1996
Consolidated Statements of Shareholders' Equity for each of
the years in the three year period ended April 30, 1996
Consolidated Statements of Cash Flows for each of the years
in the three year period ended April 30, 1996
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
Schedules 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.
3. Exhibits
3.1 (i) Article of Incorporation of the Company
(incorported) by reference to Exhibibt No.
3.1(i) to PHI's Reporton Form 10-Q for the
quarterly period ended January 31, 1996.
(ii) By-laws of the Company (incorporated by
reference to Exhibit No. 3.1(ii) to PHI's
Report on Form 10-Q for the quarterly period
ended January 31, 1996).
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 (i) 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, 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).
(ii) First Amendment to Amended and Restated Loan
Agreement, dated as of October 31, 1993
(incorporated by reference to Exhibit No.
10.4 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(iii) Second Amendment to Amended and Restated Loan
Agreement, dated as of April 15, 1994
(incorporated by 10.5 to PHI's Report on Form
10-Q for the quarterly period ended January
31, 1995).
(iv) Third Amendment to Amended and Restated Loan
Agreement, dated as of July 31, 1994
(incorporated by reference to Exhibit No.
10.6 to PHI's Report on Form 10-Q or the
quarterly period ended January 31, 1995).
(v) Fourth Amendment and Limited Waiver to
Amended and Restated Loan Agreement, dated as
of October 25, 1994 (incorporated by
reference to Exhibit No. 10.7 to PHI's Report
on Form 10-Q for the quarterly period ended
January 31, 1995).
(vi) Fifth Amendment to Amended and Restated Loan
Agreement, dated as of October 31, 1994
(incorporated by reference to Exhibit No.
10.8 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(vii) Sixth Amendment to Amended and Restated Loan
Agreement, dated as of February 27, 1995.
(viii) Seventh Amendment to Amended and Restated
Loan Agreement, dated as of October 31, 1995.
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 shareholders 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 Amended and Restated Petroleum Helicopters, Inc.
1995 Incentive Compensation Plan adopted by PHI's
Board effective July 11, 1995 and approved by the
shareholders of PHI on September 22, 1995.
10.13 Form of Non-Qualified Stock Option Agreement under
the Petroleum Helicopters, Inc. 1995 Incentive
Compensation Plan between PHI and certain of its
key employees.
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 LLP
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company
during the fourth quarter of fiscal 1996.
(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 subsidiary,
would not constitute a significant subsidiary.
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
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/_________________________ Chairman of the Board,
Carroll W. Suggs Chief Executive Officer
and Director (Principal
Executive Officer)
/s/ _________________________ Vice President and
John H. Untereker Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/_________________________ Director
Leonard M. Horner
/s/ _________________________ Director
Robert G. Lambert
357\60106\013
EXHIBITS
3.1 (i) Articles of Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1(i) to PHI's Report on Form 10-Q
for the quarterly period ended October 31, 1994).
(ii) By-laws of the Company (incorporated by reference to Exhibit
No. 3.1(ii) to PHI's Report on Form 10-Q for the quarterly
period ended January 31, 1996).
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(i)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 PHI's Report on Form 10-K dated April 30, 1993).
(ii) First Amendment to Amended and Restated Loan Agreement,
dated as of October 31,1993 (incorporated by reference
to Exhibit No. 10.4 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(iii) Second Amendment to Amended and Restated Loan Agreement,
dated as of April 15, 1994 (incorporated by reference to
Exhibit No. 10.5 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(iv) Third Amendment to Amended and Restated Loan Agreement,
dated as of July 31, 1994 (incorporated by reference to
Exhibit No. 10.6 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(v) Fourth Amendment and Limited Waiver to Amended and
Restated Loan Agreement, dated as of October 25, 1994
(incorporated by reference to Exhibit No. 10.7 to PHI's
Report on Form 10-Q for the quarterly period ended January
31, 1995).
(vi) Fifth Amendment to Amended and Restated Loan Agreement,
dated as of October 31, 1994 (incorporated by reference
to Exhibit No. 10.8 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(vii) Sixth Amendment to Amended and Restated Loan Agreement,
dated as of February 27, 1995.
(viii) Seventh Amendment to Amended and Restated Loan
Agreement, dated as of October 31, 1995.
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
shareholders 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 Amended and Restated Petroleum Helicopters, Inc. 1995
Incentive Compensation Plan adopted by PHI's Board
effective July 11, 1995 and approved by the shareholders
of PHI on September 22, 1995.
10.13 Form of Non-Qualified Stock Option Agreement under the
Petroleum Helicopters, Inc. 1995 Incentive Compensation
Plan between PHI and certain of its key employees.
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 LLP
Consent of Independent Auditors
The Board of Directors
Petroleum Helicopters, Inc.:
We consent to incorporation by reference in registration statements No. 33-
51617 on Form S-8 and No. 333-02025 on Form S-8 of Petroleum Helicopters,
Inc. of our report dated June 12, 1996, relating to the consolidated balance
sheets of Petroleum Helicopters, Inc. and subsidiaries as of April 30, 1996,
and 1995, and the related consolidated statements of earnings, shareholders'
equity, and cash flows for each of the years in the three-year period ended
April 30, 1996, which report appears in the April 30, 1996 annual report on
Form 10-K of Petroleum Helicopters, Inc.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
July 22, 1996