-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AkIc6QucOc2vFnqQBhSX7IHbJ1A55QM1+zl677YLKQiqtrz72rmwe8JfSjdqw6tn CyRSp/A9XbRm/h+sMmErSw== 0000350403-94-000006.txt : 19940801 0000350403-94-000006.hdr.sgml : 19940801 ACCESSION NUMBER: 0000350403-94-000006 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940430 FILED AS OF DATE: 19940728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETROLEUM HELICOPTERS INC CENTRAL INDEX KEY: 0000350403 STANDARD INDUSTRIAL CLASSIFICATION: 4522 IRS NUMBER: 720395707 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09827 FILM NUMBER: 94540614 BUSINESS ADDRESS: STREET 1: 113 BORMAN DRIVE STREET 2: P O BOX 23502 CITY: LAFAYETTE STATE: LA ZIP: 70508 BUSINESS PHONE: 5047336790 MAIL ADDRESS: STREET 1: 113 BORMAN DRIVE CITY: LAFAYETTE STATE: LA ZIP: 70508 10-K 1 FORM 10-K 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 EX-10 2 EXHIBIT 10 Exhibit 10.12 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT, dated as of July 15, 1994, is by and among Rocky Mountain Helicopters, Inc., RMH Aerologging, Inc., Western Helicopters, Inc., RMH Aeromedical, Inc., American Eurocopter Corporation and Petroleum Helicopters, Inc. (the "Operator"). In consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties hereby agree as follows. SECTION 1. DEFINITIONS 1.1 Defined Terms. For all purposes of this Agreement, except as otherwise expressly provided herein, each of the following terms shall have the meanings set forth below: "Accounts Receivable" means the rights of any of the Debtors to payment for services rendered by the Debtors prior to the Effective Date relating to the EMS Business as reflected on the billing records of the Debtors. "Active Employee" has the meaning set forth in subsection 6.8. "Adjustment Certificate" has the meaning set forth in subsection 2.3. "Administrative Claim" means a Claim for payment of any administrative expense of the Chapter 11 Cases entitled to priority under Sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, any actual and necessary expenses incurred after the Petition Date of preserving, maintaining or operating each Debtor's estate and of operating each Debtor's business, including any loans or other advances to the Debtors, any Fee Claim, and any fees or charges assessed against the Debtors' estates under 28 U.S.C. Section 1930. "Administrative Claim Application" means an application to the Bankruptcy Court of any Person for the allowance of an Administrative Claim to the extent such application is required pursuant to the terms of the Plan. "AEC" means American Eurocopter Corporation. "AEC Lease" means one of the five leases in effect on the Petition Date pursuant to which AEC, as Lessor, leases EMS Aircraft to one of the Debtors. "Affiliate" means any "affiliate," "insider" or "relative" as defined in Sections 101(2), (31) and (45) of the Bankruptcy Code. "Agreement" means this Asset Purchase Agreement by and among the Parties. "Aircraft Equity" has the meaning set forth in subsection 9.2. "Allowed Claim" means any Claim (a) proof of which was timely and properly filed (or deemed filed under applicable law or by order of the Court), or that was listed by the Debtors on their schedules filed under Section 521(1) of the Bankruptcy Code as liquidated in amount and not disputed or contingent, and, in any case, as to which (i) no objection to the allowance thereof has been interposed by a party in interest entitled to do so on or prior to the sixtieth (60th) day after the Effective Date or (ii) any objection has been determined by a Final Order to the extent such objection is determined in favor of the holder of the Claim, (b) based on an Administrative Claim Application to the extent such application is approved by a Final Order, (c) that is an Ordinary Course Administrative Claim, or (d) allowed under the Plan or by a Final Order. "Allowed EMS Secured Claim" means an EMS Secured Claim that (a) pursuant to Section 506(a) of the Bankruptcy Code is determined by a Final Order, not to be an Unsecured Claim, and (b) is an Allowed Claim. "Allowed Secured Claim" means a Secured Claim that (a) pursuant to Section 506(a) of the Bankruptcy Code is determined by a Final Order not to be an Unsecured Claim, and (b) is an Allowed Claim. "Allowed Unsecured Claim" means an Unsecured Claim that is an Allowed Claim. "Application" has the meaning set forth in subsection 6.1. "Assets" means all property and related rights and interests of the Debtors or of the Debtors' estates immediately prior to the occurrence of the Effective Date, including, without limitation, any proceeds, products, offspring, rents or profits thereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, Section 101 et. seq., Title 11, United States Code, as amended from time to time. "Bankruptcy Court" means The United States Bankruptcy Court for the District of Utah, or such other court as may have jurisdiction over the Chapter 11 Cases or any proceedings arising therein or related thereto. "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure and local rules applicable to cases pending before the Bankruptcy Court, as the same may from time to time be in effect and applicable to proceedings under the Plan. "Business Day" means Monday through Friday, but excluding any legal holiday listed in Bankruptcy Rule 9006(a). "Cash Purchase Price" has the meaning set forth in subsection 2.3. "Chapter 11 Cases" means the cases commenced by the Debtors pursuant to Chapter 11 of the Bankruptcy Code on the Petition Date and pending in the Bankruptcy Court as Bankruptcy Case Nos. 93C-25447 through 93C-25450. "CJI" means Corporate Jets, Inc., a Pennsylvania corporation. "Claim" means any right to payment or performance of any obligation from any of the Debtors that arose on or before the Confirmation Date, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, disputed, undisputed, secured, unsecured, matured, unmatured, equitable or legal, including, without limitation, any right that arose on or before the Confirmation Date to an equitable remedy for breach of performance if such breach gives rise to a right of payment from a Debtor, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. "Closing" has the meaning set forth in subsection 8.1. "Collection Period" has the meaning set forth in subsection 6.9. "Confirmation Date" means the date on which the Confirmation Order is entered by the Bankruptcy Court. "Confirmation Order" means the order of the Bankruptcy Court confirming the Plan and approving the transactions contemplated therein and herein. "Contested Claim" means any Claim as to which any of the Debtors, the Creditors' Committee or any other Person has timely interposed an objection in accordance with the Bankruptcy Code and the Bankruptcy Rules, the Plan or orders of the Bankruptcy Court, which objection has not been withdrawn or determined by a Final Order. "Contract" means any contract, agreement, lease, license, commitment or instrument, including any purchase order, for any sale, lease or other disposition of goods or the rendering of services with respect to the Assets, whether by or to any Debtor. "Creditor" means any Person that is the holder of a Claim. "Creditors' Committee" means the Official Committee of Unsecured Creditors appointed in the Chapter 11 Cases by the Office of the United States Trustee for the District of Utah pursuant to Section 1102 of the Bankruptcy Code. "DCC" means Deutsche Credit Corporation. "DCC Appeal" means the bankruptcy appeal styled Deutsche Credit Corporation, DRL Enterprises, Inc., MDFC Equipment Leasing Corporation, and State Street Bank and Trust Company v. Rocky Mountain Helicopters, Inc., RMH Aerologging, Inc., Western Helicopters, Inc., and RMH Aeromedical, Inc., Case No. 94CV-323-B, pending before the United States District Court for the District of Utah, Central Division (Judge Dee V. Benson). "DCC Lease" means one of the twenty-seven leases in effect on the Petition Date pursuant to which one of DCC, DRL Leasing, Inc., State Street Bank and Trust Company, or MDFC Equipment Leasing Corporation, as Lessor, leases EMS Aircraft to one of the Debtors. "Debtors" means collectively Rocky Mountain Helicopters, Inc., a Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a California corporation, and RMH Aeromedical, Inc., a Utah corporation, and each individually a Debtor, both prior to the Petition Date and during the period when the Debtors act or acted as debtors in possession in the Chapter 11 case. "Disallowed Claim" means a Claim (a) to the extent that such Claim was (i) not listed by any of the Debtors on their schedules filed pursuant to Section 521(1) of the Bankruptcy Code or listed on such schedules as disputed, contingent or unliquidated, and (ii) as to which no proof of claim was timely filed in accordance with the Bankruptcy Code and the Bankruptcy Rules or order of the Bankruptcy Court, or (b) which was or is disallowed by either (i) a Final Order, or (ii) the consent of the Creditor holding such Claim. "DOJ" means the U.S. Department of Justice. "Effective Date" has the meaning set forth in subsection 8.1. "EMS Aircraft" means the helicopters specified on Schedule I hereto directly applicable to the EMS Contracts that have been designated by an "x" on Schedule II as being acquired by the operator. "EMS Assets" means the EMS Aircraft, EMS Contracts, EMS Leases, EMS Other Property and FAA Certificate. "EMS Asset Purchase Agreements" means the asset purchase agreements among the Debtors, AEC and each of PHI, CJI and KHC pursuant to which certain Assets used in connection with, or related to, the Debtors' operation of the EMS Business shall be transferred to PHI, CJI or KHC. "EMS Business" means the emergency medical service business of the Debtors related to the EMS Assets. "EMS Contracts" means the contracts specified on Schedule II hereto that have been designated by an "x" as being acquired by the Operator except to the extent excluded pursuant to subsection 6.1. "EMS Contract Cure Amount" means the amount required to be paid to cure defaults and otherwise to comply with the requirements of Section 365(b) of the Bankruptcy Code with respect to each EMS Contract and EMS Lease to be assumed by a Debtor and assigned to the Operator pursuant to this Agreement and the Plan. "EMS Leases" means the leases applicable to the EMS Aircraft except to the extent any such lease is excluded pursuant to subsection 6.1. "EMS Other Property" means the other property specified on Schedule I hereto. "EMS Secured Claim" means a Secured Claim to the extent purportedly secured by an EMS Asset, but excluding any EMS Lease. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "FAA" means the Federal Aviation Administration. "FAA Certificate" means the operating certificate issued to the Debtors by the FAA under Part 135 of the Federal Aviation Regulations 14 C.F.R. Section 135. "Fee Claim" means a Claim under Section 330, 331 or 503 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses in the Chapter 11 Cases. "Final Fee Application" means a final application of a Professional Person under Sections 330 or 503 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses in the Chapter 11 Cases. "Final Order" means an order or a judgment of the Bankruptcy Court as entered on the docket (a) that has not been reversed, stayed, modified or amended, (b) as to which the time to appeal or seek review or rehearing has expired and as to which no appeal or petition for certiorari, review or rehearing is pending, and (c) that shall have become final and nonappealable in accordance with applicable law. "FTC" means the Federal Trade Commission. "Governmental Entity" means any court or tribunal in any jurisdiction (domestic or foreign) or any public, governmental, legislative or regulatory body, agency, department, commission, board, bureau, or other authority or instrumentality (domestic or foreign), including, without limitation, the DOJ, FAA and FTC. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "HSR Notification" means the notification and report forms required to be filed pursuant to the HSR Act. "IER" means the Individual Equipment Record. "KHC" means Keystone Helicopter Corporation, a Pennsylvania corporation. "Lien" means any mortgage, pledge, lien, encumbrance, charge, option, deed of trust, security interest, claim, restriction, easement, title defect or any other encumbrance of any type whatsoever, whether imposed by law, contract or otherwise. "Liquidating Trust" means the trust to be established pursuant to Section 4.6(a) of the Plan. "Liquidating Trustee" means the Person designated by the Creditors' Committee on or before the Effective Date to act as trustee of the Liquidating Trust. "Operator" has the meaning set forth in the first paragraph of this Agreement. "Ordinary Course Administrative Claim" means a Claim for goods delivered or services rendered to any of the Debtors in the ordinary course of business of any Debtor, from and after the Petition Date. "Parties" means collectively, the Debtors, AEC and the Operator. "Person" means any individual, corporation, partnership, limited liability company, trust (including any beneficiary thereof), incorporated or unincorporated association, joint venture, joint stock company, unincorporated organization, Governmental Entity or other entity. "Petition Date" means October 13, 1993. "PHI" means Petroleum Helicopters, Inc., a Delaware corporation. "Plan" means the Liquidating Plan of Reorganization proposed by AEC in the Chapter 11 Cases, either in its present form or as it may be amended or modified from time to time in accordance with the Bankruptcy Code or the terms thereof. "Priority Claim" means any Claim, other than an Administrative Claim or a Tax Claim, entitled to priority under Section 507(a) of the Bankruptcy Code. "Purchase Price" has the meaning set forth in subsection 2.3. "Secured Claim" means a Claim of a Creditor arising on or before the Petition Date that is purported to be secured by a Lien on any Asset of the Debtor, except to the extent that the Claim is a Disallowed Claim, and excluding any EMS Secured Claim and Washington Square Capital Claim. "Tax Claim" means any Claim that, if allowed, would be entitled to priority under Section 507(a)(7) of the Bankruptcy Code. "Transactions" means all of the transactions contemplated by this Agreement, including the purchase and sale of the EMS Assets. "Unsecured Claim" means an unsecured Claim that is not (a) an Administrative Claim, (b) a Priority Claim or (c) a Tax Claim. "Washington Square Capital Claim" means any Claim of Washington Square Capital, Inc. against any of the Debtors, including Claims arising under (i) the Loan and Security Agreement dated as of August 24, 1987, (ii) the Bankruptcy Court's Order Authorizing Use of Cash Collateral During First Extended Period dated February 11, 1994, and (iii) the Bankruptcy Court's Order Authorizing Use of Cash Collateral During Second Extended Period dated June 14, 1994. 1.2 Singular and Plural. Defined terms in this Agreement shall also mean in the singular number the plural, and in the plural number the singular. 1.3 Capitalized Terms. In addition to such terms as are defined in subsection 1.1, any other capitalized term appearing herein shall have the meaning ascribed to it in the section or subsection in which it is defined. SECTION 2. SALE AND PURCHASE OF ASSETS 1 Purchase and Sale of Assets. On the terms and subject to the conditions of this Agreement, on the Effective Date, the Debtors shall sell, transfer, assign, convey and deliver to the Operator, and the Operator shall purchase from the Debtors, the EMS Assets free and clear of any and all Liens, Claims, encumbrances, and other claims or interests of any nature whatsoever, except for Allowed EMS Secured Claims. 2 Assumption of Liabilities and Obligations. Neither the Operator nor AEC assumes or agrees to pay, perform or otherwise be responsible for any Claims, debts, liabilities, Contracts, commitments, obligations, losses, fines, costs, deficiencies or damages of any of the Debtors, whether absolute, accrued, contingent, conditional or otherwise, whether or not resulting from third party claims, whether or not arising or accruing before the Effective Date, and whether or not associated with the EMS Assets or the EMS Business, including, without limitation, obligations and liabilities relating to the EMS Contract Cure Amounts (except in the case of AEC, to the extent provided in Section 6.1(a) of the Plan), taxes, breach of any Contract, or breach of warranty relating thereto, operation of any EMS Aircraft, any product liability, any employee compensation, collective bargaining agreements, pension, profit-sharing, vacation, health insurance, disability insurance or other "employee welfare benefit plan" or "employee pension benefit plan" as those terms are defined in Sections 3(1) and 3(3) of ERISA, and worker's compensation; except that on the Effective Date the Operator shall, on the terms and subject to the conditions of this Agreement, assume, pay, discharge and perform (i) all obligations and liabilities under each EMS Contract and EMS Lease insofar as they arise or accrue on or after the Effective Date or which by the terms thereof are to be performed, observed, paid or discharged after the Effective Date and in either case only to the extent allowed by the Bankruptcy Court pursuant to subsection 6.1 of this Agreement; (ii) all Allowed EMS Secured Claims; and (iii) all obligations and liabilities arising out of events occurring after the Effective Date related to the ownership of the EMS Assets after the Effective Date; except to the extent any such duty or obligation accrues or arises as a result of a breach by the Debtors of any representation, warranty, covenant or agreement contained herein or in the Plan. 3 Purchase Price. (a) In consideration of the Debtors' sale of the EMS Assets to the Operator on the Effective Date, (i) AEC shall (A) pay to the Liquidating Trustee for deposit in the Liquidating Trust the aggregate sum of $2,000,000, which shall represent the total cash consideration to be paid to the Debtors pursuant to all EMS Asset Purchase Agreements and which amount may be adjusted as provided in this subsection (the "Cash Purchase Price"), (B) pay the EMS Contract Cure Amount with respect to the EMS Leases for the period ending on the first to occur of the Effective Date or September 30, 1994, as more fully described in Section 4.1 of the Plan, and (C) release and discharge or cause the release and discharge of the Debtors from and against the claims set forth on Schedule III; and (ii) the Operator shall assume, pay, discharge and perform the Allowed EMS Secured Claims and the other obligations and liabilities described in subsection 2.2 of this Agreement (collectively, the "Purchase Price"). (b) The Cash Purchase Price shall be adjusted as necessary to reflect all prepaid and deferred revenues and expenses arising from the EMS Assets and the conduct of the EMS Business, which shall be recorded as of the Effective Date in accordance with generally accepted accounting principles and prorated between the Debtors and the Operator so that the Debtors shall receive the benefit of all revenues and all refunds and deposits held by third parties and be responsible for all expenses, costs and obligations allocable to the conduct of the EMS Business and relating to the EMS Assets for the period prior to the Effective Date and the Operator shall receive the benefit of all revenues and be responsible for all expenses, costs and obligations allocable to the conduct of the EMS Business and relating to the EMS Assets for the period after the Effective Date. (c) At least five Business Days prior to the Effective Date, AEC and the Operator shall deliver to the Debtors and the Creditors' Committee a certificate (the "Adjustment Certificate") setting forth the amount of any Cash Purchase Price adjustments necessary to reflect the prorations described in subsection 2.3(b). Prior to the Effective Date, the Debtors and the Creditors' Committee may notify AEC and the Operator in writing of any objections that it may have to the Adjustment Certificate. If no written objection is raised prior to the Effective Date, the Debtors shall certify the Adjustment Certificate on the Effective Date and the Cash Purchase Price paid to the Liquidating Trustee on the Effective Date shall conclusively be deemed to have been agreed upon by the Parties and shall be final, binding and conclusive with respect to all Parties and shall not be subject to judicial review. If, on the other hand, the Debtors or the Creditors' Committee give timely notice of their objections to the Adjustment Certificate, the Parties shall attempt to resolve any disputed adjustments by negotiating in good faith and attempting to agree in writing as to the actual amount of the adjustments. If the Parties are unable to agree, then the portion of the Cash Purchase Price representing the disputed amount shall be placed in escrow on the Effective Date and the Parties shall submit the disputed matters to the Bankruptcy Court for resolution. Upon the Bankruptcy Court's final determination of the actual amount of the disputed adjustments, the proceeds in escrow shall be released to the appropriate Party or Parties in amounts as directed by the Bankruptcy Court. SECTION 3. REPRESENTATIONS AND WARRANTIES OF DEBTORS The Debtors hereby represent and warrant as of the Effective Date to AEC and the Operator as follows: 1 EMS Aircraft. (a) The Debtors either own or have a valid leasehold interest in each EMS Aircraft. (b) Each EMS Aircraft meets (i) the IER noted in its EMS Lease or EMS Contract and (ii) the FAA 135 airworthiness criteria. (c) All of the EMS Aircraft, in the aggregate, shall have been maintained to aircraft maintenance conditions of at least fifty (50%) percent time/life remaining. 2 EMS Contracts and EMS Leases. Each EMS Contract and EMS Lease shall be validly assumed by the Debtor and assigned to the Operator on the Effective Date and all EMS Contract Cure Amounts shall be paid or adequately reserved by the Debtor or the Liquidating Trustee as of the Effective Date (or by AEC to the limited extent provided in Section 4.1(a) of the Plan). Each EMS Contract and EMS Lease is in full force and effect and enforceable in accordance with its terms and other than defaults that will be cured by payment by the Debtor (or by AEC to the limited extent provided in Section 6.1(a) of the Plan) of the EMS Contract Cure Amounts, there exists no default or event of default or event, occurrence, condition or act that, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder. Other than failures to make payments that will be cured by payment of the EMS Contract Cure Amounts, none of the Debtors has violated any of the terms or conditions of any EMS Contract or EMS Lease and all of the covenants to be performed by any other party to any EMS Contract or EMS Lease have been fully performed. 3 EMS Other Property. The Debtors are the sole and exclusive record owners of all of the EMS Other Property. 4 Environmental Matters. The Debtors are and have been in compliance with, in all material respects, and there has been no violation of, any laws or regulations with respect to pollution or protection of the environment arising out of the Debtors' past or present ownership or use of the EMS Assets or in connection with the conduct of the EMS Business. There is no pending or threatened lawsuit or administrative proceeding before any Governmental Entity against the Debtors with respect to environmental compliance, control or liability relating to the EMS Assets or EMS Business and the Debtors have no knowledge of any facts or circumstances that could form the basis of a claim, citation or allegation against any of the Debtors for a violation of, or alleging liability under, any environmental laws. No tank for the storage of hazardous substances or wastes or petroleum products is located on or under any EMS Asset other than on EMS Aircraft, and no Debtor has any knowledge of the existence of any liabilities or potential liabilities against any Debtor associated with any such tank located on or under any property that is not an EMS Asset. 5 Employment Relations and Benefits. (a) There is no labor union that claims to represent the employees of any Debtor and no collective bargaining agreement currently being negotiated by any Debtor with respect to its employees. (b) None of the Debtors maintains nor has ever maintained any employee benefit plan that is a multi- employer plan as defined in Section 3(37) of ERISA or a plan under Title IV of ERISA. 6 Insurance. The Debtors maintain in full force and effect fire, comprehensive general liability, aircraft liability, product liability, aircraft replacement and hull, helipad, workers' compensation, and other insurance policies that, with respect to their amounts and types of coverage, are adequate to insure fully against risks to which the EMS Assets are normally exposed in the operation of the EMS Business and comply with all insurance maintenance requirements in the EMS Contracts and EMS Leases. All premiums payable under such policies have been paid in full, no notice of cancellation of any such policy has been received, and there is no existing default or event that, with the giving of notice or lapse of time or both, would constitute a default thereunder. There are no claims in existence or pending under such policies and no circumstances likely to give rise to any such claim. 7 Ability to Conduct the Business. Except as contemplated by the Plan, there is no Contract, or other agreement or arrangement of any kind, nor any judgment, order, writ, injunction or decree that by its terms prevents or would reasonably be expected to prevent the use by the Operator of the EMS Assets or the conduct by the Operator of EMS Business after the Effective Date. 8 No Changes Prior to Effective Date. During the period from the date hereof to and including the Effective Date, the EMS Business has been conducted in the ordinary course of business consistent with past practice and there has not been: (a) any event, occurrence, development or state of circumstances or facts that has had or could reasonably be expected to result in a material adverse effect on the EMS Business or EMS Assets taken as a whole; (b) any creation or other incurrence of any Lien on any of the EMS Assets except for the Allowed EMS Secured Claims; (c) any sale, transfer, lease or other disposition of any EMS Assets; (d) any transaction or any contract or agreement entered into, by any of the Debtors relating to the EMS Business or EMS Assets (including the acquisition or disposition of any EMS Assets) other than transactions and commitments in the ordinary course of business consistent with past practice, and the EMS Asset Purchase Agreements; (e) any damage, destruction, or casualty loss, whether or not covered by insurance, to any of the EMS Assets that has or could reasonably be expected to result in a material adverse effect to the EMS Business; or (f) any agreement, whether or not in writing, to do any of the foregoing. 9 "As is, Where is" Sale. Except as expressly provided herein, no representations or warranties, either expressed or implied, are made with respect to the EMS Assets, including, without limitation, any implied or expressed warranty of merchantability. Except as expressly provided herein, the EMS Assets shall be sold on an "as is, where is" basis, and the Operator shall accept delivery of the EMS Assets in such condition. SECTION 4. REPRESENTATIONS AND WARRANTIES OF AEC AEC hereby represents and warrants to the Debtors and the Operator as follows: 1 Existence and Good Standing. AEC is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, with all requisite corporate power and authority to own its property and to carry on its business as it is now being conducted. 2 Authorization. AEC has full corporate power and authority to execute and deliver this Agreement and all instruments to be delivered by it hereunder and to consummate the Transactions and AEC has taken all requisite corporate action to execute, deliver and perform this Agreement. 3 Enforceable Agreement. This Agreement and each instrument to be delivered hereunder is, or upon execution by each party thereto will be, a legal, valid and binding obligation of AEC, enforceable against it in accordance with its terms. This Agreement shall, upon execution by AEC and the Operator, be a legal, valid and binding obligation of AEC, enforceable against it by the Operator in accordance with its terms. Neither the execution, delivery nor performance of this Agreement will (a) (i) violate, conflict with, or result in a breach of any provisions of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination of or accelerate the performance required by, or (iv) result in the creation of any adverse claim against any of its properties or assets under, any of the provisions of the articles of incorporation or by-laws of AEC or any note, lease, license, agreement or other instrument or obligation to which it is a party, or by which it or its assets are bound; (b) violate any applicable law of any Governmental Entity to which AEC is subject or by which it is bound; or (c) require the approval, consent or authorization of, or the making of the any declaration, filing or registration with, any Governmental Entity or any third party that transacts business with AEC, except as provided herein. 4 No Other Representations. Except as expressly set forth in this Section, AEC makes no other representation or warranty of any kind in connection with or related to the provisions of this Agreement or the Transactions. SECTION 5. REPRESENTATIONS AND WARRANTIES OF OPERATOR The Operator hereby represents and warrants to the Debtors and AEC as follows: 1 Existence and Good Standing. The Operator is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, with all requisite corporate power and authority to own its property and to carry on its business as it is now being conducted. 2 Authorization. The Operator has full corporate power and authority to execute and deliver this Agreement and all instruments to be delivered by it hereunder and to consummate the Transactions and the Operator has taken all requisite corporate action to execute, deliver and perform this Agreement. 3 Enforceable Agreement. This Agreement and each instrument to be delivered hereunder is, or upon execution by each party thereto will be, a legal, valid and binding obligation of the Operator, enforceable against it in accordance with its terms. This Agreement shall, upon execution by AEC and the Operator, be a legal, valid and binding obligation of the Operator, enforceable against it by AEC in accordance with its terms. Neither the execution, delivery nor performance of this Agreement will (a) (i) violate, conflict with, or result in a breach of any provisions of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination of or accelerate the performance required by, or (iv) result in the creation of any adverse claim against any of its properties or assets under, any of the provisions of the articles of incorporation or by-laws of the Operator or any note, lease, license, agreement or other instrument or obligation to which it is a party, or by which it or its assets are bound; (b) violate any applicable law of any Governmental Entity to which the Operator is subject or by which it is bound; or (c) require the approval, consent or authorization of, or the making of the any declaration, filing or registration with, any Governmental Entity or any third party that transacts business with the Operator, except as provided herein. 4 No Other Representations. Except as expressly set forth in this Section, the Operator makes no other representation or warranty of any kind in connection with or related to the provisions of this Agreement or the Transactions. SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES 1 EMS Contracts and EMS Leases. (a) Within twenty days after the Confirmation Date, the Operator shall, in accordance with Section 6.1 of the Plan, file an application for assumption and assignment (the "Application") and any other appropriate pleadings with the Bankruptcy Court, in the name of the appropriate Debtor, for the Debtors to assume and to assign to the Operator each EMS Contract and EMS Lease except any EMS Contract or EMS Lease excluded by AEC and the Operator. Except to the extent provided in Section 4.1 of the Plan, the Debtors shall bear the entire cost of all such assignments, including without limitation, the payment of any EMS Contract Cure Amounts. The Application shall include a statement of the EMS Contract Cure Amounts proposed by the Operator to be paid and shall further provide a date by which the contracting party may object to the Application. The Debtors or the Liquidating Trustee shall cure all defaults and otherwise comply with the requirements of Section 365(b) of Bankruptcy Code with respect to each such EMS Contract and EMS Lease and shall (except to the extent provided in Section 4.1 of the Plan), pay all EMS Contract Cure Amounts. (b) On the Effective Date, the Debtors shall be deemed to have assumed each such EMS Contract or EMS Lease. The EMS Contract Cure Amounts relating to each such EMS Contract or EMS Lease shall conclusively be determined to be the amount set forth in the Application to the extent no objection is filed thereto, or if such an objection is filed, as set forth in the Final Order approving the Application in accordance with Section 6.1 of the Plan. 2 Determination of Allowed EMS Secured Claims. The Bankruptcy Court shall determine the extent to which each EMS Secured Claim shall be an Allowed EMS Secured Claim. Such determinations shall be made pursuant to (i) actions previously commenced by the Debtors, provided that the Operator shall be entitled to participate in any such actions as a party in interest, and at the sole option of the Operator, after the Confirmation Date the Operator shall be substituted for the Debtor as the true party in interest in any such pending actions, or (ii) motions filed by the Operator pursuant to Bankruptcy Rule 3012 and Section 506(a) of the Bankruptcy Code. The Debtors shall cooperate with the Operator in connection with the Bankruptcy Court's determination of the extent to which each EMS Secured Claim shall be an Allowed EMS Secured Claim. 3 Treatment of AEC and DCC Leases. Notwithstanding any other provision of this Agreement, pursuant to the Plan each EMS Lease that is an AEC Lease or a DCC Lease shall be assumed and assigned to the Operator, such assignment to be effective on the Effective Date, and the Operator shall thereafter perform all the obligations of the lessee thereunder. 4 Due Diligence Review. For the period from the date of this Agreement to the Effective Date, the Debtors shall make or cause to be made available at Debtors' offices for examination and reproduc- tion by the officers, attorneys, accountants and other authorized representatives of AEC and each Operator during normal business hours, all documents of every kind and character in Debtors' possession or to which Debtors have access relating or in any way pertaining to the EMS Business or EMS Assets, including, without limitation, all EMS Contracts and EMS Leases, and the IER and other maintenance records for each EMS Aircraft. The Debtors shall furnish the representatives with all information that the representatives may reasonably request and Debtors shall cause their employees, accountants and attorneys to cooperate fully with the representatives in connection with their review and examination and to make full disclosure of all material facts affecting the EMS Business and EMS Assets. The representatives shall be entitled to inspect each EMS Aircraft and, in connection with such inspection, perform a flight test to determine that all systems and equipment are in proper working order. During such investigation, AEC and the Operator shall have the right to make copies of such records, files and other materials as they may reasonably deem advisable. 5 Governmental Approvals. (a) The Parties shall cooperate in good faith and take all actions necessary or appropriate to expeditiously and diligently file all applications and documents with the FAA and the Department of Transportation in order to assign and transfer the FAA Certificate to the Operator and take such other necessary or appropriate actions to obtain the FAA's and the Department of Transportation's approval of the Transactions and of the assignment of the FAA Certificate to the Operator. (b) The Debtors and the Operator shall each file and maintain or cause to be filed and maintained with the FTC and the DOJ any HSR Notifications required to be filed by their "ultimate parent" companies under the HSR Act and the rules and regulations promulgated thereunder with respect to the Transactions. Each Party shall make such filings as soon as practicable but in no event later than five Business Days after the Confirmation Date, shall cooperate with the other Parties in accomplishing such filings, respond promptly to any request for additional information made by either the FTC or DOJ, shall keep the other Parties apprised of the status of any inquiries made by the DOJ or FTC and shall use its best efforts to cause the waiting periods under the HSR Act to terminate or expire at the earliest possible date. Each Party shall also use all reasonable efforts to resist vigorously at its cost and expense any assertion that the Transactions constitute a violation of the antitrust laws. (c) To the extent permitted by applicable law, each Party shall promptly provide the other Parties with copies of all written communications, letters, reports or other documents delivered to or received from Governmental Entities in connection with the filings contemplated by this subsection, and copies of any written memorandum relating to discussions with such Governmental Entities with respect to such filings. 6 Confidentiality of Information. If this Agreement is terminated prior to the Effective Date for any reason, AEC and each Operator shall, to the extent reasonably practicable, destroy or cause to be delivered to the Debtors all documents and other material obtained by it in connection with the transactions contemplated hereby (and copies thereof), whether obtained before or after the execution hereof, and no Party shall use or disclose, directly or indirectly, any information so obtained, or otherwise obtained by it hereunder or in connection herewith, and shall cause all such information to be kept confidential and not used in any way detrimental to any other Party. AEC and each Operator shall use its best efforts to keep confidential the documents and information furnished that are designated as "confidential" by Debtors and, if this Agreement is terminated, such confidence shall be maintained and all such documents and all copies thereof shall immediately thereafter be returned to Debtors; provided, however, that AEC and each Operator shall not be obligated to use its best efforts to keep confidential any document or information that (a) was or becomes generally available to the public other than as a result of disclosure by Debtors or (b) was or becomes available to AEC or any Operator other than as a result of disclosure by Debtors. 7 Conduct of Debtors' EMS Business; Use of EMS Assets. At all times prior to the Effective Date, the Debtors shall (i) conduct the EMS Business in the ordinary course consistent with past practices, keep available the services of its officers and employees and maintain good relationships with its customers, suppliers, distributors, vendors, agents, representatives, consultants and others having business relationships with them; (ii) not commit or omit to do any act that would cause them to breach any of the agreements, commitments or covenants contained in this Agreement; (iii) continue to operate and maintain the EMS Assets diligently and substantially in the same manner as heretofore conducted so as to minimize risk of material deterioration, damage and loss to any of the EMS Assets; (iv) maintain in full force and effect the insurance policies carried on the EMS Assets existing on the date hereof; and (v) not institute any new methods of purchase, sale, lease, management, accounting or operation or engage in any transaction or activity, enter into any agreement or make any commitment that will affect the operation or use of the EMS Assets after the Effective Date, except in the ordinary course consistent with past practices. 8 Employees. On the Effective Date, the Operator may offer employment, in the same or similar position and with the same or similar responsibilities as with Debtors, to substantially all active employees of the Debtors performing services directly assigned to the EMS Contracts who meet or exceed the Operator's employee requirements for such position. For purposes of this subsection 6.7, the term "active employee" shall mean any person who, on the Effective Date, is actively employed by any Debtor or who is on short-term disability leave, vacation, jury duty leave, sick leave, or other authorized leave of absence, military service or lay-off with a reasonable expectation of recall as of the Effective Date but shall exclude any inactive or former employee, including any person who has been on long-term disability leave or unauthorized leave of absence or who has terminated his or her employment (voluntarily or involuntarily), retired or died on or before the Effective Date. Nothing herein shall be deemed to require the Operator to offer employment to any particular employee. 9 Accounts Receivable. (a) At the Closing, the Debtors shall assign to the Operator, for purposes of collection only, all Accounts Receivable. The Debtors or the Liquidating Trustee shall deliver to the Operator on, or as soon as practicable after, the Effective Date a complete and detailed statement showing the name, amount and age of each Accounts Receivable. The Operator shall use its best efforts to collect the Accounts Receivable for a period of ninety days after the Effective Date (the "Collection Period"). (b) During the Collection Period, the Operator shall remit to the Liquidating Trustee on a monthly basis any accounts receivable collected by the Operator relating to any services rendered in connection with the conduct of the EMS Business prior to the Effective Date. The Operator shall credit sums to the oldest outstanding balance due from any account debtor unless the Operator receives other remittance instructions from the account debtors specifically identified in the invoices being paid. The Operator shall not be obligated to use any extraordinary efforts to collect any of the accounts receivable relating to the EMS Assets prior to the Effective Date or refer any such accounts receivable to a collection agency or to an attorney for collection and the Operator shall not make any such referral or compromise nor settle or adjust the amount of any such accounts receivable except with the approval of the Liquidating Trustee. The Operator shall incur no liability to the Debtors or the Liquidating Trustee for any uncollected account. None of the Debtors, the Liquidating Trustee, or the agents of either of them shall make any solicitation of these accounts during the Collection Period. (c) On or before the fifteenth day after the end of the Collection Period, the Operator shall (i) furnish the Debtors or the Liquidating Trustee a list of all Accounts Receivable that then remain uncollected, together with any files concerning the collection or attempts to collect such Accounts Receivable and payment of any remaining unremitted amounts and (ii) reassign to the Debtors or the Liquidating Trustee any uncollected Accounts Receivable. Thereafter, the Operator shall have no further obligation or liability with respect to Accounts Receivable, except that the Operator shall immediately pay over to the Debtors or the Liquidating Trustee any amount subsequently paid to the Operator and determined in accordance with the foregoing procedures to be a payment of any such reassigned Accounts Receivable. 10 Mail and Other Communications. (a) The Debtors hereby authorize the Operator from and after the Effective Date to receive and open all mail and other communications addressed to the Debtors received by the Operator, and to act with respect to such mail and other communications in such manner as the Operator may elect if such mail and other communications relate to the EMS Business or EMS Assets, or if such mail and other communications do not so relate, to forward such mail and other communications promptly to the Debtors or the Liquidating Trustee. (b) After the Effective Date, the Debtors shall promptly deliver to the Operator the original of any mail or other communication received by it relating to operations of the EMS Business or EMS Assets after the Effective Date, including specifically invoices related to such period, and any monies, checks or other instruments of payment to which the Operator is entitled, and the Operator shall promptly deliver to the Debtors or the Liquidating Trustee the original of any mail or other communication received by it relating to operations of the EMS Business or EMS Assets prior to the Effective Date, including specifically invoices related to such period, and any monies, checks or instruments of payment to which the Debtors are entitled, other than Accounts Receivable, which will be handled pursuant to subsection 6.9 of this Agreement. 11 Notification of Changes. Debtors shall promptly notify AEC and the Operator of (i) any event that could adversely affect the ability of Debtors to perform any of its agreements, commitments or covenants contained herein, or (ii) any event or condition that could be reasonably expected to results in a material adverse change in the EMS Business or EMS Assets. 12 Cooperation and Best Efforts. Each Party shall cooperate with the others and use its best efforts to (a) procure upon reasonable terms and conditions all necessary consents and approvals, (b) complete all necessary filings, registrations and certificates, (c) satisfy all requirements prescribed by law for, and all conditions set forth in this Agreement to, the consummation of the Transactions and (d) effect the Transactions at the earliest practicable date. SECTION 7. CONDITIONS PRECEDENT 1 Conditions to All Parties. The obligations of each Party are subject to the satisfaction of the following conditions: (a) HSR Act. The Parties shall have received confirmation or notice that any waiting periods under the HSR Act with respect to the Transactions shall have terminated or expired, with no outstanding requests for additional information to be supplied in connection with the HSR Notifications and no outstanding notice from either the FTC or DOJ that further action will be taken by either of them with respect to the Transactions. (b) No Injunctions or Restraints. No temporary restraining order, stay pending appeal, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Transactions shall be in effect and no Governmental Entity shall have given notice to any Party to the effect that consummation of the Transactions would constitute a violation of any applicable law. 2 Additional Conditions to the Obligations of AEC and the Operator. The obligations of AEC and the Operator to consummate the Transactions are also subject to the satisfaction (or the waiver by AEC and the Operator) of the following conditions: (a) Final Order. The Bankruptcy Court shall have entered a Confirmation Order authorizing and approving the terms and conditions of the Plan and this Agreement and authorizing the Debtors to perform all acts necessary to consummate the Transactions, and such Confirmation Order shall be a Final Order. (b) Allowed EMS Secured Claims. The Bankruptcy Court shall have entered an order determining all Allowed EMS Secured Claims and such order shall be a Final Order. (c) Plan Conditions. All conditions precedent specified in Article IX of the Plan shall have been duly satisfied. (d) FAA Certificate. The Parties shall have received approval from the FAA with respect to the assignment of the FAA Certificate by the Debtors to the Operator. (e) Other Governmental Approvals. The Parties shall have received the approval, consent or authorization of, or completed any filings or notifications with, any other Governmental Entity that are required by law to consummate the Transactions and the terms of such orders, consents, approvals or authorizations of any Governmental Entity shall permit the Transactions to be consummated without imposing any material adverse conditions with respect to the EMS Business or EMS Assets taken as a whole. (f) Representations, Warranties and Covenants. The representations and warranties of the Debtors contained in this Agreement shall be true and correct as of the date hereof and the Effective Date and the Debtors shall have performed all covenants and agreements required by this Agreement to be performed by them at or prior to the Effective Date. (g) EMS Contracts and EMS Leases. The Bankruptcy Court shall have issued an order or orders pursuant to Section 6.1 of the Plan authorizing the assumption by the Debtor and the assignment to the Operator pursuant to the Plan and this Agreement of each EMS Lease and EMS Contract. (h) Contract Matters. The Operator, in its reasonable discretion, shall have determined that the EMS Contracts, in the aggregate, generate revenue that, when added to Aircraft Equity, if any, exceeds the sum of (i) financing and/or lease payments of the EMS Aircraft, (ii) direct and reasonable indirect costs of performing such EMS Contracts and (iii) the payments referred to in subsections 9.1, 9.2 and 9.4 of this Agreement. (i) Conditions under Other Asset Purchase Agreements. The transactions contemplated by the other EMS Asset Purchase Agreements shall have been consummated. 3 Additional Conditions to the Obligations of the Debtors. The Debtors' obligations to consummate the Transactions are also subject to the satisfaction (or the waiver by the Creditors' Committee or the Debtor) of the following conditions: (a) Representations, Warranties and Covenants. The representations and warranties of AEC and the Operator contained in this Agreement shall be true and correct on the Effective Date and AEC and the Operator shall have performed in all material respects all covenants and agreements required by this Agreement to be performed by them at or prior to the Effective Date. SECTION 8. CLOSING 1 Closing. The closing of the Transactions (the "Closing") shall take place at the offices of __________ commencing at 9:00 a.m. local time on the day on which all conditions specified in Section 7 (other than conditions with respect to actions the Parties will take at the Closing) have been satisfied or waived or such other date as the Parties may mutually determine (the "Effective Date"). 2 Deliveries by the Debtors. At the Closing the Debtors shall make the following deliveries in form and substance satisfactory to AEC, the Operator and their counsel: (a) A Bill of Sale in the form attached hereto as Exhibit A executed by the Debtors; (b) FAA Bills of Sale for each EMS Aircraft in the form prescribed by the Department of Transportation or FAA at the Effective Date, a currently required example of which is attached as Exhibit B, executed by the Debtors; (c) Cash deeds and acts of sale conveying all real estate included in the EMS Assets executed by the Debtors; (d) Assignments of all intellectual property included in the EMS Assets executed by the Debtors; (e) Assignments of the EMS Contracts and EMS Leases in the form attached hereto as Exhibit C executed by the Debtors; (f) All certificates and other documents necessary to transfer the FAA Certificate to the Operator executed by the Debtors; (g) Assignment of the joint right to use the STC interiors and equipment contained in or on the EMS Aircraft in the conduct of the EMS Business executed by the Debtors; (h) Such other bills of sale, assignments and other instruments of sale, transfer, conveyance and assignment executed by the Debtors, accompanied by such consents, releases, endorsements and other instruments as may be required or as may be desirable in order to vest effectively in the Operator good and marketable title to the EMS Assets free and clear of all Liens and Claims, except for Allowed EMS Secured Claims; (i) Possession of the EMS Assets to the Operator; (j) Assignment for Collection of Accounts Receivable in the form of Exhibit D hereto executed by the Debtors; (k) The Adjustment Certificate executed by the Debtors; (l) A Release of AEC and the Operator in the form of Exhibit E hereto executed by the Debtors; and 3 Deliveries by AEC and the Operator. At the Closing AEC and the Operator shall make the following deliveries: (a) AEC shall pay to the Debtors the Cash Purchase Price by wire transfer or delivery of other immediately available funds; (b) An Assumption of EMS Contracts and EMS Leases in the form of Exhibit F hereto executed by the Operator; and (c) A General Release of the Debtors in the form of Exhibit G hereto executed by AEC and the Operator. SECTION 9. COVENANTS BETWEEN AEC AND THE OPERATOR 1 Reimbursement of Cash Purchase Price. Within 45 days of the last day of each calendar quarter ending after the Effective Date, the Operator shall pay to AEC or its designee five (5%) percent of gross revenues under each EMS Contract for services actually rendered (including any renewal, extension, restatement and/or replacement thereof) during such calendar quarter until the first to occur of (i) the fifth anniversary of the Effective Date or (ii) termination of such EMS Contract (including any renewal, extension, restatement and/or replacement thereof) (and thereafter to the extent attributable to gross revenue prior to such anniversary or termination); provided that in no event shall the payments under this subsection 9.1 as to any such EMS Contract exceed five (5%) percent of projected gross revenue under such EMS Contract, as projected prior to the Effective Date by AEC and the Operator, such projection to be based upon then (pre-Effective Date) current gross revenues under such EMS Contract, assuming a term ending on the fifth anniversary of the Effective Date and escalated on each interim anniversary date by 2.74%; and provided further, that in the event Operator voluntarily agrees to an amendment or modification of an EMS Contract prior to the fifty anniversary of the Effective Date that results in a diminution or deferral of the gross revenues otherwise earnable by or payable to Operator under such EMS Contract, for which the Operator will be compensated in a manner that is not subject to the royalty provision of this Section 9.1, then and in such event the Operator will pay to AEC or its designee the greater of (i) the gross revenues under such EMS Contract or (ii) the amount of royalty that it would otherwise have paid to AEC under this Section 9.1 based on gross revenue under such EMS Contract for the calendar quarter immediately prior to the amendment or modification of the EMS Contract. Payments under this subsection 9.1 shall be reduced to the extent all net adjustments pursuant to subsection 2.3(b) of this Agreement attributable to the EMS Assets result in a reduction to the Cash Purchase Price, such reduction to be made beginning with the first such quarterly payment and shall continue with each subsequent quarterly payment until the full amount of such adjustment has been recouped. If the adjustments pursuant to subsection 2.3(b) of this Agreement attributable to the EMS Assets result in an increase to the Cash Purchase Price, such increase shall be paid by the Operator to AEC within five (5) business days after the Effective Date. 2 Aircraft Equity. If an EMS Contract terminates prior to the expiration of the five year period referred to in subsection 9.1, then to the extent (i) the fair market value (determined prior to the Effective Date pursuant to a single appraiser jointly selected by AEC and the Operator) of any financed EMS Aircraft directly related to such EMS Contract exceeds (ii) the Allowed EMS Secured Claim and similar or related obligations attributable to such EMS Aircraft computed as of the Effective Date (such excess amount, the "Aircraft Equity"), then the Operator will continue to pay to AEC or its designee the amounts that would have been paid under subsection 9.1 (based on payments made immediately prior to such termination if such EMS Contract had not terminated prior to the expiration of the five year period referred to in subsection 9.1), and a final payment at the expiration of such five year period, if necessary, in the amount of any shortfall from the projections referred to in subsection 9.1, provided that in no event will the aggregate payments under this subsection 9.2 exceed the amount of the Aircraft Equity. 3 Lease Rates. From and after the Effective Date, each EMS Aircraft previously leased to the Debtors pursuant to an EMS Lease that is an AEC Lease or DCC Lease shall be leased by AEC or DCC to the Operator at rates and on other terms and conditions equivalent to the pre-bankruptcy, pre-default lease rates applicable to such EMS Aircraft. 4 Return of EMS Aircraft. If any EMS Contract is unilaterally terminated by the hospital or expires or terminates pursuant to the terms of such contract within 18 months of the Effective Date for any reason other than the malfeasance of the Operator, then the Operator shall have the right (exercisable without penalty on or after the first year anniversary of the date of such a termination) to cancel each lease instrument in respect of each AEC or DCC leased EMS Aircraft directly related to such EMS Contract and return such EMS Aircraft to AEC, DCC or its designee. Upon such return, the EMS Aircraft will comply in all material respects with the maintenance return conditions contained in the applicable lease. During such one year interim period, the Operator shall be free to redeploy and modify such EMS Aircraft in an effort to mitigate the cost incurred during such period, provided that such EMS Aircraft will be returned in the original lease IER configuration. 5 Right of First Offer. To the extent permitted by applicable law, if an EMS Contract is not assigned, for any reason whatsoever, to any other operator pursuant to another EMS Asset Purchase Agreement, or otherwise, the Operator shall be entitled to access to information regarding, and to evaluate, such EMS Contract and the related EMS Assets and to make an initial proposal regarding such EMS Contract. 6 Audit Rights. In connection with the preparation of the Operator's audited annual financial statements the Operator's independent auditors shall provide AEC and its auditors with (i) a letter certifying the accuracy of the gross revenues received and royalty payments made pursuant to Section 9 hereof in connection with each EMS Contract and (ii) the opportunity to meet and discuss such revenues and payments; provided, that if the Operator does not engage independent auditors at any time during the term of this Agreement, the Operator shall provide, at its expense, AEC and its auditors reasonable access to its books and records relating to the EMS Contract on an annual basis. 7 Confirmation of the Plan. (a) AEC shall, with the reasonable cooperation of the Operator, use its best efforts to file and prosecute to confirmation the Plan and shall not, without the prior written consent of the Operator, which consent shall not be unreasonably withheld, (i) withdraw or modify the Plan, (ii) support the confirmation of any other plan of reorganization, plan of liquidation or motion to convert to Chapter 7 filed in the Chapter 11 Cases, or (iii) take any action in the Chapter 11 Cases that diminishes the value of the Plan or this Agreement to the Operator. (b) If at any time after filing and prior to the Confirmation Date the Plan is determined (in the reasonable judgment of AEC, the Operator, and the operators under the other EMS Asset Purchase Agreements) to provide funds available for payment to the class of Unsecured Creditors (as defined in the Plan) in an amount less than that provided pursuant to any other confirmable plan of reorganization (as determined in the reasonable judgment of AEC, the Operators and the operators under the other EMS Asset Purchase Agreement) then on file and being prosecuted by its proponents in the Chapter 11 Cases, then: (i) AEC shall commence discussions with the Operator and/or the other operators that are parties to the other EMS Asset Purchase Agreements for the purpose of increasing the funds available for payment to such class of Unsecured Creditors; and (ii) if such discussions do not result in an increase in the funds so available for such class of unsecured creditors to an amount at least equivalent to all other such plans in the Chapter 11 Cases, then either AEC or the Operator may elect to terminate this Agreement by notice to the other, such termination to be effective three (3) business days after receipt of such notice. SECTION 10. TERMINATION AND ABANDONMENT 1 Termination. This Agreement may, by notice given on or prior to the Effective Date, be terminated: (a) Mutual Consent. By the mutual written consent of the Parties. (b) Material Breach by AEC or the Operator. By Debtors if there has been a material breach by AEC or any of the Operator of any of their representations, warranties or covenants contained in this Agreement, which is not or cannot be cured within 10 days after written notice of such breach is given to such Party, provided that the right to effect such cure shall not extend beyond the date set forth in subparagraph (f) below. (c) Material Breach by Debtors. By AEC and the Operator if there has been a material breach by Debtors of any of their representations, warranties or covenants contained in this Agreement, which is not or cannot be cured within 10 days after written notice of such breach is given to Debtors, provided that the right to effect such cure shall not extend beyond the date set forth in subparagraph (f) below. (d) Material Adverse Change. By AEC and the Operator if there shall have been a material adverse change in the EMS Business or the EMS Assets taken as a whole. (e) Vacate Confirmation Order. By AEC and the Operator if the Confirmation Order is vacated by the Bankruptcy Court or appealed by any Person and such Person obtains an order staying consummation of the Transactions. (f) By the Operator or AEC pursuant to subsection 9.7(b). (g) Abandonment. By all of the Operator, AEC, and the operators under the other EMS Asset Purchase Agreements, acting jointly, if (i) any condition to consummating the Transactions specified in Section 7 has not been met or waived by the appropriate Party by December 31, 1994, (ii) any such condition cannot be met by such date and has not been waived or (iii) the Transactions have not occurred by such date. 2 Effect of Termination; Survival. Upon termination of this Agreement pursuant to this Section, this Agreement shall be void and there shall be no liability by reason of this Agreement, or the termination thereof, on the part of any Party or their respective directors, officers, employees, agents, affiliates or shareholders except for any liability of a Party arising out of a breach of any covenant in this Agreement prior to the date of termination or any covenant that survives pursuant to the following sentence. Subsection 6.6, this subsection 10.2 and Section 11 shall survive any termination of this Agreement. SECTION 11. MISCELLANEOUS 1 Further Assurances. On and after the Effective Date, the Parties shall execute, acknowledge and deliver such further bills of sale, assignments, conveyances, leases and other assurances, documents and instruments of transfer, and shall take such other action consistent with the terms of this Agreement, as may be appropriate to effectuate the terms of this Agreement or to carry out the purposes hereof. 2 Notices. All notices, requests, claims, demands or other communications hereunder shall be in writing and shall be given by hand delivery, by overnight mail delivery service, or by telex or telecopier (provided no error is reported in transmission) to the respective addresses as set forth opposite each Party's name on the signature page hereof or such substituted addresses as any Party may, from time to time, designate in a written notice given in like manner. Notices shall be deemed given upon receipt by the addressee. 3 Waiver. The failure by any Party to enforce any of its rights hereunder shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver signed by the waiving party. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. 4 Expenses. Except as otherwise set forth herein or in the Plan, each Party shall pay its own expenses incident to this Agreement and any other agreements, documents or other instruments to be executed and delivered pursuant hereto, including all legal and accounting fees; provided, however, that, unless exempted pursuant to Section 1146(c) of the Bankruptcy Code, the Debtors or the Liquidating Trustee shall pay all sales, use, transfer, purchase, recordation and documentary taxes and fees, if any, arising out of the Transactions. 5 Survival. The representations and warranties made by the Parties in this Agreement shall not survive the Effective Date. 6 Integrated Agreement. The Plan, this Agreement and the exhibits and schedules thereto and hereto constitute the entire understanding and agreement among the Parties with respect to the subject matter thereof and hereof, and there are no agreements, understandings or restrictions, among the Parties other than those set forth or provided for therein or herein, all prior agreements and understandings being superseded thereby and hereby. 7 Choice of Law. The validity of this Agreement, the construction of its terms and the determination of the rights and duties of the parties hereto hereunder shall be governed by and construed in accordance with the laws of the State of Louisiana. 8 Successors and Assigns. This Agreement shall bind and inure to the benefit of the Parties and their respective successors, including any duly appointed trustee in any Chapter 11 Case or any duly appointed trustee in any superseding case under Chapter 7 of the Bankruptcy Code. No Party may assign its rights or obligations hereunder without the prior written consent of the other Parties, except for assignments by the Operator to a subsidiary of which it owns all of the outstanding capital stock, provided that the Operator shall not thereby be relieved of the obligations set forth in Section 9 of this Agreement and shall guarantee the payment and performance by such wholly-owned subsidiary of its obligations under any EMS Lease that is an AEC Lease or DCC Lease. Nothing in this Agreement is intended or shall be construed to confer upon or to give any Person other than the Parties any rights or remedies under or by reason of this Agreement, except as expressly provided for herein. 9 Amendment. This Agreement may be amended only by an agreement in writing signed by each Party. 10 Headings. The headings in this Agreement have been included solely for reference and shall not be considered in the interpretation or construction of this Agreement. 11 Counterparts. This Agreement may be executed by the Parties in one or more counterparts, all of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. * * * * * IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. DEBTORS: Debtors' address is: ROCKY MOUNTAIN HELICOPTERS, INC. RMH AEROLOGGING, INC. P. O. Box 1337 WESTERN HELICOPTERS, INC. Provo, Utah 84603 RMH AEROMEDICAL, INC. By: Name: Title: AEC's address is: AMERICAN EUROCOPTER CORPORATION 2701 Forum Drive Grand Prairie, Texas 65053 By: Name: Title: OPERATOR: Operator's address is: PETROLEUM HELICOPTERS, INC. 5728 Jefferson Highway Harahan, Louisiana 70123 By: Name: Title: Signature page to Asset Purchase Agreement dated as of ___________, 1994 Schedule I Page 1 of 3 EMS OTHER ASSETS 1. Real property, improvements and fixtures associated with and essential to ongoing field operations applicable to the programs that have been designated by an "X" in the applicable operator's column in Schedule II. 2. All rights to use the name Rocky Mountain Helicopters, Inc., any derivative thereof, and the initials RMH. 3. Rights to use the STC interiors and equipment contained in or on the EMS Aircraft in the conduct of the EMS Business. 4. All records, files and other documents related to the EMS Assets, including but not limited to aircraft, engine and component maintenance records, maintenance plans and other historical records and any related software and programs. 5. All parts and equipment inventory located at the EMS Contract site and used or useful in the conduct of the EMS Business, other than duplicate parts having a value in excess of $500 and all engines and component assemblies. Note: The EMS Assets set forth on these Schedules I & II reflect all EMS Assets known to the Operator as of the date hereof, and these Schedules are subject to amendment to the extent necessary or appropriate to reflect changes to the EMS Assets identified prior to the Confirmation Date. Schedule I Page 1 of 3 EMS OTHER ASSETS 1. Rights to use the STC interiors and equipment contained in or on the EMS Aircraft in the conduct of the EMS Business. 2. All records, files and other documents related to the EMS Assets, including but not limited to aircraft, engine and component maintenance records, maintenance plans and other historical records and any related software and programs. 3. All parts and equipment inventory located at the EMS Contract site and used or useful in the conduct of the EMS Business, other than duplicate parts having a value in excess of $500 and all engines and component assemblies. Note: The EMS Assets set forth on these Schedules I & II reflect all EMS Assets known to the Operator as of the date hereof, and these Schedules are subject to amendment to the extent necessary or appropriate to reflect changes to the EMS Assets identified prior to the Confirmation Date. Schedule I Page 2 of 3 Item No. Owner Type Serial No.Hospital Contract 1 GMAC 222 47044 Souix Falls 2 Fleet Credit (Via Western Heli) 441 441-0076Tuscon 3 GE Capital 441 441-0092 St. George, Ut. 4 Midlantic 441 441-0066 Omaha 5 WSC 441 441-0143 Redding, Ca. 6 GMAC Allstar 1621 Des Moines 7 New England Capital Allstar 1024 Tupelo 8 AEC AS350B 1101 Waterloo 9 AEC AS350B 1173 Iowa City 10 AEC AS350B 1035 Kansas City 11 AEC AS350B 1273 Traverse City 12 Burr/First Security AS350B 1472 Eagle Rescue 13 First Security AS350B 1178 Kansas City 14 Fleet Credit AS350B 1602 Little Rock 15 GE Capital AS350B 1369 Huntington 16 Jim Burr AS350B 1674 Osage Beach 17 Key Bank of Utah AS350B 1434 Eagle Rescur 18 Concord AS350B2 2575 Frisco, Co. 19 Hasson AS350B2 2404 Columbia, S.C. 20 Hasson AS350B2 2389 West Slope, Co. 21 Norwest Equip. Finance AS350B2 2728 Albuquerque 22 Norwest Equip. Finance AS350B2 2654 Colorado 23 AEC AS355F1 5093 LaCrosse 24 N/A Augusta N/A Salt Lake City (Helicopter) 25 N/A Augusta N/A Salt Lake City (Helicopter) 26 DCC/MDFC BK117 7036 Hartford 27 DCC/MDFC BK117 7060 Hartford 28 DCC/SSB BK117 7115 Charleston 29 DCC/MDFC BK117 7143 Lexington 30 DCC/SSB BK117 7077 Louisville 31 DCC/SSB BK117 7125 Omaha 32 DCC/SSB BK117 7082 Pittsburg 33 DCC/SSB BK117 7088 Pittsburg 34 DCC/MDFC BK117 7154 Pittsburg 35 DCC/SSB BK117 7111 Redding, Ca. 36 DCC/SSB BK117 7129 Sacremento 37 DCC/MDFC BK117 7163 Tuscon 38 DCC/MDFC BK117 7169 Tuscon 39 DCC/DRL BK117 7104 Tulsa 40 DCC/SSB BK117 7110 Valhalla 41 DCC/DRL BK117 7107 Worchester 42 DCC/MDFC BK117 7173 Worchester 43 DCC/MDFC BK117 7141 Nashville 44 DEBIS BK117 7231 Columbus, Mo. 45 DEBIS/MERCEDES BENZ BK117 7230 Omaha 46 DCC/? BK117 Morgantown 47 DCC/? BK117 St. Petersburg Schedule I Page 3 of 3 Item No. Owner Type Serial No.Hospital Contract 48 DCC/State Street Equity B0105 754 Greenville 49 DCC/SSB B0105 796 Jacksonville 50 DCC/? B0105 Pensacola 51 N/A B0105 N/A Springfield, Mo. 52 DCC/? B0105 790 Asheville 53 Salt Lake City (Fixed Wing) 54 Salt Lake City (Fixed Wing) 55 RMH SA316B 1910 Reno If any EMS Aircraft is not subject to a "true" lease, such lease will be subject to subsection 6.2 of the Agreement rather than subsection 6.1. Schedule II Acquisition of Rocky Mountain Helicopter's Emergency Medical Services Programs Programs Aircraft KHC CJI PHI 1 Albuquerque, NM 1 x AStar X 2 Colorado Springs, CO 1 x AStar X 3 Denver, CO 2 x AStar X 4 Redding, CA 1 x BK117 X 1 x C-441 5 Reno, NV 1 x Alouette X 6 Sacramento, CA 1 x BK117 X 7 Salt Lake City, UT 2 x A109K2 X (aircraft are hospital-owned) 1 x 441 8 Tucson, AR 2 x BK117 X 1 x 441 9 Eagle Rescue (Phoenix, AR)2 x AStars X 10 Healthnet (West Virginia) 2 x BK117 X 1 x AStar 11 Hartford, CT 2 x BK117 X 12 Lexington, KY 1 x BK117 X 13 Louisville, KY 1 x BK117 X 14 Worcester, MA 2 x BK117 X 15 Pittsburgh, PA 3 x BK117 X 16 Valhalla (New York City) 1 x BK117 X 17 Iowa City, IA 2 x AStar X 18 Des Moines, IA 1 x AStar X 19 LaCrosse, WI 1 x TwinStar X 20 Omaha, NE (University) 1 x BK117 X 21 Omaha, NE (St. Joseph's) 1 x BK117 X 1 x 441 22 Sioux Falls, IA 1 x 222 X 23 Columbia, MO 1 x BK117 X 1 x AStar 24 Kansas City, MO 2 x AStar X 25 Little Rock, AR 1 x AStar X 26 Springfield, MO 1 x BO105 X (aircraft is hospital-owned) 27 Traverse City, MI 1 x AStar X 28 Tulsa, OK 1 x BK117 X 29 Tupelo, MS 1 x AStar (C30) X 30 Jacksonville, FL 1 x BO105 X 31 Columbia, SC 1 x AStar X 32 Asheville, NC 1 x BO105 X 33 Nashville, TN 1 x BK117 X 34 Greenville, NC 1 x BO105 X 35 Pensacola, FL 1 x BO105 X 36 St. Petersburg, FL 1 x BK117 X 6/24/94 rocky/sched-2 Exhibit A to Asset Purchase Agreement BILL OF SALE Rocky Mountain Helicopters, Inc., a Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a California corporation and RMH Aeromedical, Inc., a Utah corporation (collectively, the "Debtors") as debtors-in- possession under Case Nos. 93C-25447 through 93C-25450 in the United States Bankruptcy Court for the District of Utah, pursuant to that certain Asset Purchase Agreement (the "Agreement"), dated as of ___________________, 1994, by and among the Debtors, American Eurocopter Corporation, a __________________ corporation and ________________________________________ (the "Operator"), and under authority of Confirmation Order dated __________________, 1994 approving the transactions contemplated by the Agreement, do hereby sell, convey, assign, transfer and deliver to the Operator, its successors and assigns, those certain assets listed on Schedules A and B attached hereto and the Operating Certificate issued to the Debtors by the Federal Aviation Administration under Part 135 of the Federal Aviation Regulations 14 C.F.C. Section 135 (collectively, the "Conveyed Assets"), free and clear of any and all liens, mortgages, pledges, security interests, restrictions, prior assignments, liabilities, obligations, encumbrances, charges, tenancies, licenses, encroachments, covenants, rights-of-way, easements, successor or transferee liabilities, and claims of any and every kind, nature and description whatsoever, including any "interest in property" within the meaning of that term as it is used in the United States Bankruptcy Code, except for Allowed EMS Secured Claims (as defined in the Agreement); to have and to hold unto the Operator, its successors and assigns, forever. The Debtors do hereby agree to execute and deliver to the Operator, its successors and assigns, such further documents and instruments of conveyance, assignment, transfer, endorsement, direction or authorization, and take such other action as the Operator shall reasonably request in order to convey, transfer to, enforce and confirm in the Operator all or any of the Conveyed Assets transferred hereby or to be transferred to the Operator by the Debtors pursuant to the provisions of the Agreement and to assist the Operator in reducing the Conveyed Assets to its possession. IN WITNESS WHEREOF, the Debtors have executed this Bill of Sale this ________ day of ________________________, 1994. DEBTORS: Rocky Mountain Helicopters, Inc. RMH Aerologging, Inc. Western Helicopters, Inc. RMH Aeromedical, Inc. By: Name: Title: 34 Exhibit A to Asset Purchase Agreement BILL OF SALE Rocky Mountain Helicopters, Inc., a Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a California corporation and RMH Aeromedical, Inc., a Utah corporation (collectively, the "Debtors") as debtors-in- possession under Case Nos. 93C-25447 through 93C-25450 in the United States Bankruptcy Court for the District of Utah, pursuant to that certain Asset Purchase Agreement (the "Agreement"), dated as of ___________________, 1994, by and among the Debtors, American Eurocopter Corporation, a __________________ corporation and __________________ (the "Operator"), and under authority of Confirmation Order dated __________________, 1994 approving the transactions contemplated by the Agreement, do hereby sell, convey, assign, transfer and deliver to the Operator, its successors and assigns, those certain assets listed on Schedules A and B attached hereto (collectively, the "Conveyed Assets"), free and clear of any and all liens, mortgages, pledges, security interests, restrictions, prior assignments, liabilities, obligations, encumbrances, charges, tenancies, licenses, encroachments, covenants, rights-of-way, easements, successor or transferee liabilities, and claims of any and every kind, nature and description whatsoever, including any "interest in property" within the meaning of that term as it is used in the United States Bankruptcy Code, except for Allowed EMS Secured Claims (as defined in the Agreement); to have and to hold unto the Operator, its successors and assigns, forever. The Debtors do hereby agree to execute and deliver to the Operator, its successors and assigns, such further documents and instruments of conveyance, assignment, transfer, endorsement, direction or authorization, and take such other action as the Operator shall reasonably request in order to convey, transfer to, enforce and confirm in the Operator all or any of the Conveyed Assets transferred hereby or to be transferred to the Operator by the Debtors pursuant to the provisions of the Agreement and to assist the Operator in reducing the Conveyed Assets to its possession. IN WITNESS WHEREOF, the Debtors have executed this Bill of Sale this ________ day of ________________________, 1994. DEBTORS: Rocky Mountain Helicopters, Inc. RMH Aerologging, Inc. Western Helicopters, Inc. RMH Aeromedical, Inc. By: Name: Title: 35 Exhibit A to Asset Purchase Agreement BILL OF SALE Rocky Mountain Helicopters, Inc., a Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a California corporation and RMH Aeromedical, Inc., a Utah corporation (collectively, the "Debtors") as debtors-in- possession under Case Nos. 93C-25447 through 93C-25450 in the United States Bankruptcy Court for the District of Utah, pursuant to that certain Asset Purchase Agreement (the "Agreement"), dated as of ___________________, 1994, by and among the Debtors, American Eurocopter Corporation, a __________________ corporation and __________________ (the "Operator"), and under authority of Confirmation Order dated __________________, 1994 approving the transactions contemplated by the Agreement, do hereby sell, convey, assign, transfer and deliver to the Operator, its successors and assigns, those certain assets listed on Schedules A and B attached hereto (collectively, the "Conveyed Assets"), free and clear of any and all liens, mortgages, pledges, security interests, restrictions, prior assignments, liabilities, obligations, encumbrances, charges, tenancies, licenses, encroachments, covenants, rights-of-way, easements, successor or transferee liabilities, and claims of any and every kind, nature and description whatsoever, including any "interest in property" within the meaning of that term as it is used in the United States Bankruptcy Code, except for Allowed EMS Secured Claims (as defined in the Agreement); to have and to hold unto the Operator, its successors and assigns, forever. The Debtors do hereby agree to execute and deliver to the Operator, its successors and assigns, such further documents and instruments of conveyance, assignment, transfer, endorsement, direction or authorization, and take such other action as the Operator shall reasonably request in order to convey, transfer to, enforce and confirm in the Operator all or any of the Conveyed Assets transferred hereby or to be transferred to the Operator by the Debtors pursuant to the provisions of the Agreement and to assist the Operator in reducing the Conveyed Assets to its possession. IN WITNESS WHEREOF, the Debtors have executed this Bill of Sale this ________ day of ________________________, 1994. DEBTORS: Rocky Mountain Helicopters, Inc. RMH Aerologging, Inc. Western Helicopters, Inc. RMH Aeromedical, Inc. By: Name: Title: 36 Exhibit B to Asset Purchase Agreement United States of America FORM APPROVED DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION OMB NO.2120-0042 AIRCRAFT BILL OF SALE FOR AND IN CONSIDERATION OF $ THE UNDERSIGNED OWNER(S) OF THE FULL LEGAL AND BENEFICIAL TITLE OF THE AIRCRAFT DES- CRIBED AS FOLLOWS: UNITED STATES REGISTRATION NUMBER N AIRCRAFT MANUFACTURER & MODEL AIRCRAFT SERIAL No. DOES THIS DAY OF 19 HEREBY SELL, GRANT, TRANSFER AND DELIVER ALL RIGHTS, TITLE AND INTERESTS Do Not Write In This Block IN AND TO SUCH AIRCRAFT UNTO: FOR FAA USE ONLY NAME AND ADDRESS (IF INDIVIDUAL(S), GIVE LAST NAME, FIRST NAME AND MIDDLE INITIAL.) P U R C H A S E R DEALER CERTIFICATE NUMBER AND TO EXECUTORS, ADMINISTRATORS, AND ASSIGNS TO HAVE AND TO HOLD SINGULARLY THE SAID AIRCRAFT FOREVER, AND WARRANTS THE TITLE THEREOF. IN TESTIMONY WHEREOF HAVE SET HAND AND SEAL THIS DAY OF 19 NAME(S) OF SELLER SIGNATURE(S) TITLE (TYPED OR PRINTED) (IN INK) (IF EXECUTED (TYPED OR PRINTED) FOR CO-OWNERSHIP, ALL MUST SIGN.) S E L L E R ACKNOWLEDGMENT (NOT REQUIRED FOR PURPOSES OF FAA RECORDING: HOWEVER, MAY BE REQUIRED BY LOCAL LAW FOR VALIDITY OF THE INSTRUMENT.) ORIGINAL: TO FAA AC FORM 8050-2 (8-85) (0052-00-629-0002) 38 Exhibit C to Asset Purchase Agreement ASSIGNMENT OF EMS CONTRACTS AND EMS LEASES This Assignment of Contracts and Leases (the "Assignment"), is by and between Rocky Mountain Helicopters, Inc., a Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a California corporation and RMH Aeromedical, Inc., a Utah corporation (collectively, the "Debtors") as debtors-in-possession under Case Nos. 93C-25447 through 93C-25450 in the United States Bankruptcy Court for the District of Utah and ______________________ (the "Operator"). Reference is made to the Asset Purchase Agreement dated as of _________________, 1994 (the "Agreement"), by and among the Debtors, American Eurocopter Corporation, a __________________ corporation ("AEC"), and the Operator. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Agreement. In accordance with and subject to the terms of the Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and under authority of Confirmation Order dated ____________________, 1994 approving the transactions contemplated by the Agreement, the Debtors and the Operator hereby agree: (a) The Debtors hereby sell, convey, assign, transfer and deliver to the Operator, its successors and assigns, those certain contracts listed on Schedule A attached hereto (the "EMS Contracts") and those certain leases listed on Schedule B attached hereto (the "EMS Leases"), each of which is in full force and effect and enforceable in accordance with its terms and, other than defaults that will be cured by payment by Debtors of the EMS Contract Cure Amounts, there exists no default or event of default or event, occurrence, condition or act that, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder; to have and to hold unto the Operator, its successors and assigns, forever. (b) The liabilities and obligations assumed by the Operator are only those provided in that certain Assumption of Contracts, Liabilities and Obligations by and between the Debtors and the Operator dated as of this date. (c) The Debtors do hereby agree to execute and deliver to the Operator, its successors and assigns, such further documents and instruments of assignment, conveyance, transfer, endorsement, direction or authorization, and take such other action as the Operator shall reasonably request in order to convey, transfer to, enforce and confirm in the Operator all or any of the EMS Contracts and EMS Leases transferred hereby or to be transferred to the Operation by the Debtors pursuant to the provisions of the Agreement and to assist the Operator in reducing the EMS Contracts and EMS Leases to its possession. -39- IN WITNESS WHEREOF, the Debtor and the Operator have caused this Assignment to be duly executed as of _______________________, 1994. WITNESSES DEBTORS: Rocky Mountain Helicopters, Inc. RMH Aerologging, Inc. Western Helicopters, Inc. RMH Aeromedical, Inc. By: Name: Title: OPERATOR: By: Name: Title: -40- Exhibit D to Asset Purchase Agreement ASSIGNMENT FOR COLLECTION OF ACCOUNTS RECEIVABLE This Assignment for Collection of Accounts Receivable (the "Assignment"), is by and between Rocky Mountain Helicopters, Inc., a Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a California corporation and RMH Aeromedical, Inc., a utah corporation, (collectively, the "Debtors"), and _____________________ (the "Operator"). Reference is made to the Asset Purchase Agreement dated as of ____________________, 1994 (the "Agreement"), by and among the Debtors, American Eurocopter Corporation, a _________________ corporation ("AEC"), and the Operator. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Agreement. In accordance with and subject to the terms of the Agreement and for and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Debtors and the Operator hereby agree: (d) For purposes of collection only, the Debtors hereby assign to the Operator all Accounts Receivable as of the Effective Date and the Operator accepts such assignment on the terms set forth in Subsection 6.8 of the Agreement. (e) The covenants regarding the procedures with respect to Accounts Receivable in Subsection 6.8 of the Agreement shall survive the execution, delivery and acceptance of this Assignment on the terms set forth in the Agreement and this Assignment will in no way expand or limit the rights and obligations of the Operator, the Debtors or AEC under the Agreement. (f) This Assignment shall inure to the benefit of and shall be binding upon the parties hereto, their successors, transferees and assigns. -41- IN WITNESS WHEREOF, the Debtors and the Operator have caused this Assignment to be duly executed as of __________________, 1994. WITNESSES DEBTORS: Rocky Mountain Helicopters, Inc. RMH Aerologging, Inc. Western Helicopters, Inc. RMH Aeromedical, Inc. By: Name: Title: OPERATOR: By: Name: Title: -42- Exhibit E to Asset Purchase Agreement RELEASE OF AEC AND OPERATOR (TO COME) -43- Exhibit F to Asset Purchase Agreement ASSUMPTION OF CONTRACTS, LIABILITIES AND OBLIGATIONS This Assumption of Contracts, Liabilities and Obligations (the "Assumption"), is by and between Rocky Mountain Helicopters, Inc., a Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a California corporation and RMH Aeromedical, Inc., a Utah corporation (the "Debtors"), and ________________________, a ___________________ corporation (the "Operator"). Reference is made to the Asset Purchase Agreement dated as of __________________, 1994 (the "Agreement"), by and among the Debtors, American Eurocopter Corporation, a _________________________ corporation ("AEC"), and the Operator. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Agreement. In accordance with and subject to the terms of the Agreement and for and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Debtors and the Operator hereby agree: (g) The Operator hereby assumes and agrees to pay, discharge and perform (a) all the obligations and liabilities under each EMS Contract and EMS Lease insofar as they arise or accrue on or after the Effective Date or which by the terms thereof are to be performed, observed, paid or discharged after the Effective Date and in either case only to the extent allowed by the Bankruptcy Court pursuant to Subsection 6.1 of the Agreement; (b) all Allowed EMS Secured Claims; and (c) all obligations and liabilities arising out of events occurring after the Effective Date related to the ownership of the EMS Assets after the Effective Date; except to the extent any such duty or obligation accrues or arises as a result of a breach by the Debtors of any representation, warranty, covenant or agreement contained in the Agreement or in the Plan. (h) This Assumption will in no way expand or limit the rights and obligations of the Operator, the Debtors or AEC under the Agreement. (i) This Assumption shall inure to the benefit of and shall be binding upon the parties hereto, their successors, transferees and assigns. -44- IN WITNESS WHEREOF, the Operator and the Debtors have caused this Assumption to be duly executed as of _______________________, 1994. WITNESSES DEBTORS: Rocky Mountain Helicopters, Inc. RMH Aerologging, Inc. Western Helicopters, Inc. RMH Aeromedical, Inc. By: Name: Title: OPERATOR: By: Name: Title: -45- Exhibit G to Asset Purchase Agreement GENERAL RELEASE OF DEBTORS BY AEC OPERATOR (TO COME) -46- EX-23 3 EXHIBIT 23 Exhibit 23.1 Consent of Independent Auditors The Board of Directors Petroleum Helicopters, Inc.: We consent to incorporation by reference in registration statements No. 33-51605 on Form S-3 and No. 33-51617 on Form S-8 of Petroleum Helicopters, Inc. of our reports dated June 20, 1994, relating to 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, and all related schedules, which reports appear in the April 30, 1994, annual report on Form 10-K of Petroleum Helicopters, Inc. KPMG PEAT MARWICK New Orleans, Louisiana July 25, 1994 Exhibit 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in the Registration Statement of Petroleum Helicopters, Inc. on Form S-8 (No. 33- 51617) and on Form S-3 (No. 33-51605) of our reports dated July 19, 1992 included in this Annual report on Form 10-K for the year ended April 30, 1994. DELOITTE & TOUCHE New Orleans, Louisiana July 25,1994 -----END PRIVACY-ENHANCED MESSAGE-----