-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JmZLo68RvgXY8FsyqC2QxKJ6s2xCy0yaj+JP93kkJ58bL4KJoBzjvqGZ6RX5D2z7 mEE/EPxLlJeTfeIOBUxdRg== 0000350403-96-000009.txt : 19960730 0000350403-96-000009.hdr.sgml : 19960730 ACCESSION NUMBER: 0000350403-96-000009 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960729 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETROLEUM HELICOPTERS INC CENTRAL INDEX KEY: 0000350403 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, NONSCHEDULED [4522] IRS NUMBER: 720395707 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11581 FILM NUMBER: 96600519 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/A 1 ===================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K/A (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From .......... to .......... Commission File No. 0-9827 PETROLEUM HELICOPTERS, INC. (Exact name of registrant as specified in its charter) Louisiana 72-0395707 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2121 Airline Highway Suite 400 70001-5979 P.O. Box 578, Metairie, Louisiana (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (504) 828-3323 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Voting Common Stock Non-Voting Common Stock (Title of Each Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No State the aggregate market value of the voting stock held by non-affiliates of the registrant. Date Amount July 18, 1996 $22,400,000 Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Voting Common Stock ....2,799,761 shares outstanding as of July 19, 1996. Non-Voting Common Stock .2,276,093 shares outstanding as of July 19, 1996. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive proxy statement to be used in connection with its 1996 Annual Meeting of Shareholders will be, upon filing with the Commission, incorporated by reference into Part III of this Form 10-K. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ========================================================================= Item 8. Financial Statements and Supplementary Data Independent Auditors' Report The Board of Directors and Shareholders Petroleum Helicopters, Inc.: We have audited the consolidated balance sheets of Petroleum Helicopters, Inc. and subsidiaries as of April 30, 1996 and 1995, and the related consolidated statements of earnings, shareholders' equity, and cash flows for each of the years in the three-year period ended April 30, 1996. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Petroleum Helicopters, Inc. and subsidiaries as of April 30, 1996 and 1995, and the results of their operations and their cash flows for each of the years in the three-year period ended April 30, 1996, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP /s/ KPMG PEAT MARWICK LLP New Orleans, Louisiana June 12, 1996 PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES Consolidated Balance Sheets April 30, 1996 and 1995 (Thousands of dollars) Assets 1996 1995 Current assets: Cash and cash equivalents $ 1,899 $2,506 Accounts receivable - net of allowance: Trade 27,305 28,655 Investee companies 298 950 Notes and other 1,122 888 Inventory of spare parts and aviation fuel - at lower of average cost or market 25,947 25,560 Prepaid expenses 1,159 989 Refundable income taxes 737 - Notes receivable - investee companies 1,166 - Assets held for sale - 215 ______ ______ Total current assets 59,633 59,763 ______ ______ Notes receivable 358 - ______ ______ Investments 4,890 1,002 ______ ______ Property and equipment, at cost: Flight equipment 189,956 180,064 Other 22,845 19,752 _______ _______ 212,801 199,816 Less accumulated depreciation (116,469) (113,568) ________ ________ 96,332 86,248 ________ ________ Other 102 95 ________ ________ Total assets $ 161,315 $ 147,108 ======== ======== (Continued) PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES Consolidated Balance Sheets, Continued (Thousands of dollars) Liabilities and Shareholders' Equity 1996 1995 Current liabilities: Accounts payable - trade $ 8,209 $5,805 Accrued expenses 10,869 9,419 Accrued vacation pay 4,813 4,897 Income taxes payable - 331 Current portion of long-term debt 8,810 8,755 Other 389 747 ______ ______ Total current liabilities 33,090 29,954 ______ ______ Long-term debt 28,522 27,060 ______ ______ Deferred income taxes 14,966 12,066 ______ ______ Other long-term liabilities 3,336 2,321 ______ ______ Shareholders' equity: Voting common stock - par value of $.10; authorized 12,500,000; issued shares of 2,799,761 and 2,864,760 in 1996 and 1995 280 286 Non-voting common stock - par value of $.10; authorized 12,500,000; issued shares of 2,276,093 and 2,200,830 in 1996 and 1995 227 220 ______ ______ Total common stock 507 506 Additional paid-in capital 10,220 10,118 Retained earnings 70,674 65,083 ______ ______ 81,401 75,707 Total liabilities and shareholders' ______ ______ equity $ 161,315 $ 147,108 ======= ======= See accompanying notes to consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES Consolidated Statements of Earnings Years ended April 30, 1996, 1995 and 1994 (Thousands of dollars and shares, except per share amounts) 1996 1995 1994 Revenues: Operating revenues $ 185,865 $ 174,397 $ 178,697 Gain on equipment disposals 1,067 1,091 475 Equity in net earnings (losses) of investee companies 397 (83) - _______ _______ _______ 187,329 175,405 179,172 _______ _______ _______ Expenses: Direct expenses 161,807 153,282 162,227 Selling, general and administrative 11,871 10,237 8,715 Interest expense 3,098 3,098 2,676 _______ _______ _______ 176,776 166,617 173,618 _______ _______ _______ Earnings before income taxes 10,553 8,788 5,554 Income taxes 4,087 3,606 2,221 _______ _______ _______ Net earnings $ 6,466 $ 5,182 $ 3,333 ======= ======= ======= Net earnings per share $ 1.28 $ 0.96 $ 0.61 ======= ======= ======= Weighted average common shares outstanding 5,066 5,409 5,478 ======= ======= ======= Dividends declared per common share $ 0.17 $ 0.06 $ - ======= ======= ======= See accompanying notes to consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES Consolidated Statements of Shareholders' Equity (Thousands of dollars and shares)
Voting Voting Non-Voting Common Stock Additional Common Stock Common Stock Held in Treasury Paid-in Retained Shares Amount Shares Amount Shares Amount Capital Earnings Balance April 30, 1993 4,199 $ 350 2,200 $ 183 921 $ 77 $ 11,027 $ 60,493 Net earnings - - - - - - - 3,333 _____ _____ _____ _____ _____ _____ _____ _____ Balance April 30, 1994 4,199 350 2,200 183 921 77 11,027 63,826 Change in par value - 70 - 37 - 15 (92) - Purchase ONI shares - - - - 413 42 (824) (3,605) Retire treasury stock (1,334) (134) - - (1,334) (134) - - Other - - 1 - - - 7 - Net earnings - - - - - - - 5,182 Dividends - - - - - - - (320) _____ _____ _____ _____ _____ _____ _____ _____ Balance April 30, 1995 2,865 286 2,201 220 - - 10,118 65,083 Equity adjustment on translation - - - - - - - (13) Stock Options Exercised 10 1 - - - - 99 - Other (75) (7) 75 7 - - 3 - Net Earnings - - - - - - - 6,466 Dividends - - - - - - - (862) _____ _____ _____ _____ _____ _____ _____ _____ Balance April 30, 1996 2,800 $ 280 2,276 $ 227 - - 10,220 $ 70,674 ===== ===== ===== ===== ===== ===== ====== ======
See accompanying notes to consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended April 30, 1996, 1995 and 1994 (Thousands of dollars) 1996 1995 1994 Operating activities: Net earnings $ 6,466 $ 5,182 $ 3,333 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 8,344 8,413 8,573 Deferred income taxes 2,900 2,043 1,138 Gain on equipment disposals (1,067) (1,091) (475) Equity in net (earnings) losses of investee companies (397) 83 - Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 1,217 (3,043) 3,156 Increase in inventory (387) (710) (258) Decrease (increase) in prepaid expenses and refundable income taxes, and notes receivable (2,080) 653 1,368 Increase (decrease) in accounts payable - trade and other accrued expenses 2,646 2,746 (312) Increase (decrease) in income taxes payable (325) 331 - Other 2,032 59 (83) ______ ______ ______ Net cash provided by operating activities 19,349 14,666 16,440 Investing activities: Investments (3,303) - - Purchase of property and equipment (23,808) (20,326) (14,330) Proceeds from sales of property and equipment 6,147 12,125 1,672 Other - - (290) ______ ______ ______ Net cash used in investing activities (20,964) (8,201) (12,948) ______ ______ ______ Financing activities: Proceeds from long-term debt 23,303 13,000 32,780 Payments on long-term debt (21,787) (17,738) (33,011) Issuance of common stock 100 - - Purchase of treasury stock - (4,471) - Dividends paid (608) (320) - ______ ______ ______ Net cash provided (used) in financing activities 1,008 (9,529) (231) ______ ______ ______ Increase (decrease) in cash and cash equivalents (607) (3,064) 3,261 Cash and cash equivalents at beginning of year 2,506 5,570 2,309 ______ ______ ______ Cash and cash equivalents at end of year $ 1,899 $ 2,506 $ 5,570 ====== ====== ====== See accompanying notes to consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements April 30, 1996, 1995 and 1994 (1) Summary of Significant Accounting Policies (a)Principles of Consolidation The consolidated financial statements include the accounts of Petroleum Helicopters, Inc. and its wholly-owned subsidiaries (the Company) after the elimination of all significant intercompany accounts and transactions. Investments in 20 to 50 percent owned affiliates are accounted for by the equity method and consist primarily of investments in foreign affiliates. (b)Use of Estimates In preparing the company's financial statements management makes informed estimates and assumptions that affect the amounts reported in the financial statements and related disclosures. Actual results may differ from these estimates. (c)Cash Equivalents The Company considers cash equivalents to include demand deposits and investments with original maturity dates of three months or less. (d)Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight- line method based upon estimated useful lives of ten years for flight equipment and three to ten years for other equipment. A residual value of 25% of cost is used in the calculation of depreciation of flight equipment and other equipment. When property and equipment is sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in earnings at the time of sale or other disposition, except in the case of long-term sale and leaseback transactions. (e) Income Taxes A consolidated federal income tax return is filed by the Company and its subsidiaries. Income taxes have not been provided on the undistributed net earnings of the investee companies since, among other things, the amount of taxes involved are not significant. Income taxes are accounted for in accordance with the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. (f)Self-Insurance The Company maintains a self-insurance program for a portion of its health care costs. The Company is liable for claims up to $200,000 per covered individual annually, and aggregate claims up to $4,135,000 annually. Self-insurance costs are accrued based upon the aggregate of the liability for reported claims and the estimated liability for claims incurred but not reported. The Company does not presently have any significant obligations for post employment benefits. (g) Concentration of Credit Risk The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company places its cash and temporary cash investments with high quality financial institutions and currently invests primarily in U.S. government obligations with maturities of less than three months. A majority of the Company's business is conducted with major oil and gas exploration companies with operations in the Gulf of Mexico. The Company continually evaluates the financial strength of its customers but does not require collateral to support the customer receivables. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, current market conditions and other information. (h)Earnings per Common and Common Equivalent Share Primary earnings per share are computed based on the weighted average number of shares and dilutive equivalent shares of common stock (stock options) outstanding during each year using the treasury stock method. (i)Reclassifications Certain reclassifications have been made to the prior years financial statements in order to conform with the classifications adopted for reporting in 1996. (j)Fair Value of Financial Instruments Fair value of cash, cash equivalents, accounts receivable, accounts payable and debt approximates book value at April 30, 1996. (k)New Accounting Pronouncements The Financial Accounting Standards Board (the FASB) issued Statement of Financial Accounting Standards (SFAS) No. 121. "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement is effective for fiscal years beginning after December 15, 1995. Management does not believe that this pronouncement will have a material impact on its fiscal 1997 consolidated financial statements. The FASB also issued SFAS No. 123. "Accounting for Stock Based Compensation," effective also for fiscal years beginning after December 15, 1995. The new statement encourages, but does not require, companies to measure stock-based compensation cost using a fair value method, rather than the intrinsic value method prescribed by Accounting Principles Board (APB) opinion No. 25. Companies choosing to continue to measure stock-based compensation using the intrinsic value method must disclose on a pro forma basis net earnings and net earnings per share as if the fair value method were used. Management is currently evaluating the requirements of SFAS No. 123. (2) Long-Term Debt 1996 1995 (Thousands of dollars) Secured term loan note due in quarterly installments of $2,000,000 commencing January 31, 1991, with interest (April 30, 1996 - 8.2% and April 30, 1995 - 8.4%) fluctuating with libor and prime $ 25,562 $ 27,790 Secured note due October 31, 1997, under a revolving credit facility totaling $15,000,000 with interest (April 30, 1996 - 8.2% and April 30, 1995 - 8.4%) fluctuating with libor and prime 4,500 - Secured 10 year promissory notes due in monthly installments of $107,747 commencing July 9, 1993 with a fixed interest rate of 7.0% 7,270 8,025 ______ ______ 37,332 35,815 Less current portion 8,810 8,755 ______ ______ Long-term portion $ 28,522 $ 27,060 ====== ====== Scheduled maturities of long-term debt are as follows: (Thousands of dollars) 1997 $ 8,810 1998 8,868 1999 8,931 2000 7,060 2001 1,070 Thereafter 2,593 ______ $ 37,332 ====== At April 30, 1996, the following assets and their related book values are pledged as collateral on notes aggregating $37.3 million: (Thousands of dollars) Equipment, net of depreciation $ 46,865 Inventory 25,595 Accounts receivable, net 26,144 ______ $ 98,604 ====== The secured term and revolving loan agreements require the Company to maintain certain levels of working capital and shareholders' equity and contain other provisions some of which restrict expenditures for the purchase of the Company's stock, for capital expenditures and for payment of dividends. Such agreements also limit the creation, incurrence or assumption of Funded Debt (as defined, which includes long-term debt), and the acquisition of investments. At April 30, 1996, the Company's working capital exceeded the amount required by approximately $ .7 million, and shareholders' equity exceeded the required level by approximately $ 5.9 million. Dividends are generally limited to 20% of net earnings. At April 30, 1996, the Company was in compliance with the provisions of its loan agreements. The secured term and revolving loan agreement permit both prime rate based and London InterBank Offered Rate ("LIBOR") borrowings at LIBOR rates plus a floating spread. The spread for LIBOR and prime rate borrowings will float up or down based on the Company's performance as determined by a leverage ratio. The spread can range from 0% to 0.5% above the applicable prime rate and from 1.5% to 2.25% above LIBOR. Interest paid was $3,351,000, $2,970,000, and $2,136,000 for the years ended April 30, 1996, 1995 and 1994, respectively. (3) Income Taxes Income tax expense for the three years ended April 30, 1996, is composed of the following: 1996 1995 1994 (Thousands of dollars) Current: Federal $ 757 $ 1,234 $ 853 State 344 270 148 Foreign 85 59 82 Deferred - principally Federal 2,901 2,043 1,138 ______ ______ ______ $ 4,087 $ 3,606 $ 2,221 ====== ====== ====== Deferred income tax expense (benefit) results from the following: 1996 1995 1994 (Thousands of dollars) Accelerated depreciation $ 1,408 $ 2,564 $ 1,496 Accrued expenses and other liabilities (138) (2,353) (636) Effect of tax credits 1,631 1,832 278 ______ ______ ______ $ 2,901 $ 2,043 $ 1,138 ====== ====== ====== Income tax expense as a percentage of pre-tax earnings varies from the effective Federal statutory rate of 34% as a result of the following: Years ended April 30 1996 1995 1994 Amount % Amount % Amount % (Thousands of dollars, except percentages) Income taxes at statutory rate $ 3,588 34 $ 2,988 34 $ 1,888 34 Increase (decrease) in taxes resulting from: Equity in net (earnings) losses of consolidated investee companies (134) (1) 28 - - - Effect of state income taxes 227 2 178 2 98 2 Other items - net 406 4 412 5 235 4 ______ ___ ______ ___ ______ ___ $ 4,087 39 $ 3,606 41 $ 2,221 40 ====== === ====== === ====== === For income tax purposes, the Company had approximately $ 81,000 of general business tax credit carryforwards. These general business tax credit carryforwards will expire between 1998 and 2001. The Company also has approximately $ 564,000 of alternative minimum tax credit carryforwards available to reduce future Federal regular income taxes over an indefinite period. The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and deferred tax liabilities at April 30, 1996 and 1995 are presented below: 1996 1995 (Thousands of dollars) Deferred tax assets: Tax credits $ 645 $ 2,276 Vacation accrual 1,774 1,812 Inventory valuation 881 792 Workman's compensation reserve 381 518 Other 2,678 2,423 _____ _____ Total deferred tax assets 6,359 7,821 _____ _____ Deferred tax liabilities: Tax depreciation in excess of book depreciation 20,840 19,432 Other 485 455 ______ ______ Total deferred tax liabilities 21,325 19,887 ______ ______ Net deferred tax liability $ 14,966 $ 12,066 ====== ====== No valuation allowance was recorded against the net deferred tax assets because management believes that the deferred tax assets will more than likely be realized in full through future operating results and the reversal of taxable temporary differences. Income taxes paid were approximately $2,267,000, $1,168,000, and $470,000 for the years ended April 30, 1996, 1995 and 1994, respectively. (4) Employee Benefit Plans The Company established, effective July 1, 1989, an Employee Savings Plan under Section 401(k) of the Internal Revenue Code. The Plan provides that the Company match up to 3% of employee contributions. The Company's contribution was $1,616,000, $1,586,000, and $1,604,000 for the years ended April 30, 1996, 1995 and 1994, respectively. Effective September 1, 1994, the Company adopted a Supplemental Executive Retirement Plan ("SERP"). The nonqualified and unfunded plan provides senior management with supplemental retirement and death benefits at age 65. Life insurance policies, of which the Company is the sole owner and beneficiary, were purchased on the lives of each of the participants. Supplemental retirement benefits were based on one-third (1/3) of the participants' monthly income at the time of adoption. Currently, there are no SERP provisions for an increase in benefits, partial vesting or early retirement. The assumed discount rate was 7.5%. Expenses related to the plan were $ 308,000 for 1996 and $ 197,000 for 1995. During fiscal 1996, the Board of Directors approved an Officer Deferred Compensation Plan and a Director Deferred Compensation Plan. Both plans were effective May 31, 1995. The plans permit key officers and all directors to defer a portion of their compensation. The plans are nonqualified and unfunded. (5) Stock Option Plans Effective May 1, 1992, the Company's Board of Directors adopted the Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and Stock Appreciation Rights Plan (the "Plan"). The Plan was approved at the Annual Meeting of Shareholders on September 30, 1992. The Company is authorized to grant non-qualified stock options and stock appreciation rights (Sar) to selected employees to purchase up to 100,000 shares of the Company's non-voting common stock at an exercise price of not less than 25% of their Fair Market Value at the date of grant. The options may be exercised any time after one year from the date of grant until their expiration at five years from such date. During fiscal 1993 an officer of the Company was granted non- qualified options to purchase 15,000 shares of voting common stock at the fair market value of the stock at the date of grant. The options were not granted under the 1992 Plan. The options expire five years from the date of grant. Effective May, 1995 the Company's Board of Directors adopted the PHI 1995 Incentive Plan (the "1995 Plan"). The plan was approved at the Annual Meeting of Shareholders on September 22, 1995. The Company is authorized to issue a total of 175,000 shares of voting common stock and 325,000 shares of non-voting common stock under the 1995 Plan. The Compensation Committee of the Board of Directors is authorized under the 1995 Plan to grant stock options, restricted stock, stock appreciation rights, performance shares, stock awards and cash awards. During fiscal 1996, 23,200 and 58,000 non- qualified stock options for voting and non-voting common stock, respectively, were granted under the 1995 Plan. The exercise price of the grants is equal to the fair market value of the underlying stock at the date of grant. These options will vest on July 31, 1996 only to the extent certain 1996 performance targets are met. In the event any of the stock options become vested, one-half become exercisable on July 31, 1996 and one-half become exercisable on July 31, 1997. The stock options expire on May 31, 2005. A summary of the Plans' activities for the years ended April 30, 1996, 1995, and 1994 is as follows: (CAPTION> 1992 Plan Other 1995 Plan Options Options Options Total Non-Voting Voting Voting Non-Voting Balance outstanding at April 30, 1993 15,000 - 15,000 - - Options granted at $15.50 87,000 87,000 - - - Options cancelled (6,000) (6,000) - - - _______ _______ _______ _______ _______ Balance outstanding at April 30, 1994 96,000 81,000 15,000 - - Options cancelled (6,000) (6,000) - - - _______ _______ _______ _______ _______ Balance outstanding at April 30, 1995 90,000 75,000 15,000 - - _______ _______ _______ _______ _______ Options granted at $9.75 (voting) and $8.50 (non-voting) 81,200 - - 23,200 58,000 Options exercised (10,000) - (10,000) - - _______ _______ _______ _______ _______ Balance outstanding at April 30, 1996 161,200 75,000 5,000 23,200 58,000 ======= ======= ======= ======= ======= Shares exercisable at April 30, 1994 - - - - - ======= ======= ======= ======= ======= Shares exercisable at April 30, 1995 30,000 25,000 5,000 - - ======= ======= ======= ======= ======= Shares exercisable at April 30, 1996 50,000 50,000 - - - ======= ======= ======= ======= ======= Shares available for future grant at April 30, 1996 443,800 25,000 - 151,800 267,000 ======== ======= ======= ======= =======
(6) Supplemental Cash Flow Information and Financing Activities In 1996, the Company entered into agreements for the sale and leaseback of two helicopters. The book values of the equipment totalling $ 3.5 million were removed from the balance sheet, and the gains realized on the sale transactions totalling $ 0.3 million were deferred and are being credited to income as rent expense adjustments over the lease term. Rentals on these transactions average $ 0.4 million annually. In 1994, the Company entered into an agreement to acquire up to 28% of a corporate joint venture. In 1994 the Company acquired a 13.7% interest in the corporate joint venture in exchange for a helicopter and equipment with net values totalling $519,000. At April 30, 1994, the Company had a note receivable from the joint venture which the Company had the option to convert into an additional 9.3% of common stock of the corporate joint venture. In 1995 the Company exercised the option and contributed equipment valued at $191,000 to acquire an additional 5% of the corporate joint venture. On July 13, 1995 the Company purchased 49% of Irish Helicopters Limited (IHL) based in Dublin Ireland for $3 million. IHL operates five aircraft which are engaged primarily in search and rescue missions off the Irish Coast. (7) Shareholders' Equity In connection with the Company's reincorporation, which was approved by the shareholders at the Company's September 28, 1994 annual meeting of shareholders, the par value of the voting common stock and non-voting common stock was changed from $ .08 1/3 per share to $ .10 per share. On February 28, 1995 the Company purchased 413,308 shares of the Company's common voting stock at market value for $ 4.5 million from Offshore Navigation, Inc. ("ONI"), an affiliate of the Company. Prior to the acquisition, these shares represented approximately 12.6% of the Company's outstanding voting common stock. The shares were placed in the Company's treasury. Subsequent to the purchase of the ONI shares, all shares of voting common stock held in treasury were retired. (8) Commitments and Contingencies The Company leases certain aircraft used in its operations. The Company generally pays all insurance, taxes and maintenance expenses associated with these aircraft and some of these leases contain renewal and purchase options. Aggregate rental commitments to lease aircraft under operating leases are due in years subsequent to April 30, 1996, as follows: (Thousands of dollars) 1997 $ 11,079 1998 10,742 1999 10,641 2000 10,425 2001 10,181 Thereafter 14,903 ______ $ 67,971 ====== Rental expense consisted of the following: (Thousands of dollars) (Years ended April 30) 1996 1995 1994 Aircraft $ 12,145 $ 11,364 $ 12,369 Other 1,690 1,745 1,637 ______ ______ ______ $ 13,835 $ 13,109 $ 14,006 ====== ====== ====== Subsequent to year end, the Company purchased six aircraft for an aggregate of $ 4 million. In addition, the Company plans to purchase twenty-two helicopters in 1997. The total purchase price is estimated to be $ 21 million. These purchases are subject to obtaining customer commitments. In the first quarter of fiscal 1996 the Company began an environmental review at selected domestic bases. Based on this review, known or suspected fuel contamination has been identified at eight of its bases. Management now believes it is possible that similar fuel contamination will be found at additional bases. During the prior year, initial assessments of the costs to remediate this contamination were commenced and a preliminary estimate of the costs expected to be incurred at three of the Company's bases was received. The Company is seeking additional information regarding this preliminary estimate, and further assessments are planned at all other bases at which known or suspected fuel contamination has been identified. Depending in part upon the results of these assessments, the Company also anticipates that it will conduct additional studies at its other bases. Based on the information currently available to management, an additional provision of $1,500,000 has been made in the current year. The Company has expensed, including reserve provisions for environmental costs, $1,797,000 for the current year. The aggregate reserve for environmental related costs, at April 30, 1996, is $1.7 million. The Company will make additional provisions in future periods to the extent appropriate as further information regarding these costs becomes available. A director of the Company serves as Chairman of the Board of Aviall, Inc., a supplier of parts to the Company. During fiscal 1996, total purchases from Aviall were $ 6 million. The Company believes that the prices paid for such parts were representative of that which would have been paid in an arms length transaction. The Company is named as a defendant in various legal actions which have arisen in the ordinary course of its business and have not been finally adjudicated. The amount, if any, of ultimate liability with respect to such matters cannot be determined; however, after consulting with legal counsel, the Company has established accruals which it believes adequately provide for the settlement of such litigation which have not had a material effect on the Company's financial condition. (9) Supplementary Data - Quarterly Financial Data (Unaudited) The summarized quarterly results of operations for the years ended April 30,1996 and 1995 (in thousands of dollars, except per share data) are as follows: Quarter Ended July 31, October 31, January 31, April 30, 1995 1995 1996 1996 Revenues $ 46,710 $ 48,418 $ 45,712 $ 46,489 Gross profit $ 5,307 $ 6,406 $ 5,644 $ 6,701 Net earnings $ 1,391 $ 1,934 $ 1,339 $ 1,802 Net earnings per share $ .27 $ .39 $ .26 $ .36 Quarter Ended July 31, October 31, January 31, April 30, 1994 1994 1995 1995 Revenues $ 44,390 $ 45,045 $ 41,903 $ 44,067 Gross profit $ 4,307 $ 5,574 $ 5,131 $ 6,103 Net earnings $ 1,161 $ 1,455 $ 810 $ 1,756 Net earnings per share $ .21 $ .27 $ .15 $ .33 Part IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) 1. Financial Statements Included in Part II of this report: Independent Auditors' Report Consolidated Balance Sheets at April 30, 1996 and 1995 Consolidated Statements of Earnings for each of the years in the three year period ended April 30, 1996 Consolidated Statements of Shareholders' Equity for each of the years in the three year period ended April 30, 1996 Consolidated Statements of Cash Flows for each of the years in the three year period ended April 30, 1996 Notes to Consolidated Financial Statements 2. Financial Statement Schedules Schedules are omitted because they are either not required or not applicable, or because the required information is shown in the Consolidated Financial Statements or Notes thereto. 3. Exhibits 3.1 (i) Article of Incorporation of the Company (incorported) by reference to Exhibibt No. 3.1(i) to PHI's Reporton Form 10-Q for the quarterly period ended January 31, 1996. (ii) By-laws of the Company (incorporated by reference to Exhibit No. 3.1(ii) to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1996). 10.1 Master Helicopter Lease Agreement dated May 29, 1991 between AT&T Systems Leasing Corporation and PHI (incorporated by reference to Exhibit No. 10.1 (2) to PHI's Report on Form 10-K dated April 30, 1992). 10.2 Master Helicopter Lease Agreement dated February 14, 1991 between General Electric Capital Corporation and PHI (incorporated by reference to Exhibit No. 10.1 (1) to PHI's Report on Form 10-K dated April 30, 1991). 10.3 (i) Amended and Restated Loan Agreement originally dated as of January 31, 1986 Amended and Restated in its entirety as of July 9, 1993 among Petroleum Helicopters, Inc., Whitney National Bank, First National Bank of Commerce, and NationsBank of Texas, N.A., as agent (incorporated by reference to Exhibit No. 10.3 to PHI's Report on Form 10-K dated April 30, 1993). (ii) First Amendment to Amended and Restated Loan Agreement, dated as of October 31, 1993 (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (iii) Second Amendment to Amended and Restated Loan Agreement, dated as of April 15, 1994 (incorporated by 10.5 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (iv) Third Amendment to Amended and Restated Loan Agreement, dated as of July 31, 1994 (incorporated by reference to Exhibit No. 10.6 to PHI's Report on Form 10-Q or the quarterly period ended January 31, 1995). (v) Fourth Amendment and Limited Waiver to Amended and Restated Loan Agreement, dated as of October 25, 1994 (incorporated by reference to Exhibit No. 10.7 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (vi) Fifth Amendment to Amended and Restated Loan Agreement, dated as of October 31, 1994 (incorporated by reference to Exhibit No. 10.8 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (vii) Sixth Amendment to Amended and Restated Loan Agreement, dated as of February 27, 1995. (viii) Seventh Amendment to Amended and Restated Loan Agreement, dated as of October 31, 1995. 10.4 Installment promissory note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,122,441.56, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-K dated April 30, 1993). 10.5 Installment Promissory Note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,078,695.58, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.5 to PHI's Report on Form 10-K dated April 30, 1993). 10.6 Installment Promissory Note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,078,695.58, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.6 to PHI's Report on Form 10-K dated April 30, 1993). 10.7 The Petroleum Helicopters, Inc. 401(k) Retirement Plan effective July 1, 1989 (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-K dated April 30, 1990). 10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and Stock Appreciation Rights Plan adopted by PHI's Board effective May 1, 1992 and approved by the shareholders of PHI on September 30, 1992 (incorporated by reference to Exhibit No. 10.8 to PHI's Report on Form 10-K dated April 30, 1993). 10.9 Form of Stock Option Agreement for the Grant of Non-Qualified Stock Options Under the Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and Stock Appreciation Rights Plan dated June 2, 1993 between PHI and certain of its key employees (incorporated by reference to Exhibit No. 10.9 to PHI's Report on Form 10-K dated April 30, 1993). 10.10 Employment Agreement between PHI and John H. Untereker dated June 15, 1992 (incorporated by reference to Exhibit No. 10.10 to PHI's Report on Form 10-K dated April 30, 1993). 10.11 Stock Option Agreement between PHI and John H. Untereker dated April 12, 1993, but effective as of July 20, 1992 (incorporated by reference to Exhibit No. 10.11 to PHI's Report on Form 10-K dated April 30, 1993). 10.12 Amended and Restated Petroleum Helicopters, Inc. 1995 Incentive Compensation Plan adopted by PHI's Board effective July 11, 1995 and approved by the shareholders of PHI on September 22, 1995. 10.13 Form of Non-Qualified Stock Option Agreement under the Petroleum Helicopters, Inc. 1995 Incentive Compensation Plan between PHI and certain of its key employees. 21 Subsidiaries of the Registrant (incorporated by reference to Exhibit No. 21 to PHI's Report on Form 10-K dated April 30, 1993). 23.1 Consent of KPMG Peat Marwick LLP 27.1 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the fourth quarter of fiscal 1996. (d) Financial Statement Schedules Financial statements or information regarding 50% or less owned entities accounted for by the equity method have been omitted because such entities, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary. Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PETROLEUM HELICOPTERS, INC. By: /s/ Carroll W. Suggs 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, July 26, 1996 Carroll W. Suggs Chief Executive Officer and Director (Principal Executive Officer) /s/ John H. Untereker Vice President and July 26, 1996 John H. Untereker Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Leonard M. Horner Director July 26, 1996 Leonard M. Horner /s/ Robert G. Lambert Director July 26, 1996 Robert G. Lambert 357\60106\013 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PETROLEUM HELICOPTERS, INC. Date: July 29, 1996 /s/ John H. Untereker John H. Untereker Vice President and Chief Financial Officer EXHIBITS 3.1 (i) Articles of Incorporation of the Company (incorporated by reference to Exhibit No. 3.1(i) to PHI's Report on Form 10-Q for the quarterly period ended October 31, 1994). (ii) By-laws of the Company (incorporated by reference to Exhibit No. 3.1(ii) to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1996). 10.1 Master Helicopter Lease Agreement dated May 29, 1991 between AT&T Systems Leasing Corporation and PHI (incorporated by reference to Exhibit No. 10.1 (2) to PHI's Report on Form 10-K dated April 30, 1992). 10.2 Master Helicopter Lease Agreement dated February 14, 1991 between General Electric Capital Corporation and PHI (incorporated by reference to Exhibit No. 10.1 (1) to PHI's Report on Form 10-K dated April 30, 1991). 10.3(i)Amended and Restated Loan Agreement originally dated as of January 31, 1986 Amended and Restated in its entirety as of July 9, 1993 among Petroleum Helicopters, Inc., Whitney National Bank, First National Bank of Commerce, NationsBank of Texas, N.A. and NationsBank of Texas, N.A., as agent (incorporated by reference to Exhibit No. 10.3 PHI's Report on Form 10-K dated April 30, 1993). (ii) First Amendment to Amended and Restated Loan Agreement, dated as of October 31,1993 (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (iii) Second Amendment to Amended and Restated Loan Agreement, dated as of April 15, 1994 (incorporated by reference to Exhibit No. 10.5 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (iv) Third Amendment to Amended and Restated Loan Agreement, dated as of July 31, 1994 (incorporated by reference to Exhibit No. 10.6 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (v) Fourth Amendment and Limited Waiver to Amended and Restated Loan Agreement, dated as of October 25, 1994 (incorporated by reference to Exhibit No. 10.7 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (vi) Fifth Amendment to Amended and Restated Loan Agreement, dated as of October 31, 1994 (incorporated by reference to Exhibit No. 10.8 to PHI's Report on Form 10-Q for the quarterly period ended January 31, 1995). (vii) Sixth Amendment to Amended and Restated Loan Agreement, dated as of February 27, 1995. (viii) Seventh Amendment to Amended and Restated Loan Agreement, dated as of October 31, 1995. 10.4 Installment promissory note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,122,441.56, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-K dated April 30, 1993). 10.5 Installment Promissory Note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,078,695.58, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.5 to PHI's Report on Form 10-K dated April 30, 1993). 10.6 Installment Promissory Note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,078,695.58, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.6 to PHI's Report on Form 10-K dated April 30, 1993). 10.7 The Petroleum Helicopters, Inc. 401(k) Retirement Plan effective July 1, 1989 (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-K dated April 30, 1990). 10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and Stock Appreciation Rights Plan adopted by PHI's Board effective May 1, 1992 and approved by the shareholders of PHI on September 30, 1992 (incorporated by reference to Exhibit No. 10.8 to PHI's Report on Form 10-K dated April 30, 1993). 10.9 Form of Stock Option Agreement for the Grant of Non- Qualified Stock Options Under the Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and Stock Appreciation Rights Plan dated June 2, 1993 between PHI and certain of its key employees (incorporated by reference to Exhibit No. 10.9 to PHI's Report on Form 10-K dated April 30, 1993). 10.10 Employment Agreement between PHI and John H. Untereker dated June 15, 1992 (incorporated by reference to Exhibit No. 10.10 to PHI's Report on Form 10-K dated April 30, 1993). 10.11 Stock Option Agreement between PHI and John H. Untereker dated April 12, 1993, but effective as of July 20, 1992 (incorporated by reference to Exhibit No. 10.11 to PHI's Report on Form 10-K dated April 30, 1993). 10.12 Amended and Restated Petroleum Helicopters, Inc. 1995 Incentive Compensation Plan adopted by PHI's Board effective July 11, 1995 and approved by the shareholders of PHI on September 22, 1995. 10.13 Form of Non-Qualified Stock Option Agreement under the Petroleum Helicopters, Inc. 1995 Incentive Compensation Plan between PHI and certain of its key employees. 21 Subsidiaries of the Registrant (incorporated by reference to Exhibit No. 21 to PHI's Report on Form 10-K dated April 30, 1993). 23.1 Consent of KPMG Peat Marwick LLP 27.1 Financial Data Schedule -----END PRIVACY-ENHANCED MESSAGE-----