8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of report (Date of earliest event reported) March 16, 2007

PHI, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Louisiana	0-9827	72-0395707
(State of Other Jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2001 SE Evangeline Thruway, Lafayette, LA		70508
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (800) 235-2452

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
Press Release

Item 2.02. Results of Operations and Financial Condition

     On March 16, 2007, PHI, Inc. issued a press release announcing its year-end 2006 earnings. The press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(a)	Financial Statements of Business Acquired.
	None.
(b)	Pro Forma Financial Information.
	None.
(c)	Exhibits

Exhibit No.	Description
99.1	Press Release of PHI, Inc. dated March 16, 2007, announcing earnings for the year-ended December 31, 2006.

SIGNATURES

     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 hereunto duly authorized.

	PHI, Inc. (Registrant)
Date: March 19, 2007	By:	/s/	Michael J. McCann
			Name: Michael J. McCann Title: Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of PHI, Inc. dated March 16, 2007 announcing earnings for the year-ended December 31, 2006.

EX-99.1

Exhibit 99.1

                       News Release
CONTACT: Michael J. McCann
                        CFO and Treasurer
                        (337) 235-2452

FOR IMMEDIATE RELEASE

PHI, INC. ANNOUNCES RESULTS
FOR THE YEAR ENDED DECEMBER 31, 2006

     LAFAYETTE, LA – March 16, 2007 – PHI, Inc. (“PHI”) today reported a net loss of $0.7 million ($0.05 per diluted share) on operating revenues of $413.1 million for the year ended December 31, 2006, compared to net earnings of $14.2 million ($1.76 per diluted share) on operating revenues of $363.6 million for the year ended December 31, 2005. The current year’s results include a charge for debt restructuring of $12.8 million, as well as reduced revenue and increased costs related to the pilots’ strike which commenced September 20, 2006. These items are more fully discussed in our Form 10-K.

     Operating revenues for 2006 were $413.1 million compared to $363.6 million for 2005, an increase of $49.5 million. Domestic Oil and Gas operating revenues increased $28.4 million due primarily to customer requirements for additional aircraft, and contractual rate increases. Operating revenues in the Air Medical segment increased $21.3 million, or 19%, due to the additional operations established during 2005 that were in operation for a full year in 2006. Although Domestic Oil and Gas and Air Medical segments reflected increased revenues compared to 2005, both segments were adversely affected by the pilots’ strike.

As previously reported, the pilots represented by the OPEIU (the Office and Professional Employees International Union) commenced a general strike on September 20, 2006 affecting both the Domestic Oil and Gas and Air Medical segments. Approximately 236 pilots initially participated in this strike, out of a total pilot work force of 597. On November 10, 2006, the OPEIU notified the Company that it was ending the strike, purportedly offering an “unconditional” return to work of the remaining striking pilots.

To date, 196 of 236 striking pilots (83%) have been rehired or have taken themselves out of consideration for continued employment. In addition to processing the remaining striking pilots back to work, we continue to hire additional pilots. That process was interrupted November 10, 2006, when the union announced that the striking pilots would return to work unconditionally, but in early January 2007, we again commenced hiring pilots based on increasing needs due to new aircraft deliveries. As of February 28, 2007, the pilot work force was 648, compared to a total pilot work force on the date the strike commenced of 597. Continuing legal issues related to the pilots’ strike are more fully discussed in our Form 10K.

In the fourth quarter of 2006, operating revenues were $95.3 million compared to operating revenues of $102.6 million in the same quarter of 2005. The net loss in the fourth quarter 2006 was $5.3 million, or $0.34 per share diluted share, compared to net earnings of $6.4 million or $0.62 per diluted share in the fourth quarter of 2005. There were 4.9 million more shares outstanding at December 31, 2006 than were outstanding at December 31, 2005.

Certain statements in this release constitute forward-looking statements or statements that may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “forecast,” “anticipate,” “estimate,” “project,” “intend,” “expect,” “should,” “believe,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors that could cause the Company’s actual results, performance (financial or operating) or achievements to differ materially from the results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. The above factors are more fully discussed in the Company’s SEC filings.

PHI provides helicopter transportation and related services to a broad range of customers including the oil and gas industry, air medical industry and also provides third-party maintenance services to select customers. PHI Common Stock is traded on The Nasdaq National Market System (symbols PHII and PHIIK).

###

PHI, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Thousands of dollars and shares, except per share data)

	For the Year Ended
	December 31,
	2006			2005
Operating revenues	$	413,118		$	363,610
Gain, net on disposition of property and equipment		1,910			1,173
Other		8,036			2,057
		423,064			366,840
Expenses:
Direct expenses		366,272			299,263
Selling, general and administrative		27,839			24,896
Interest expense		17,243			20,448
Loss on debt restructuring		12,790			—
		424,144			344,607
Earnings (loss) before income taxes		(1,080	)		22,233
Income taxes		(413	)		8,079
Net earnings (loss)	$	(667	)	$	14,154
Earnings (loss) per share
Basic	$	(0.05	)	$	1.76
Diluted	$	(0.05	)	$	1.76
Weighted average shares outstanding:
Basic		13,911			8,040
Diluted		13,911			8,063
Total shares outstanding		15,288			10,422

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Summarized financial information concerning the Company’s reportable operating segments for the years ended December 31, 2006, 2005 and 2004:

				Year Ended
	December 31,
	2006			2005			2004
	(Thousands of dollars)
Segment operating revenues
Domestic Oil and Gas	$	248,035		$	219,644		$	180,102
Air Medical		133,397			112,123			77,476
International		25,588			28,192			24,342
Technical Services		6,098			3,651			9,388
Total operating revenues		413,118			363,610			291,308
Segment direct expense
Domestic Oil and Gas		213,279			173,177			151,107
Air Medical		130,412			104,465			67,664
International		18,456			19,099			18,668
Technical Services		4,125			2,522			7,935
Total direct expense		366,272			299,263			245,374
Segment selling, general and administrative expense
Domestic Oil and Gas		1,010			1,003			1,499
Air Medical		7,384			6,503			6,525
International		96			214			49
Technical Services		82			7			12
Total selling, general and administrative expense		8,572			7,727			8,085
Total direct and selling, general and administrative expense		374,844			306,990			253,459
Net segment profit
Domestic Oil and Gas		33,746			45,464			27,496
Air Medical		(4,399	)		1,155			3,287
International		7,036			8,879			5,625
Technical Services		1,891			1,122			1,441
Total		38,274			56,620			37,849
Other, net		9,946			3,230			2,961
Unallocated selling, general and administrative costs		(19,267	)		(17,100	)		(12,949	)
Interest expense		(17,243	)		(20,448	)		(20,109	)
Loss on debt restructuring		(12,790	)		—			—
Earnings (loss) before income taxes	$	(1,080	)	$	22,233		$	7,752
Flight hours
Domestic Oil and Gas		107,735			111,236			100,814
Air Medical		29,980			26,619			19,595
International		13,265			16,788			15,871
Total		150,980			154,643			136,280
Air Medical Transports		20,808			17,200			11,390
Aircraft operated at period end
Domestic Oil and Gas		152			155			151
Air Medical		68			64			51
International		16			16			19
Total		236			235			221

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