Business Segments and Geographic Areas

12 Months Ended

Dec. 31, 2011

Business Segments and Geographic Areas [Abstract]

BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

(11) BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

PHI is primarily a provider of helicopter services, including helicopter maintenance and repair services. The Company has used a combination of factors to identify its reportable segments as required by ASC 280, “Segment Reporting”. The overriding determination of the Company’s segments is based on how the chief operating decision-maker of the Company, the Chairman of the Board and Chief Executive Officer, evaluates the Company’s results of operations. The underlying factors include customer bases, types of service, operational management, physical locations, and underlying economic characteristics of the types of work the Company performs.

The Oil and Gas segment provides helicopter services to oil and gas customers operating in the Gulf of Mexico and two foreign countries. The Air Medical segment provides helicopter services to hospitals and medical programs in several U.S. states, and also to individuals in which case the Company is paid by either a commercial insurance company, federal or state agency, or the patient. The Company’s PHI Air Medical, L.L.C. subsidiary is included in the Air Medical segment. The Technical Services segment provides helicopter repair and overhaul services for existing flight operations customers. The Company also operates five aircraft for the National Science Foundation in Antarctica under the Technical Services segment.

Each segment has a portion of selling, general and administrative expenses that is charged directly to the segment and a portion that is allocated. Direct charges represent the vast majority of segment selling, general and administrative expenses. Allocated selling, general and administrative expenses is based primarily on total segment costs as a percentage of total operating costs.

Air Medical operations are headquartered in Phoenix, Arizona, where the Company maintains significant separate facilities and administrative staff dedicated to this segment. Those costs are charged directly to the Air Medical segment, resulting in a disproportionate share of selling, general and administrative expenses compared to the Company’s other reportable segments.

Customers of the Company in the Oil and Gas segment consist principally of major integrated energy companies and independent exploration and production companies. The customers, individually or considered as a group under common ownership, which accounted for greater than 10% of accounts receivable or 10% of operating revenues during the periods reflected were as follows:

	Accounts Receivable December 31,						Operating Revenues Years Ended December 31,
	2011			2010			2011			2010			2009
Customer A		15	%		15	%		15	%		17	%		15	%
Customer B		7	%		7	%		14	%		14	%		13	%

The following table shows information about the profit or loss and assets of each of the Company’s reportable segments for the years ended December 31, 2011, 2010, and 2009. The information contains certain allocations, including allocations of depreciation, rents, insurance, and overhead expenses that the Company deems reasonable and appropriate for the evaluation of results of operations. The Company does not allocate gains on dispositions of property and equipment, other income, interest expense, income taxes, and corporate selling, general, and administrative expenses to the segments. Where applicable, the tables present the unallocated amounts to reconcile the totals to the Company’s consolidated financial statements. Corporate assets are principally cash, short-term investments, other assets, and certain property, and equipment.

Certain reclassifications have been made to prior fiscal year amounts to conform with the current fiscal year presentation. These changes had no impact on consolidated net sales or operating income.

	Year Ended December 31,
	2011			2010			2009
	(Thousands of dollars)
Segment operating revenues
Oil and Gas	$	355,406		$	345,402		$	316,198
Air Medical		171,669			160,517			160,113
Technical Services		12,551			11,016			10,864
Total operating revenues		539,626			516,935			487,175
Segment direct expenses
Oil and Gas		310,281			290,106			263,818
Air Medical		151,503			145,356			147,630
Technical Services		7,956			8,240			7,179
Total direct expenses		469,740			443,702			418,627
Segment selling, general and administrative expenses
Oil and Gas		3,506			4,594			3,636
Air Medical		5,198			4,987			6,484
Technical Services		53			31			51
Total selling, general and administrative expenses		8,757			9,612			10,171
Total direct and selling, general and administrative expenses		478,497			453,314			428,798
Net segment profit
Oil and Gas		41,619			50,702			48,744
Air Medical		14,968			10,174			5,999
Technical Services		4,542			2,745			3,634
Total		61,129			63,621			58,377
Other, net (1)		543			417			336
Unallocated selling, general and administrative expenses		(25,612	)		(20,535	)		(20,835	)
Interest expense		(27,974	)		(19,389	)		(16,037	)
Loss on debt restructuring		—			(9,521	)		—
Earnings before income taxes	$	8,086		$	14,593		$	21,841

(1) Including gains on disposition of property and equipment and other income.

	Year Ended December 31,
	2011		2010		2009
	(Thousands of dollars)
Expenditures for long-lived assets
Oil and Gas	$	88,742	$	88,146	$	36,674
Air Medical		10,227		8,789		20,205
Corporate		1,983		1,522		1,301
Total	$	100,952	$	98,457	$	58,180

	Year Ended
	December 31,
	2011		2010		2009
	(Thousands of dollars)
Depreciation and Amortization
Oil and Gas	$	21,422	$	18,204	$	16,988
Air Medical		8,466		7,982		7,926
Technical Services		167		260		285
Corporate		1,243		1,635		2,565
Total	$	31,298	$	28,081	$	27,764
Assets
Oil and Gas	$	525,175	$	447,973	$	408,802
Air Medical		230,666		232,645		227,766
Technical Services		9,645		8,347		8,382
Corporate		198,645		256,174		160,556
Total	$	964,132	$	945,139	$	805,506

The following table presents the Company’s revenues from external customers attributed to operations in the United States and foreign areas and long-lived assets in the United States and foreign areas.

	Year Ended
	December 31,
	2011		2010		2009
	(Thousands of dollars)
Operating revenues:
United States	$	527,945	$	509,221	$	480,128
International		11,681		7,714		7,047
Total	$	539,626	$	516,935	$	487,175
Long-Lived Assets:
United States	$	652,948	$	592,333	$	546,077
International		6,808		4,200		2,459
Total	$	659,756	$	596,533	$	548,536