Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

(12) COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain aircraft, facilities, and equipment used in its operations. The related lease agreements, which include both non-cancelable and month-to-month terms, generally provide for fixed monthly rentals and, for certain real estate leases, renewal options. The Company generally pays all insurance, taxes, and maintenance expenses associated with these aircraft leases and some of these leases contain renewal and purchase options at fair market values. Rental expense incurred under these leases consisted of the following:

	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2012		2011		2010
	(Thousands of dollars)
Aircraft	$	36,240	$	25,408	$	30,219
Other		8,081		7,150		7,258
Total	$	44,321	$	32,558	$	37,477

Included in the above rental expense is $0.3 million in 2012, $0.2 million in 2011, and $0.1 million in 2010 paid to GE Air, Inc. and Gonsoulin Enterprises, Inc. for the lease of aircraft and real estate. The lessor companies are owned by our CEO and majority voting shareholder.

The following table presents the remaining aggregate lease commitments under operating leases having initial non-cancelable terms in excess of one year. The table includes renewal periods on the principal operating facility lease.

	Aircraft		Other		Total
	(Thousands of dollars)
2013	$	39,137	$	3,941	$	43,078
2014		39,137		3,359		42,496
2015		38,860		2,908		41,768
2016		31,964		2,592		34,556
2017		22,095		2,145		24,240
Thereafter		27,495		4,681		32,176
	$	198,688	$	19,626	$	218,314

The above remaining lease commitments include $0.5 million remaining on an aircraft lease with GE Air, Inc., an entity owned by our CEO and majority shareholder.

In 2012, we purchased two heavy aircraft off lease pursuant to purchase options in the lease contracts, for an aggregate purchase price of $27.6 million, using proceeds from the sale of short-term investments. As of December 31, 2012, we had options to purchase aircraft under lease becoming exercisable in 2013 through 2019 for the following aggregate purchase prices: $54.6 million in 2013, $114.4 million in 2014, $33.5 million in 2016, $89.8 million in 2017, and $19.5 million in 2019. Subject to market conditions, we intend to exercise these options as they become exercisable.

Guarantees

In the normal course of business with customers, vendors, and others, we provide guarantees, performance, and payment bonds pursuant to certain agreements. The aggregate amount of these guarantees and bonds at December 31, 2012 was $1.1 million and are scheduled to expire between March 2013 and September 2013.

Purchase Commitments

In 2012, we executed a contract to acquire six new heavy aircraft for our Oil and Gas segment. The aggregate acquisition cost will be $160.3 million and delivery for the aircraft is scheduled for 2013.

We also have a contract to acquire ten light helicopters, with the remaining three scheduled for delivery in 2013.

Total aircraft deposits of $12.1 million were included in Other Assets as of December 31, 2012. This amount represents deposits for aircraft purchase contracts.

Environmental Matters

We have recorded an aggregate estimated probable liability of $0.5 million as of December 31, 2012 for environmental response costs. The Company has conducted environmental surveys of its former Lafayette facility located at the Lafayette Regional Airport, which it vacated in 2001, and has determined that limited soil and groundwater contamination exists at the facility. The Company has installed groundwater monitoring wells at the facility and periodically monitors and reports on the contamination to the Louisiana Department of Environmental Quality (“LDEQ”). The Company previously submitted a Risk Evaluation Corrective Action Plan (RECAP) Standard Site Assessment Report to the LDEQ fully delineating the extent and type of contamination and updated the Report to include additional analytical data in April 2006. LDEQ reviewed the Assessment Report and requested a Corrective Action Plan from the Company. LDEQ approved the Corrective Action Plan (“CAP”) for the remediation of the former PHI Plant I location on August 23, 2010. All Louisiana Department of Natural Resources (“DNR”) approvals were received and the project began on May 16, 2011. Sampling will be performed on a quarterly basis over the next year to evaluate the effectiveness of remedial actions. Based upon the May 2003 Site Assessment Report, the April 2006 update, ongoing monitoring, and the August 2010 CAP, the Company believes the ultimate remediation costs for the former Lafayette facility will not be material to its consolidated financial position, results of operations, or cash flows.

Legal Matters

The Company is named as a defendant in various legal actions that have arisen in the ordinary course of business and have not been finally adjudicated. In the opinion of management, the amount of the liability with respect to these actions will not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

Employee Matters

On December 31, 2009, the Office and Professional Employees International Union (“OPEIU”), the union representing the Company’s domestic pilots, sued the Company in the Western District of Louisiana asserting that the OPEIU’s acceptance in 2009 of the terms and conditions of employment for the Company’s pilots initially implemented by the Company prior to a 2006 strike has created a binding collective bargaining agreement and that the Company has inappropriately made unilateral revisions to those terms including failing to pay a retention bonus. The Court administratively stayed this case pending the completion of two (2) other suits between the parties that have since been resolved in the Company’s favor. PHI filed a motion to dismiss the OPEIU’s claims on May 11, 2012, and the Court dismissed all claims against PHI without prejudice for lack of jurisdiction to award the equitable relief sought in the complaint, entering a final judgment on October 15, 2012. The OPEIU has appealed this decision to the Fifth Circuit Court of Appeals and filed its Appellant’s Brief on January 23, 2013.