Business Segments and Geographic Areas

12 Months Ended

Dec. 31, 2012

Business Segments and Geographic Areas [Abstract]

BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

(13) 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 one foreign country, 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 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						Operating Revenues
	December 31,						Years Ended December 31,
	2012			2011			2012			2011			2010
Customer A		8	%		15	%		15	%		15	%		17	%
Customer B		13	%		7	%		13	%		14	%		14	%

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, 2012, 2011, and 2010. 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,
	2012			2011			2010
	(Thousands of dollars)
Segment operating revenues
Oil and Gas	$	424,514		$	355,406		$	345,402
Air Medical		211,148			171,669			160,517
Technical Services		11,024			12,551			11,016
Total operating revenues		646,686			539,626			516,935
Segment direct expenses
Oil and Gas		360,400			310,281			290,106
Air Medical		175,944			151,503			145,356
Technical Services		8,043			7,956			8,240
Total direct expenses		544,387			469,740			443,702
Segment selling, general and administrative expenses
Oil and Gas		3,736			3,506			4,594
Air Medical		7,300			5,198			4,987
Technical Services		—			53			31
Total selling, general and administrative expenses		11,036			8,757			9,612
Total direct and selling, general and administrative expenses		555,423			478,497			453,314
Net segment profit
Oil and Gas		60,378			41,619			50,702
Air Medical		27,904			14,968			10,174
Technical Services		2,981			4,542			2,745
Total		91,263			61,129			63,621
Other, net (1)		334			543			417
Unallocated selling, general and administrative expenses		(28,015	)		(25,612	)		(20,535	)
Interest expense		(29,533	)		(27,974	)		(19,389	)
Loss on debt restructuring		—			—			(9,521	)
Earnings before income taxes	$	34,049		$	8,086		$	14,593

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

	Year Ended
	December 31,
	2012		2011		2010
	(Thousands of dollars)
Expenditures for long-lived assets
Oil and Gas	$	115,543	$	88,742	$	88,146
Air Medical		19,516		10,227		8,789
Corporate		1,360		1,983		1,522
Total	$	136,419	$	100,952	$	98,457

	Year Ended
	December 31,
	2012		2011		2010
	(Thousands of dollars)
Depreciation and Amortization
Oil and Gas	$	24,048	$	21,422	$	18,204
Air Medical		10,208		8,466		7,982
Technical Services		83		167		260
Corporate		7,156		1,243		1,635
Total	$	41,495	$	31,298	$	28,081
Assets
Oil and Gas	$	638,103	$	525,175
Air Medical		265,869		230,666
Technical Services		84,797		9,645
Corporate		159,125		198,645
Total	$	1,147,894	$	964,132

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,
	2012		2011		2010
	(Thousands of dollars)
Operating revenues:
United States	$	618,270	$	527,945	$	509,221
International		28,416		11,681		7,714
Total	$	646,686	$	539,626	$	516,935
Long-Lived Assets:
United States	$	723,977	$	652,948
International		25,524		6,808
Total	$	749,501	$	659,756