Business Segments and Geographic Areas

12 Months Ended

Dec. 31, 2014

Segment Reporting [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 Accounting Standards Codification 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.

A segment’s operating profit is its operating revenues less its direct expenses and selling, general and administrative expenses. 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.

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, one foreign country, and 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 that own their own aircraft. The Company also operates five aircraft for the National Science Foundation in Antarctica under the Technical Services segment.

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.

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,
	2014			2013			2014			2013			2012
Oil and Gas segment:
Customer A		7	%		7	%		17	%		15	%		15	%
Customer B		12	%		12	%		13	%		13	%		13	%
Air Medical &
Technical Services segments:
Customer C		20	%		20	%		10	%		17	%		2	%

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, 2014, 2013, and 2012. 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.

	Year Ended
	December 31,
	2014			2013			2012
	(Thousands of dollars)
Segment operating revenues
Oil and Gas	$	516,909		$	489,055		$	424,514
Air Medical		300,212			277,884			211,148
Technical Services		19,149			89,561			11,024
Total operating revenues		836,270			856,500			646,686
Segment direct expenses
Oil and Gas(1)		411,679			393,251			360,400
Air Medical		243,573			231,880			175,944
Technical Services		14,851			88,221			8,043
Total segment direct expenses		670,103			713,352			544,387
Segment selling, general and administrative expenses
Oil and Gas		4,615			4,059			3,736
Air Medical(2)		9,801			8,875			7,300
Technical Services		157			1			—
Total segment selling, general and administrative expenses		14,573			12,935			11,036
Total segment expenses		684,676			726,287			555,423
Net segment profit
Oil and Gas		100,615			91,745			60,378
Air Medical		46,838			37,129			27,904
Technical Services		4,141			1,339			2,981
Total		151,594			130,213			91,263
Other, net (3)		(10,539	)		15,569			334
Unallocated selling, general and administrative expenses		(28,597	)		(26,207	)		(28,015	)
Interest expense		(29,510	)		(29,434	)		(29,533	)
Loss on debt extinguishment		(29,833	)		—			—
Earnings before income taxes	$	53,115		$	90,141		$	34,049

(1) Includes equity in loss of unconsolidated affiliate.

(2) Includes interest expense $0.3 million for the year ended December 31, 2013.

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

	Year Ended
	December 31,
	2014		2013		2012
	(Thousands of dollars)
Expenditures for long-lived assets
Oil and Gas	$	119,235	$	62,934	$	115,543
Air Medical		37,317		37,728		19,516
Corporate		1,153		1,928		1,360
Total	$	157,705	$	102,590	$	136,419

	Year Ended
	December 31,
	2014		2013		2012
	(Thousands of dollars)
Depreciation and Amortization
Oil and Gas	$	29,635	$	26,653	$	24,048
Air Medical		13,067		11,395		10,208
Technical Services		493		172		83
Corporate		7,653		4,628		7,156
Total	$	50,848	$	42,848	$	41,495
Assets
Oil and Gas	$	726,008	$	643,384
Air Medical		336,510		318,345
Technical Services		7,842		8,686
Corporate		305,720		202,908
Total	$	1,376,080	$	1,173,323

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,
	2014		2013		2012
	(Thousands of dollars)
Operating revenues:
United States	$	747,063	$	699,298	$	618,270
International		89,207		157,202		28,416
Total	$	836,270	$	856,500	$	646,686
Long-Lived Assets:
United States	$	846,377	$	752,936
International		31,441		32,536
Total	$	877,818	$	785,472