DEBTOR IN POSSESSION FINANCIAL INFORMATION

The financial statements below represent the condensed financial statements of the Debtors. The Debtors include PHI, Inc., PHI Air Medical, LLC, PHI Tech Services, Inc., PHI Helipass, LLC, and AM Equity Holdings, LLC. Intercompany transactions among the Debtors have been eliminated in the financial statements contained herein. Intercompany transactions among the Debtors and the non–debtor subsidiaries have not been eliminated in the Debtors’ financial statements.

PHI, INC. AND DEBTOR'S

CONDENSED COMBINED BALANCE SHEETS

(Thousands of dollars, except share data)

(Unaudited)



	March 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents	$	2,781
Short-term investments	73,336
Accounts receivable – net
Trade	145,914
Other	5,229
Inventories of spare parts – net	49,963
Prepaid expenses	12,487
Income taxes receivable	942
Total current assets	290,652
Property and equipment – net	856,827
Right of use assets	133,722
Restricted cash and investments	19,789
Other assets	149,142
Total assets	$	1,450,132
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	33,766
Accrued and other current liabilities	44,903
Current portion of operating lease liabilities	4,750
Current maturities of long term debt	875
Total current liabilities	84,294
Long-term debt:
Term loan issued March 13, 2019, net of debt issuance costs of $5,609	63,516
Related party term loan issued September 28, 2018, net of debt issuance costs of $656	129,344
Deferred income taxes	54,938
Other long-term liabilities	3,324
Long-term operating lease liabilities	109,232
Total liabilities not subject to compromise	360,354
Liabilities subject to compromise	513,125
Total liabilities	957,773

Shareholders’ Equity:
Voting common stock – par value of $0.10; 12,500,000 shares authorized, 2,905,757 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	291
Non-voting common stock – par value of $0.10; 37,500,000 shares authorized, 12,919,681 issued and outstanding at March 31, 2019 and December 31, 2018, respectively	1,290
Additional paid-in capital	313,304
Accumulated other comprehensive income (loss)	(3		)
Retained earnings	177,477
Total shareholders’ equity	492,359
Total liabilities and shareholders’ equity	$	1,450,132

PHI, INC. AND DEBTOR'S

CONDENSED COMBINED STATEMENTS OF OPERATIONS

(Thousands of dollars)

(Unaudited)



	Quarter Ended March 31,
	2019
Operating revenues, net	$	126,662
Expenses:
Direct expenses	137,049
Selling, general and administrative expenses	21,482
Total operating expenses	158,531
Loss on disposal of assets	51
Equity in (income) loss of unconsolidated affiliates, net	(1,361		)
Operating (loss) income	(30,559		)
Interest expense	8,166
Reorganization items, net	1,600
Other income – net	(184		)
	9,582
Loss before income taxes	(40,141		)
Income tax benefit	(3,605		)
Net loss	$	(36,536	)

PHI, INC. AND DEBTOR'S

CONDENSED COMBINED STATEMENTS OF CASH FLOWS

(Thousands of dollars)

(Unaudited)



	Quarter Ended March 31,
	2019
Operating activities:
Net loss	(36,536		)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	14,739
Deferred income taxes	(3,689		)
Loss (gain) on asset dispositions	51
Equity in (income) loss of unconsolidated affiliate, net	(1,361		)
Inventory valuation reserves	586
Changes in operating assets and liabilities	(10,378		)
Net cash used in operating activities	(36,588		)
Investing activities:
Purchase of property and equipment	(6,526		)
Proceeds from asset dispositions	12
Purchase of short-term investments	(139,616		)
Proceeds from sale of short-term investments	80,512
Refund of Deposit on Aircraft	503
Net cash used in investing activities	(65,115		)
Financing activities:
Debt issuance cost	(5,668		)
Proceeds from Term Loan	70,000
Net cash provided by financing activities	64,332
Decrease in cash, cash equivalents and restricted cash	(37,371		)
Cash, cash equivalents and restricted cash at the beginning of period	47,865
Cash, cash equivalents and restricted cash end of period	$	10,494