Debtor in Possession (Tables)

3 Months Ended

Mar. 31, 2019

Condensed Financial Statements, Captions [Line Items]

Condensed Consolidating Balance Sheets

PHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

(Thousands of dollars)

(Unaudited)

	March 31, 2019
	Parent Company Only (issuer)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash	$	1,335		$	1,584	$	12,965		$	—		$	15,884
Short-term investments	73,336			—		—			—			73,336
Accounts receivable – net	61,431			94,491		27,647			(4,756		)	178,813
Intercompany receivable	—			98,314		22,560			(120,874		)	—
Inventories of spare parts – net	39,525			10,438		3,025			—			52,988
Prepaid expenses	9,605			2,881		1,458			—			13,944
Income taxes receivable	385			557		—			—			942
Total current assets	185,617			208,265		67,655			(125,630		)	335,907
Investment in subsidiaries	470,310			—		—			(470,310		)	—
Property and equipment – net	567,578			289,267		39,591			—			896,436
Right of use assets	122,365			12,130		9,703						144,198
Restricted cash and investments	19,789			—		—			—			19,789
Other assets	17,207			1,150		624			—			18,981
Deferred income tax	—			—		4,521			—			4,521
Total assets	$	1,382,866		$	510,812	$	122,094		$	(595,940	)	$	1,419,832
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	31,793		$	6,065	$	5,752		$	(4,756	)	$	38,854
Accrued and other current liabilities	14,000			12,183		5,900			—			32,083
Current portion of operating lease liabilities	21,043			3,406		2,095			—			26,544
Intercompany payable	64,894			13,452		42,528			(120,874		)	—
Total current liabilities	131,730			35,106		56,275			(125,630		)	97,481
Long-term debt	192,860			—		—			—			192,860
Deferred income taxes and other long-term liabilities	475			57,787		160			—			58,422
Long-term operating lease liabilities	102,033			8,809		7,594			—			118,436
Liabilities subject to compromise	513,125			—		—			—			513,125
Shareholders’ Equity:
Common stock and paid-in capital	316,400			77,951		132,297			(210,248		)	316,400
Accumulated other comprehensive loss	(3		)	—		(3,135		)	—			(3,138		)
Retained earnings	126,246			331,159		(71,097		)	(260,062		)	126,246
Total shareholders’ equity	442,643			409,110		58,065			(470,310		)	439,508
Total liabilities and shareholders’ equity	$	1,382,866		$	510,812	$	122,094		$	(595,940	)	$	1,419,832

PHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

(Thousands of dollars)

	December 31, 2018
	Parent Company Only (issuer)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash	$	39,091		$	1,259	$	10,524		$	—		$	50,874
Short-term investments	14,232			—		—			—			14,232
Accounts receivable – net	64,416			93,060		28,812			(3,823		)	182,465
Intercompany receivable	—			91,468		—			(91,468		)	—
Inventories of spare parts – net	43,933			9,577		3,188			—			56,698
Prepaid expenses	7,295			2,520		1,604			—			11,419
Income taxes receivable	394			556		—			—			950
Total current assets	169,361			198,440		44,128			(95,291		)	316,638
Investment in subsidiaries and others	471,790			—		—			(471,790		)	—
Property and equipment – net	576,763			287,375		38,347			—			902,485
Restricted investments	19,781			—		—			—			19,781
Other assets	17,179			1,199		—			—			18,378
Deferred income tax	—			—		4,944			—			4,944
Goodwill	—			—		—			—			—
Intangible assets	—			—		—			—			—
Total assets	$	1,254,874		$	487,014	$	87,419		$	(567,081	)	$	1,262,226
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Senior Notes issued March 17, 2014	$	499,740		$	—	$	—		$	—		$	499,740
Accounts payable	44,089			4,587		5,452			(3,839		)	50,289
Accrued and other current liabilities	25,158			12,335		7,799			—			45,292
Intercompany payable	74,336			—		17,116			(91,452		)	—
Total current liabilities	643,323			16,922		30,367			(95,291		)	595,321
Long-term debt	129,235			—		—			—			129,235
Deferred income taxes and other long-term liabilities	4,934			58,752		551			—			64,237
Shareholders’ Equity:
Common stock and paid-in capital	315,898			77,951		132,650			(210,601		)	315,898
Accumulated other comprehensive loss	(3		)	—		(3,949		)	—			(3,952		)
Retained earnings	161,487			333,389		(72,200		)	(261,189		)	161,487
Total shareholders’ equity	477,382			411,340		56,501			(471,790		)	473,433
Total liabilities and shareholders’ equity	$	1,254,874		$	487,014	$	87,419		$	(567,081	)	$	1,262,226

Condensed Consolidating Statements of Operations

PHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Thousands of dollars)

(Unaudited)

	For the Quarter Ended March 31, 2019
	Parent Company Only (issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Operating revenues, net	$	74,032		$	59,302		$	24,339	$	(5,783	)	$	151,890
Expenses:
Direct expenses	84,502			59,026			19,129		(5,783		)	156,874
Selling, general and administrative expenses	18,050			3,437			3,386		(4		)	24,869
Total operating expenses	102,552			62,463			22,515		(5,787		)	181,743
Loss on disposal of assets, net	51			—			—		—			51
Equity in income of unconsolidated affiliates, net	(1,361		)	—			—		—			(1,361		)
Operating (loss) income	(27,210		)	(3,161		)	1,824		4			(28,543		)
Equity in net income of consolidated subsidiaries	1,127			—			—		(1,127		)	—
Interest expense	8,162			4			—		—			8,166
Reorganization items, net	1,600			—			—		—			1,600
Other income, net	(188		)	—			224		4			40
	10,701			4			224		(1,123		)	9,806
(Loss) earnings before income taxes	(37,911		)	(3,165		)	1,600		1,127			(38,349		)
Income tax (benefit) expense	(2,670		)	(935		)	497		—			(3,108		)
Net (loss) earnings	$	(35,241	)	$	(2,230	)	$	1,103	$	1,127		$	(35,241	)

PHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Thousands of dollars)

	For the Quarter Ended March 31, 2018
	Parent Company Only (issuer)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Operating revenues, net	$	78,092		$	58,709	$	49,502	$	(25,933	)	$	160,370
Expenses:
Direct expenses	83,997			55,364		42,779		(25,914		)	156,226
Selling, general and administrative expenses	8,747			3,167		3,549		(4		)	15,459
Total operating expenses	92,744			58,531		46,328		(25,918		)	171,685
Loss (gain) on disposal of assets, net	879			—		—		—			879
Equity in (income) loss of consolidated affiliate	37			—		—		—			37
Operating (loss) income	(15,568		)	178		3,174		(15		)	(12,231		)
Equity in net income of consolidated subsidiaries	(2,099		)	—		—		2,099			—
Interest expense	8,195			1		543		(542		)	8,197
Other income, net	305			—		213		527			1,045
	6,401			1		756		2,084			9,242
(Loss) earnings before income taxes	(21,969		)	177		2,418		(2,099		)	(21,473		)
Income tax (benefit) expense	(4,986		)	—		496		—			(4,490		)
Net (loss) earnings	$	(16,983	)	$	177	$	1,922	$	(2,099	)	$	(16,983	)

Condensed Consolidating Statements of Cash Flows

PHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Thousands of dollars)

(Unaudited)

	For the Quarter Ended March 31, 2019
	Parent Company Only (issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash used in operating activities	$	(32,855	)	$	(869	)	$	825		$	—	$	(32,899	)
Investing activities:
Purchase of property and equipment	(6,575		)	—			(372		)	—		(6,947		)
Proceeds from asset dispositions	12			—			—			—		12
Purchase of short-term investments	(139,616		)	—			—			—		(139,616		)
Proceeds from sale of short-term investments	80,512			—			—			—		80,512
Refund of deposit on aircraft	503			—			—			—		503
Net cash used in investing activities	(65,164		)	—			(372		)	—		(65,536		)
Financing activities:
Debt issuance costs	(5,668		)	—			—			—		(5,668		)
Proceeds from Term Loan	70,000											70,000
Due to/from affiliate, net	(4,046		)	1,194			2,852			—		—
Net cash provided by financing activities	60,286			1,194			2,852			—		64,332
Effect of exchange rate changes on cash	—			—			(864		)	—		(864		)
Increase (decrease) in cash, cash equivalents and restricted cash	(37,733		)	325			2,441			—		(34,967		)
Cash, cash equivalents and restricted cash at the beginning of period	46,781			1,259			10,524			—		58,564
Cash, cash equivalents and restricted cash at end of period	$	9,048		$	1,584		$	12,965		$	—	$	23,597

PHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Thousands of dollars)

	For the Quarter Ended March 31, 2018
	Parent Company Only (issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used in) provided by operating activities	$	(9,764	)	$	6,141		$	2,191		$	—	$	(1,432	)
Investing activities:
Purchase of property and equipment	(5,459		)	—			(1,206		)	—		(6,665		)
Proceeds from asset dispositions	842			—			—			—		842
Purchase of short-term investments	(134,319		)	—						—		(134,319		)
Proceeds from sale of short-term investments	136,259			—						—		136,259
Payments of deposits on aircraft	(274		)	—						—		(274		)
Net cash provided by investing activities	(2,951		)	—			(1,206		)	—		(4,157		)
Financing activities:
Proceeds from line of credit	33,750			—			—			—		33,750
Payments on line of credit	(29,500		)	—			—			—		(29,500		)
Due to/from affiliate, net	8,472			(6,234		)	(2,238		)	—		—
Net cash provided by (used in) financing activities	12,722			(6,234		)	(2,238		)	—		4,250
Increase (decreased) in cash	7			(93		)	(1,253		)	—		(1,339		)
Cash, beginning of period	47			1,072			7,651			—		8,770
Cash, end of period	$	54		$	979		$	6,398		$	—	$	7,431

Phi, Inc. and Debtors [Member]

Condensed Financial Statements, Captions [Line Items]

Condensed Consolidating Balance Sheets

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

Condensed Consolidating Statements of Operations

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	)

Condensed Consolidating Statements of Cash Flows

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