-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EMhpIlIBvZCVwUfLiVQkrARN2kQ0bRh5805VQLHQ6IHTgQ3NfJ0i30F+0OXLl2Gr FnmHpY9TNAu1337IprQ3og== 0000073887-01-000012.txt : 20010223 0000073887-01-000012.hdr.sgml : 20010223 ACCESSION NUMBER: 0000073887-01-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OFFSHORE LOGISTICS INC CENTRAL INDEX KEY: 0000073887 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, NONSCHEDULED [4522] IRS NUMBER: 720679819 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05232 FILM NUMBER: 1542928 BUSINESS ADDRESS: STREET 1: 224 RUE DE JEAN STREET 2: PO BOX 5C CITY: LAFAYETTE STATE: LA ZIP: 70505 BUSINESS PHONE: 3182331221 MAIL ADDRESS: STREET 1: 224 RUE DE JEAN 70508 STREET 2: PO BOX 5C CITY: LAFAYETTE STATE: LA ZIP: 70505 10-Q 1 0001.txt FORM 10Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q |X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2000 |_| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period _____ to _____ Commission File Number 0-5232 OFFSHORE LOGISTICS, INC. (Exact name of registrant as specified in its charter) DELAWARE 72-0679819 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 224 RUE DE JEAN P. O. BOX 5C, LAFAYETTE, LOUISIANA 70505 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (337) 233-1221 - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| Indicate the number shares outstanding of each of the issuer's classes of Common Stock, as of December 31, 2000. 21,402,421 shares of Common Stock, $.01 par value PART I - FINANCIAL INFORMATION Item 1. Financial Statements OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Statements of Income (thousands of dollars, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, -------------------------- --------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ------------ GROSS REVENUE: Operating revenue......................................... $ 122,101 $ 103,371 $ 355,935 $ 314,766 Gain (loss) on disposal of assets......................... 15 1,795 548 3,322 ----------- ----------- ----------- ----------- 122,116 105,166 356,483 318,088 OPERATING EXPENSES Direct cost............................................... 91,801 81,331 266,687 254,117 Depreciation and amortization............................. 8,445 8,685 26,147 25,260 General and administrative................................ 7,296 6,079 23,397 20,191 ----------- ----------- ----------- ----------- 107,542 96,095 316,231 299,568 ----------- ----------- ----------- ----------- OPERATING INCOME.......................................... 14,574 9,071 40,252 18,520 Earnings from unconsolidated entities..................... 2,122 1,067 4,021 3,254 Interest income........................................... 1,030 668 2,425 2,402 Interest expense.......................................... 4,756 4,553 13,688 13,949 ----------- ----------- ----------- ----------- INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST............................ 12,970 6,253 33,010 10,227 Provision for income taxes................................ 4,015 1,935 10,231 3,170 Minority interest......................................... (352) (351) (1,046) (1,060) ----------- ----------- ----------- ----------- NET INCOME................................................ $ 8,603 $ 3,967 $ 21,733 $ 5,997 =========== =========== =========== =========== Net income per common share: Basic..................................................... $ 0.41 $ 0.19 $ 1.03 $ 0.28 ========== =========== =========== =========== Diluted................................................... $ 0.37 $ 0.19 $ 0.97 $ 0.28 ========== =========== =========== ===========
2
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (thousands of dollars) DECEMBER 31, MARCH 31, --------------- ------------ 2000 2000 --------------- ------------ ASSETS Current Assets: Cash and cash equivalents...................................................$ 42,222 $ 37,935 Accounts receivable......................................................... 110,123 96,387 Inventories................................................................. 79,294 80,435 Prepaid expenses............................................................ 9,852 5,725 -------------- ------------ Total current assets..................................................... 241,491 220,482 Investments in unconsolidated entities.......................................... 17,016 14,093 Property and equipment - at cost: Land and buildings.......................................................... 9,863 11,005 Aircraft and equipment...................................................... 618,737 605,949 -------------- ------------ 628,600 616,954 Less: accumulated depreciation and amortization................................ (167,091) (142,931) -------------- ------------ 461,509 474,023 Other assets.................................................................... 28,598 34,576 -------------- ------------ $ 748,614 $ 743,174 ============== ============ LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Accounts payable............................................................$ 27,595 $ 30,749 Accrued liabilities......................................................... 62,324 52,082 Deferred taxes.............................................................. 18,386 18,443 Current maturities of long-term debt........................................ 16,492 16,540 -------------- ------------ Total current liabilities................................................ 124,797 117,814 Long-term debt, less current maturities......................................... 212,170 224,738 Other liabilities and deferred credits.......................................... 3,285 2,932 Deferred taxes.................................................................. 97,769 96,739 Minority interest............................................................... 12,240 11,911 Stockholders' Investment: Common Stock, $.01 par value, authorized 35,000,000 shares; outstanding 21,402,421 and 21,105,921 at December 31 and March 31, respectively (exclusive of 1,281,050 treasury shares) 214 211 Additional paid-in capital.................................................. 119,668 116,074 Retained earnings........................................................... 203,737 182,004 Accumulated other comprehensive income (loss)............................... (25,266) (9,249) -------------- ------------ 298,353 289,040 -------------- ------------ $ 748,614 $ 743,174 ============== ============
3 OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (thousands of dollars)
NINE MONTHS ENDED DECEMBER 31, ---------------------------- 2000 1999 ------------ ------------ Cash flows from operating activities: Net income..................................................................$ 21,733 $ 5,997 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization............................................... 26,147 25,260 Increase (decrease) in deferred taxes....................................... 5,296 2,018 Gain on asset dispositions.................................................. (548) (3,322) Equity in earnings from unconsolidated entities over (under) dividends received.......................................... (1,339) (3,659) Minority interest in earnings............................................... 1,046 1,060 (Increase) decrease in accounts receivable.................................. (18,530) (5,386) (Increase) decrease in inventories.......................................... (1,477) 3,001 (Increase) decrease in prepaid expenses and other........................... 50 (4,213) Increase (decrease) in accounts payable..................................... (1,521) 707 Increase (decrease) in accrued liabilities.................................. 11,719 (3,683) Increase (decrease) in other liabilities and deferred credits............... 350 376 ------------- ------------ Net cash provided by operating activities....................................... 42,926 18,156 ------------- ------------ Cash flows from investing activities: Capital expenditures........................................................ (31,528) (54,312) Proceeds from asset dispositions............................................ 2,012 9,236 Investments................................................................. (1,200) -- ------------- ------------ Net cash used in investing activities........................................... (30,716) (45,076) ------------- ------------ Cash flows from financing activities: Proceeds from borrowings.................................................... 2,604 6,452 Repayment of debt........................................................... (13,185) (7,360) Repurchase of common stock.................................................. -- -- Issuance of common stock.................................................... 3,597 -- ------------- ------------ Net cash provided by (used in) financing activities............................. (6,984) (908) ------------- ------------ Effect of exchange rate changes in cash......................................... (939) 35 ------------- ------------ Net increase (decrease) in cash and cash equivalents............................ 4,287 (27,793) Cash and cash equivalents at beginning of period................................ 37,935 70,594 ------------- ------------ Cash and cash equivalents at end of period......................................$ 42,222 $ 42,801 ============= ============ Supplemental disclosure of cash flow information Cash paid during the period for: Interest....................................................................$ 12,227 $ 12,283 Income taxes................................................................$ 2,977 $ 3,786
4 OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000 NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States. In the opinion of management, any adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended December 31, 2000, are not necessarily indicative of the results that may be expected for the year ending March 31, 2001. For further information, refer to the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. NOTE B - EARNINGS PER SHARE Basic earnings per common share were computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share for the three and nine months ended December 31, 2000 excluded 311,065 and 311,355 stock options, respectively, at a weighted average exercise price of $19.15, which were outstanding during the periods but were anti-dilutive. Diluted earnings per share for the three and nine months ended December 31, 1999 excluded 3,976,928 shares related to the convertible debt and 843,000 and 903,471 stock options, respectively, at a weighted average exercise price of $15.07 and $14.69, respectively, which were outstanding during the periods but were anti-dilutive. The following table sets forth the computation of basic and diluted net income per share:
THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ---------------------------- -------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Net income (thousands of dollars): Income available to common stockholders.................... $ 8,603 $ 3,967 $ 21,733 $ 5,997 Interest on convertible debt, net of taxes................. 941 -- 2,823 -- ------------ ------------ ------------ ----------- Income available to common stockholders, plus assumed conversions.............................. $ 9,544 $ 3,967 $ 24,556 $ 5,997 ============ ============ ============ =========== Shares: Weighted average number of common shares outstanding......................................... 21,211,888 21,103,421 21,144,019 21,103,421 Options.................................................... 364,717 8,393 253,040 12,936 Convertible debt........................................... 3,976,928 -- 3,976,928 -- ------------ ------------ ------------ ----------- Weighted average number of common shares outstanding, plus assumed conversions.......... 25,553,533 21,111,814 25,373,987 21,116,357 ============ ============ ============ =========== Net income per share: Basic...................................................... $ 0.41 $ 0.19 $ 1.03 $ 0.28 ============ ============ ============ =========== Diluted.................................................... $ 0.37 $ 0.19 $ 0.97 $ 0.28 ============ ============ ============ ===========
5 NOTE C - COMMITMENTS AND CONTINGENCIES On November 16, 1999, the Office and Professional Employees International Union ("OPEIU") petitioned the National Mediation Board ("NMB") to conduct an election among the mechanics and related personnel employed by Air Logistics, L.L.C. and Air Logistics of Alaska, Inc. The election for Air Logistics, L.L.C. was held on March 13, 2000 with the mechanics voting in favor of the Company. The NMB dismissed the matter with respect to the Alaska-based group on January 24, 2000, but due to extraordinary circumstances, the NMB did accept another representation application covering the Air Logistics of Alaska, Inc. mechanics and related employees. The Alaska election was held on July 21, 2000 with the mechanics voting in favor of the International Union of Operating Engineers ("IUOE"). Negotiations with the IUOE are in progress. The Company does not believe that current organizing efforts will place it at a disadvantage with its competitors and management believes that pay scales, benefits, and work rules will continue to be similar throughout the industry. NOTE D - COMPREHENSIVE INCOME In 1998, the Financial Accounting Standards Board issued SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 requires an entity to report and display comprehensive income and its components. Comprehensive income is as follows (thousands of dollars):
THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ------------------------ ----------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Net Income........................................$ 8,603 $ 3,967 $ 21,733 $ 5,997 Other Comprehensive Income: Currency translation adjustment............... 2,812 (5,173) (16,017) 140 ---------- ---------- ---------- ---------- Comprehensive Income (Loss).......................$ 11,415 $ (1,206) $ 5,716 $ 6,137 ========== ========== ========== ==========
NOTE E - DERIVATIVE FINANCIAL INSTRUMENTS In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" which establishes accounting and reporting standards for derivative instruments and for hedging activities. It requires that entities recognize all derivatives as either assets or liabilities in the statements of financial position and measure those instruments at fair value. Changes in a derivative's fair value are to be recognized currently in earnings unless specific hedge accounting criteria are met. The Company will be required to adopt SFAS No. 133, as amended by SFAS No. 137, no later than April 1, 2001. The Company does not use derivative instruments or hedging activities extensively in its business and therefore the adoption of this new statement is not expected to materially affect the Company's financial position or results of operations. The new statement could however cause volatility in the components of other comprehensive income. 6 NOTE F - SEGMENT INFORMATION The Company has adopted SFAS No. 131, "Disclosures about Segments of An Enterprise and Related Information", which requires that companies disclose segment data based on how management makes decisions about allocating resources to segments and measuring their performance. The Company operates principally in two business segments: Helicopter activities and Production management and related services. The following shows reportable segment information for the three and nine months ended December 31, 2000 and 1999, reconciled to consolidated totals, and prepared on the same basis as the Company's consolidated financial statements (in thousands):
THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ------------------------- ------------------------ 2000 1999 2000 1999 ---------- ----------- ---------- ---------- Segment operating revenue from external customers: Helicopter activities..................................... $ 107,050 $ 90,180 $ 312,030 $ 278,103 Production management and related services................ 12,367 10,785 35,871 29,786 ----------- ----------- ----------- ----------- Total segment operating revenue....................... $ 119,417 $ 100,965 $ 347,901 $ 307,889 =========== =========== =========== =========== Intersegment operating revenue: Helicopter activities..................................... $ 3,513 $ 3,027 $ 10,306 $ 8,625 Production management and related services................ -- -- -- -- ----------- ----------- ----------- ----------- Total intersegment operating revenue.................. $ 3,513 $ 3,027 $ 10,306 $ 8,625 =========== =========== =========== =========== Consolidated operating revenue reconciliation: Helicopter activities..................................... $ 110,563 $ 93,207 $ 322,336 $ 286,728 Production management and related services................ 12,367 10,785 35,871 29,786 Corporate................................................. 2,684 2,406 8,034 6,877 Intersegment eliminations................................. (3,513) (3,027) (10,306) (8,625) ----------- ----------- ----------- ----------- Total consolidated operating revenue.................. $ 122,101 $ 103,371 $ 355,935 $ 314,766 =========== =========== =========== =========== Consolidated operating income reconciliation: Helicopter activities..................................... $ 14,060 $ 6,214 $ 39,314 $ 13,234 Production management and related services................ 505 661 1,834 1,816 ----------- ----------- ----------- ----------- Total segment operating income........................ 14,565 6,875 41,148 15,050 Gain (loss) disposal of assets............................ 15 1,795 548 3,322 Corporate................................................. (6) 401 (1,444) 148 ----------- ----------- ----------- ----------- Total consolidated operating income................... $ 14,574 $ 9,071 $ 40,252 $ 18,520 =========== =========== =========== ===========
7 NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION In connection with the sale of the Company's $100 million 7 7/8% Senior Notes due 2008, certain of the Company's subsidiaries (the "Guarantor Subsidiaries") jointly, severally and unconditionally guaranteed the payment obligations under the Senior Notes. The following supplemental financial information sets forth, on a consolidating basis, the balance sheet, statement of income and cash flow information for Offshore Logistics, Inc. ("Parent Company Only"), for the Guarantor Subsidiaries and for Offshore Logistics, Inc.'s other subsidiaries (the "Non-Guarantor Subsidiaries"). The Company has not presented separate financial statements and other disclosures concerning the Guarantor Subsidiaries because management has determined that such information is not material to investors. The supplemental condensed consolidating financial information has been prepared pursuant to the rules and regulations for condensed financial information and does not include all disclosures included in annual financial statements, although the Company believes that the disclosures made are adequate to make the information presented not misleading. Certain reclassifications were made to conform all of the financial information to the financial presentation on a consolidated basis. The principal eliminating entries eliminate investments in subsidiaries, intercompany balances and intercompany revenues and expenses. The allocation of the consolidated income tax provision was made using the with and without allocation method. 8 NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2000
Parent Non- Company Guarantor Guarantor Only Subsidiaries Subsidiaries Eliminations Consolidated ---------- ------------ ------------ ------------ ------------- ASSETS Current assets: Cash and cash equivalents...............$ 8,925 $ 2,975 $ 30,322 $ -- $ 42,222 Accounts receivable..................... 917 34,839 79,043 (4,676) 110,123 Inventories............................. -- 41,772 37,522 -- 79,294 Prepaid expenses........................ 170 2,053 7,629 -- 9,852 ----------- ----------- ----------- ----------- ------------- Total current assets.................. 10,012 81,639 154,516 (4,676) 241,491 Intercompany investment................... 222,628 -- -- (222,628) -- Investments in unconsolidated entities.... -- -- 17,016 -- 17,016 Intercompany note receivables............. 294,679 -- -- (294,679) -- Property and equipment--at cost: Land and buildings...................... 135 3,654 6,074 -- 9,863 Aircraft and equipment.................. 5,128 173,677 440,042 (110) 618,737 ----------- ----------- ----------- ----------- ------------- 5,263 177,331 446,116 (110) 628,600 Less: Accumulated depreciation and amortization...................... (2,558) (81,092) (83,441) -- (167,091) ----------- ----------- ----------- ----------- ------------- 2,705 96,239 362,675 (110) 461,509 Other assets.............................. 10,596 15,871 2,020 111 28,598 ----------- ----------- ----------- ----------- ------------- $ 540,620 $ 193,749 $ 536,227 $ (521,982) $ 748,614 =========== =========== =========== =========== ============= LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable........................$ 134 $ 5,635 $ 26,502 $ (4,676) $ 27,595 Accrued liabilities..................... 6,883 16,084 39,483 (126) 62,324 Deferred taxes.......................... 1,004 -- 17,382 -- 18,386 Current maturities of long-term debt.... -- -- 16,492 -- 16,492 ----------- ----------- ----------- ----------- ------------- Total current liabilities............. 8,021 21,719 99,859 (4,802) 124,797 Long-term debt, less current maturities... 190,922 -- 21,248 -- 212,170 Intercompany notes payable................ 5,012 12,191 277,350 (294,553) -- Other liabilities and deferred credits.... 270 2,245 770 -- 3,285 Deferred taxes............................ 13,155 37,382 47,232 -- 97,769 Minority interest......................... 12,240 -- -- -- 12,240 Stockholders' investment: Common stock.............................. 214 4,062 43 (4,105) 214 Additional paid in capital................ 119,667 53,168 13,499 (66,666) 119,668 Retained earnings....................... 203,847 62,982 72,511 (135,603) 203,737 Accumulated other comprehensive income (loss)......................... (12,728) -- 3,715 (16,253) (25,266) ----------- ----------- ----------- ----------- ------------- 311,000 120,212 89,768 (222,627) 298,353 ----------- ----------- ----------- ----------- ------------- $ 540,620 $ 193,749 $ 536,227 $ (521,982) $ 748,614 =========== =========== =========== =========== =============
9 NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME NINE MONTHS ENDED DECEMBER 31, 2000
Parent Non- Company Guarantor Guarantor Only Subsidiaries Subsidiaries Eliminations Consolidated ------------ ------------ ------------ ------------ ------------- GROSS REVENUE Operating revenue...........................$ 339 $ 121,527 $ 234,069 $ -- $ 355,935 Intercompany revenue........................ -- 10,701 218 (10,919) -- Gain(loss) on disposal of equipment......... (82) (34) 774 (110) 548 ----------- ----------- ----------- ----------- ------------- 257 132,194 235,061 (11,029) 356,483 OPERATING EXPENSES Direct cost................................. 9 101,995 164,683 -- 266,687 Intercompany expense........................ -- 218 10,701 (10,919) -- Depreciation and amortization............... 330 7,469 18,348 -- 26,147 General and administrative.................. 5,732 6,121 11,544 -- 23,397 ----------- ----------- ----------- ----------- ------------- 6,071 115,803 205,276 (10,919) 316,231 ----------- ----------- ----------- ----------- ------------- OPERATING INCOME(LOSS)...................... (5,814) 16,391 29,785 (110) 40,252 Earnings from unconsolidated entities....... 16,898 -- 4,021 (16,898) 4,021 Interest income............................. 24,441 158 1,882 (24,056) 2,425 Interest expense............................ 10,589 9 27,146 (24,056) 13,688 ----------- ----------- ----------- ----------- ------------- INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST.... 24,936 16,540 8,542 (17,008) 33,010 Allocation of consolidated income taxes..... 2,047 5,537 2,647 -- 10,231 Minority interest........................... (1,046) -- -- -- (1,046) ----------- ----------- ----------- ----------- ------------- NET INCOME..................................$ 21,843 $ 11,003 $ 5,895 $ (17,008) $ 21,733 =========== =========== =========== =========== =============
10 NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED DECEMBER 31, 2000
Parent Non- Company Guarantor Guarantor Only Subsidiaries Subsidiaries Eliminations Consolidated ----------- ----------- ------------ ------------ -------------- Net cash provided by (used in) operating activities......................$ (8,723) $ 17,712 $ 40,760 $ (6,823) $ 42,926 ----------- ----------- ----------- ----------- ------------- Cash flows from investing activities: Capital expenditures...................... (486) (17,087) (13,955) -- (31,528) Proceeds from asset dispositions.......... -- 27 1,985 -- 2,012 Investments in subsidiaries............... -- -- (1,200) -- (1,200) ----------- ----------- ----------- ----------- ------------- Net cash provided by (used in) investing activities...................... (486) (17,060) (13,170) -- (30,716) ----------- ----------- ----------- ----------- ------------- Cash flows from financing activities: Proceeds from borrowings.................. -- -- 9,834 (7,230) 2,604 Repayment of debt......................... -- -- (27,238) 14,053 (13,185) Issuance of common stock.................. 3,597 -- -- -- 3,597 ----------- ----------- ----------- ----------- ------------- Net cash provided by (used in) financing activities....................... 3,597 -- (17,404) 6,823 (6,984) ----------- ----------- ----------- ----------- ------------- Effect of exchange rate changes in cash..... -- -- (939) -- (939) ----------- ----------- ----------- ----------- ------------- Net increase (decrease) in cash and cash equivalents.......................... (5,612) 652 9,247 -- 4,287 Cash and cash equivalents at beginning of period.................... 14,537 2,323 21,075 -- 37,935 ----------- ----------- ----------- ----------- ------------- Cash and cash equivalents at end of period.........................$ 8,925 $ 2,975 $ 30,322 $ -- $ 42,222 =========== =========== =========== =========== =============
11 NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET MARCH 31, 2000
Parent Non- Company Guarantor Guarantor Only Subsidiaries Subsidiaries Eliminations Consolidated ----------- ------------ ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents...............$ 14,537 $ 2,323 $ 21,075 $ -- $ 37,935 Accounts receivable..................... 280 22,822 75,116 (1,831) 96,387 Inventories............................. -- 38,023 42,412 -- 80,435 Prepaid expenses........................ 227 558 4,940 -- 5,725 ----------- ----------- ----------- ----------- ----------- Total current assets.................. 15,044 63,726 143,543 (1,831) 220,482 Intercompany investment................... 201,410 -- -- (201,410) -- Investments in unconsolidated entities.... 1,108 229 12,756 -- 14,093 Intercompany note receivables............. 286,388 -- 3,844 (290,232) -- Property and equipment--at cost: Land and buildings...................... -- 3,220 7,785 -- 11,005 Aircraft and equipment.................. 4,335 155,867 445,747 -- 605,949 ----------- ----------- ----------- ----------- ---------- 4,335 159,087 453,532 -- 616,954 Less: Accumulated depreciation and amortization...................... (2,939) (75,943) (64,049) -- (142,931) ----------- ----------- ----------- ----------- ---------- 1,396 83,144 389,483 -- 474,023 Other assets.............................. 11,558 16,700 6,207 111 34,576 ----------- ----------- ----------- ----------- ---------- $ 516,904 $ 163,799 $ 555,833 $ (493,362) $ 743,174 =========== =========== =========== =========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable........................$ 196 $ 4,931 $ 27,151 $ (1,529) $ 30,749 Accrued liabilities..................... 6,074 10,028 36,286 (306) 52,082 Deferred taxes.......................... -- -- 18,443 -- 18,443 Current maturities of long-term debt.... -- -- 16,540 -- 16,540 ----------- ----------- ----------- ----------- ---------- Total current liabilities............. 6,270 14,959 98,420 (1,835) 117,814 Long-term debt, less current maturities... 190,922 -- 33,816 -- 224,738 Intercompany notes payable................ 3,844 379 286,004 (290,227) -- Other liabilities and deferred credits.... 272 2,223 437 -- 2,932 Deferred taxes............................ 9,508 33,564 53,667 -- 96,739 Minority interest......................... 11,911 -- -- -- 11,911 Stockholders' investment: Common stock............................ 211 4,048 1,384 (5,432) 211 Additional paid in capital.............. 116,074 52,567 15,928 (68,495) 116,074 Retained earnings....................... 182,004 56,059 65,068 (121,127) 182,004 Accumulated other comprehensive income (loss)......................... (4,112) -- 1,109 (6,246) (9,249) ----------- ----------- ----------- ----------- ---------- 294,177 112,674 83,489 (201,300) 289,040 ----------- ----------- ----------- ----------- ---------- $ 516,904 $ 163,799 $ 555,833 $ (493,362) $ 743,174 =========== =========== =========== =========== ==========
12 NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME NINE MONTHS ENDED DECEMBER 31, 1999
Parent Non- Company Guarantor Guarantor Only Subsidiaries Subsidiaries Eliminations Consolidated ----------- ------------ ------------ ------------ -------------- GROSS REVENUE Operating revenue...........................$ 244 $ 98,580 $ 215,942 $ -- $ 314,766 Intercompany revenue........................ -- 5,907 216 (6,123) -- Gain on disposal of equipment............... 12 3,136 174 -- 3,322 ----------- ----------- ----------- ----------- ------------- 256 107,623 216,332 (6,123) 318,088 OPERATING EXPENSES Direct cost................................. 3 80,474 173,640 -- 254,117 Intercompany expense........................ -- 217 5,906 (6,123) -- Depreciation and amortization............... 131 7,493 17,636 -- 25,260 General and administrative.................. 3,899 4,481 11,811 -- 20,191 ----------- ----------- ----------- ----------- ------------- 4,033 92,665 208,993 (6,123) 299,568 ----------- ----------- ----------- ----------- ------------- OPERATING INCOME(LOSS)...................... (3,777) 14,958 7,339 -- 18,520 Earnings from unconsolidated entities....... 1,284 -- 3,254 (1,284) 3,254 Interest income............................. 22,186 259 1,038 (21,081) 2,402 Interest expense............................ 10,669 -- 24,361 (21,081) 13,949 ----------- ----------- ----------- ----------- ------------- INCOME(LOSS) BEFORE PROVISION(BENEFIT) FOR INCOME TAXES AND MINORITY INTEREST.... 9,024 15,217 (12,730) (1,284) 10,227 Allocation of consolidated income taxes..... 2,019 5,098 (3,947) -- 3,170 Minority interest........................... (1,008) -- (52) -- (1,060) ----------- ----------- ----------- ----------- ------------- NET INCOME(LOSS) ...........................$ 5,997 $ 10,119 $ (8,835) $ (1,284) $ 5,997 =========== =========== =========== =========== =============
13 NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED DECEMBER 31, 1999
Parent Non- Company Guarantor Guarantor Only Subsidiaries Subsidiaries Eliminations Consolidated ----------- ------------ ------------ ------------ ------------ Net cash provided by (used in) operating activities......................$ (7,031) $ 5,158 $ 34,349 $ (14,320) $ 18,156 ----------- ----------- ----------- ----------- ----------- Cash flows from investing activities: Capital expenditures...................... (110) (12,766) (41,436) -- (54,312) Proceeds from asset dispositions.......... 19 4,947 4,270 -- 9,236 Investments in subsidiaries............... 3,751 (3,751) -- -- -- ----------- ----------- ----------- ----------- ----------- Net cash provided by (used in) investing activities...................... 3,660 (11,570) (37,166) -- (45,076) ----------- ----------- ----------- ----------- ----------- Cash flows from financing activities: Proceeds from borrowings.................. -- -- 6,452 -- 6,452 Repayment of debt......................... (14,320) -- (7,360) 14,320 (7,360) ----------- ----------- ----------- ----------- ----------- Net cash used in financing activities....... (14,320) -- (908) 14,320 (908) ----------- ----------- ----------- ----------- ----------- Effect of exchange rate changes in cash..... -- -- 35 -- 35 ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents.......................... (17,691) (6,412) (3,690) -- (27,793) Cash and cash equivalents at beginning of period.................... 34,775 10,584 25,235 -- 70,594 ----------- ----------- ----------- ----------- ----------- Cash and cash equivalents at end of period...........................$ 17,084 $ 4,172 $ 21,545 $ -- $ 42,801 =========== =========== =========== =========== ============
14 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company, through its Air Logistics' subsidiaries ("Air Log") and with its investment in Bristow Aviation Holdings Limited ("Bristow"), is a major supplier of helicopter transportation services to the worldwide offshore oil and gas industry. The Company also provides production management services to the domestic offshore oil and gas industry through its wholly owned subsidiary, Grasso Production Management, Inc. ("GPM"). RESULTS OF OPERATIONS A summary of operating results and other income statement information for the applicable periods is as follows (in thousands of dollars):
THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ------------------------- -------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Operating revenue.......................................... $ 122,101 $ 103,371 $ 355,935 $ 314,766 Gain on disposal of assets................................. 15 1,795 548 3,322 Operating expenses......................................... 107,542 96,095 316,231 299,568 ----------- ----------- ----------- ----------- Operating income........................................... 14,574 9,071 40,252 18,520 Earnings from unconsolidated entities...................... 2,122 1,067 4,021 3,254 Interest income (expense), net............................. (3,726) (3,885) (11,263) (11,547) ----------- ----------- ----------- ----------- Income before provision for income taxes................... 12,970 6,253 33,010 10,227 Provision for income taxes................................. 4,015 1,935 10,231 3,170 Minority interest.......................................... (352) (351) (1,046) (1,060) ----------- ----------- ----------- ----------- Net income................................................. $ 8,603 $ 3,967 $ 21,733 $ 5,997 =========== =========== =========== ===========
The following tables set forth certain operating information, which will form the basis for discussion of each of the Company's two identified segments, Helicopter Activities and Production Management and Related Services. Beginning in fiscal year 2000, the Company has changed the basis of segmentation within its Helicopter Activities segment. The respective international operations of Air Log (headquartered in the United States) and Bristow (headquartered in the United Kingdom) are managed and reported as a separate division. The International division encompasses all helicopter activities outside of the United States Gulf of Mexico and Alaska (reported as "Air Log") and the United Kingdom and Europe Sectors of the North Sea (reported as "Bristow"). 15
THREE MONTHS ENDED DECEMBER 31, ----------------------------------- 2000 1999 ------------ ------------ (in thousands, except flight hours) Flight hours (excludes unconsolidated entities): Helicopter Activities: Air Log............................................... 30,485 24,952 Bristow............................................... 12,320 11,210 International......................................... 21,386 14,795 ----------- ----------- Total.............................................. 64,191 50,957 =========== =========== Operating revenues: Helicopter Activities: Air Log.............................................. $ 32,175 $ 23,998 Bristow.............................................. 44,897 42,330 International........................................ 35,156 27,324 Less: Intercompany.................................. (1,665) (445) ----------- ----------- Total.............................................. 110,563 93,207 Production management and related services............... 12,367 10,785 Corporate................................................ 2,684 2,406 Less: Intersegment...................................... (3,513) (3,027) ----------- ----------- Consolidated total................................. $ 122,101 $ 103,371 =========== =========== Operating income, excluding gain or loss on disposal of assets: Helicopter Activities: Air Log.............................................. $ 4,820 $ 3,450 Bristow.............................................. 2,100 (831) International........................................ 7,140 3,595 ----------- ----------- Total.............................................. 14,060 6,214 Production management and related services............... 505 661 Corporate................................................ (6) 401 ----------- ----------- Consolidated total................................. $ 14,559 $ 7,276 =========== =========== Gross margin, excluding gain or loss on disposal of assets: Helicopter Activities: Air Log.............................................. 15.0% 14.4% Bristow.............................................. 4.7% (2.0)% International........................................ 20.3% 13.2% Total.............................................. 12.7% 6.7% Production management and related services............... 4.1% 6.1% Consolidated total................................. 11.9% 7.0%
16
NINE MONTHS ENDED DECEMBER 31, ----------------------------------- 2000 1999 ------------ ------------ (in thousands, except flight hours) Flight hours (excludes unconsolidated entities): Helicopter Activities: Air Log............................................... 87,253 77,371 Bristow............................................... 39,611 41,672 International......................................... 59,270 41,572 ----------- ----------- Total.............................................. 186,134 160,615 =========== =========== Operating revenues: Helicopter Activities: Air Log.............................................. $ 90,149 $ 70,969 Bristow.............................................. 134,589 140,268 International........................................ 101,894 76,092 Less: Intercompany.................................. (4,296) (601) ----------- ----------- Total.............................................. 322,336 286,728 Production management and related services............... 35,871 29,786 Corporate................................................ 8,034 6,877 Less: Intersegment...................................... (10,306) (8,625) ----------- ----------- Consolidated total................................. $ 355,935 $ 314,766 =========== =========== Operating income, excluding gain or loss on disposal of assets: Helicopter Activities: Air Log.............................................. $ 14,331 $ 9,954 Bristow.............................................. 5,001 (4,413) International........................................ 19,982 7,693 ----------- ----------- Total.............................................. 39,314 13,234 Production management and related services............... 1,834 1,816 Corporate................................................ (1,444) 148 ----------- ----------- Consolidated total................................. $ 39,704 $ 15,198 =========== =========== Gross margin, excluding gain or loss on disposal of assets: Helicopter Activities: Air Log.............................................. 15.9% 14.0% Bristow.............................................. 3.7% (3.1)% International........................................ 19.6% 10.1% Total.............................................. 12.2% 4.6% Production management and related services............... 5.1% 6.1% Consolidated total................................. 11.2% 4.8%
17 HELICOPTER ACTIVITIES Air Log and Bristow conduct helicopter activities principally in the Gulf of Mexico and the North Sea, respectively, where they provide support to the production, exploration and construction activities of oil and gas companies. Air Log also charters helicopters to governmental entities involved in regulating offshore oil and gas operations in the Gulf of Mexico and provides helicopter services to the Alyeska Pipeline in Alaska. Bristow also provides search and rescue work for the British Coast Guard. International's activities include Air Log and Bristow's respective operations in the following countries: Australia, Brazil, China, Colombia, India, Kazakhstan, Kosovo, Mexico, Nigeria, Spain, The Maldives and Trinidad. These international operations are subject to local governmental regulations and to uncertainties of economic and political conditions in those areas. International also includes Air Log's service agreements with, and equity interests in, entities that operate aircraft in Brazil, Egypt and Mexico ("unconsolidated entities"). Operating revenues from helicopter activities increased by 18.6% and 12.4% during the three and nine months ended December 31, 2000, respectively, over the prior year comparable periods, with operating expenses increasing 3.5% and 10.9%, respectively. Higher levels of exploration and development by domestic oil companies and an increase in international contracts in the current year, as compared to the fiscal year 2000 periods, led to the improvement, along with the impact in fiscal 2000 of the loss of two major customers in the North Sea effective August 1, 1999. Flight activity in the Gulf of Mexico and certain international markets began increasing during the fourth quarter of fiscal 2000, and has continued this trend throughout fiscal year 2001. Air Log's flight activity for the three and nine-month periods ended December 31, 2000 is above the similar prior year levels by 22.2% and 12.8%, respectively. An increase in activity was prevalent in both the Gulf of Mexico market and Alaska. Revenues for the same periods were up 34% and 27%, respectively. The disproportionate increase in revenue in relation to flight hours was due to a shift in the mix of aircraft generating revenue, coupled with rate increases of approximately 6% in the Gulf of Mexico, which went into effect beginning February 1, 2000. Flight hours and revenue generated from larger, crew change aircraft in the Gulf of Mexico increased 32% and 50%, respectively, from the similar quarter in the prior year, while smaller, production related aircraft increased 20% and 22%, respectively. For the nine month period flight hours and revenue generated from larger, crew change aircraft in the Gulf of Mexico increased 28% and 44%, respectively, over the prior year, while smaller, production related aircraft increased 10% and 16%, respectively. Air Log's operating margin of 15.0% and 15.9% for the three and nine months ended December 31, 2000 has improved over the comparable prior year periods, which had margins of 14.4% and 14.0%, respectively. Increased maintenance and other costs lowered the operating margin for the quarter as compared to the year-to-date margin. During October 2000, Air Log was awarded a contract to provide all of the helicopter services for a Gulf of Mexico production management services company. The contract, which was fully phased in by late November, involves eighteen (18) helicopters and generated revenues of approximately $2.4 million during the current quarter. Previously, Air Log had five (5) aircraft contracted to this customer. Bristow's revenue for the three and nine-month periods ended December 31, 2000 increased by 6.1% and decreased by 4.0%, respectively, from the similar periods in the prior year. Bristow's flight hours for the three and nine-month periods ended December 31, 2000 increased by 9.9% and decreased by 4.9%, respectively, from the similar periods in the prior year. The decrease in flight activity and revenue for the nine-month period is the net result of a decrease in North Sea flight hours, primarily related to the cessation of contracts with two major customers on August 1, 1999, offset by an increase in flight hours in Norway. These aforementioned contracts accounted for $11.9 million of revenue during the nine months ended December 31, 1999. Bristow's operating margin improved to 4.7% and 3.7% for the three and nine-month periods ended December 31, 2000, from (2.0)% and (3.1)%, respectively, in the prior year periods. At September 30, 1999, $5.0 million was reflected in that quarter's results for restructuring charges for the North Sea operations. Absent these charges, Bristow's operating margin for the nine-month period ended December 31, 1999 would have increased to less than 1%. The improvement in margin during the nine months ended December 31, 2000, after considering the restructuring charges discussed above, is due to increased flying on a spot basis, an increase in the spot rates charged, and the effect of cost cutting measures previously implemented. The operating margin for the nine months ended December 31, 2000, is impacted by employee severance costs of $1.5 million recognized during the first quarter of fiscal 2001. These severance costs were the result of management's continuing review of Bristow's North Sea operations and support functions elsewhere in the U.K. Absent these charges, Bristow's operating margin for the nine months ended December 31, 2000, would have been 4.8%. 18 Internationally, flight hours increased during the three and nine months ended December 31, 2000, by 44.5% and 42.6%, respectively, from the similar periods in the prior year. Revenues also increased accordingly during the three and nine months ended December 31, 2000 by 28.7% and 33.9%, respectively, from the similar periods in the prior year. An increase in activity was prevalent in Brazil, China, Mexico and Nigeria. In Nigeria revenues were up 3% and 5% over the prior year three and nine-month periods as drilling activities in Nigeria improved during the past year. During March 2000, the Company's 49% owned affiliate in Mexico was awarded a $75 million three year contract to provide helicopter transportation services to the Federal Electric Commission of Mexico. Most of the aircraft needed to fulfill the contract requirements are being leased from the Company. The start up of the contract was in phases over a two-month period, which began March 31, 2000, and generated revenue of approximately $3.0 and $8.0 million during the three and nine months ended December 31, 2000. During the current year, the Company imported a seventh aircraft to Brazil to cover the increased ad hoc flying resulting from the international oil companies expanding into the Brazilian market. Also during the current year, the Company completed its $1.2 million investment, subject to approval by relevant government authorities, in a local Brazilian operator. This investment will serve to secure Air Log's presence in Brazil and enhance the local operator's ability to do business with the international oil companies. PRODUCTION MANAGEMENT AND RELATED SERVICES Operating revenues for GPM increased by 14.7% and 20.4% during the three and nine-month periods ended December 31, 2000, as compared to the similar periods in the prior year. The increase in revenue is primarily due to higher energy prices, which resulted in increased production activity in the Gulf of Mexico. GPM was also awarded two significant contracts, which help to account for higher revenue for the current year. GPM's margin declined during the current quarter primarily due to increased employee benefit costs. CORPORATE AND OTHER General and administrative expense increased during the three- and nine-month periods ended December 31, 2000, primarily due to increased compensation costs related to the Company's performance based incentive compensation plan costs. Additionally, the nine-month period also included costs incurred to review a potential reorganization of the Company's legal operating structure. Earnings from unconsolidated subsidiaries increased during the current quarter primarily due to the resumption of distributions from the Company's Mexican joint venture. For the nine months ended December 31, 2000 earnings from unconsolidated entities increased due to the distributions discussed above offset by lower earnings reported by Bristow's training joint venture. The effective income tax rate from continuing operations was approximately 31% for the nine months ended December 31, 2000 and 1999. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents were $42.2 million as of December 31, 2000, a $4.3 million increase from March 31, 2000. Working capital as of December 31, 2000 was $116.7 million, a $14.0 million increase from March 31, 2000. Total debt was $228.7 million as of December 31, 2000. 19 As of December 31, 2000, Bristow had a (pound)15 million ($22.4 million) revolving credit facility with a syndicate of United Kingdom banks that matures on February 28, 2001. As of December 31, 2000, Bristow had (pound)0.6 million ($0.8 million) of letters of credit utilized and no funds were drawn under this credit facility. As of December 31, 2000, the Company had a $20 million unsecured working capital line of credit with a bank that expires on September 30, 2001. No funds were drawn under this facility as of December 31, 2000. Management believes that its normal operations, lines of credit and available financing will provide sufficient working capital and cash flow to meet debt service needs for the foreseeable future. Management also believes that credit facilities with similar terms will be obtained before the expiration of above facilities. During the nine months ended December 31, 2000, the Company received proceeds of $2.0 million primarily from the sale of non-aviation assets and purchased two Bell 412's for $10.0 million, two Bell 407's for $2.2 million, three S76's for $3.5 million, twelve 206L's for $4.7 million and seven 206B's for $2.0 million to fulfill customer contract requirements. These aircraft acquisitions were made with existing cash. The Company has a commitment to acquire six-(6) new Bell 407 helicopters for $9.0 million with delivery scheduled during the first quarter of calendar 2001. During the nine months ended December 31, 1999, the Company received proceeds of $9.2 million from nine separate disposals of aircraft. During the same period, the Company purchased seven Bell 407's for $9.2 million, four S-61's for $11.0 million, two S-76's for $4.5 million, one Bell 412 for $4.3 million and three Super Puma's for $20.4 million. In addition, the Company placed $4.0 million into escrow, included in other assets as of March 31, 2000, for the purchase of three S-76 aircraft. Of the S-76's, only two were acquired and the unused escrowed funds were returned to the Company during fiscal 2001. LEGAL MATTERS The Company has received notices from the United States Environmental Protection Agency that it is one of approximately 160 potentially responsible parties ("PRP") at one Superfund site in Texas, one of over 300 PRPs at one site in Louisiana and a PRP at one site in Rhode Island. The Company believes, based on presently available information, that its potential liability for clean up and other response costs in connection with these sites is not likely to have a material adverse effect on the Company's business or financial condition. RECENT ACCOUNTING PRONOUNCEMENTS In December 1999, the Securities and Exchange Commission released Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB 101"), providing the SEC's view with respect to the application of generally accepted accounting principles to selected revenue recognition issues. As amended, SAB 101 will become effective for the fourth quarter of fiscal 2001. The Company is currently assessing the impact of SAB 101 and currently believes that the effect, if any, will not have a material effect on the Company's financial position or results of operations." In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" which establishes accounting and reporting standards for derivative instruments and for hedging activities. It requires that entities recognize all derivatives as either assets or liabilities in the statements of financial position and measure those instruments at fair value. Changes in a derivative's fair value are to be recognized currently in earnings unless specific hedge accounting criteria are met. The Company will be required to adopt SFAS No. 133, as amended by SFAS No. 137, no later than April 1, 2001. The Company does not use derivative instruments or hedging activities extensively in its business and therefore the adoption of this new statement is not expected to materially affect the Company's financial position or results of operations. The new statement could however cause volatility in the components of other comprehensive income. 20 FORWARD LOOKING STATEMENTS This report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements included herein other than statements of historical fact are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements") may include, but are not limited to, demand for Company services, worldwide activity levels in oil and natural gas exploration, development and production, fluctuations in oil and natural gas prices, unionization and the response thereto by the Company's customers, currency fluctuations, international political conditions and the ability to achieve reduced operating expenses. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. No material changes from the 2000 annual report disclosures. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (b) Reports on Form 8-K: There were no Form 8-K filings during the quarter ended December 31, 2000. 21 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OFFSHORE LOGISTICS, INC. BY:/s/ GEORGE M. SMALL ---------------------------------- GEORGE M. SMALL President and Chief Operating Officer DATE: February 14, 2001 /s/ H. EDDY DUPUIS BY: ---------------------------------- H. EDDY DUPUIS Vice President and Chief Financial Officer DATE: February 14, 2001 -----END PRIVACY-ENHANCED MESSAGE-----