##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended: September 30, 2007
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from to
 Commission file number: 0-9827
 PHI, Inc.
  Louisiana
    
    72-0395707(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)2001 SE Evangeline ThruwayLafayette, Louisiana
    
    70508(Address of principal executive offices)
    
    (Zip Code)
 (337) 235-2452
  þ o
  o þ o
  o þ
   Class
    
    Outstanding at November 2, 2007Voting Common Stock
    
    2,852,616 sharesNon-Voting Common Stock
    
    12,423,992 shares




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##### 



PHI, INC.
 Index  Form 10-Q
 Part I  Financial InformationItem 1. Financial Statements  UnauditedCondensed Consolidated Balance Sheets  September 30, 2007
and December 31, 2006
    
    
    3Condensed Consolidated Statements of Operations  Quarter and
Nine Months Ended September 30, 2007 and 2006
    
    
    4Condensed Consolidated Statements of Cash Flows  Nine
Months Ended September 30, 2007 and 2006
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    30Item 4. Controls and Procedures
    
    
    31Part II  Other InformationItem 1. Legal Proceedings
    
    
    32Item 1.A. Risk Factors
    
    
    32Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 3. Defaults Upon Senior Securities
    
    
    39Item 4. Submission of Matters to a Vote of Security Holders
    
    
    39Item 5. Other Information
    
    
    39Item 6. Exhibits
    
    
    40Signatures
    
    
    41Second Amendment to Loan AgreementFourth Amendment to Loan AgreementFifth Amendment to Loan AgreementCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906
  2




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PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 PHI, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Thousands of dollars, except share data)
 (Unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    647
    
    
    $
    820Short-term investments
    
    
    86,856
    
    
    
    153,414Accounts receivable  net of allowance:Trade
    
    
    101,213
    
    
    
    87,366Other
    
    
    3,674
    
    
    
    1,928Inventories of spare parts and supplies
    
    
    55,094
    
    
    
    55,596Assets held for sale
    
    
    5,647
    
    
    
    Other current assets
    
    
    8,901
    
    
    
    7,930Refundable income taxes
    
    
    72
    
    
    
    635Total current assets
    
    
    262,104
    
    
    
    307,689Other
    
    
    32,772
    
    
    
    23,816Property and equipment, net
    
    
    428,222
    
    
    
    369,465Total assets
    
    $
    723,098
    
    
    $
    700,970LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    25,264
    
    
    $
    35,815Accrued liabilities
    
    
    12,721
    
    
    
    8,511Accrued interest
    
    
    6,554
    
    
    
    3,045Accrued vacation payable
    
    
    3,787
    
    
    
    2,583Accrued wages and salaries
    
    
    6,494
    
    
    
    3,636Total current liabilities
    
    
    54,820
    
    
    
    53,590Long-term debt
    
    
    201,750
    
    
    
    205,500Deferred income taxes
    
    
    42,021
    
    
    
    32,828Other long-term liabilities
    
    
    7,933
    
    
    
    8,927Commitments and contingencies (Note 3)Shareholders Equity:Voting common stock  par value of $0.10;
authorized shares of 12,500,000
    
    
    285
    
    
    
    285Non-voting common stock  par value of $0.10;
authorized shares of 12,500,000
    
    
    1,242
    
    
    
    1,242Additional paid-in capital
    
    
    290,695
    
    
    
    290,695Accumulated other comprehensive income
    
    
    65
    
    
    
    77Retained earnings
    
    
    124,287
    
    
    
    107,826Total shareholders equity
    
    
    416,574
    
    
    
    400,125Total liabilities and shareholders equity
    
    $
    723,098
    
    
    $
    700,970
  3




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PHI, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (Unaudited)
 Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Operating revenues
    
    $
    118,401
    
    
    $
    109,315
    
    
    $
    333,129
    
    
    $
    317,844Gain (loss) on disposition of
assets, net
    
    
    6,988
    
    
    
    621
    
    
    
    15,596
    
    
    
    (541
    )Other
    
    
    1,119
    
    
    
    2,659
    
    
    
    4,263
    
    
    
    6,076126,508
    
    
    
    112,595
    
    
    
    352,988
    
    
    
    323,379Expenses:Direct expenses
    
    
    101,427
    
    
    
    93,224
    
    
    
    291,779
    
    
    
    269,492Selling, general and
administrative expenses
    
    
    7,374
    
    
    
    6,795
    
    
    
    22,306
    
    
    
    20,203Interest expense
    
    
    3,895
    
    
    
    4,039
    
    
    
    12,262
    
    
    
    13,241Loss on debt restructuring
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,790112,696
    
    
    
    104,058
    
    
    
    326,347
    
    
    
    315,726Earnings before income taxes
    
    
    13,812
    
    
    
    8,537
    
    
    
    26,641
    
    
    
    7,653Income taxes
    
    
    5,183
    
    
    
    3,415
    
    
    
    10,180
    
    
    
    3,061Net earnings
    
    $
    8,629
    
    
    $
    5,122
    
    
    $
    16,461
    
    
    $
    4,592Weighted average shares
outstanding:Basic
    
    
    15,288
    
    
    
    15,288
    
    
    
    15,288
    
    
    
    13,447Diluted
    
    
    15,306
    
    
    
    15,306
    
    
    
    15,307
    
    
    
    13,463Net earnings per shareBasic
    
    $
    0.56
    
    
    $
    0.34
    
    
    $
    1.08
    
    
    $
    0.34Diluted
    
    $
    0.56
    
    
    $
    0.33
    
    
    $
    1.08
    
    
    $
    0.34
  4




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PHI, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Thousands of dollars)
 (Unaudited)
 Nine Months EndedSeptember 30,2007
    
    
    2006Cash flows from operating activities:Net earnings
    
    $
    16,461
    
    
    $
    4,592Adjustments to reconcile net earnings to net cash
provided by operating activities:Depreciation
    
    
    23,201
    
    
    
    22,389Deferred income taxes
    
    
    9,193
    
    
    
    2,100(Gain) loss on disposition of assets, net
    
    
    (15,596
    )
    
    
    541Loss on debt restructuring
    
    
    
    
    
    
    12,790Other
    
    
    665
    
    
    
    594Changes in operating assets and liabilities
    
    
    (17,457
    )
    
    
    (20,226
    )Net cash provided by operating activities
    
    
    16,467
    
    
    
    22,780Cash flows from investing activities:Purchase of property and equipment
    
    
    (97,488
    )
    
    
    (81,622
    )Purchase of short-term investments
    
    
    (104,337
    )
    
    
    (157,103
    )Proceeds from sale of short-term investments
    
    
    170,895
    
    
    
    60,041Deposits on aircraft
    
    
    (9,448
    )
    
    
    (23,000
    )Proceeds from asset dispositions
    
    
    27,488
    
    
    
    30,797Net cash used in investing activities
    
    
    (12,890
    )
    
    
    (170,887
    )Cash flows from financing activities:Proceeds of debt issuance  Senior Notes
    
    
    
    
    
    
    200,000Premium and costs to retire debt early
    
    
    
    
    
    
    (10,208
    )Repayment of Senior Notes
    
    
    
    
    
    
    (200,000
    )Debt issuance costs
    
    
    
    
    
    
    (4,629
    )Proceeds from line of credit
    
    
    36,450
    
    
    
    138,700Payments on line of credit
    
    
    (40,200
    )
    
    
    (138,500
    )Proceeds from stock issuance, net
    
    
    
    
    
    
    160,722Net cash (used in) provided by financing activities
    
    
    (3,750
    )
    
    
    146,085Decrease in cash and cash equivalents
    
    
    (173
    )
    
    
    (2,022
    )Cash and cash equivalents, beginning of period
    
    
    820
    
    
    
    3,036Cash and cash equivalents, end of period
    
    $
    647
    
    
    $
    1,014Supplemental Disclosures Cash Flow InformationInterest paid
    
    $
    8,263
    
    
    $
    9,021Taxes paid, net
    
    $
    21
    
    
    $
    68
  5




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. General
   2. Segment Information
     Oil and Gas Segment.
 6




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Air Medical Segment.
   Revenue
    

    AccountsReceivableQuarter Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    2006Gross billings
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Provision for contractual discounts
    
    
    46
    %
    
    
    43
    %
    
    
    46
    %
    
    
    43
    %
    
    
    34
    %
    
    
    32
    %Provision for uncompensated care
    
    
    12
    %
    
    
    11
    %
    
    
    10
    %
    
    
    10
    %
    
    
    20
    %
    
    
    21
    %Amounts attributable to Medicaid, Medicare, Insurance and Self Pay as a percentage of net Air
Medical revenues are as follows:Quarter Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Medicaid
    
    
    10
    %
    
    
    12
    %
    
    
    9
    %
    
    
    12
    %Medicare
    
    
    15
    %
    
    
    15
    %
    
    
    15
    %
    
    
    14
    %Insurance
    
    
    69
    %
    
    
    63
    %
    
    
    67
    %
    
    
    62
    %Self Pay
    
    
    6
    %
    
    
    10
    %
    
    
    9
    %
    
    
    12
    %
  7




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Technical Services Segment.
   Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Thousands of dollars)
    
    
    (Thousands of dollars)Segment operating revenuesOil and Gas
    
    $
    76,853
    
    
    $
    71,416
    
    
    $
    213,843
    
    
    $
    212,168Air Medical
    
    
    39,839
    
    
    
    35,735
    
    
    
    113,036
    
    
    
    100,042Technical Services
    
    
    1,709
    
    
    
    2,164
    
    
    
    6,250
    
    
    
    5,634Total operating revenues
    
    
    118,401
    
    
    
    109,315
    
    
    
    333,129
    
    
    
    317,844Segment direct expenses (1)Oil and Gas
    
    
    65,805
    
    
    
    58,912
    
    
    
    185,000
    
    
    
    169,668Air Medical
    
    
    34,579
    
    
    
    32,560
    
    
    
    102,220
    
    
    
    94,938Technical Services
    
    
    1,043
    
    
    
    1,752
    
    
    
    4,559
    
    
    
    4,886Total direct expenses
    
    
    101,427
    
    
    
    93,224
    
    
    
    291,779
    
    
    
    269,492Segment selling, general and administrative expensesOil and Gas
    
    
    406
    
    
    
    301
    
    
    
    1,196
    
    
    
    950Air Medical
    
    
    1,882
    
    
    
    1,758
    
    
    
    5,721
    
    
    
    5,403Technical Services
    
    
    12
    
    
    
    14
    
    
    
    37
    
    
    
    24Total selling, general and administrative expenses
    
    
    2,300
    
    
    
    2,073
    
    
    
    6,954
    
    
    
    6,377Total direct and selling, general and administrative expenses
    
    
    103,727
    
    
    
    95,297
    
    
    
    298,733
    
    
    
    275,869Net segment profitOil and Gas
    
    
    10,642
    
    
    
    12,203
    
    
    
    27,647
    
    
    
    41,550Air Medical
    
    
    3,378
    
    
    
    1,417
    
    
    
    5,095
    
    
    
    (299
    )Technical Services
    
    
    654
    
    
    
    398
    
    
    
    1,654
    
    
    
    724Total
    
    
    14,674
    
    
    
    14,018
    
    
    
    34,396
    
    
    
    41,975Other, net (2)
    
    
    8,107
    
    
    
    3,280
    
    
    
    19,859
    
    
    
    5,535Unallocated selling, general and administrative costs
    
    
    (5,074
    )
    
    
    (4,722
    )
    
    
    (15,352
    )
    
    
    (13,826
    )Interest expense
    
    
    (3,895
    )
    
    
    (4,039
    )
    
    
    (12,262
    )
    
    
    (13,241
    )Loss on debt restructuring
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,790
    )Earnings before income taxes
    
    $
    13,812
    
    
    $
    8,537
    
    
    $
    26,641
    
    
    $
    7,653
 
 1)
    
    Included in direct expense are the depreciation expense amounts below: Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Oil and Gas
    
    $
    4,359
    
    
    $
    4,509
    
    
    $
    13,063
    
    
    $
    12,822Air Medical
    
    
    1,946
    
    
    
    2,343
    
    
    
    6,568
    
    
    
    6,627Technical Services
    
    
    104
    
    
    
    37
    
    
    
    489
    
    
    
    140Total
    
    $
    6,409
    
    
    $
    6,889
    
    
    $
    20,120
    
    
    $
    19,589Unallocated SG&A
    
    $
    1,011
    
    
    $
    1,047
    
    
    $
    3,081
    
    
    $
    2,800
 
 2)
    
    Including gains (losses) on disposition of assets and other income. 8




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3. Commitments and Contingencies
 Environmental Matters 
 Legal Matters
  Long-term Debt
   9




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Operating Leases
  Purchase Commitments
 Assets Held for Sale
 4. Property and Equipment
  5. Valuation Accounts
   6. Employees
 Union Related Matters 
  10




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Employee Incentive Compensation 
 7. Recent Accounting Pronouncements
     11




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8. Shareholders Equity
   9. Comprehensive Income
  Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Thousands of dollars)
    
    
    (Thousands of dollars)Net earnings
    
    $
    8,629
    
    
    $
    5,122
    
    
    $
    16,461
    
    
    $
    4,592SFAS No. 158 adjustment
    
    
    14
    
    
    
    
    
    
    
    (12
    )
    
    
    Comprehensive income
    
    $
    8,643
    
    
    $
    5,122
    
    
    $
    16,449
    
    
    $
    4,592
 10. Condensed Consolidating Financial Information
    12




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PHI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(Thousands of dollars)
(Unaudited)
 September 30, 2007ParentCompany
    
    
    GuarantorOnly
    
    
    Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    217
    
    
    $
    430
    
    
    $
    
    
    
    $
    647Short-term investments
    
    
    86,856
    
    
    
    
    
    
    
    
    
    
    
    86,856Accounts receivable  net of allowance
    
    
    90,511
    
    
    
    14,376
    
    
    
    
    
    
    
    104,887Inventories of spare parts and supplies
    
    
    55,094
    
    
    
    
    
    
    
    
    
    
    
    55,094Assets held for sale
    
    
    5,647
    
    
    
    
    
    
    
    
    
    
    
    5,647Other current assets
    
    
    8,889
    
    
    
    12
    
    
    
    
    
    
    
    8,901Refundable income taxes
    
    
    44
    
    
    
    28
    
    
    
    
    
    
    
    72Total current assets
    
    
    247,258
    
    
    
    14,846
    
    
    
    
    
    
    
    262,104Investment in subsidiaries and other
    
    
    55,604
    
    
    
    
    
    
    
    (55,604
    )
    
    
    Intercompany receivable
    
    
    
    
    
    
    49,027
    
    
    
    (49,027
    )
    
    
    Other assets
    
    
    32,495
    
    
    
    277
    
    
    
    
    
    
    
    32,772Property and equipment, net
    
    
    415,601
    
    
    
    12,621
    
    
    
    
    
    
    
    428,222Total Assets
    
    $
    750,958
    
    
    $
    76,771
    
    
    $
    (104,631
    )
    
    $
    723,098LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    48,084
    
    
    $
    2,949
    
    
    $
    
    
    
    $
    51,033Intercompany payable
    
    
    49,027
    
    
    
    
    
    
    
    (49,027
    )
    
    
    Accrued vacation payable
    
    
    3,499
    
    
    
    288
    
    
    
    
    
    
    
    3,787Total current liabilities
    
    
    100,610
    
    
    
    3,237
    
    
    
    (49,027
    )
    
    
    54,820Long-term debt
    
    
    201,750
    
    
    
    
    
    
    
    
    
    
    
    201,750Deferred income taxes and other long-term
liabilities
    
    
    32,024
    
    
    
    17,930
    
    
    
    
    
    
    
    49,954Shareholders Equity:Paid-in capital
    
    
    292,222
    
    
    
    4,402
    
    
    
    (4,402
    )
    
    
    292,222Accumulated other comprehensive
income
    
    
    65
    
    
    
    
    
    
    
    
    
    
    
    65Retained earnings
    
    
    124,287
    
    
    
    51,202
    
    
    
    (51,202
    )
    
    
    124,287Total shareholders equity
    
    
    416,574
    
    
    
    55,604
    
    
    
    (55,604
    )
    
    
    416,574Total Liabilities and
Shareholders Equity
    
    $
    750,958
    
    
    $
    76,771
    
    
    $
    (104,631
    )
    
    $
    723,098
 
 1)
    
    Foreign subsidiaries represent minor subsidiaries and are included in the guarantors subsidiaries amounts. 13




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PHI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(Thousands of dollars)
 December 31, 2006ParentCompany
    
    
    GuarantorOnly
    
    

Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    385
    
    
    $
    435
    
    
    $
    
    
    
    $
    820Short-term investments
    
    
    153,414
    
    
    
    
    
    
    
    
    
    
    
    153,414Accounts receivable  net of allowance
    
    
    75,642
    
    
    
    13,652
    
    
    
    
    
    
    
    89,294Inventories of spare parts and supplies
    
    
    55,596
    
    
    
    
    
    
    
    
    
    
    
    55,596Other current assets
    
    
    7,922
    
    
    
    8
    
    
    
    
    
    
    
    7,930Refundable income taxes
    
    
    44
    
    
    
    591
    
    
    
    
    
    
    
    635Total current assets
    
    
    293,003
    
    
    
    14,686
    
    
    
    
    
    
    
    307,689Investment in subsidiaries and other
    
    
    46,226
    
    
    
    
    
    
    
    (46,226
    )
    
    
    Intercompany receivable
    
    
    
    
    
    
    44,085
    
    
    
    (44,085
    )
    
    
    Other assets
    
    
    23,759
    
    
    
    57
    
    
    
    
    
    
    
    23,816Property and equipment, net
    
    
    361,570
    
    
    
    7,895
    
    
    
    
    
    
    
    369,465Total assets
    
    $
    724,558
    
    
    $
    66,723
    
    
    $
    (90,311
    )
    
    $
    700,970LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    46,653
    
    
    $
    4,354
    
    
    $
    
    
    
    $
    51,007Intercompany payable
    
    
    44,085
    
    
    
    
    
    
    
    (44,085
    )
    
    
    Accrued vacation payable
    
    
    2,295
    
    
    
    288
    
    
    
    
    
    
    
    2,583Total current liabilities
    
    
    93,033
    
    
    
    4,642
    
    
    
    (44,085
    )
    
    
    53,590Long-term debt
    
    
    205,500
    
    
    
    
    
    
    
    
    
    
    
    205,500Deferred income taxes and other long-term
liabilities
    
    
    25,900
    
    
    
    15,855
    
    
    
    
    
    
    
    41,755Shareholders Equity:Paid-in capital
    
    
    292,222
    
    
    
    4,402
    
    
    
    (4,402
    )
    
    
    292,222Accumulated other comprehensive
income
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    77Retained earnings
    
    
    107,826
    
    
    
    41,824
    
    
    
    (41,824
    )
    
    
    107,826Total shareholders equity
    
    
    400,125
    
    
    
    46,226
    
    
    
    (46,226
    )
    
    
    400,125Total liabilities and
shareholders equity
    
    $
    724,558
    
    
    $
    66,723
    
    
    $
    (90,311
    )
    
    $
    700,970
 14




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PHI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Thousands of dollars)
(Unaudited)
 For the quarter ended September 30, 2007ParentCompany
    
    
    GuarantorOnly
    
    

Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedOperating revenues
    
    $
    100,311
    
    
    $
    18,090
    
    
    $
    
    
    
    $
    118,401Management fees
    
    
    723
    
    
    
    
    
    
    
    (723
    )
    
    
    Gain on dispositions of assets, net
    
    
    6,988
    
    
    
    
    
    
    
    
    
    
    
    6,988Other
    
    
    1,119
    
    
    
    
    
    
    
    
    
    
    
    1,119109,141
    
    
    
    18,090
    
    
    
    (723
    )
    
    
    126,508Expenses:Direct expenses
    
    
    89,533
    
    
    
    11,894
    
    
    
    
    
    
    
    101,427Management fees
    
    
    
    
    
    
    723
    
    
    
    (723
    )
    
    
    Selling, general, and administrative
    
    
    6,607
    
    
    
    767
    
    
    
    
    
    
    
    7,374Equity in net income of consolidated
subsidiaries
    
    
    (3,835
    )
    
    
    
    
    
    
    3,835
    
    
    
    Interest expense
    
    
    3,895
    
    
    
    
    
    
    
    
    
    
    
    3,89596,200
    
    
    
    13,384
    
    
    
    3,112
    
    
    
    112,696Earnings before income taxes
    
    
    12,941
    
    
    
    4,706
    
    
    
    (3,835
    )
    
    
    13,812Income taxes
    
    
    4,312
    
    
    
    871
    
    
    
    
    
    
    
    5,183Net earnings
    
    $
    8,629
    
    
    $
    3,835
    
    
    $
    (3,835
    )
    
    $
    8,629
 For the quarter ended September 30, 2006ParentCompany
    
    
    GuarantorOnly
    
    

Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedOperating revenues
    
    $
    94,968
    
    
    $
    14,347
    
    
    $
    
    
    
    $
    109,315Management fees
    
    
    574
    
    
    
    
    
    
    
    (574
    )
    
    
    Gain on dispositions of assets, net
    
    
    621
    
    
    
    
    
    
    
    
    
    
    
    621Other
    
    
    2,651
    
    
    
    8
    
    
    
    
    
    
    
    2,65998,814
    
    
    
    14,355
    
    
    
    (574
    )
    
    
    112,595Expenses:Direct expenses
    
    
    82,158
    
    
    
    11,066
    
    
    
    
    
    
    
    93,224Management fees
    
    
    
    
    
    
    574
    
    
    
    (574
    )
    
    
    Selling, general, and administrative
    
    
    6,042
    
    
    
    753
    
    
    
    
    
    
    
    6,795Equity in net income of consolidated
subsidiaries
    
    
    (1,564
    )
    
    
    
    
    
    
    1,564
    
    
    
    Interest expense
    
    
    4,039
    
    
    
    
    
    
    
    
    
    
    
    4,03990,675
    
    
    
    12,393
    
    
    
    990
    
    
    
    104,058Earnings before income taxes
    
    
    8,139
    
    
    
    1,962
    
    
    
    (1,564
    )
    
    
    8,537Income taxes
    
    
    3,017
    
    
    
    398
    
    
    
    
    
    
    
    3,415Net earnings
    
    $
    5,122
    
    
    $
    1,564
    
    
    $
    (1,564
    )
    
    $
    5,122
 
 1)
    
    Foreign subsidiaries represent minor subsidiaries and are included in the guarantors
subsidiaries amounts. 15




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PHI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Thousands of dollars)
(Unaudited)
 For the nine months ended September 30, 2007ParentCompany
    
    
    GuarantorOnly
    
    

Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedOperating revenues
    
    $
    282,892
    
    
    $
    50,237
    
    
    $
    
    
    
    $
    333,129Management fees
    
    
    2,009
    
    
    
    
    
    
    
    (2,009
    )
    
    
    Gain on dispositions of assets, net
    
    
    15,596
    
    
    
    
    
    
    
    
    
    
    
    15,596Other
    
    
    4,255
    
    
    
    8
    
    
    
    
    
    
    
    4,263304,752
    
    
    
    50,245
    
    
    
    (2,009
    )
    
    
    352,988Expenses:Direct expenses
    
    
    257,298
    
    
    
    34,481
    
    
    
    
    
    
    
    291,779Management fees
    
    
    
    
    
    
    2,009
    
    
    
    (2,009
    )
    
    
    Selling, general, and administrative
    
    
    20,060
    
    
    
    2,246
    
    
    
    
    
    
    
    22,306Equity in net income of consolidated
subsidiaries
    
    
    (9,378
    )
    
    
    
    
    
    
    9,378
    
    
    
    Interest expense
    
    
    12,262
    
    
    
    
    
    
    
    
    
    
    
    12,262280,242
    
    
    
    38,736
    
    
    
    7,369
    
    
    
    326,347Earnings before income taxes
    
    
    24,510
    
    
    
    11,509
    
    
    
    (9,378
    )
    
    
    26,641Income taxes
    
    
    8,049
    
    
    
    2,131
    
    
    
    
    
    
    
    10,180Net earnings
    
    $
    16,461
    
    
    $
    9,378
    
    
    $
    (9,378
    )
    
    $
    16,461
 For the nine months ended September 30, 2006ParentCompany
    
    
    GuarantorOnly
    
    

Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedOperating revenues
    
    $
    276,355
    
    
    $
    41,489
    
    
    $
    
    
    
    $
    317,844Management fees
    
    
    1,660
    
    
    
    
    
    
    
    (1,660
    )
    
    
    Loss on dispositions of assets, net
    
    
    (541
    )
    
    
    
    
    
    
    
    
    
    
    (541
    )Other
    
    
    6,061
    
    
    
    15
    
    
    
    
    
    
    
    6,076283,535
    
    
    
    41,504
    
    
    
    (1,660
    )
    
    
    323,379Expenses:Direct expenses
    
    
    239,786
    
    
    
    29,706
    
    
    
    
    
    
    
    269,492Management fees
    
    
    
    
    
    
    1,660
    
    
    
    (1,660
    )
    
    
    Selling, general, and administrative
    
    
    18,083
    
    
    
    2,120
    
    
    
    
    
    
    
    20,203Equity in net income of consolidated
subsidiaries
    
    
    (5,755
    )
    
    
    
    
    
    
    5,755
    
    
    
    Interest expense
    
    
    13,241
    
    
    
    
    
    
    
    
    
    
    
    13,241Loss on debt restructuring
    
    
    12,790
    
    
    
    
    
    
    
    
    
    
    
    12,790278,145
    
    
    
    33,486
    
    
    
    4,095
    
    
    
    315,726Earnings before income taxes
    
    
    5,390
    
    
    
    8,018
    
    
    
    (5,755
    )
    
    
    7,653Income taxes
    
    
    798
    
    
    
    2,263
    
    
    
    
    
    
    
    3,061Net earnings
    
    $
    4,592
    
    
    $
    5,755
    
    
    $
    (5,755
    )
    
    $
    4,592
 16




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PHI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
 For the nine months ended September 30, 2007ParentCompany
    
    
    GuarantorOnly
    
    

Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    16,469
    
    
    $
    (2
    )
    
    $
    
    
    
    $
    16,467Cash flows from investing activities:Purchase of property and equipment
    
    
    (97,485
    )
    
    
    (3
    )
    
    
    
    
    
    
    (97,488
    )Proceeds from asset dispositions
    
    
    27,488
    
    
    
    
    
    
    
    
    
    
    
    27,488Sale of short-term investments
    
    
    66,558
    
    
    
    
    
    
    
    
    
    
    
    66,558Deposits on aircraft
    
    
    (9,448
    )
    
    
    
    
    
    
    
    
    
    
    (9,448
    )Net cash
used in investing activities
    
    
    (12,887
    )
    
    
    (3
    )
    
    
    
    
    
    
    (12,890
    )Cash flows from financing activities:Payments on line of credit, net
    
    
    (3,750
    )
    
    
    
    
    
    
    
    
    
    
    (3,750
    )Net cash used in financing activities
    
    
    (3,750
    )
    
    
    
    
    
    
    
    
    
    
    (3,750
    )Decrease in cash and cash equivalents
    
    
    (168
    )
    
    
    (5
    )
    
    
    
    
    
    
    (173
    )Cash and cash equivalents, beginning of
period
    
    
    385
    
    
    
    435
    
    
    
    
    
    
    
    820Cash and cash equivalents, end of period
    
    $
    217
    
    
    $
    430
    
    
    $
    
    
    
    $
    647
 For the nine months ended September 30, 2006ParentCompany
    
    
    GuarantorOnly
    
    

Subsidiaries (1)
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    22,572
    
    
    $
    208
    
    
    $
    
    
    
    $
    22,780Cash flows from investing activities:Purchase of property and equipment
    
    
    (81,428
    )
    
    
    (194
    )
    
    
    
    
    
    
    (81,622
    )Proceeds from asset dispositions
    
    
    30,797
    
    
    
    
    
    
    
    
    
    
    
    30,797Purchase of short-term investments
    
    
    (97,062
    )
    
    
    
    
    
    
    
    
    
    
    (97,062
    )Deposits on aircraft
    
    
    (23,000
    )
    
    
    
    
    
    
    
    
    
    
    (23,000
    )Net cash used in investing activities
    
    
    (170,693
    )
    
    
    (194
    )
    
    
    
    
    
    
    (170,887
    )Cash flows from financing activities:Proceeds of debt issuance  senior notes
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    200,000Premium and costs to retire debt early
    
    
    (10,208
    )
    
    
    
    
    
    
    
    
    
    
    (10,208
    )Repayment of senior notes
    
    
    (200,000
    )
    
    
    
    
    
    
    
    
    
    
    (200,000
    )Debt issuance costs
    
    
    (4,629
    )
    
    
    
    
    
    
    
    
    
    
    (4,629
    )Proceeds on line of credit, net
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    200Proceeds from stock issuance, net
    
    
    160,722
    
    
    
    
    
    
    
    
    
    
    
    160,722Net cash provided by financing activities
    
    
    146,085
    
    
    
    
    
    
    
    
    
    
    
    146,085Decrease in cash and cash equivalents
    
    
    (2,036
    )
    
    
    14
    
    
    
    
    
    
    
    (2,022
    )Cash and cash equivalents, beginning of
period
    
    
    2,577
    
    
    
    459
    
    
    
    
    
    
    
    3,036Cash and cash equivalents, end of period
    
    $
    541
    
    
    $
    473
    
    
    $
    
    
    
    $
    1,014
 
 1)
    
    Foreign subsidiaries represent minor subsidiaries and are included in the guarantors
subsidiaries amounts. 17




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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  Forward-Looking Statements
  Overview
    18




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19




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20




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21




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Operating Statistics
  Quarter Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006(1)
    
    2007
    
    2006(1)Flight hours:Oil and Gas
    
    
    27,893
    
    
    
    31,439
    
    
    
    82,583
    
    
    
    93,454Air Medical
    
    
    8,620
    
    
    
    7,986
    
    
    
    23,636
    
    
    
    22,866Technical Services
    
    
    
    
    
    
    109
    
    
    
    408
    
    
    
    581Total
    
    
    36,513
    
    
    
    39,534
    
    
    
    106,627
    
    
    
    116,901Air Medical Transports(2)
    
    
    5,891
    
    
    
    5,661
    
    
    
    16,463
    
    
    
    15,794
 September 30,2007
    
    2006Aircraft operated at period end:Oil and Gas
    
    
    161
    
    
    
    162Air Medical
    
    
    72
    
    
    
    69Technical Services
    
    
    4
    
    
    
    4Total (3)
    
    
    237
    
    
    
    235
 
 (1)
    
    All prior periods have been recast to conform to the 2007 segment presentation. See Note
2, Segment Information, to the Condensed Consolidated Financial Statements for discussion on
change in reportable segments.(2)
    
    Represents individual patient transports for the period. Flight hours for these
transports are included above.(3)
    
    Includes 12 aircraft as of September 30, 2007 and 2006 that are customer owned. Quarter Ended September 30, 2007 compared with Quarter Ended September 30, 2006
 Combined Operations
 Revenues
  Other Income and Gains
 22




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Direct Expenses
 Selling, General, and Administrative Expenses
 Interest Expense
 Income Taxes
 Earnings
 Segment Discussion
 Oil and Gas
 23




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Air Medical
     24




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##### Table of Contents



Technical Services
   Nine Months Ended September 30, 2007 compared with Nine Months Ended September 30, 2006
 Combined Operations
 Revenues 
  Other Income and Gains
  Direct Expenses
 25




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Selling, General, and Administrative Expenses
 Interest Expense
 Loss on Debt Restructuring
 Income Taxes
 Earnings
 Segment Discussion
 Oil and Gas
  26




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Air Medical
     27




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Technical Services
   Liquidity and Capital Resources
 General
  Cash Flow
    Financing Activities
  28




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Credit Facility
  Contractual Obligations
   29




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##### Table of Contents



Payment Due by YearBeyondTotal
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2011(Thousands of dollars)New aircraft purchase
commitments (1)
    
    $
    161,751
    
    
    $
    57,910
    
    
    $
    80,311
    
    
    $
    23,530
    
    
    $
    
    
    
    $
    
    
    
    $
    New aircraft purchase
commitments (2)
    
    
    18,591
    
    
    
    
    
    
    
    18,591
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Existing aircraft lease
obligations
    
    
    161,103
    
    
    
    4,261
    
    
    
    17,043
    
    
    
    17,044
    
    
    
    17,645
    
    
    
    18,913
    
    
    
    86,197Other lease
obligations
    
    
    21,099
    
    
    
    874
    
    
    
    3,249
    
    
    
    2,528
    
    
    
    2,202
    
    
    
    1,841
    
    
    
    10,405Long-term debt
    
    
    201,750
    
    
    
    
    
    
    
    
    
    
    
    1,750
    
    
    
    
    
    
    
    
    
    
    
    200,000$
    564,294
    
    
    $
    63,045
    
    
    $
    119,194
    
    
    $
    44,852
    
    
    $
    19,847
    
    
    $
    20,754
    
    
    $
    296,602
 
 (1)
    
    These commitments are for aircraft that we intend to finance with remaining cash from
the equity offering completed April 2006, with cash from operations, and operating leases.(2)
    
    These commitments are for aircraft that we intend to finance with an operating lease.
Once the leases are entered into, the lease payments will be spread out over future years. Environmental Matters
  New Accounting Pronouncements
  
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  30




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Item 4. CONTROLS AND PROCEDURES
   31




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PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
   
 Item 1. A. RISK FACTORS
  RISKS INHERENT IN OUR BUSINESS
 Our operations are affected by adverse weather conditions and seasonal factors.
  Ø
    
    the tropical storm and hurricane season in the Gulf of Mexico;Ø
    
    poor weather conditions that often prevail during winter and can develop in any season; and;Ø
    
    reduced daylight hours during the winter months.
    32




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We may not be able to obtain acceptable customer contracts covering some of our new helicopters,
and there will be a delay between the time that a helicopter is delivered to us and the time that
it can begin generating revenues.
    Our contracts generally can be terminated or downsized by our customers without penalty.
  Increased governmental regulations could increase our costs or reduce our ability to operate
successfully.
    33




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The helicopter services business is highly competitive.
    The failure to maintain our safety record would seriously harm our ability to attract new customers
and maintain our existing customers.
  Helicopter operations involve risks that may not be covered by our insurance or may increase the
cost of our insurance.
    34




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##### Table of Contents



Our air medical operations, which we are expanding, expose us to numerous special risks, including
collection risks, high start-up costs and potential medical malpractice claims.
   Our international operations are subject to political, economic and regulatory uncertainty.
  Ø
    
    political, social and economic instability;Ø
    
    terrorism, kidnapping and extortion;Ø
    
    potential seizure or nationalization of assets;Ø
    
    import-export quotas; andØ
    
    currency fluctuations or devaluation.
  Ø
    
    the awarding of contracts to local contractors;Ø
    
    the employment of local citizens; andØ
    
    the establishment of foreign subsidiaries with significant
ownership positions reserved by the foreign government for local
ownership.
 Our failure to attract and retain qualified personnel could adversely affect us.
  35




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RISKS SPECIFIC TO OUR COMPANY
 We are highly dependent on the offshore oil and gas industry.
  Ø
    
    the supply of, and demand for, oil and natural gas and market
expectations regarding supply and demand;Ø
    
    weather-related or other natural causes;Ø
    
    actions of OPEC, and Middle Eastern and other oil producing
countries, to control prices or change production levels;Ø
    
    general economic conditions in the United States and worldwide;Ø
    
    war, civil unrest or terrorist activities;Ø
    
    governmental regulation; andØ
    
    the price and availability of alternative fuels.
    Our pilot workforce represented by Office and Professional Employees International Union conducted
a general strike beginning on September 20, 2006.
  36




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##### Table of Contents



We depend on a small number of large oil and gas industry customers for a significant portion of
our revenues, and our credit exposure within this industry is significant.
  Our Chairman of the Board and Chief Executive Officer is also our principal stockholder and has
voting control of the Company.
  Our substantial indebtedness could adversely affect our financial condition and impair our ability
to operate our business.
    Ø
    
    require us to dedicate a substantial portion of our cash flow from
operations to pay principal of, and interest on, our indebtedness,
thereby reducing the availability of our cash flow to fund working
capital, capital expenditures or other general corporate purposes,
or to carry out other aspects of our business plan;Ø
    
    increase our vulnerability to general adverse economic and
industry conditions and limit our ability to withstand competitive
pressures;
 37




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Ø
    
    limit our flexibility in planning for, or reacting to, changes in
our business and future business opportunities;Ø
    
    place us at a competitive disadvantage compared to our competitors
that have less debt; and limit our ability to obtain additional
financing to fund future working capital, capital expenditures and
other aspects of our business plan;Ø
    
    limit our ability to obtain additional financing for working
capital, capital expenditures and other aspects of our business
plan.
  The DOJ investigation could result in criminal proceedings and the imposition of fines and
penalties.
   Our stock has a low trading volume.
  We do not pay dividends.
  Provisions in our articles of incorporation and by-laws and Louisiana law make it more difficult to
effect a change in control, which could discourage a takeover of our company and adversely affect
the price of our common stock.
  38




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Future sales of our shares could depress the market price of our non-voting common stock.
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5. OTHER INFORMATION
  39




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##### Table of Contents



Item 6. EXHIBITS
 (a)
    
    Exhibits
 3.1
    
    (i)
    
    Amended and Restated Articles of Incorporation of the Company (incorporated
by reference to Exhibit No. 3.1(i) to PHIs Report on Form 10-Q for the quarterly
period ended June 30, 2006).(ii)
    
    Amended and Restated By-laws of the Company (as amended through
May 1, 2002) (incorporated by reference to Exhibit 3.1(iii) to PHIs Report on
Form 10-K for the year ended December 31, 2006).
 4.1
    
    Loan Agreement dated as of April 23, 2002 by and among Petroleum Helicopters,
Inc., Acadian Composites, LLC, Air Evac Services, Inc., Evangeline Airmotive Inc., and
International Helicopter Transport, Inc. and Whitney National Bank (incorporated by
reference to Exhibit 10.3 to PHIs Report on Form 10-Q for the quarterly period ended
June 30, 2002; File No. 0-9827).4.2
    
    1st Amendment to Loan Agreement dated as of April 23, 2002 by and
among Petroleum Helicopters, Inc. Acadian Composites, LLC, Air Evac Services, Inc.,
Evangeline Airmotive Inc., and International Helicopter Transport, Inc. and Whitney
National Bank (incorporated by reference to Exhibit 10.4 to PHIs Report on Form 10-Q
for the quarterly period ended June 30, 2004).4.3
    
    First Supplemental Indenture dated April 12, 2006, among PHI, Inc., the
Subsidiary Guarantors named therein and The Bank of New York, as Trustee (incorporated
by reference to Exhibit 10.1 to PHIs Report on Form 8-K filed on April 13, 2006).4.4
    
    Indenture dated April 12, 2006 among PHI, Inc., the Subsidiary Guarantors named
therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.2
to PHIs Report on Form 8-K filed on April 13, 2006).4.5
    
    Third Amendment to Loan Agreement dated April 12, 2006 by and among PHI, Inc.,
Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive, Inc.),
and International Helicopter Transport, Inc. and Whitney National Bank (incorporated by
reference to Exhibit 10.4 to PHIs Report on Form 8-K filed on April 13, 2006).4.6
    
    Registration Rights Agreement dated April 12, 2006 (incorporated by reference
to Exhibit 10.3 to PHIs Report on Form 8-K filed on April 13, 2006).4.7
    
    Second Amendment to Loan Agreement dated September 30, 2005 by and among
Petroleum Helicopters, Inc., Air Evac Services, Inc., Evangeline Airmotive, Inc., and International Helicopter Transport, Inc. and Whitney
National Bank.4.8
    
    Fourth Amendment to Loan Agreement dated September 30, 2006 by and among PHI,
Inc., Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive,
Inc.), and International Helicopter Transport, Inc. and Whitney National Bank.4.9
    
    Fifth Amendment to Loan Agreement dated August 1, 2007 by and among PHI, Inc.,
Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive, Inc.),
and International Helicopter Transport, Inc. and Whitney National Bank.
 40




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##### Table of Contents



31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chairman and Chief Executive Officer.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chairman and Chief Executive Officer.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.
 
 SIGNATURES
  PHI, Inc.November 8, 2007
    By:
    /s/ Al A. GonsoulinAl A. GonsoulinChairman and Chief Executive OfficerNovember 8, 2007
    By:
    /s/ Michael J. McCannMichael J. McCannChief Financial Officer 41




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##### Table of Contents



(a)
    
    Exhibits
 3.1
    
    (i)
    
    Amended and Restated Articles of Incorporation of the Company (incorporated
by reference to Exhibit No. 3.1(i) to PHIs Report on Form 10-Q for the quarterly
period ended June 30, 2006).(ii)
    
    Amended and Restated By-laws of the Company (as amended through
May 1, 2002) (incorporated by reference to Exhibit 3.1(iii) to PHIs Report on
Form 10-K for the year ended December 31, 2006).
 4.1
    
    Loan Agreement dated as of April 23, 2002 by and among Petroleum Helicopters,
Inc., Acadian Composites, LLC, Air Evac Services, Inc., Evangeline Airmotive Inc., and
International Helicopter Transport, Inc. and Whitney National Bank (incorporated by
reference to Exhibit 10.3 to PHIs Report on Form 10-Q for the quarterly period ended
June 30, 2002; File No. 0-9827).4.2
    
    1st Amendment to Loan Agreement dated as of April 23, 2002 by and
among Petroleum Helicopters, Inc. Acadian Composites, LLC, Air Evac Services, Inc.,
Evangeline Airmotive Inc., and International Helicopter Transport, Inc. and Whitney
National Bank (incorporated by reference to Exhibit 10.4 to PHIs Report on Form 10-Q
for the quarterly period ended June 30, 2004).4.3
    
    First Supplemental Indenture dated April 12, 2006, among PHI, Inc., the
Subsidiary Guarantors named therein and The Bank of New York, as Trustee (incorporated
by reference to Exhibit 10.1 to PHIs Report on Form 8-K filed on April 13, 2006).4.4
    
    Indenture dated April 12, 2006 among PHI, Inc., the Subsidiary Guarantors named
therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.2
to PHIs Report on Form 8-K filed on April 13, 2006).4.5
    
    Third Amendment to Loan Agreement dated April 12, 2006 by and among PHI, Inc.,
Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive, Inc.),
and International Helicopter Transport, Inc. and Whitney National Bank (incorporated by
reference to Exhibit 10.4 to PHIs Report on Form 8-K filed on April 13, 2006).4.6
    
    Registration Rights Agreement dated April 12, 2006 (incorporated by reference
to Exhibit 10.3 to PHIs Report on Form 8-K filed on April 13, 2006).4.7
    
    Second Amendment to Loan Agreement dated September 30, 2005 by and among
Petroleum Helicopters, Inc., Air Evac Services, Inc., Evangeline Airmotive, Inc., and International Helicopter Transport, Inc. and Whitney
National Bank.4.8
    
    Fourth Amendment to Loan Agreement dated September 30, 2006 by and among PHI,
Inc., Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive,
Inc.), and International Helicopter Transport, Inc. and Whitney National Bank.4.9
    
    Fifth Amendment to Loan Agreement dated August 1, 2007 by and among PHI, Inc.,
Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive, Inc.),
and International Helicopter Transport, Inc. and Whitney National Bank.




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##### Table of Contents



31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chairman and Chief Executive Officer.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chairman and Chief Executive Officer.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.