PHI, Inc. (“PHI”) (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the year ended December 31, 2011.
Oil and Gas operating revenues increased $10.0 million, related primarily to increased heavy aircraft flight hours and revenues. This increase was offset in part by a decrease in revenues for light and medium aircraft. Although there was an increase in revenue in the Oil and Gas segment, flight hours and revenue for deepwater drilling support began to achieve the same level of activity as before the Macondo incident only in the fourth quarter of 2011. Flight hours were 111,546 for 2011, compared to 114,122 for the same period in 2010.
Net Oil and Gas segment profit was $41.6 million for the year ended December 31, 2011, compared to $50.7 million for the year ended December 31, 2010. Revenue in the first three quarters of 2011 was adversely affected by decreased deepwater drilling activity caused by the Macondo oil spill in 2010. Deepwater drilling permits began to be issued and affect our customers in approximately April 2011 and permitting activity has improved since that time. There was also an increase in direct expense of $20.2 million, as discussed in our Form 10-K.
Operating revenues in the Air Medical segment increased $11.2 million primarily due to increased revenues for hospital based contracts of $8.0 million due to increased flight hours for those contracts. There was also an increase in revenues of $3.2 million in the independent provider programs due to an improved payor mix and rate increases implemented in 2010 and 2011. Patient transports were 17,638 for 2011, compared to 18,480 for 2010, a decrease of 842 transports. Flight hours were 33,650 for 2011, compared to 33,222 for 2010.Net segment profit for the Air Medical segment was $15.0 million for the year ended December 31, 2011, compared to $10.2 million for the year ended December 31, 2010. The increase in segment profit in the Air Medical segment was primarily due to increased revenues related to increased activity on hospital contracts and rate increases, offset in part by increased direct expenses of $6.1 million. Operating income for 2010 includes a credit of $3.1 million related to termination of a manufacturer’s warranty program in 2010.
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