PHI, Inc. (“PHI”) (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the year ended December 31, 2012.
Consolidated operating revenues for the year ended December 31, 2012 increased $107.1 million over the year ended December 31, 2011. Our Oil and Gas medium and heavy aircraft flight hours and revenues increased primarily as a result of the continuing improvement in the Gulf of Mexico deepwater drilling activity. Operating revenues in the Air Medical segment increased $39.5 million, with $28.0 million primarily due to increased revenues in the independent provider programs as a result of increased transports, an improved payor mix, and rate increases. Revenues from hospital based contracts increased $11.3 million primarily resulting from additional contracts. In the Technical Services segment, revenues decreased $1.5 million primarily due to lower overall project activity.
Consolidated net earnings for 2012 were $18.1 million, compared to net earnings of $4.9 million for 2011. Earnings before tax for 2012 were $34.0 million compared to earnings before tax of $8.1 million in 2011. Earnings per diluted share were $1.17 for 2012 compared to earnings per diluted share of $0.31 for 2011. The increase in earnings is primarily due to the increased Oil and Gas and Air Medical segment profits.
Oil and Gas segment revenues were $424.5 million for 2012, compared to $355.4 million for 2011, an increase of $69.1 million. Flight hours were 116,840 for 2012, compared to 111,546 for 2011. The increase in Oil and Gas revenues was related primarily to increased medium and heavy aircraft flight hours and revenue due to increased deepwater drilling activity in the Gulf of Mexico.
Oil and Gas segment profit was $60.4 million for 2012, compared to $41.6 million for 2011. The $18.8 million increase was due to increased revenues partially offset by increased direct expenses. Operating margins were 14% for 2012, compared to 12% for 2011. The Oil and Gas segment revenues are primarily driven by contracted aircraft and flight hours. Costs are primarily fixed and are driven by the number of aircraft, with a variable portion that is driven by flight hours. The increase in segment profit and margin is primarily due to increased medium and heavy aircraft utilization attributable to increased deep water drilling activity in the Gulf of Mexico. Oil and Gas segment results for the first half of 2011 were significantly adversely impacted by the Macondo incident and the related moratorium on deepwater drilling in the Gulf of Mexico and stricter permitting and other regulatory requirements imposed on offshore oil and gas exploration and production companies.