Slide 1: Confidential Information Memorandum PHI, Inc. June 2019
Exhibit 99.1 Confidential Information Memorandum P H I , I N C . J U N E 2019Exhibit 99.1 Confidential Information Memorandum P H I , I N C . J U N E 2019
Slide 2: Disclaimer
Disclaimer Limitations of Report This fiscal year 2019 budget of PHI, Inc. (“PHI” or the “Company”) and the related information contained herein has been prepared based upon financial and other data provided to FTI Consulting, Inc. (“FTI”) from the Company’s management, staff and advisors and from t
Slide 3: Table of Contents
Table of Contents Chapter Page Company Overview 6 Oil & Gas Business Overview 19 Air Medical Business Overview 37 Technical Services Business Overview 56 Corporate 63 Appendix 67 2Table of Contents Chapter Page Company Overview 6 Oil & Gas Business Overview 19 Air Medical Business Overview 37 Techni
Slide 4: Historical and Projected Financial Summary
Historical and Projected Financial Summary Revenue ($mm) $1,000 $836 $804 $741 $722 $800 $700 $674 $666 $634 $580 $600 $400 $200 $0 FY 2014A FY 2015A FY 2016A FY 2017A FY 2018A LTM Mar-19 FY 2019B FY 2020P FY 2021P (1) EBITDA ($mm) $200 $174 $150 $128 $100 $74 $64 $51 $46 $40 $39 $37 $50 $0 FY 2014A
Slide 5: Historical A/R and Inventory Balances
Historical A/R and Inventory Balances Historical A/R Balances ($mm) FY2016A Average: $148mm FY 2016A FY 2017A FY 2018A FY2017A Average: $146mm $220 FY2018A Average: $191mm $180 $140 $100 January February March April May June July August September October November December Inventory Balances ($mm) FY
Slide 6: EBITDA Adjustments Overview
EBITDA Adjustments Overview Adjusted EBITDA Bridge Commentary Regarding Adjustments 1. Includes various legal and professional fees LTM and expenses associated with the M&A FY 2018 Mar-19 ($ in thousands) process, the Blue Torch financing and EBITDA $40,844 $22,048 restructuring negotiations with le
Slide 7: Company Overview
Company OverviewCompany Overview
Slide 8: PHI Overview
Overview PHI Overview (2) PHI Overview Operating Revenue Breakdown (FY18) ¡ PHI, Inc., (the “Company” or “PHI”) provides industry-leading transportation services to the oil and gas and air medical industries in O&G and Technical the United States and internationally Services 62% ¡ The Company operat
Slide 9: Management Team
Overview Management Team PHI’s management team is comprised of seasoned industry experts with proven track records of success § In September 2001, Mr. Gonsoulin purchased a controlling interest in Petroleum Helicopters, Inc. (now known as PHI, Inc.), assuming AI Gonsoulin the role of Chairman. He wa
Slide 10: Key PHI Milestones
Overview Key PHI Milestones 1997 2001 DOD / CARB Certification Al Gonsoulin Acquires a 2012 Controlling Stake in PHI Air Medical International ¡ PHI obtains DOD and CARB Certifications Expansion ¡ In September 2001, Al Gonsoulin purchases a controlling interest in ¡ Commencement of three-year contra
Slide 11: Investment Thesis
Overview Investment Thesis PHI is a diversified transportation services provider with two principal operating segments which constitute fully-standalone platforms with shared investment criteria representative of PHI’s overarching corporate identity Third Largest Full-Scope Air Provider of Mission C
Slide 12: Legal Entity Structure
Overview Legal Entity Structure The below represents the Company’s legal entity structure as of 12/31/18 • All ownership 100% unless otherwise noted PHI-LE 9691 • Omits immaterial entities PHI, Inc. (Louisiana) IHTI-LE 9720/2516 9692 PHIINTLHC-LE PHIAEL-LE ENERGYRISK-LE 9683 9698 PHI Tech Services,
Slide 13: P&L Forecast
Overview P&L Forecast ($ Thousands) Actual FY2014 Actual FY2015 Actual FY2016 Actual FY2017 Actual FY2018 Forecast FY2019B Forecast FY2020 Forecast FY2021 $ % of Rev $ % of Rev $ % of Rev $ % of Rev $ % of Rev $ % of Rev $ % Rev $ % Rev Total Revenues 836,270 100.0% 804,228 100.0% 634,098 100.0% 5 7
Slide 14: Consolidating P&L Forecast
Overview Consolidating P&L Forecast ¡ The table below shows the revenue and EBITDA contribution by segment. EBITDA is projected to decrease from $40.8M in FY2018 to $40.0M in FY2019 ¡ Both Air Medical Group and Technical Services are high EBITDA margin segments, with Air Medical Group contributing t
Slide 15: Consolidating P&L Forecast (cont'd)
Overview Consolidating P&L Forecast (cont’d) ($ Thousands) FY2020 Consolidating P&L FY2021 Consolidating P&L Oil and Air Medical Technical Oil and Air Medical Technical Gas Group Services Corp. Elim. Consolidated Gas Group Services Corp. Elim. Consolidated Total Revenues 397,316 300,272 30,080 - (6,
Slide 16: Consolidating LTM P&L
Overview Consolidating LTM P&L ($ Thousands) LTM March 2019 Consolidating P&L Oil and Air Medical Technical Gas Group Services Corp. Elim. Consolidated Total Revenues 369,550 260,360 39,610 - (3,571) 665,949 Aircraft Variable Costs (127,604) (31,286) (5,917) 160 189 ( 164,459) Total Aircraft Fixed C
Slide 17: Revenue Bridge – 2018 to 2019B
Overview Revenue Bridge – 2018 to 2019B $750,000 $390,000 $3,057 $370,000 $0 $2,228 $1,979 $700,000 $33,899 $350,000 $8,185 $650,000 $330,000 $380,238 $374,032 $310,000 $600,000 $700,387 $674,423 $290,000 $550,000 $270,000 $250,000 $500,000 Actual FY2018 Revenues Flight Revenue - Fixed Flight Revenu
Slide 18: EBITDA Bridge – 2018 to 2019B
Overview EBITDA Bridge – 2018 to 2019B $390,000 $3,057 $50,000 $370,000 $45,000 $1,309 $345 $1,592 $40,000 $350,000 $12,479 $10,107 $35,000 $330,000 $30,000 $380,238 $25,000 $374,032 $310,000 $40,844 $20,000 $39,971 $290,000 $15,000 $10,000 $270,000 $5,000 $250,000 $0 Actual FY2018 Revenues Flight R
Slide 19: Consolidated Capital Expenditures
Overview Consolidated Capital Expenditures Actual FY2018 Forecast FY2019 Forecast FY2020 Forecast FY2021 B ($ Thousands) $ % of Capex $ % of Capex $ % of Capex $ % of Capex Capex Oil & Gas (34,170) 79.6% (13,353) 40.0% (10,000) 20.9% (10,000) 22.6% Air Medical ( 7,268) 16.9% (15,591) 46.7% (34,811)
Slide 20: Oil & Gas Business Overview
Oil & Gas Business OverviewOil & Gas Business Overview
Slide 21: Provider of Mission Critical Services To Energy Companies
Oil & Gas Provider of Mission Critical Services To Energy Companies Leader in providing offshore helicopter support to global energy companies (1) Segment Overview Flight Hours Over Time (in thousands) 140 ¡ Since its founding in 1949, PHI’s primary business has been the 116 120 transportation of pe
Slide 22: Oil & Gas Key Highlights
Oil & Gas Key Highlights 1 2 Exceptional Safety Culture Forefront of Global Standards Driven by Engaged Workforce and Procedures 8 3 Seasoned Best-in-Class Provider of Mission Critical Management Team Services to Energy Companies 7 4 Largest Operator in the Gulf of Built for Higher Throughput for Me
Slide 23: Oil & Gas Key Customers
Oil & Gas Key Customers The Company relies on industry leading customers to drive a significant amount of revenues for the Oil & Gas sector Key Customer Overview ¡ KEY CUSTOMERS: The Company’s key customers include Shell, BP and ExxonMobil (each of whom PHI has worked with for 35 or more years), ENI
Slide 24: Global Operations
Oil & Gas Global Operations Operating in numerous countries around the globe ¡ Primary focus of flight operations has historically been in the Gulf of Mexico; however, in December 2017, PHI acquired HNZ Group Inc.’s (“HNZ”) offshore business, expanding its reach internationally ¡ The Company classif
Slide 25: Expanded International Footprint via HNZ Acquisition
Oil & Gas Expanded International Footprint and Capabilities via HNZ Acquisition The acquisition of HNZ’s offshore business expands PHI’s platform in support of its global customers, and provides additional opportunities across which to deploy the fleet and increase aircraft utilization Attractive Ca
Slide 26: Fleet Composition
Oil & Gas Fleet Composition (2) Fleet Snapshot Operated Aircraft Overview Ownership Status ¡ As of 12/31/18, the O&G Fleet was comprised of 125 aircraft with Appraised Avg. Cust. Value of an average age of 14 years, including 107 Company-owned (1) Manufacturer Type Age Owned Leased Oper. Total Owned
Slide 27: Recent Cyclical Challenges and the Continued Path Forward
Oil & Gas Recent Cyclical Challenges and the Continued Path Forward Recent Challenges Path Forward We believe the O&G segment is well positioned to weather the The O&G segment experienced earnings pressure starting FY storm and capitalize on the continued rebound in energy 2015 due to challenges in
Slide 28: Helicopter Transportation Industry Dynamics
Oil & Gas Helicopter Transportation Industry Dynamics The oil and gas helicopter industry is poised to capitalize upon a recovery in oil prices, in addition to other favorable factors including higher oil demand arising from population growth and an uptick in E&P spending to replace existing product
Slide 29: Global Production and Consumption
Oil & Gas Global Production and Consumption Global production and consumption of petroleum has increased incrementally in each year since a downturn in late 2014, with another small uptick in both production and consumption expected in 2019 (1) (1) Global Production and Consumption Global Petroleum
Slide 30: Increased Activity in Gulf of Mexico
Oil & Gas Increased Activity in Gulf of Mexico In addition to an improving global environment for the oil and gas sector, the Company believes it is poised to capitalize on increased activity in the Gulf of Mexico driven by a cyclical readjustment of costs and technological improvements (1) Gulf of
Slide 31: Rig Counts
Oil & Gas Rig Counts Global rig counts have trended upward since 2016, with additional growth expected in 2019 and beyond, particularly in the Gulf of Mexico basin (1) Global & Gulf of Mexico Rig Counts Global Rig Count & Gulf of Mexico Growth Rate ¡ International rig count represents a leading indi
Slide 32: Global O&G Sector Capex
Oil & Gas Global O&G Sector Capex Capex spending in the global oil and gas sector has been accelerating since 2016, with further growth expected in 2019 and beyond Expected Capex Growth ¡ GLOBAL CAPEX EXPECTATIONS: In 2018, a 20% increase in North America upstream capex lifted the global average to
Slide 33: FY2019 Budgeting Process
Oil & Gas FY2019 Budgeting Process Budgeting Process ¡ The O&G forecast was developed on a bottoms-up basis using existing customer contracts and projected flight hours ¡ Approximately $335M of revenues are based on existing contracts that are subject to annual escalators on fixed monthly revenue an
Slide 34: Oil & Gas P&L Forecast
Oil & Gas P&L Forecast Actual FY2018 Forecast FY2019B Forecast FY2020 Forecast FY2021 Actual FY2018 $ % of Rev $ % of Rev $ % of Rev $ % of Rev ($ Thousands) Total Revenues 3 80,238 100.0% 372,053 100.0% 397,316 100.0% 414,358 100.0% Aircraft Variable Costs (128,457) -33.8% (128,399) -34.5% (130,094
Slide 35: Oil & Gas Revenue Bridge – 2018 to 2019B
Oil & Gas Revenue Bridge – 2018 to 2019B $390,000 $3,057 $390,000 $370,000 $766 $3,572 $5,378 $370,000 $350,000 $350,000 $330,000 $330,000 $380,238 $374,032 $310,000 $380,238 $372,053 $310,000 $290,000 $290,000 $270,000 $270,000 $250,000 $250,000 Actual FY2018 Revenues Flight Revenue - Fixed Flight
Slide 36: Oil & Gas EBITDA Bridge – 2018 to 2019B
Oil & Gas EBITDA Bridge – 2018 to 2019B $35,000 $390,000 $3,057 $30,000 $370,000 $25,000 $350,000 $11,444 $534 $20,000 $330,000 $1,872 $380,238 $15,000 $374,032 $29,910 $310,000 $10,000 $290,000 $19,803 $5,000 $270,000 $250,$0 000 A Ac cttu ua all F FY Y2 20 01 18 8 R Ee B vIe Tn D uA es GF rlo ig s
Slide 37: Consolidating Revenue Forecast
Oil & Gas Consolidating Revenue Forecast ¡ The table below shows the revenue contribution by each business unit under the Oil & Gas Segment in 2018, along with projections for 2019 ¡ Going forward, the Company intends to classify its various Oil and Gas operating regions as PHI Americas vs. PHI Inte
Slide 38: Air Medical Business Overview
Air Medical Business OverviewAir Medical Business Overview
Slide 39: Air Medical Business Overview
Air Medical Business Overview Air Medical provides best-in-class air medical transportation services for leading medical institutions and emergency service agencies throughout the United States (1) Segment Overview Areas of Operation ¡ Leading provider of emergency medical helicopter services with p
Slide 40: Air Medical Business Overview (cont'd)
Air Medical Business Overview (cont’d) 1 2 Exceptional Safety Culture Forefront of Global Standards Driven by Engaged Workforce and Procedures 8 3 Seasoned Best-in-Class Third Largest Full-Scope Air Management Team Ambulance Operator 7 4 Established International Strong, Long-Term Industry Execution
Slide 41: Strategic Investment in Diversified Service Delivery Models
Air Medical Strategic Investment in Diversified Service Delivery Models Air Medical generates revenue using five delivery models Helicopter Services § On-demand emergency transportation services, typically based on geographic proximity; PHI Air Independent- Medical provides full scope of services Pr
Slide 42: Exceptional Safety Culture Driven by Engaged Workforce
Air Medical Exceptional Safety Culture Driven by Engaged Workforce Life-Saving Behaviors and Thinking Perform Practice Safety PHI Uninterrupted 360° Protocols with Walk-Around Sharps Believe Refrain from Using Personal Electronic Verify Critical Maintenance Tasks Devices During Critical Activities ¡
Slide 43: Forefront of Global Standards and Procedures
Air Medical Forefront of Global Standards and Procedures Pioneered Enhanced Operational Control Matrix ü (Adopted by the FAA as a Best Practice) ü First to Equip all Aircraft with Night Vision Goggles Destination Zero, Life-Saving Behaviors, Life-Saving Thinking ü and Behavioral Competency Hiring ü
Slide 44: Strong Financial Profile
Air Medical Strong Financial Profile Strong and Stable Financial Growth Financials Summary ($ in millions) $350 35.0% ¡ Highly analytical, demographic-based approach to base 313 300 locations to optimize payor mix and growth performance $300 30.0% 282 278 28.9% 257 257 27.5% ¡ Continuously managed o
Slide 45: Robust Key Performance Metrics
Air Medical Robust Key Performance Metrics Air Medical’s Independent Provider Model business is stable and exhibits favorable performance metrics (1) (2) Independent Transports (in thousands) Payor Mix by Revenue 20 18.5 18.4 18.2 17.9 Insurance Medicare Medicaid Self-Pay 17.1 18 0% 1% 1% 1% 1% 4.3
Slide 46: Highly Differentiated, Underpinned by Safety and Operational Excellence
Air Medical Highly Differentiated, Underpinned by Safety and Operational Excellence (1) ¡ Highly experienced flight crew, trained by industry leading ¡ 100% owned fleet with no near-term purchase obligations practitioners who follow a state-of-the-art curriculum covering ¡ Mix of light and medium ai
Slide 47: Fleet Composition
Air Medical Fleet Composition (2) Fleet Snapshot Operated Aircraft Overview Ownership Status ¡ As of 12/31/18, Air Medical operated a fleet of 113 aircraft with an Appraised average age of 14 years, including 106 Company-owned aircraft with a Avg. Cust. Value of (1)(2) (1) Manufacturer Make Age Owne
Slide 48: Industry Dynamics
Air Medical Industry Dynamics As indicated by the data below, the U.S. air medical industry is positioned for long-term growth due to favorable secular tailwinds, including an aging U.S. population and a growing universe of insurance-covered patients that need to travel longer distances to receive m
Slide 49: Key Trends Driving Need for Air Ambulance Services
Air Medical Key Trends Driving Need for Air Ambulance Services Trends in hospital and emergency care accessibility and demographics drive an increasing need for air ambulance services Drivers of Demand for Air Ambulance Services ¡ The air medical industry is estimated to have completed approximately
Slide 50: Air Ambulance Market Overview & Payor Mix
Air Medical Air Ambulance Market Overview & Payor Mix The air ambulance industry is highly concentrated, with the revenues of all major players highly dependent upon a mix of payors with varying reimbursement rates Market Overview & Payor Mix Air Ambulance Payor Mix as % of Transports – PHI (2018) S
Slide 51: Tangible Growth Opportunities
Air Medical Tangible Growth Opportunities Air Medical is well-positioned to leverage its existing platform to pursue opportunities that will drive top line growth 1 2 3 Increase Addressable New Independent Bases Same Base Growth Market ü Potential to convert hospital ü Air Medical continues to inves
Slide 52: FY2019 Budgeting Process
Air Medical FY2019 Budgeting Process Air Medical ¡ The 2019 Air Medical budget was built on a bottom’s up basis, with revenues and operating costs projected by each base. Revenues are forecasted based on expected transport volumes and flight hours ¡ Approximately $46.6M of revenues are associated wi
Slide 53: Air Medical P&L Forecast
Air Medical P&L Forecast Actual FY2018 Forecast FY2019B Forecast FY2020 Forecast FY2021 $ % of Rev $ % of Rev $ % of Rev $ % of Rev ($ Thousands) Total Revenues 2 60,574 100.0% 294,473 100.0% 3 00,272 100.0% 3 17,129 100.0% Aircraft Variable Costs (32,838) -12.6% (42,327) -14.4% (42,042) -14.0% (43,
Slide 54: Air Medical Revenue Bridge – 2018 to 2019B
Air Medical Revenue Bridge – 2018 to 2019B $390,000 $3,057 $370,000 $300,000 $295,000 $350,000 $8,040 $290,000 $285,000 $330,000 $280,000 $380,238 $374,032 $310,000 $275,000 $25,002 $294,473 $270,000 $290,000 $265,000 $857 $260,000 $270,000 $260,574 $255,000 $250,000 $250,000 Actual FY2018 Revenues
Slide 55: Air Medical EBITDA Bridge – 2018 to 2019B
Air Medical EBITDA Bridge – 2018 to 2019B $390,000 $50,000 $3,057 $45,000 $370,000 $1,796 $40,000 $350,000 $14,274 $35,000 $30,000 $330,000 $25,000 $380,238 $374,032 $310,000 $41,184 $20,000 $15,000 $290,000 $28,705 $10,000 $270,000 $5,000 $250,000 $0 Actual FA Yc 2t0 u1 a 8 l FY Rev 2e 0n 1u 8e E s
Slide 56: Consolidating Revenue Forecast
Air Medical Consolidating Revenue Forecast ¡ The table below shows the revenue contribution by each business unit under the Air Medical Group Segment ¡ The percentage of IPM revenues / total revenues is projected to decline from 59% to 56%, increase from 21% to 23% for CPM, decline from 17% to 16% f
Slide 57: Technical Services Business Overview
Technical Services Business OverviewTechnical Services Business Overview
Slide 58: Technical Services Business Overview
Technical Services Business Overview Technical Services has three key identifiable operating areas which supplement the Company’s oil and gas operations MRO Government Service Helipass #HEER617 Maintenance, repair and overhaul services Proprietary software Flight services to as a service governmenta
Slide 59: Technical Services Business Overview (cont'd)
Technical Services Business Overview (cont’d) Supporting Segment Overview ¡ Technical Services provides auxiliary services that complement the Company’s major service offerings and contributes overall leverage to the Company’s operations ¡ Provides helicopter maintenance, repair and overhaul (“MRO”)
Slide 60: Technical Services FY2019 Budgeting Process
Technical Services FY2019 Budgeting Process Budgeting Process ¡ The 2019 Technical Services budget was built on the following: ¡ The area of the segment that provides flight services for government customers was determined on a bottoms-up basis using existing customer contracts and projected flight
Slide 61: Technical Services P&L Forecast
Technical Services P&L Forecast Actual FY2018 Forecast FY2019B Forecast FY2020 Forecast FY2021 ($ Thousands) Actual FY2018 Forecast FY2019 Fav/(Unfav) Variance $ % of Rev $ % of Rev $ % of Rev $ % of Rev $ % of Rev $ % of Rev $ % ∆ ($ Thousands) Total Revenues 260,574 100.0% 2 94,473 100.0% 300,272
Slide 62: Technical Services Revenue Bridge – 2018 to 2019B
Technical Services Revenue Bridge – 2018 to 2019B $45,000 $390,000 $3,057 $40,000 $370,000 $6,242 $35,000 $3,925 $523 $612 $350,000 $30,000 $330,000 $25,000 $380,238 $20,000 $374,032 $39,282 $310,000 $37,053 $15,000 $290,000 $10,000 $270,000 $5,000 $250,000 $0 Actual FY2018 Revenues Flight Revenue -
Slide 63: Technical Services EBITDA Bridge – 2018 to 2019B
Technical Services EBITDA Bridge – 2018 to 2019B $8,000 $7,000 $2,251 $6,000 $942 $5,000 $4,000 $7,250 $3,000 $5,941 $2,000 $1,000 $0 B EBITDA Actual FY2018 EBITDA Gross Margin (excl. D&A) SG&A (excl. D&A) Projected FY2019 EBITDA 62Technical Services EBITDA Bridge – 2018 to 2019B $8,000 $7,000 $2,25
Slide 64: Corporate
CorporateCorporate
Slide 65: Corporate Overview
Corporate Overview Segment Overview ¡ Corporate primarily consists of the administrative departments within the Company (excludes any intercompany eliminations) ¡ Key costs included in the segment are: ¡ Payroll, bonus and benefits ¡ IT related expenses ¡ Licensing fees and franchise taxes ¡ Marketi
Slide 66: Corporate Summary Forecast
Corporate Summary Forecast ($ Thousands) Actual FY2018 Forecast FY2019B Fav/(Unfav) Variance $ % of Rev $ % of Rev $ % ∆ Total Revenues - N/A - N/A - N/A Aircraft Variable Costs (0) N/A (135) N/A (135) N/A Aircraft Fixed Costs 91 N/A (5) N/A (96) -106.0% Other Operating Expenses (91) N/A (0) N/A 90
Slide 67: Company-Wide Performance Initiatives
Corporate Company-Wide Performance Initiatives Historical Performance Improvement Initiatives Current Performance Improvement Initiatives ¡ Previous performance improvement initiatives that were ¡ PHI is currently implementing several performance improvement undertaken include: initiatives aimed at
Slide 68: Appendix
AppendixAppendix
Slide 69: FY2016 - FY2019 Financial Summary: Consolidated Balance Sheet
FY2016 - FY2019 Financial Summary Consolidated Balance Sheet The balance sheet assumes Senior Note interest is accrued over the forecast period, and not paid in cash. The balance sheet does assume that Thirty Two LLC Term Loan interest is paid in cash Balance Sheet Actual Actual Estimated Forecast B
Slide 70: FY2020 – FY2021 Financial Forecast: Working Capital Accounts
FY2020 – FY2021 Financial Forecast Consolidated Working Capital Accounts The forecasted working capital accounts exclude Senior Note interest accrual in FY2020 and FY2021 Balance Sheet Forecast Forecast ($ Thousands) Dec-20 Dec-21 Accounts Receivable 1 86,964 1 90,219 Inventory 58,399 60,151 Prepaid
Slide 71: FY2016 - FY2019 Financial Summary: Consolidated Cash Flow Statement
FY2016 - FY2019 Financial Summary Consolidated Cash Flow Statement The cash flow statement assumes Senior Note interest is accrued over the forecast period, and not paid in cash. The cash flow statement does assume that Thirty Two LLC Term Loan interest is paid in cash Cash Flow Statement Cash Flow
Slide 72: 7171
7171