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, 1999
|_| 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 of shares outstanding of each of the issuer's
classes of Common Stock, as of December 31, 1999.
21,103,421 shares of Common Stock, $.01 par value
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------- --------------------
1999 1998 1999 1998
--------- --------- -------- --------
<S> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue.............................. $ 103,371 $ 116,099 $ 314,766 $ 361,534
Gain on disposal of equipment.................. 1,795 91 3,322 1,377
--------- --------- --------- ---------
105,166 116,190 318,088 362,911
OPERATING EXPENSES
Direct cost.................................... 81,331 92,194 254,117 277,688
Depreciation and amortization.................. 8,685 8,635 25,260 25,619
General and administrative..................... 6,079 6,692 20,191 20,621
--------- --------- --------- ---------
96,095 107,521 299,568 323,928
--------- --------- --------- ---------
OPERATING INCOME............................... 9,071 8,669 18,520 38,983
Earnings from unconsolidated entities.......... 1,067 1,909 3,254 4,514
Interest income................................ 668 936 2,402 2,626
Interest expense............................... 4,553 4,880 13,949 14,917
--------- --------- --------- ---------
INCOME BEFORE PROVISION FOR INCOME
TAXES........................................ 6,253 6,634 10,227 31,206
Provision for income taxes..................... 1,935 1,988 3,170 9,362
Minority interest.............................. (351) (325) (1,060) (954)
--------- --------- --------- ---------
NET INCOME..................................... $ 3,967 $ 4,321 $ 5,997 $ 20,890
========= ========= ========= =========
Net income per common share:
Basic.......................................... $ 0.19 $ 0.20 $ 0.28 $ 0.96
========= ========= ========== =========
Diluted........................................ $ 0.19 $ 0.20 $ 0.28 $ 0.92
========= ========= ========== =========
</TABLE>
2
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(thousands of dollars)
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
------------- ---------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.....................................$ 42,801 $ 70,594
Accounts receivable........................................... 94,474 89,077
Inventories................................................... 79,885 82,853
Prepaid expenses.............................................. 5,855 5,999
------------- ---------
Total current assets....................................... 223,015 248,523
Investments in unconsolidated entities........................... 13,644 9,998
Property and equipment - at cost:
Land and buildings............................................ 11,198 10,860
Aircraft and equipment........................................ 598,329 554,852
------------- ---------
609,527 565,712
Less: accumulated depreciation and amortization................. (141,783) (122,796)
------------- ---------
467,744 442,916
Other assets..................................................... 33,811 30,593
------------- ---------
$ 738,214 $ 732,030
============= =========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable..............................................$ 36,253 $ 35,534
Accrued liabilities........................................... 39,176 42,395
Deferred taxes................................................ 17,705 17,697
Current maturities of long-term debt.......................... 16,671 10,037
------------- ---------
Total current liabilities.................................. 109,805 105,663
Long-term debt, less current maturities.......................... 226,066 233,615
Other liabilities and deferred credits........................... 3,375 3,000
Deferred taxes................................................... 96,972 94,908
Minority interest................................................ 11,731 10,716
Stockholders' Investment:
Common Stock, $.01 par value, authorized 35,000,000 shares;
outstanding 21,103,421 at December 31 and March 31
(exclusive of 1,281,050 treasury shares)................... 211 211
Additional paid-in capital.................................... 116,053 116,053
Retained earnings............................................. 179,111 173,114
Accumulated other comprehensive income (loss)................. (5,110) (5,250)
------------- ---------
290,265 284,128
------------- ---------
$ 738,214 $ 732,030
============= =========
</TABLE>
3
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(thousands of dollars)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
------------------------
1999 1998
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income......................................................$ 5,997 $ 20,890
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization................................... 25,260 25,619
Increase in deferred taxes...................................... 2,018 4,629
Gain on asset dispositions...................................... (3,322) (1,377)
Equity in earnings from unconsolidated entities
over dividends received...................................... (3,659) (1,418)
Minority interest in earnings................................... 1,060 954
Increase in accounts receivable................................. (5,386) (10,887)
(Increase) decrease in inventories.............................. 3,001 (5,554)
Increase in prepaid expenses and other.......................... (4,213) (3,366)
Increase in accounts payable.................................... 707 14,416
Increase (decrease) in accrued liabilities...................... (3,683) 2,005
Increase in other liabilities and deferred credits.............. 376 406
----------- ---------
Net cash provided by operating activities.......................... 18,156 46,317
----------- ---------
Cash flows from investing activities:
Capital expenditures............................................ (54,312) (21,074)
Proceeds from asset dispositions................................ 9,236 2,656
----------- ---------
Net cash used in investing activities.............................. (45,076) (18,418)
----------- ---------
Cash flows from financing activities:
Proceeds from borrowings........................................ 6,452 --
Repayment of debt............................................... (7,360) (10,347)
Repurchase of common stock...................................... -- (3,888)
Issuance of common stock........................................ -- 113
----------- ---------
Net cash used in financing activities.............................. (908) (14,122)
----------- ---------
Effect of exchange rate changes in cash............................ 35 (3)
----------- ---------
Net increase (decrease) in cash and cash equivalents............... (27,793) 13,774
Cash and cash equivalents at beginning of period................... 70,594 56,076
----------- ---------
Cash and cash equivalents at end of quarter........................$ 42,801 $ 69,850
=========== =========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest........................................................$ 12,283 $ 14,316
Income taxes.................................................... 3,786 2,910
</TABLE>
4
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999
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 generally
accepted accounting principles. 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, 1999, are not necessarily
indicative of the results that may be expected for the year ending March 31,
2000. 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, 1999.
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, 1999 excluded 3,976,928 shares related to the convertible debt and 1,177,500
and 979,362 stock options, respectively, at a weighted average exercise price of
$13.93 and $14.54, respectively, which were outstanding during the periods but
were anti-dilutive. Diluted earnings per common share for the three months ended
December 31, 1998 excluded 4,142,178 shares related to the convertible debt
which were outstanding during the period but were anti-dilutive. For the nine
months ended December 31, 1998, diluted earnings per share was determined on the
assumption that the convertible debt was converted on April 1, 1997. Diluted
earnings per share for the three and nine months ended December 31, 1998
excluded 337,000 and 274,000 stock options, respectively, at a weighted average
exercise price of $19.06 and $18.04, 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:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------- ---------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Income (thousands of dollars):
Income available to common stockholders.......... $ 3,967 $ 4,321 $ 5,997 $ 20,890
Interest on convertible debt, net of taxes....... -- -- -- 3,032
---------- ---------- ---------- ----------
Income available to common stockholders,
plus assumed conversions.................... $ 3,967 $ 4,321 $ 5,997 $ 23,922
========== ========== ========== ==========
Shares:
Weighted average number of common
shares outstanding............................... 21,103,421 21,463,117 21,103,421 21,671,329
Options.......................................... 8,393 54,027 12,936 84,103
Convertible debt................................. -- -- -- 4,207,788
---------- ---------- ---------- ----------
Weighted average number of common
shares outstanding, plus assumed conversions.. 21,111,814 21,517,144 21,116,357 25,963,220
========== ========== ========== ==========
Net Income per share:
Basic............................................ $ 0.19 $ 0.20 $ 0.28 $ 0.96
========== ========== ========== ==========
Diluted.......................................... $ 0.19 $ 0.20 $ 0.28 $ 0.92
========== ========== ========== ==========
</TABLE>
5
<PAGE>
NOTE C - Commitments and Contingencies
On November 16, 1999, the Office and Professional Employees
International Union ("Union") petitioned the National Mediation Board ("NMB") to
conduct an election among the mechanics and related personnel employed by both
Air Logistics, LLC and Air Logistics of Alaska, Inc. The NMB dismissed the
matter with respect to the Alaska-based group on January 24, 2000. Absent
extraordinary circumstances, the NMB will not accept another representation
application covering the Air Logistics of Alaska, Inc. mechanics and related
employees for a period of one year. Air Logistics, LLC has provided the NMB with
a list of potential eligible voters and the NMB has authorized an election. The
ballots will be counted by the NMB on March 13, 2000. The Company does not
believe these organizing efforts will place it at a disadvantage with its
competitors as management believes that pay scales 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):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------- -------------------
1999 1998 1999 1998
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Net Income.......................................... $ 3,967 $ 4,321 $ 5,997 $ 20,890
Other Comprehensive Income:
Currency translation adjustment.................. (5,173) (6,578) 140 (2,198)
--------- --------- -------- --------
Comprehensive Income (Loss)......................... $ (1,206) $ (2,257) $ 6,137 $ 18,692
========= ========= ======== ========
</TABLE>
NOTE E - Derivative Financial Instruments
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
Statement establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement 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 has not yet
quantified the impact on its financial statements that may result from adoption
of SFAS No. 133, however, the Company does not use derivative instruments or
hedging activities extensively in its business.
6
<PAGE>
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, 1999 and 1998, reconciled to
consolidated totals, and prepared on the same basis as the Company's
consolidated financial statements (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------- -------------------
1999 1998 1999 1998
-------- --------- -------- -------
<S> <C> <C> <C> <C>
Segment operating revenue from external customers:
Helicopter activities........................... $ 90,180 $ 104,402 $ 278,103 $ 325,952
Production management and related services...... 10,785 10,328 29,786 31,774
--------- --------- --------- ---------
Total segment operating revenue............. $ 100,965 $ 114,730 $ 307,889 $ 357,726
========= ========= ========= =========
Intersegment operating revenue:
Helicopter activities........................... $ 3,027 $ 1,994 $ 8,625 $ 6,084
Production management and related services...... -- -- -- --
--------- --------- --------- ---------
Total intersegment operating revenue........ $ 3,027 $ 1,994 $ 8,625 $ 6,084
========= ========= ========= =========
Consolidated operating revenue reconciliation:
Helicopter activities........................... $ 93,207 $ 106,396 $ 286,728 $ 332,036
Production management and related services...... 10,785 10,328 29,786 31,774
Intersegment eliminations....................... (3,027) (1,994) (8,625) (6,084)
Corporate....................................... 2,406 1,369 6,877 3,808
--------- --------- --------- ---------
Total consolidated operating revenue........ $ 103,371 $ 116,099 $ 314,766 $ 361,534
========= ========= ========= =========
Consolidated operating income reconciliation:
Helicopter activities........................... $ 6,214 $ 8,210 $ 13,234 $ 37,227
Production management and related services...... 661 734 1,816 2,174
--------- --------- --------- ---------
Total segment operating income.............. 6,875 8,944 15,050 39,401
Gain on disposal of equipment................... 1,795 91 3,322 1,377
Corporate....................................... 401 (366) 148 (1,795)
--------- --------- --------- ---------
Total consolidated operating income......... $ 9,071 $ 8,669 $ 18,520 $ 38,983
========= ========= ========= =========
</TABLE>
7
<PAGE>
NOTE G - Supplemental Condensed Consolidating Financial Information
In connection with the sale of the Company's $100 million 7 7/8% Senior
Notes due 2008, certain of the Company's subsidiaries (the "Guarantor
Subsidiaries") jointly, severally and unconditionally guaranteed the payment
obligations under the Senior Notes. The following supplemental financial
information sets forth, on a consolidating basis, the balance sheet, statement
of income and cash flow information for Offshore Logistics, Inc. ("Parent
Company Only"), for the Guarantor Subsidiaries and for Offshore Logistics,
Inc.'s other subsidiaries (the "Non-Guarantor Subsidiaries"). The Company has
not presented separate financial statements and other disclosures concerning the
Guarantor Subsidiaries because management has determined that such information
is not material to investors.
The supplemental condensed consolidating financial information has been
prepared pursuant to the rules and regulations for condensed financial
information and does not include all disclosures included in annual financial
statements, although the Company believes that the disclosures made are adequate
to make the information presented not misleading. Certain reclassifications were
made to conform all of the financial information to the financial presentation
on a consolidated basis. The principal eliminating entries eliminate investments
in subsidiaries, intercompany balances and intercompany revenues and expenses.
The allocation of the consolidated income tax provision was made using the
with and without allocation method.
8
<PAGE>
NOTE G - Supplemental Condensed Consolidating Financial Statements - Continued
Supplemental Condensed Consolidating Balance Sheet
December 31, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...............$ 17,084 $ 4,172 $ 21,545 $ -- $ 42,801
Accounts receivable..................... 225 22,446 73,226 (1,423) 94,474
Inventories............................. -- 36,419 43,466 -- 79,885
Prepaid expenses........................ 158 689 5,008 -- 5,855
----------- ----------- ----------- ----------- -------------
Total current assets.................. 17,467 63,726 143,245 (1,423) 223,015
Intercompany investment................... 201,560 -- -- (201,560) --
Investments in unconsolidated entities.... 1,108 229 12,307 -- 13,644
Intercompany note receivables............. 281,045 10 -- (281,055) --
Property and equipment--at cost:
Land and buildings...................... -- 3,220 7,978 -- 11,198
Aircraft and equipment.................. 3,684 155,371 439,274 -- 598,329
----------- ----------- ----------- ----------- -------------
3,684 158,591 447,252 -- 609,527
Less: Accumulated depreciation
and amortization...................... (2,852) (75,819) (63,112) -- (141,783)
----------- ----------- ----------- ----------- -------------
832 82,772 384,140 -- 467,744
Other assets.............................. 12,355 17,640 3,705 111 33,811
----------- ----------- ----------- ----------- -------------
$ 514,367 $ 164,377 $ 543,397 $ (483,927) $ 738,214
=========== =========== =========== =========== =============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable........................$ 147 $ 4,912 $ 34,649 $ (3,455) $ 36,253
Accrued liabilities..................... 5,847 10,296 23,215 (182) 39,176
Deferred taxes.......................... -- -- 17,705 -- 17,705
Current maturities of long-term debt.... -- -- 16,671 -- 16,671
----------- ----------- ----------- ----------- -------------
Total current liabilities............. 5,994 15,208 92,240 (3,637) 109,805
Long-term debt, less current maturities... 190,922 -- 35,144 -- 226,066
Intercompany notes payable................ 3,787 -- 275,053 (278,840) --
Other liabilities and deferred credits.... 4 2,364 1,007 -- 3,375
Deferred taxes............................ 8,615 33,177 55,180 -- 96,972
Minority interest......................... 11,731 -- -- -- 11,731
Stockholders' investment:
Common stock............................ 211 4,048 1,384 (5,432) 211
Additional paid in capital.............. 116,053 54,567 16,831 (71,398) 116,053
Retained earnings....................... 179,111 55,013 65,759 (120,772) 179,111
Accumulated other comprehensive
income (loss)......................... (2,061) -- 799 (3,848) (5,110)
----------- ----------- ----------- ----------- -------------
293,314 113,628 84,773 (201,450) 290,265
----------- ----------- ----------- ----------- -------------
$ 514,367 $ 164,377 $ 543,397 $ (483,927) $ 738,214
=========== =========== =========== =========== =============
</TABLE>
9
<PAGE>
NOTE G - Supplemental Condensed Consolidating Financial Statements - Continued
Supplemental Condensed Consolidating Statement of Income
Nine Months Ended December 31, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
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................ 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
=========== =========== =========== =========== =============
</TABLE>
10
<PAGE>
NOTE G - Supplemental Condensed Consolidating Financial Statements - Continued
Supplemental Condensed Consolidating Statement of Cash Flows
Nine Months Ended December 31, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
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
=========== =========== =========== =========== =============
</TABLE>
11
<PAGE>
NOTE G - Supplemental Condensed Consolidating Financial Statements - Continued
Supplemental Condensed Consolidating Balance Sheet
March 31, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...............$ 34,775 $ 10,584 $ 25,235 $ -- $ 70,594
Accounts receivable..................... 3,792 20,752 67,499 (2,966) 89,077
Inventories............................. -- 36,621 46,232 -- 82,853
Prepaid expenses........................ 220 577 5,202 -- 5,999
----------- ----------- ----------- ----------- -------------
Total current assets.................. 38,787 68,534 144,168 (2,966) 248,523
Intercompany investment................... 220,575 -- -- (220,575) --
Investments in unconsolidated entities.... 1,108 229 8,661 -- 9,998
Intercompany note receivables............. 233,444 3,015 86 (236,545) --
Property and equipment--at cost:
Land and buildings...................... -- 3,220 7,640 -- 10,860
Aircraft and equipment.................. 3,630 149,544 401,678 -- 554,852
----------- ----------- ----------- ----------- -------------
3,630 152,764 409,318 -- 565,712
Less: Accumulated depreciation
and amortization...................... (2,772) (72,292) (47,732) -- (122,796)
----------- ----------- ----------- ----------- -------------
858 80,472 361,586 -- 442,916
Other assets.............................. 12,607 18,200 (325) 111 30,593
----------- ----------- ----------- ----------- -------------
$ 507,379 $ 170,450 $ 514,176 $ (459,975) $ 732,030
=========== =========== =========== =========== =============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable........................$ 148 $ 4,378 $ 33,764 $ (2,756) $ 35,534
Accrued liabilities..................... 7,033 11,171 24,620 (429) 42,395
Deferred taxes.......................... -- -- 17,697 -- 17,697
Current maturities of long-term debt.... -- -- 10,037 -- 10,037
----------- ----------- ----------- ----------- -------------
Total current liabilities............. 7,181 15,549 86,118 (3,185) 105,663
Long-term debt, less current maturities... 190,922 -- 42,693 -- 233,615
Intercompany notes payable................ 6,364 -- 229,962 (236,326) --
Other liabilities and deferred credits.... 4 2,364 632 -- 3,000
Deferred taxes............................ 907 32,815 61,186 -- 94,908
Minority interest......................... 10,716 -- -- -- 10,716
Stockholders' investment:
Common stock............................ 211 4,048 1,384 (5,432) 211
Additional paid in capital.............. 116,053 58,318 16,800 (75,118) 116,053
Retained earnings....................... 173,114 57,356 78,628 (135,984) 173,114
Accumulated other comprehensive
income (loss)......................... 1,907 -- (3,227) (3,930) (5,250)
----------- ----------- ----------- ----------- -------------
291,285 119,722 93,585 (220,464) 284,128
----------- ----------- ----------- ----------- -------------
$ 507,379 $ 170,450 $ 514,176 $ (459,975) $ 732,030
=========== =========== =========== =========== =============
</TABLE>
12
<PAGE>
NOTE G - Supplemental Condensed Consolidating Financial Statements - Continued
Supplemental Condensed Consolidating Statement of Income
Nine Months Ended December 31, 1998
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue........................ $ 8 $ 110,511 $ 251,015 $ -- $ 361,534
Intercompany revenue..................... -- 7,756 517 (8,273) --
Gain on disposal of equipment............ 11 85 1,281 -- 1,377
---------- ----------- ----------- ----------- -----------
19 118,352 252,813 (8,273) 362,911
OPERATING EXPENSES
Direct cost.............................. -- 88,210 189,478 -- 277,688
Intercompany expense..................... -- 517 7,756 (8,273) --
Depreciation and amortization............ 118 7,464 18,037 -- 25,619
General and administrative............... 4,466 4,528 11,627 -- 20,621
---------- ----------- ----------- ----------- -----------
4,584 100,719 226,898 (8,273) 323,928
---------- ----------- ----------- ----------- -----------
OPERATING INCOME (LOSS).................. (4,565) 17,633 25,915 -- 38,983
Earnings from unconsolidated entities.... 17,698 -- 4,519 (17,703) 4,514
Interest income.......................... 21,256 361 824 (19,815) 2,626
Interest expense......................... 11,034 -- 23,698 (19,815) 14,917
---------- ----------- ----------- ----------- -----------
INCOME BEFORE PROVISION
FOR INCOME TAXES.................... 23,355 17,994 7,560 (17,703) 31,206
Allocation of consolidated income taxes.. 1,544 5,842 1,976 -- 9,362
Minority interest........................ (921) -- (33) -- (954)
---------- ----------- ----------- ----------- -----------
NET INCOME............................. $ 20,890 $ 12,152 $ 5,551 $ (17,703) $ 20,890
=========== =========== =========== =========== ===========
</TABLE>
13
<PAGE>
NOTE G - Supplemental Condensed Consolidating Financial Statements - Continued
Supplemental Condensed Consolidating Statement of Cash Flows
Nine Months Ended December 31, 1998
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities............... $ 4,864 $ 7,564 $ 35,448 $ (1,559) $ 46,317
----------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures............... -- (5,305) (15,769) -- (21,074)
Proceeds from asset dispositions... 15 145 2,496 -- 2,656
----------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
investing activities............... 15 (5,160) (13,273) -- (18,418)
----------- ------------ ----------- ----------- -----------
Cash flows from financing activities:
Proceeds from borrowings........... 20 -- -- (20) --
Repayment of debt.................. (3,300) -- (8,626) 1,579 (10,347)
Repurchase of common stock......... (3,888) -- -- -- (3,888)
Issuance of common stock........... 113 -- -- -- 113
----------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
financing activities............... (7,055) -- (8,626) 1,559 (14,122)
----------- ----------- ----------- ----------- -----------
Effect of exchange rate changes in cash. -- -- (3) -- (3)
----------- ----------- ------------ ----------- -----------
Net increase (decrease) in cash and
cash equivalents................... (2,176) 2,404 13,546 -- 13,774
Cash and cash equivalents
at beginning of period............. 34,264 5,192 16,620 -- 56,076
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents
at end of period.................. $ 32,088 $ 7,596 $ 30,166 $ -- $ 69,850
=========== =========== =========== =========== ===========
</TABLE>
14
<PAGE>
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
worldwide oil and gas industry.
Results of Operations
A summary of operating results and other income statement information
for the applicable periods is as follows (in thousands of dollars):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
--------------------- --------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Operating revenue............................... $ 103,371 $ 116,099 $ 314,766 $ 361,534
Gain on disposal of equipment................... 1,795 91 3,322 1,377
Operating expenses.............................. 96,095 107,521 299,568 323,928
--------- --------- --------- ---------
Operating income................................ 9,071 8,669 18,520 38,983
Earnings from unconsolidated entities........... 1,067 1,909 3,254 4,514
Interest income (expense), net.................. (3,885) (3,944) (11,547) (12,291)
--------- --------- --------- ---------
Income before provision for income taxes........ 6,253 6,634 10,227 31,206
Provision for income taxes...................... 1,935 1,988 3,170 9,362
Minority interest............................... (351) (325) (1,060) (954)
--------- --------- --------- ---------
Net income...................................... $ 3,967 $ 4,321 $ 5,997 $ 20,890
========= ========= ========= =========
</TABLE>
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) will, from this point forward, be reported as a separate
division. The new International division will encompass 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
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended December 31,
----------------------------------------
Current
Segment Previous Segment Format
Format ------------------------
1999 1999 1998
----------- ---------- ---------
(in thousands, except flight hours)
<S> <C> <C> <C>
Flight hours (excludes unconsolidated entities):
Helicopter Activities:
Air Log..................................... 24,952 29,858 28,995
Bristow..................................... 11,210 21,099 26,958
International............................... 14,795 -- --
--------- --------- ---------
Total.................................... 50,957 50,957 55,953
========= ========= =========
Operating revenues:
Helicopter Activities:
Air Log.................................... $ 23,998 $ 28,911 $ 30,268
Bristow.................................... 42,330 64,741 76,301
International.............................. 27,324 -- --
Less: Intercompany........................ (445) (445) (173)
--------- --------- ---------
Total.................................... 93,207 93,207 106,396
Production management and related services..... 10,785 10,785 10,328
Corporate...................................... 2,406 2,406 1,369
Less: Intercompany............................ (3,027) (3,027) (1,994)
--------- --------- ---------
Consolidated total....................... $ 103,371 $ 103,371 $ 116,099
========= ========= =========
Operating income (loss), excluding gain or loss
on disposal of equipment:
Helicopter Activities:
Air Log.................................... $ 3,450 $ 4,993 $ 7,732
Bristow.................................... (831) 1,221 478
International.............................. 3,595 -- --
--------- --------- ---------
Total.................................... 6,214 6,214 8,210
Production management and related services..... 661 661 734
Corporate...................................... 401 401 (366)
--------- --------- ---------
Consolidated total....................... $ 7,276 $ 7,276 $ 8,578
========= ========= =========
Gross margin, excluding gain or loss on disposal
of equipment:
Helicopter Activities:
Air Log.................................... 14.4 % 17.3% 25.5%
Bristow.................................... (2.0)% 1.9% 0.6%
International.............................. 13.2 % -- --
Total.................................... 6.7 % 6.7% 7.7%
Production management and related services..... 6.1 % 6.1% 7.1%
Consolidated total....................... 7.0 % 7.0% 7.4%
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended December 31,
-----------------------------------------
Current
Segment Previous Segment Format
Format -------------------------
1999 1999 1998
----------- ---------- ---------
(in thousands, except flight hours)
<S> <C> <C> <C>
Flight hours (excludes unconsolidated entities):
Helicopter Activities:
Air Log..................................... 77,371 90,588 94,834
Bristow..................................... 41,672 70,027 82,650
International............................... 41,572 -- --
--------- --------- ---------
Total.................................... 160,615 160,615 177,484
========= ========= =========
Operating revenues:
Helicopter Activities:
Air Log.................................... $ 70,969 $ 84,269 $ 97,178
Bristow.................................... 140,268 203,060 235,449
International.............................. 76,092 -- --
Less: Intercompany........................ (601) (601) (591)
--------- --------- ---------
Total.................................... 286,728 286,728 332,036
Production management and related services..... 29,786 29,786 31,774
Corporate...................................... 6,877 6,877 3,808
Less: Intercompany............................ (8,625) (8,625) (6,084)
--------- --------- ---------
Consolidated total....................... $ 314,766 $ 314,766 $ 361,534
========= ========= =========
Operating income (loss), excluding gain or loss
on disposal of equipment:
Helicopter Activities:
Air Log.................................... $ 9,954 $ 14,321 $ 21,349
Bristow.................................... (4,413) (1,087) 15,878
International.............................. 7,693 -- --
--------- --------- ---------
Total.................................... 13,234 13,234 37,227
Production management and related services..... 1,816 1,816 2,174
Corporate...................................... 148 148 (1,795)
--------- --------- ---------
Consolidated total....................... $ 15,198 $ 15,198 $ 37,606
========= ========= =========
Gross margin, excluding gain or loss on disposal
of equipment:
Helicopter Activities:
Air Log.................................... 14.0 % 17.0 % 22.0%
Bristow.................................... (3.1)% (0.5)% 6.7%
International.............................. 10.1 % -- --
Total.................................... 4.6 % 4.6 % 11.2%
Production management and related services..... 6.1 % 6.1 % 6.8%
Consolidated total....................... 4.8 % 4.8 % 10.4%
</TABLE>
17
<PAGE>
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 operations in the following countries: Australia,
Brazil, China, Colombia, Cyprus, India, Kazakhstan, Kosovo, Mexico, Nigeria 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 Egypt and Mexico
("unconsolidated entities").
Air Log's flight activity for the three-month period ended December 31,
1999 is above the similar prior year level by 3.0% however, for the nine-month
period ended December 31, 1999 flight activity is 4.5% below that experienced in
the prior year. The increase in quarter to date comparisons is driven primarily
by increased flying in the Gulf of Mexico, Brazil and Mexico. These increases
are reflective of an overall general improvement in these markets. Despite these
increases, oil companies have been slow to return to the levels of exploration
and development activity experienced prior to calendar year 1998. Revenue for
the three and nine-month periods ended December 31, 1999 fell by 4.5% and 13.3%
respectively from the similar periods in the prior year. The inconsistent change
in revenue as compared with flight activity for the current quarter is due
primarily to a shift in the mix of aircraft generating revenues. Flight hours
and revenue generated from larger, crew change aircraft in the Gulf of Mexico
decreased by 29% from the similar quarter in the prior year, while flight hours
and revenue from smaller, production related aircraft increased by 2.1% and less
than 1% from the year ago quarter, respectively. Air Log's operating margin of
17.3% for the quarter compares to 25.5% for the similar quarter in the prior
year. This decrease is due to the decrease in flight hours from higher margin
crew change aircraft discussed above and increased compensation costs for pilots
and other employees.
Bristow's flight hours for the three and nine-month periods ended
December 31, 1999 decreased by 21.7% and 15.3%, respectively from the similar
periods in the prior year. This net decrease in flight activity is comprised of
decreases in Bristow's North Sea and Trinidad markets, offset by increases in
flight activity in Nigeria and Australia. The decrease in the North Sea activity
is related to an overall slow down in exploration and development activity in
that market, which includes the previously reported termination of contracts
with two major customers, effective August 1, 1999. In the prior year quarter,
these two customers accounted for 3,817 flight hours and $10.8 million in
revenue. Excluding the impact of this lost work, North Sea flight hours and
revenue for the remaining customer base decreased by 28.2% and 24.2%,
respectively, from the similar quarter in the prior year as a result of reduced
utilization and pricing pressures from customers. The North Sea has been more
adversely affected by low oil prices due to generally higher exploration and
production costs in that area compared with other production areas around the
world. Bristow's operating margin changed from 0.6% and 6.7% for the three and
nine-month periods ended December 31, 1998, to 1.9% and (0.5)%, respectively in
the current periods. These low margins are due to the reduced utilization and
pricing pressures discussed above and the terminated contracts and related
restructuring charges of $5 million recognized in the second quarter of fiscal
year 2000. The restructuring charges were incurred to adjust Bristow's staffing
to the current volume of work and entailed a reduction in the North Sea
workforce by 19%. Absent these charges, Bristow's operating margin for the
nine-month period ended December 31, 1999 would have been 1.9%. The company
expects to realize at least $7 million in combined annual salary savings from
the aforementioned redundancy program. In addition, further cost reductions are
being pursued as management works to establish a more cost effective and
competitive organization; however it is likely that Bristow's results and
operating margins will be adversely affected for sometime absent increased
activity in the North Sea market.
18
<PAGE>
Production Management and Related Services
Operating revenues for GPM increased by 4.4% during the three-month
period ended December 31, 1999 and decreased by 6.3% during the nine-months
ended December 31, 1999, as compared to the similar periods in the prior year.
The change in revenue was matched by a slightly larger change in costs,
resulting in a reduction in operating income from period to period. GPM's
operating margin was 6.1% in the current quarter compared to 7.1% the year ago
quarter.
Corporate and Other
Earnings from unconsolidated subsidiaries decreased during the current
quarter primarily due to the deferral of distributions from the Company's
Mexican joint venture as a result of lower than expected activity levels. The
effective income tax rates from continuing operations were approximately 31% and
30% for the nine-months ended December 31, 1999 and 1998, respectively.
Liquidity and Capital Resources
Cash and cash equivalents were $42.8 million as of December 31, 1999, a
$27.8 million decrease from March 31, 1999. Working capital as of December 31,
1999 was $113.2 million, a $29.7 million decrease from March 31, 1999. Total
debt was $242.7 million as of December 31, 1999.
As of December 31, 1999, Bristow had a (pound)15 million ($24.2 million)
revolving credit facility with a syndicate of United Kingdom banks that matures
on December 31, 2002. As of December 31, 1999, Bristow had (pound)1.4 million
($2.3 million) of letters of credit utilized and no funds were drawn under this
credit facility. As of December 31, 1999, 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, 1999.
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.
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, 1 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 December 31,
1999, for the purchase of three S-76 aircraft. The Company has no other material
capital commitments outstanding.
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.
Year 2000 Matters
To date the Company has not encountered any significant Year 2000
problems with any of its information technology (IT) systems, such as accounting
and financial ledgers and aircraft and pilot records, or non-IT systems (which
incorporate embedded technology), such as onboard navigational, communication
and safety systems, nor is it aware of any problems with its vendors' or
customers' systems. However, Year 2000 issues may yet arise that are not
currently apparent. To date, the Company has spent $0.4 million on its
replacement and remediation efforts and no additional expenditures are
contemplated. The Company does not separately account for the internal costs
incurred for its Year 2000 compliance efforts. Such costs consist
19
<PAGE>
primarily of salaries and benefits for the Company's IT personnel. The Company
has a Year 2000 contingency plan in place if any problems arise for it or any of
its significant vendors or customers.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
Statement 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 has not yet
quantified the impact to its financial statements that may result from adoption
of SFAS No. 133, however, 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
positions or results of operations. The new statement could however cause
volatility in the components of other comprehensive income.
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. Factors that could cause actual results
to differ materially from those in the forward-looking statements contained in
this report include the possibility that the annual salary cost savings,
currently expected to be realized as a result of recent employee terminations,
will not be as large as management presently expects, that Bristow's results and
operating margins will not be as adversely affected, and for as long as
management currently anticipates, and that there is a substantially increased
level of activity in the Company's markets. Other important factors that could
cause actual results to differ materially from the Company's expectations (with
those included in the prior sentence "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, the
ability to achieve reduced operating expenses and the ability to maintain year
2000 compliance. 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 change from 1999 annual report disclosures.
20
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Listed below are the documents filed as exhibits to this report:
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K:
There were no Form 8-K filings during the quarter ended December 31, 1999.
21
<PAGE>
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
DATE: February 11, 2000
BY: /s/ H. Eddy Dupuis
-------------------------
H. EDDY DUPUIS
Vice President and
Chief Financial Officer
DATE: February 11, 2000
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule Contains Summary Financial Information Extracted From The
December 31, 1999 Financial Statements And Is Qualified In Its Entirety By
Reference To Such Financial Statements.
</LEGEND>
<CIK> 0000073887
<NAME> Offshore Logistics, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 42,801
<SECURITIES> 0
<RECEIVABLES> 94,474
<ALLOWANCES> 0
<INVENTORY> 79,885
<CURRENT-ASSETS> 223,015
<PP&E> 609,527
<DEPRECIATION> 141,783
<TOTAL-ASSETS> 738,214
<CURRENT-LIABILITIES> 109,805
<BONDS> 226,066
0
0
<COMMON> 211
<OTHER-SE> 290,054
<TOTAL-LIABILITY-AND-EQUITY> 738,214
<SALES> 314,766
<TOTAL-REVENUES> 318,088
<CGS> 254,117
<TOTAL-COSTS> 299,568
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,949
<INCOME-PRETAX> 10,227
<INCOME-TAX> 3,170
<INCOME-CONTINUING> 5,997
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,997
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
</TABLE>
