<SUBMISSION>
<ACCESSION-NUMBER>0000950134-01-508446
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20010930
<FILING-DATE>20011114
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PETROLEUM HELICOPTERS INC
<CIK>0000350403
<ASSIGNED-SIC>4522
<IRS-NUMBER>720395707
<STATE-OF-INCORPORATION>LA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-09827
<FILM-NUMBER>1785544
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2121 AIRLINE DRIVE SUITE 400
<STREET2>P O BOX 578
<CITY>METAIRIE
<STATE>LA
<ZIP>70001-5979
<PHONE>5048283323
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>113 BORMAN DRIVE
<CITY>LAFAYETTE
<STATE>LA
<ZIP>70508
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d92220e10-q.txt
<DESCRIPTION>FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2001
<TEXT>
<PAGE>

================================================================================

                       Securities and Exchange Commission
                             Washington, D. C. 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: September 30, 2001

                                       OR

         [ ]      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

                           PETROLEUM HELICOPTERS, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                                                     <C>
                             Louisiana                                               72-0395707
          (State or other jurisdiction of incorporation or              (I.R.S. Employer Identification No.)
                           organization)

                     2001 SE Evangeline Thruway
                        Lafayette, Louisiana                                            70508
              (Address of principal executive offices)                               (Zip Code)
</Table>

       Registrant's telephone number, including area code: (337) 235-2452

                          2121 Airline Drive Suite 400
                  P.O. Box 578, Metairie, Louisiana 70001-5979
                 (Former address, 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 (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                  Yes X  No
                                     ---   ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.

<Table>
<Caption>
                               Class                     Outstanding at October 31, 2001
                               -----                     -------------------------------
<S>                                       <C>
                         Voting Common Stock                      2,851,866 shares
                       Non-Voting Common Stock                    2,404,897 shares
</Table>

================================================================================

<PAGE>


                           PETROLEUM HELICOPTERS, INC.

                                INDEX - FORM 10-Q

                         Part I - Financial Information

<Table>
<S>           <C>                                                                               <C>
                                 Part I - Financial Information

Item 1.       Financial Statements - Unaudited
                  Consolidated Balance Sheets - September 30, 2001 and
                     December 31, 2000 ................................................          3
                  Consolidated Statements of Operations - Three Months
                     and Nine Months Ended September 30, 2001 and 2000.................          4
                  Consolidated Statements of Cash Flows - Nine Months
                     Ended September 30, 2001 and 2000 ................................          5
                  Notes to Consolidated Financial Statements ..........................          6

Item 2.       Management's Discussion and Analysis of Financial
                  Condition and Results of Operations .................................         11

Item 3.       Quantitative and Qualitative Disclosures about
                  Market Risk .........................................................         20

                                      Part II - Other Information


Item 1.       Legal Proceedings .......................................................         20

Item 6.       Exhibits and Reports on Form 8-K ........................................         20

              Signature ...............................................................         21
</Table>


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS

                  PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

<Table>
<Caption>
                                                                    SEPTEMBER 30,      DECEMBER 31,
                                                                         2001              2000
                                                                    -------------      ------------
<S>                                                                 <C>                <C>
                                ASSETS
Current Assets:
    Cash and cash equivalents                                       $       5,991      $        863
    Accounts receivable -- net of allowance:
       Trade                                                               48,520            39,399
       Other                                                                1,652             3,490
    Inventory                                                              35,307            35,175
    Prepaid expenses                                                        6,113             5,112
    Refundable income taxes                                                 1,839             3,852
                                                                    -------------      ------------
                  Total current assets                                     99,422            87,891

Property and equipment, net                                               123,334           131,856
Other                                                                       7,891             3,008
                                                                    -------------      ------------
                  Total Assets                                      $     230,647      $    222,755
                                                                    =============      ============

                 LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
    Accounts payable and accrued liabilities                        $      30,943      $     30,047
    Accrued vacation payable                                                6,922             6,553
    Current maturities of long-term debt and capital lease
         obligations                                                       15,431             9,744
                                                                    -------------      ------------
                  Total current liabilities                                53,296            46,344

Long-term debt and capital lease obligations, net of current
     maturities                                                            53,349            65,075
Deferred income taxes                                                      21,819            17,600
Other long-term liabilities                                                13,947            12,114
Commitments and Contingencies (Note 4)

Shareholders' Equity
    Voting common stock -- par value of $0.10;
     authorized shares of 12,500,000                                          285               279
    Non-voting common stock -- par value of $0.10;
     authorized shares of 12,500,000                                          240               237
    Additional paid-in capital                                             13,192            12,045
    Accumulated other comprehensive income (loss)                          (2,086)               --
    Retained earnings                                                      76,605            69,061
                                                                    -------------      ------------
                Total shareholders' equity                                 88,236            81,622
                                                                    -------------      ------------
                Total Liabilities and Shareholders' Equity          $     230,647      $    222,755
                                                                    =============      ============
</Table>

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


                                       3
<PAGE>


                  PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

<Table>
<Caption>
                                                        QUARTER ENDED                NINE MONTHS ENDED
                                                         SEPTEMBER 30,                 SEPTEMBER 30,
                                                  -------------------------      -------------------------
                                                     2001           2000            2001           2000
                                                  ----------     ----------      ----------     ----------
<S>                                               <C>            <C>             <C>            <C>
REVENUES AND OTHER
  INCOME:
    Operating revenues                            $   73,613     $   60,894      $  205,406     $  168,658
    Other income (loss), net                           1,038           (358)          3,772          2,189
                                                  ----------     ----------      ----------     ----------
                                                      74,651         60,536         209,178        170,847
                                                  ----------     ----------      ----------     ----------

EXPENSES:
    Direct expenses                                   60,485         55,724         178,091        157,743
    Selling, general, and
        administrative                                 5,078          4,412          14,172         12,479
     Interest expense                                  1,536          1,329           4,908          4,312
                                                  ----------     ----------      ----------     ----------
                                                      67,099         61,465         197,171        174,534
                                                  ----------     ----------      ----------     ----------

Income (loss) before income taxes                      7,552           (929)         12,007         (3,687)

Income taxes                                           2,794             82           4,443           (922)
                                                  ----------     ----------      ----------     ----------

Net income (loss)                                 $    4,758     $   (1,011)     $    7,564     $   (2,765)
                                                  ==========     ==========      ==========     ==========

Weighted average common shares outstanding:
    Basic                                              5,197          5,165           5,179          5,163
    Diluted                                            5,310          5,165           5,286          5,163

Net income (loss) per common share:
    Basic                                         $     0.92     $    (0.20)     $     1.46     $    (0.54)
    Diluted                                       $     0.90     $    (0.20)     $     1.43     $    (0.54)
</Table>


The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


                                       4
<PAGE>


                  PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)

<Table>
<Caption>
                                                                        NINE MONTHS ENDED
                                                                          SEPTEMBER 30,
                                                                   --------------------------
                                                                      2001            2000
                                                                   ----------      ----------
<S>                                                                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                              $    7,564      $   (2,765)
    Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
        Depreciation                                                   11,288          10,088
        Deferred income taxes                                           3,740            (385)
        Gain on asset dispositions                                     (3,535)         (2,855)
        Bad debt allowance related to note receivable                     575              --
        Equity in net losses of investee companies, net of
            distributions                                                  --             439
        Other                                                             449             575
    Changes in operating assets and liabilities                        (7,965)          4,414
                                                                   ----------      ----------

Net cash provided by operating activities                              12,116           9,511
                                                                   ----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Investments in and advances to affiliates                             200          (1,266)
    Proceeds from notes receivable                                         --             198
    Purchase of property and equipment                                (18,517)        (12,745)
    Proceeds from asset dispositions                                   16,675          15,955
                                                                   ----------      ----------

Net cash (used in) provided by investing activities                    (1,642)          2,142
                                                                   ----------      ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from long-term debt                                        2,500           9,000
    Payments on long-term debt                                         (8,539)        (22,194)
    Other                                                                 693              --
                                                                   ----------      ----------

Net cash used in financing activities                                  (5,346)        (13,194)
                                                                   ----------      ----------

Increase (decrease) in cash and cash equivalents                        5,128          (1,541)

Cash and cash equivalents, beginning of period                            863           1,663
                                                                   ----------      ----------

Cash and cash equivalents, end of period                           $    5,991      $      122
                                                                   ==========      ==========
</Table>


The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


                                       5
<PAGE>


                  PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   GENERAL

The accompanying unaudited condensed consolidated financial statements include
the accounts of Petroleum Helicopters, Inc. and subsidiaries ("PHI" or the
"Company"). In the opinion of management, these financial statements reflect all
adjustments, consisting of only normal, recurring adjustments, necessary to
present fairly the financial results for the interim periods presented. These
condensed consolidated financial statements should be read in conjunction with
the financial statements contained in the Company's Annual Report on Form 10-K
for the year ended December 31, 2000 and the accompanying notes and Management's
Discussion and Analysis of Financial Condition and Results of Operations.

The Company's financial results, particularly as they relate to the Company's
domestic oil and gas operations, are influenced by seasonal fluctuations as
discussed in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000. Therefore, the results of operations for interim periods are
not necessarily indicative of the operating results that may be expected for a
full fiscal year.

2.   SEGMENT INFORMATION

The Company has identified four principal segments: Domestic Oil and Gas and
Other, International, Aeromedical, and Technical Services. The Domestic Oil and
Gas and Other segment primarily provides helicopter services to oil and gas
customers operating in the Gulf of Mexico. The International segment provides
helicopters in various foreign countries to oil and gas customers, which
primarily consists of operations in the west coast of Africa. The Aeromedical
segment provides helicopter services to hospitals and medical programs in
several U.S. states. The Company's AirEvac subsidiary is included in the
Aeromedical segment. The Technical Services segment provides helicopter repair
and overhaul services for a variety of helicopter owners and operators.

Segment operating income is operating revenues less direct expenses, selling,
general, and administrative costs and interest expense allocated to the
operating segment. Unallocated overhead consists primarily of corporate selling,
general, and administrative costs that the Company does not allocate to the
operating segments.

Summarized financial information concerning the Company's reportable operating
segments for the quarter and nine months ended September 30, 2001 and 2000 is as
follows (in thousands):


                                       6
<PAGE>


<Table>
<Caption>
                                                         QUARTER ENDED                 NINE MONTHS ENDED
                                                         SEPTEMBER 30,                   SEPTEMBER 30,
                                                  --------------------------      --------------------------
                                                     2001            2000            2001            2000
                                                  ----------      ----------      ----------      ----------
<S>                                               <C>             <C>             <C>             <C>
Segment operating revenues, excluding
  other income:
     Domestic Oil and Gas and Other               $   51,150      $   40,613      $  137,418      $  109,318
     International                                     5,100           4,586          16,169          14,663
     Aeromedical                                      11,766          10,928          35,415          33,041
     Technical Services                                5,597           4,767          16,404          11,636
                                                  ----------      ----------      ----------      ----------
         Total operating revenues,
           excluding other income                 $   73,613      $   60,894      $  205,406      $  168,658
                                                  ==========      ==========      ==========      ==========

Segment operating income (loss),
  excluding other income:
     Domestic Oil and Gas and Other               $   10,561      $    2,160      $   17,769      $    2,256
     International                                        44            (170)           (491)           (410)
     Aeromedical                                        (613)            (98)            267              28
     Technical Services                                  883             968           2,624           1,838
                                                  ----------      ----------      ----------      ----------
         Total segment operating income
           excluding other income                     10,875           2,860          20,169           3,712
Other income, net                                      1,038            (358)          3,772           2,189
Unallocated selling, general
  and administrative expense                          (4,361)         (3,431)        (11,934)         (9,588)
                                                  ----------      ----------      ----------      ----------
               Income (loss) before income
                 taxes                            $    7,552      $     (929)     $   12,007      $   (3,687)
                                                  ==========      ==========      ==========      ==========
</Table>


3.       OTHER ASSETS

In June 2001, the Company executed an agreement for the sale of its 50% equity
interest and related assets in Clintondale Aviation, Inc. ("Clintondale"), which
operated helicopters, and fixed-wing aircraft primarily in Kazakhstan. The
Company had also previously leased four aircraft to Clintondale. The Company
received a promissory note for $3.1 million from Clintondale in exchange for the
previously leased four aircraft, certain amounts receivable from Clintondale,
and the Company's 50% equity interest in Clintondale. The book value of the
assets sold totaled $3.1 million, less a provision recorded at December 31, 2000
of $1.3 million, or a net amount of $1.8 million.

As a result of the tragic events that occurred September 11, 2001, the Company
reassessed Clintondale's financial ability to repay the note receivable based on
their reduced operations in Kazakhstan and therefore recorded a charge to
earnings of $575,000 in the third quarter.

Other Assets also includes $3.0 million that the Company funded toward the
construction cost of a new principal operating facility leased by the Company.
Any such amounts funded by PHI, up to $4.0 million, will amortize over 10 years
at 7% per annum and the resulting monthly amortization amounts will reduce PHI's
monthly lease payments for the first 10 years of the lease. A final $1.0 million
was funded by PHI in October 2001.


                                       7
<PAGE>


4.   COMMITMENTS AND CONTINGENCIES

Environmental Matters -- The Company currently has an aggregate estimated
liability of $3.0 million for environmental remediation costs that are probable
and estimable. The Company recorded no additional provisions for the quarter and
nine months ended September 30, 2001. The Company has been conducting
environmental surveys of the Lafayette facility which it recently vacated, and,
has determined that contamination exists at that facility. To date, borings have
been conducted to determine the type and extent of contamination. Additional
borings are required to complete this process and the Company has filed a plan
with the Louisiana Department of Environmental Quality (LDEQ) to conduct these
additional borings. The Company expects that the assessment process will be
complete by the 4th quarter of 2002. Once the extent and type of contamination
are defined, a risk evaluation in accordance with the Louisiana RECAP standard
will be submitted and evaluated by LDEQ. At that point, LDEQ will establish what
cleanup standards must be met at the site. When the process is complete, the
Company will be in a position to develop the appropriate remediation plan and
the resulting cost of remediation.

To date the Company has expended $124,000 on conducting these surveys and
expects to spend an additional $109,000 performing those borings by year end.

Legal Matters -- The Company is named as a defendant in various legal actions
that have arisen in the ordinary course of its business and have not been
finally adjudicated. The amount, if any, of ultimate liability with respect to
such matters cannot be determined. In the opinion of management, the amount of
the ultimate liability with respect to these actions will not have a material
adverse effect on results of operations, cash flow or financial position of the
Company.

Long-Term Debt -- On July 3, 2001, the Company executed a revised credit
agreement with its lending group. The revised credit agreement provides for a
$45.0 million revolving credit facility and a $25.5 million secured term credit
facility. The credit facility is secured by substantially all of the Company's
assets. The secured term and revolving loan permit prime rate based borrowings
and "Offshore Base Rate" (equivalent to LIBOR) based borrowings. The secured
term credit facility is payable in scheduled payments of $3.0 million on
December 31, 2001, and $1.9 million per quarter beginning on March 31, 2002 to
September 30, 2004. At September 30, 2001 and December 31, 2000, $22.0 million
and $30.0 million was outstanding on the secured term credit facility. The
revolving credit facility converts to a term loan on January 31, 2002, with
scheduled quarterly installments equal to 5% of the principal amount outstanding
at the conversion date, with the final balance due January 31, 2003. At
September 30, 2001 and December 31, 2000, $44.5 million and $37.5 million was
outstanding on the revolving credit facility.

The Company is subject to certain financial covenants under its loan agreement
with its principal lending group, and was in compliance with those covenants on
September 30, 2001. These covenants include maintaining certain levels of cash
flow, working capital and shareholders' equity and contain other provisions,
some of which restrict the purchases of the Company's stock, capital
expenditures, and payment of dividends. The declaration or payment of dividends
is restricted to 20% of net earnings for the previous four fiscal quarters. The
loan agreement also limits the creation, incurrence, or assumption of Funded
Debt (as defined, which includes long-term debt) and the acquisition of
investments in unconsolidated subsidiaries.

At September 30, 2001 and December 31, 2000, amounts outstanding on a capital
lease for two aircraft were $2.2 million and $2.3 million, respectively.

Operating Leases -- The Company began leasing a new principal operating facility
for twenty years, including three five-year renewal options, effective September
2001. Under the terms of the new facility lease, there was a commitment by the
Company, to fund $4.0 million of construction costs. Amounts funded by PHI will
amortize over 10 years at 7% per annum and the resulting monthly amortization
amounts will reduce PHI's monthly lease payments for the first 10 years of the
lease. As of September


                                       8
<PAGE>


30, 2001, the Company paid $3.0 million of the commitment. The final $1.0
million commitment was paid in October 2001.

The Company leases certain aircraft, facilities, and equipment used in its
operations. The related lease agreements, which include both non-cancelable and
month-to-month terms, generally provide for fixed monthly rentals and, for
certain real estate leases, renewal options. The Company has approximately
$111.8 million in aggregate lease commitments under operating leases of which
approximately $18.1 million is payable during the next twelve months. At
December 31, 2000, lease commitments under operating leases totaled $128.7
million.

Purchase Commitments -- At September 30, 2001, the Company had no outstanding
purchase commitments.

5. INTEREST RATE SWAPS

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133. SFAS No. 133 establishes new
accounting and reporting standards for derivative financial instruments and for
hedging activities. SFAS No. 133 requires the Company to measure all derivatives
at fair value and to recognize them in the balance sheet as an asset or
liability, depending on the Company's rights or obligations under the applicable
derivative contract.

The Company uses interest rate swaps to hedge its cash flow related to interest.
Effective January 1, 2001, the Company began accounting for its interest rate
swaps in accordance with SFAS No. 133, as amended, and has designated the
interest rate swaps as cash flow hedges. The cumulative effect of adopting SFAS
No. 133, as amended, on January 1, 2001 resulted in an increase of $38,000 to
other comprehensive income. As of September 30, 2001, the fair market value of
these interest rate swaps was a $2.1 million liability and is included in other
long-term liabilities on the balance sheet.

6. ACCUMULATED OTHER COMPREHENSIVE INCOME

Following is a summary of the Company's comprehensive income (loss) for the
quarter and nine months ended September 30, 2001 and 2000 (in thousands):


<Table>
<Caption>
                                                 QUARTER ENDED             NINE MONTHS ENDED
                                                 SEPTEMBER 30,               SEPTEMBER 30,
                                            ----------------------      ----------------------
                                              2001          2000          2001          2000
                                            --------      --------      --------      --------
<S>                                         <C>           <C>           <C>           <C>
Net income (loss)                           $  4,758      $ (1,011)     $  7,564      $ (2,765)
Other comprehensive income
  (loss):
     Cumulative effect of adopting
        SFAS No. 133                              --            --            38            --
     Unrecognized income (loss) on
        interest rate swaps                   (1,221)           --        (2,124)           --
                                            --------      --------      --------      --------
Comprehensive income (loss)                 $  3,537      $ (1,011)     $  5,478      $ (2,765)
                                            ========      ========      ========      ========
</Table>


                                       9
<PAGE>


7. VALUATION ACCOUNTS

The Company establishes an allowance for doubtful accounts based upon factors
surrounding the credit risk of specific customers, current market conditions,
and other information. The allowance for doubtful accounts was $1.4 million and
$2.2 million at September 30, 2001 and December 31, 2000, respectively.

The Company also establishes valuation reserves related to obsolescent and
excess inventory. The inventory valuation reserves were $4.2 million and $3.7
million at September 30, 2001 and December 31, 2000, respectively.

8. SEVERANCE LIABILITY

At December 31, 2000, the Company recorded a severance liability of $1.1 million
for a plan of termination for approximately 120 employees. That termination plan
was executed in the first quarter 2001. There was no additional severance cost
incurred in the third quarter ended September 30, 2001. The related severance
liability at September 30, 2001 was $0.4 million covering three employees and
certain other cost related to the termination of all employees under the plan.
The Company expects to pay the remaining severance liability over the next 21
months.

9. NEW ACCOUNTING PRONOUNCEMENTS

On June 29, 2001, SFAS No. 141, "Business Combinations" was approved by the
Financial Accounting Standards Board ("FASB"). SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Goodwill and certain intangible assets will remain on the
balance sheet and not be amortized. On an annual basis, and when there is reason
to suspect that their values have been diminished or impaired, these assets must
be tested for impairment, and write-downs may be necessary. The Company
implemented SFAS No. 141 on July 1, 2001 and it has determined that this
statement did not have a material impact on its consolidated financial position
or results of operations.

On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was
approved by the FASB. SFAS No. 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will cease upon
adoption of this statement. The Company is required to implement SFAS No. 142 on
January 1, 2002 and it has determined that this statement will have no material
impact on its consolidated financial position or results of operation.

SFAS No. 143, Accounting for Asset Retirement Obligations, requires the
recording of liabilities for all legal obligations associated with the
retirement of long-lived assets that result from the normal operation of those
assets. These liabilities are required to be recorded at their fair values
(which are likely to be the present values of the estimated future cash flows)
in the period in which they are incurred. SFAS No.143 requires the associated
asset retirement costs to be capitalized as part of the carrying amount of the
long-lived asset. The asset retirement obligation will be accreted each year
through a charge to expense. The amounts added to the carrying amounts of the
assets will be depreciated over the useful lives of the assets. The Company is
required to implement SFAS No. 143 on January 1, 2003, and it has not determined
the impact that this statement will have on its consolidated financial position
or results of operations.

SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets,
promulgates standards for measuring and recording impairments of long-lived
assets. Additionally, this standard establishes requirements for classifying an
asset as held for sale, and changes existing accounting and reporting standards
for discontinued operations and exchanges for long-lived assets. The Company is
required to


                                       10
<PAGE>


implement SFAS No. 144 on January 1, 2002, and it does not expect the
implementation of this standard to have a material effect on the Company's
financial position or results of operations.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") should be read in conjunction with the accompanying
unaudited condensed consolidated financial statements and the notes thereto as
well as the Company's Annual Report on Form 10-K for the year ended December 31,
2000.

FORWARD-LOOKING STATEMENTS

All statements other than statements of historical fact contained in this Form
10-Q, other periodic reports filed by the Company under the Securities Exchange
Act of 1934, and other written or oral statements made by it or on its behalf,
are forward-looking statements. When used herein, the words "anticipates",
"expects", "believes", "goals", "intends", "plans", or "projects" and similar
expressions are intended to identify forward-looking statements. It is important
to note that forward-looking statements are based on a number of assumptions
about future events and are subject to various risks, uncertainties, and other
factors that may cause the Company's actual results to differ materially from
the views, beliefs, and estimates expressed or implied in such forward-looking
statements. Although the Company believes that the assumptions reflected in
forward-looking statements are reasonable, no assurance can be given that such
assumptions will prove correct. Factors that could cause the Company's results
to differ materially from the results discussed in such forward-looking
statements include but are not limited to the following: flight variances from
expectations, volatility of oil and gas prices, the substantial capital
expenditures and commitments required to acquire aircraft, environmental risks,
competition, government regulation, unionization, operating hazards, risks
related to international operations, the ability to obtain insurance, and the
ability of the Company to implement its business strategy. All forward-looking
statements in this document are expressly qualified in their entirety by the
cautionary statements in this paragraph. PHI undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events, or otherwise.

OVERVIEW

Total revenues during the third quarter of 2001 reflected improvement over the
third quarter of 2000 primarily due to rate increases, which were implemented
January 2001 and May 2001. Those rate increases become effective at customer
contract renewal dates unless implemented earlier by mutual agreement. The
improvement in earnings is also primarily a result of those rate increases.

The third quarter was adversely impacted by the tragic events of September 11,
2001. The immediate effects on PHI were a restriction of flight operations from
September 11, 2001 through September 13, 2001. Some curtailment of training and
other operations continued for approximately two weeks after September 11, 2001.
Additionally, PHI incurred increased security costs and increased insurance
costs. The Company has had discussions with customers regarding passing these
increased costs to them. However, the Company is unable to quantify the extent
that it will be successful in charging these increased costs to its customers.

As a result of the tragic events that occurred September 11, 2001, the Company
reassessed Clintondale's financial ability to repay the note receivable based on
their reduced operations in Kazakhstan and therefore recorded a charge to
earnings of $0.6 million in the third quarter.


                                       11
<PAGE>


Under the Air Transportation Safety and System Stabilization Act passed by
Congress in the aftermath of the September 11, 2001 events, PHI may be entitled
to compensation from the Government for a portion of lost revenues and earnings.
However, there is no assurance as to the amount, if any, of compensation that
the Company may receive.

The Company also began experiencing decreased flight activity in the third
quarter of 2001 because of decreased oil and gas activity in the Gulf of Mexico.
The Company expects the decrease in flight activity to continue through the
fourth quarter of 2001 when compared to the fourth quarter of 2000. However, the
Company also expects that it will have earnings from operations in the fourth
quarter of 2001 compared to operating losses in the fourth quarter of 2000.

The Company is in the process of reviewing all its business lines. This review
includes rates to customers, utilization of the aircraft, and costs. Actions
taken as a result of this review could include, but not limited to, increases in
customer rates, actions related to costs, and could also include exiting a
business segment.

RESULTS OF OPERATIONS

The following tables present certain non-financial operational statistics for
the quarter and nine months ended September 30, 2001 and 2000:


<Table>
<Caption>
                                                 QUARTER ENDED           NINE MONTHS ENDED
                                                 SEPTEMBER 30,             SEPTEMBER 30,
                                             ---------------------     ---------------------
                                               2001         2000         2001         2000
                                             --------     --------     --------     --------
<S>                                          <C>          <C>          <C>          <C>
FLIGHT HOURS:
     Domestic Oil and Gas and Other            37,226       43,762      113,497      118,663
     International                              4,853        5,078       15,832       16,107
     Aeromedical                                5,765        5,639       16,863       16,552
     Other                                        722           91          897          459
                                             --------     --------     --------     --------
                  Total                        48,566       54,570      147,089      151,781
                                             ========     ========     ========     ========
</Table>


<Table>
<Caption>
                                                                            SEPTEMBER 30,
                                                                       ---------------------
                                                                         2001         2000
                                                                       --------     --------
<S>                                                                    <C>          <C>
AIRCRAFT OPERATED AT PERIOD END:
     Domestic Oil and Gas and Other                                        191           200
     International                                                          18            31
     Aeromedical                                                            40            46
                                                                       -------      --------
                  Total                                                    249           277
                                                                       =======      ========
</Table>


QUARTER ENDED SEPTEMBER 30, 2001 COMPARED WITH QUARTER ENDED SEPTEMBER 30, 2000

Combined Operations

Operating revenues were $73.6 million for the quarter ended September 30, 2001
as compared to $60.9 million for the quarter ended September 30, 2000. The
increase of $12.7 million was primarily due to rate increases implemented
January 2001 and May 2001. The number of aircraft at the end of the period
declined to 249 as compared to 277 at September 30, 2000, and flight hours for
the three months ended September 30, 2001 were down 6,004 hours as compared to
the three months ended September 30, 2000. The decrease in flight hours was
attributable to the restrictions of flight operations caused by the tragic


                                       12
<PAGE>


events of September 11, 2001, along with lower flight activity due to decreased
oil and gas activities in the Gulf of Mexico as evidenced by decreased drilling
rig activity.

There was a net labor cost increase and an increase in aircraft parts usage cost
in the current quarter compared to the same period in the prior year. The labor
cost increase was related to compensation increases for pilots and mechanics.
That increase was offset to some extent by a reduction in personnel implemented
in February 2001.

The Company also recorded a $0.6 million bad debt allowance related to its notes
receivable from Clintondale. The allowance is the result of the tragic events
that occurred September 11, 2001, which caused the Company to reassess
Clintondale's financial ability to repay the note receivable based on their
reduced operations in Kazakhstan.

The Company's net income for the quarter was $4.8 million compared to a loss in
the same period in the prior year of $1.0 million. Earnings before tax for the
quarter were $7.6 million compared to a loss of $0.9 million in the same period
of the prior year. Earnings per diluted share for the quarter were $0.90 as
compared to a loss per diluted share in the same quarter prior year of $0.20.
The improvement in earnings from operations is due primarily to the rate
increase implemented May 2001.

Domestic Oil and Gas and Other

Domestic Oil & Gas and Other segment revenues increased 26.1% to $51.2 million
for the quarter ended September 30, 2001 compared to $40.6 million during the
same period in the prior year. The increase of $10.6 million as compared to the
third quarter 2000 was due primarily to rate increases implemented January 2001
and May 2001.

The Domestic Oil & Gas and Other segment had operating income of $10.6 million
for the quarter compared to $2.2 million for the same period in 2000. Operating
margin of 20.6% for the third quarter compares favorably to a margin of 5.3% in
the prior period.

International

International segment revenues increased 11.2% to $5.1 million for the quarter
ended September 30, 2001 compared to $4.6 million during the same period in the
prior year. The increase was primarily due to a contract in Taiwan.

The International segment had an operating profit of less than $0.1 million for
the quarter compared to a $0.2 million operating loss for the same period in
2000. The change in the operating income was due to the contract in Taiwan that
commenced earlier this year.

The Company is continuing in its efforts to exit the operation in Taiwan. The
customer will require additional aircraft and the Company has elected not to
make the capital expenditures required to service the customer's expanded
operations.

Aeromedical

Aeromedical segment revenues increased 7.7% to $11.8 million for the quarter
ended September 30, 2001 compared to $10.9 million during the same period in the
prior year. The increase in operating revenues is the result of a new contract
in Grand Junction, Colorado, and an increase in activity in the Company's Air
Evac operations in Arizona.


                                       13
<PAGE>


The Aeromedical segment generated an operating loss of $0.6 million as compared
to an operating loss in the same quarter prior year of $0.1 million. The loss in
the current period is due to increased compensation cost.

Technical Services

The Technical Services segment revenues for the quarter ended September 30, 2001
were $5.6 million compared to $4.8 million in the prior year, an increase of
17.4%. This was due to increased activity related to certain long-term
contracts.

Technical Services operating income decreased slightly for the quarter to $0.9
million compared to $1.0 million in the same quarter in the prior year. The
decrease in operating income is due primarily to an increase in parts and labor
costs.

OTHER INCOME, NET

Other income, net was $1.0 million for the three months ended September 30, 2001
as compared to a net loss of $0.4 million for the three months ended September
30, 2000. Included in other income, net, are gains from aircraft sales, which
were $1.0 million for the three months ended September 30, 2001. There were no
aircraft sales for the same period of the prior year.

DIRECT EXPENSES

Direct expenses for the quarter ended September 30, 2001 increased by 8.5% to
$60.5 million compared to $55.7 million in the same period in the prior year.
The increase in direct expenses was due primarily to increases in compensation
to pilots and mechanics, and increases in aircraft parts usage.

Depreciation expense included in direct expenses for the quarter ended September
30, 2001 was $3.2 million compared to $3.1 million in the same period prior
year. Total depreciation expense was $3.4 million for the quarter ended
September 30, 2001 and 2000. The increase was attributable to depreciation on
new aircraft and refurbishments to older aircraft.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses for the quarter ended September
30, 2001 were $5.1 million compared to $4.4 million in the same period in 2000.
The increase for the period was primarily related to the $0.6 million bad debt
allowance recorded on the note receivable from Clintondale.

INTEREST EXPENSE

Interest expense for the quarter ended September 30, 2001 increased $0.2 million
to $1.5 million. The increase is due primarily to higher debt levels in the
current quarter compared to the same quarter in the prior year.

INCOME TAXES

Income tax expense for the quarter ended September 30, 2001 was $2.8 million
compared to $0.1 million for the quarter ended September 30, 2000. The effective
tax-rate was 37.0% and 8.8% for the quarter ended September 30, 2001 and 2000,
respectively.


                                       14
<PAGE>


NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 2000

Combined Operations

Operating revenues for the nine months ended September 30, 2001 were $205.4
million compared to $168.7 million for the nine months ended September 30, 2000.
The increase in revenue is primarily related to rate increases implemented in
January 2001 and May 2001. Those rate increases become effective at customer
contract renewal dates unless implemented earlier by mutual agreement. The
number of aircraft at the end of the period were 249 as compared to 277 at
September 30, 2000. Flight hours for the nine months ended September 30, 2001
were down 4,692 hours as compared to the nine months ended September 30, 2000.
The decrease in flight hours was attributable to decreased third quarter flight
hours due to the restrictions of flight operations caused by the tragic events
of September 11, 2001, along with lower flight activity due to decreased oil and
gas activities in the Gulf of Mexico as evidenced by decreased drilling rig
activity.

There was a labor cost increase and an increase in aircraft parts usage cost in
the current nine months compared to the same period in the prior year. The labor
cost increase was related to compensation increases for pilots and mechanics.
That increase was offset to some extent by a reduction in personnel implemented
in February 2001.

The Company also recorded a $0.6 million bad debt allowance related to its notes
receivable from Clintondale. The allowance is the result of the tragic events
that occurred September 11, 2001, which caused the Company to reassess
Clintondale's financial ability to repay the note receivable based on their
reduced operations in Kazakhstan.

The Company's net income for the nine months ended September 30, 2001 was $7.6
million compared to a loss for the nine months ended September 30, 2000 of $2.8
million. Earnings before tax for the nine months ended September 30, 2001 was
$12.0 million compared to a loss of $3.7 million for the same period in the
prior year. Earnings per diluted share for the nine months ended September 30,
2001 was $1.43 as compared to a loss per diluted share for the nine months ended
September 30, 2000 of $0.54. The improvement in earnings from operations is due
primarily to the rate increase implemented May 2001.

Domestic Oil and Gas and Other

Domestic Oil & Gas and Other revenues were $137.4 million for the nine months
ended September 30, 2001 compared to $109.3 million for the nine months ended
September 30, 2000, an increase of $28.1 million or 25.7%. The increase in
revenue is primarily related to rate increases implemented in January 2001 and
May 2001. Those rate increases become effective at customer contract renewal
dates unless implemented earlier by mutual agreement.

Domestic Oil and Gas and Other segment had operating income of $17.8 million for
the nine months ended September 30, 2001 compared to operating income of $2.3
million for the same period in 2000. The operating margin for the nine months
ended September 2001 was 12.9% compared to 2.1% for the same period of the prior
year. The improvement in earnings and operating margin occurred in the second
and third quarters and is the result primarily of the rate increase implemented
May 1, 2001. There were increases primarily in human resource cost and parts
usage cost, which was offset in part by cost reductions implemented earlier in
the year.


                                       15
<PAGE>


International

International segment revenues were $16.2 million for the nine months ended
September 30, 2001 compared to $14.7 million during the same period in the prior
year. The increase was primarily due to a contract in Taiwan.

The International segment had a $0.5 million operating loss for the nine months
ended September 30, 2001 compared to a $0.4 million operating loss for the same
period in 2000. The increase in the operating loss was due to increased
compensation expense, offset in part by operating income from a contract in
Taiwan, which commenced earlier this year.

The Company is continuing in its efforts to exit the operation in Taiwan. The
customer will require additional aircraft and the Company has elected not to
make the capital expenditures required to service the customer's expanded
operations.

Aeromedical

Aeromedical had revenue of $35.4 for the nine months ended September 30, 2001
compared to $33.0 million for the same period in the prior year, an increase of
7.2%. This increase was primarily due to a new contract in Grand Junction,
Colorado and an increase in activity in the Company's AirEvac operations in
Arizona.

Aeromedical had operating income of $0.3 million for the nine months ended
September 30, 2001 compared to operating income of less than $0.1 million for
the same period in 2000. Although the year-to-date earnings reflect an
improvement in this segment as compared to the same period in the prior year,
the improvement occurred mainly in the first quarter of the current year.

Technical Services

The Technical Services segment operating revenues for the nine months ended
September 30, 2001 were $16.4 million compared to $11.6 million in the prior
year, an increase of $4.8 million. This increase is due primarily to increased
activity on certain long term contracts.

The Technical Services segment had operating income of $2.6 million for the nine
months compared to $1.8 million for the same nine months in 2000.

The operating margin was 16.0% in the nine months ended September 30, 2001 and
15.8% for the nine months ended September 30, 2000. The improvement in operating
income and in the operating margin is related to an increase in activity on
certain long-term contracts.

OTHER INCOME, NET

Other income, net was $3.8 million for the nine months ended September 30, 2001
as compared to $2.2 million for the nine months ended September 30, 2000.
Included in other income, net, are gains from aircraft sales, which totaled $3.3
million for the nine months ended September 30, 2001 as compared to $2.7 million
in the same period prior year.


                                       16
<PAGE>


DIRECT EXPENSES

Direct expenses for the nine months ended September 30, 2001 increased by 12.9%
to $178.1 million compared to $157.7 million in same period in the prior year.
The increase was due to a net increase in human resource costs resulting from
increased compensation costs for pilots and mechanics, and an increase in
aircraft parts usage. There was also an increase in cost of sales related to an
increase in Technical Services activity.

Depreciation expense included in direct expenses for the nine months ended
September 30, 2001 was $10.3 million compared to $9.2 million in the same period
prior year. Total depreciation expense was $11.3 million and $10.1 million for
the same two periods, respectively. The increase was attributable to
depreciation on new aircraft and refurbishments to older aircraft, along with
the acceleration of deprecation on certain assets that the Company has abandoned
with its move to the new operating facility in Lafayette, Louisiana.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses for the nine months ended
September 30, 2001 increased by 13.6% to $14.2 million compared to $12.5 million
in the same period in the prior year. The increase for the period was related to
certain costs incurred related to improvements of the Company's inventory system
and replacement of its accounting system, corporate legal matters, and costs
incurred in reviewing and improving procedures and systems in the Company's
aircraft maintenance facility in Lafayette, Louisiana. In addition there were
severance charges recorded in the current year related to a reduction in force,
implemented in the first quarter, of $0.3 million and the $0.6 million bad debt
allowance recorded on the note receivable from Clintondale.

INTEREST EXPENSE

Interest expense for the nine months ended September 30, 2001 increased $0.6
million to $4.9 million as compared to the nine months ended September 30, 2000.
The increase is due primarily to higher debt levels in the current period
compared to the same period in the prior year.

INCOME TAXES

Income tax expense for the nine months ended September 30, 2001 was $4.4
million, or an effective tax rate of 37.0%. This compares to an income tax
benefit recorded in the same period prior year of $0.9 million.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash position as of September 30, 2001 was $6.0 million compared
to $0.9 million at December 31, 2000. Working capital increased $4.1 million
from $41.5 million at December 31, 2000 to $45.6 million at September 30, 2001.
Net cash provided by operating activities for the nine months ended September
30, 2001 was $12.1 million. Net cash provided by operating activities along with
$16.7 million of aircraft sales funded expenditures for property and equipment
of $18.5 million for the nine months ended September 30, 2001.

Total long-term debt including capital lease obligations decreased $6.0 million
since December 31, 2000 to $68.8 million at September 30, 2001. The current
portion of the long-term debt was $15.4 million at September 30, 2001. On July
3, 2001, the Company executed a revised credit agreement with its lending group.
The revised credit agreement provides for a $45.0 million revolving credit
facility and a $25.5 million secured term credit facility. The credit facility
is secured by substantially all of the Company's assets. The secured term and
revolving loan permit prime rate based borrowings and "Offshore Base


                                       17
<PAGE>


Rate" based borrowings. The secured term credit facility is payable in scheduled
payments of $3.0 million on December 31, 2001, and $1.9 million per quarter
beginning on March 31, 2002 to September 30, 2004. At September 30, 2001 and
December 31, 2000, $22.0 million and $30.0 million was outstanding on the
secured term credit facility, respectively. The revolving credit facility
converts to a term loan on January 31, 2002, with scheduled quarterly
installments equal to 5% of the principal amount outstanding at the conversion
date, with the final balance due January 31, 2003. At September 30, 2001 and
December 31, 2000, $44.5 million and $37.5 million was outstanding on the
revolving credit facility, respectively. During the third quarter the Company
paid $3.5 million of term debt.

The amount expended for the purchase and completion of aircraft improvements and
engines and other property and equipment was $18.5 million for the nine months
ended September 30, 2001, compared to $12.7 million for the nine months ended
September 30, 2000.

The Company executed a lease agreement for a new principal operating facility
for twenty years, effective September 2001. Under the terms of the new facility
lease, the Company has committed to fund $4.0 million of construction costs. As
of September 30, 2001, the Company had funded $3.0 million of the commitment.
Amounts funded by PHI will amortize over 10 years at 7% per annum and the
resulting monthly amortization amounts will reduce PHI's monthly lease payments
for the first 10 years of the lease. The final $1.0 million commitment was paid
in October 2001.

The Company believes that the combination of improved cash flow from operations
and planned aircraft sales will fund required debt principal and interest
payments and necessary capital expenditures during the next twelve months.

ENVIRONMENTAL MATTERS

The Company currently has an aggregate estimated liability of $3.0 million for
environmental remediation costs that are probable and estimable. The Company
recorded no additional provisions for the quarter and nine months ended
September 30, 2001. The Company has been conducting environmental surveys of the
Lafayette facility which it recently vacated, and, has determined that
contamination exists at that facility. To date, borings have been conducted to
determine the type and extent of contamination. Additional borings are required
to complete this process and the Company has filed a plan with the Louisiana
Department of Environmental Quality (LDEQ) to conduct these additional borings.
The Company expects that the assessment process will be complete by the 4th
quarter of 2002. Once the extent and type of contamination are defined, a risk
evaluation in accordance with the Louisiana RECAP standard will be submitted and
evaluated by LDEQ. At that point, LDEQ will establish what cleanup standards
must be met at the site. When the process is complete, the Company will be in a
position to develop the appropriate remediation plan and the resulting cost of
remediation.

To date the Company has expended $124,000 on conducting these surveys and
expects to spend an additional $109,000 performing those borings by year end.

UNION CONTRACT

On April 27, 2001, the Company and the Office & Professional Employees
International Union ("OPEIU") reached a tentative agreement on all terms and
conditions of a three-year collective bargaining agreement covering its domestic
pilots. This agreement was ratified by the Company's domestic pilots on June 13,
2001, and was effective retroactively to June 1, 2001.


                                       18
<PAGE>


NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133. SFAS No. 133 establishes new
accounting and reporting standards for derivative financial instruments and for
hedging activities. SFAS No. 133 requires the Company to measure all derivatives
at fair value and to recognize them in the balance sheet as an asset or
liability, depending on the Company's rights or obligations under the applicable
derivative contract.

The Company uses interest rate swaps to hedge its cash flow related to interest.
Effective January 1, 2001, the Company began accounting for its interest rate
swaps in accordance with SFAS No. 133, as amended and has designated the
interest rate swaps as cash flow hedges. The cumulative effect of adopting SFAS
No. 133, as amended on January 1, 2001 resulted in an increase of $38,000 to
other comprehensive income. As of September 30, 2001, the fair market value of
these interest rate swaps was a $2.1 million liability and is included in other
long-term liabilities on the balance sheet.

On June 29, 2001, SFAS No. 141, "Business Combinations" was approved by the
Financial Accounting Standards Board ("FASB"). SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Goodwill and certain intangible assets will remain on the
balance sheet and not be amortized. On an annual basis, and when there is reason
to suspect that their values have been diminished or impaired, these assets must
be tested for impairment, and write-downs may be necessary. The Company
implemented SFAS No. 141 on July 1, 2001 and it has determined that this
statement did not have a material impact on its consolidated financial position
or results of operations.

On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was
approved by the FASB. SFAS No. 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will cease upon
adoption of this statement. The Company is required to implement SFAS No. 142 on
January 1, 2002 and it has determined that this statement will have no material
impact on its consolidated financial position or results of operation.

SFAS No. 143, Accounting for Asset Retirement Obligations, requires the
recording of liabilities for all legal obligations associated with the
retirement of long-lived assets that result from the normal operation of those
assets. These liabilities are required to be recorded at their fair values
(which are likely to be the present values of the estimated future cash flows)
in the period in which they are incurred. SFAS No.143 requires the associated
asset retirement costs to be capitalized as part of the carrying amount of the
long-lived asset. The asset retirement obligation will be accreted each year
through a charge to expense. The amounts added to the carrying amounts of the
assets will be depreciated over the useful lives of the assets. The Company is
required to implement SFAS No. 143 on January 1, 2003, and it has not determined
the impact that this statement will have on its consolidated financial position
or results of operations.

SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets,
promulgates standards for measuring and recording impairments of long-lived
assets. Additionally, this standard establishes requirements for classifying an
asset as held for sale, and changes existing accounting and reporting standards
for discontinued operations and exchanges for long-lived assets. The Company is
required to implement SFAS No. 144 on January 1, 2002, and it does not expect
the implementation of this standard to have a material effect on the Company's
financial position or results of operations.


                                       19
<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of a decline in market interest rates, the estimated fair value of
the Company's interest rate swaps declined to a liability of $2.1 million, an
increase of $1.2 million in the liability. There were no other material changes
to the Company's disclosures regarding derivatives in its Form 10-K for the year
ended December 31, 2000.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in various legal proceedings primarily involving claims
for personal injury. The Company believes that the outcome of all such
proceedings, even if determined adversely, would not have a material adverse
effect on its consolidated financial statements.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)    Exhibits

           3.1    (i) 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 October 31, 1994).

                  (ii) By-laws of the Company as amended.

         10.23    Second Amended and Restated Loan Agreement among Petroleum
                  Helicopters, Inc., and Bank of America, NA, Whitney National
                  Bank, Bank One, NA, and Bank of America, N.A. as Agent, and
                  Letter of Credit Issuing Bank dated July 3, 2001 (incorporated
                  by reference to Exhibit 10.23 to PHI's report on Form 10-Q for
                  the quarterly period ended June 30, 2001.

(b)    Reports on Form 8-K

         The Registrant filed the following current reports on Form 8-K during
         the quarter ended September 30, 2001.

<Table>
<Caption>
                  Date                         Item Reported
                  ----                         -------------
<S>                                            <C>
                  September 20, 2001           Changes in Control of Registrant
</Table>


                                       20
<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.



                                     Petroleum Helicopters, Inc.





November 14, 2001                    By: /s/ Michael J. McCann
                                         ---------------------------------------
                                     Michael J. McCann
                                     Chief Financial Officer and Treasurer


                                       21
<PAGE>


                               INDEX TO EXHIBITS

<Table>
<Caption>
        EXHIBIT
        NUMBER                        DESCRIPTION
        -------                       -----------
<S>               <C>
           3.1    (i) 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 October 31, 1994).

                  (ii) By-laws of the Company as amended.

         10.23    Second Amended and Restated Loan Agreement among Petroleum
                  Helicopters, Inc., and Bank of America, NA, Whitney National
                  Bank, Bank One, NA, and Bank of America, N.A. as Agent, and
                  Letter of Credit Issuing Bank dated July 3, 2001 (incorporated
                  by reference to Exhibit 10.23 to PHI's report on Form 10-Q for
                  the quarterly period ended June 30, 2001.
</Table>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1(II)
<SEQUENCE>3
<FILENAME>d92220ex3-1ii.txt
<DESCRIPTION>BY-LAWS OF THE COMPANY AS AMENDED
<TEXT>
<PAGE>
                                                                EXHIBIT 3.1 (ii)


                              AMENDED AND RESTATED
                                     BY-LAWS
                                       OF
                           PETROLEUM HELICOPTERS, INC.


                               SECTION 1. OFFICES

         1.1 PRINCIPAL OFFICE. The principal office of the Corporation shall be
located at 2001 S.E. Evangeline Thruway, Lafayette, Louisiana 70508.

         1.2 ADDITIONAL OFFICES. The Corporation may have such offices at such
other places as the Corporation's Board of Directors (the "Board") may from time
to time determine or the business of the Corporation may require.

                        SECTION 2. SHAREHOLDERS MEETINGS

         2.1 PLACE OF MEETINGS. Unless otherwise required by law or these
By-laws, all meetings of the shareholders shall be held at the principal office
of the Corporation or at such other place, within or without the State of
Louisiana, as may be designated by the Board.

         2.2 ANNUAL MEETINGS. An annual meeting of the shareholders shall be
held at such date at such time as may be specified by the Board in the call of
the meeting, for the purpose of electing directors and for the transaction of
such other business as may be properly brought before the meeting. If no annual
shareholders' meeting is held for a period of eighteen months, any shareholder
may call such meeting to be held at the registered office of the Corporation as
shown on the records of the Secretary of State of Louisiana.

         2.3 SPECIAL MEETINGS. Special meetings of the shareholders, for any
purpose or purposes, may be called by the Chairman of the Board, the Chief
Executive Officer or the Board, or by the shareholders as provided in the
Articles of Incorporation.

         2.4 NOTICE OF MEETINGS. Except as otherwise provided by law, the
authorized person or persons calling a shareholders' meeting shall cause written
notice of the time, place and purpose of the meeting to be given to all
shareholders entitled to vote at such meeting, at least ten days and not more
than sixty days prior to the day fixed for the meeting. Notice of the annual
meeting need not state the purpose or purposes thereof, unless action is to be
taken at the meeting as to which notice is required by law or the By-laws.


<PAGE>


Notice of a special meeting shall state the purpose or purposes thereof, and the
business conducted at any special meeting shall be limited to the purpose or
purposes stated in the notice.

         2.5 LIST OF SHAREHOLDERS. At every meeting of shareholders, a list of
shareholders entitled to vote, arranged alphabetically and certified by the
Corporation's Secretary or by the agent of the Corporation having charge of
transfers of shares, showing the number and class of shares held by each such
shareholder on the record date for the meeting, shall be produced on the request
of any shareholder.

         2.6 QUORUM. At all meetings of shareholders, the holders of a majority
of the total voting power of the Corporation shall constitute a quorum; provided
that this subsection shall not have the effect of reducing the vote required to
approve or affirm any matter that may be established by law, the Articles of
Incorporation or these By-laws.

         2.7 VOTING. When a quorum is present at any meeting a majority of the
total voting power shall decide each question brought before such meeting,
unless the question is one upon which, by express provision of law or the
Articles of Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
Directors shall be elected by plurality vote.

         2.8 PROXIES-GENERAL. At any meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote in person or by
proxy appointed by an instrument in writing executed by such shareholder and
bearing a date not more than eleven months prior to the meeting, unless the
instrument provides for a longer period, but in no case will an outstanding
proxy be valid for longer than three years from the date of its execution. The
person appointed as proxy need not be a shareholder of the Corporation.

         2.9 EXECUTION OF PROXIES. Any proxy must be executed by a shareholder
or the shareholder's authorized officer, director, employee or agent. Any
signature on a proxy may be affixed by any reasonable means, including but not
limited to facsimile signature.

         2.10 ELECTRONICALLY TRANSMITTED PROXIES. A shareholder may authorize
another person or persons to act for him as proxy by transmitting or authorizing
the transmission of a telegram, cablegram or other means of electronic
transmission to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or similar agent duly
authorized by the person who will be the holder of the proxy to receive such


                                      -2-
<PAGE>


transmission; provided, however, that any such telegram, cablegram or other
means of electronic transmission shall be submitted with information from which
the Corporation may determine that the telegram, cablegram or other electronic
transmission was authorized by the shareholder. If it is determined that such
electronic transmissions are valid, the inspectors or other persons making that
determination shall specify the information upon which they relied.

         2.11 VALIDITY OF COPIES AND OTHER REPRODUCTIONS OF PROXIES. Any copy,
facsimile, telecommunication or other reliable reproduction of the writing or
transmission created pursuant hereto may be substituted or used in lieu of the
original writing or transmission for all purposes for which the original writing
or transmission could be used; provided, however, that such copy, facsimile
telecommunication or other reliable reproduction shall be a complete
reproduction of the entire original writing or transmission.

         2.12 VOTING POWER PRESENT OR REPRESENTED. For purposes of determining
the amount of voting power present or represented at any annual or special
meeting of shareholders with respect to voting on a particular proposal, shares
as to which the proxy holders have been instructed to abstain from voting on the
proposal, and shares that have been precluded from voting (whether by law,
regulations of the Securities and Exchange Commission, rules or by-laws of any
self-regulatory organization or otherwise), will not be treated as present; but
such shares will be counted as present for purposes of determining the existence
of a quorum.

         2.13 ADJOURNMENTS. Adjournments of any annual or special meeting of
shareholders may be taken without new notice being given unless a new record
date is fixed for the adjourned meeting, but any meeting at which directors are
to be elected shall be adjourned only from day to day until such directors shall
have been elected.

         2.14 WITHDRAWAL. If a quorum is present or represented at a duly
organized meeting, such meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum as fixed in Section 2.6 of these By-laws, or the refusal of any
shareholders present to vote.

         2.15 LACK OF QUORUM. If a meeting cannot be organized because a quorum
has not attended, those present may adjourn the meeting to such time and place
as they may determine, subject, however, to the provisions of Section 73C of the
Business Corporation Law of Louisiana. In the case of any meeting called for the
election of directors, those who attend the second of such


                                      -3-
<PAGE>


adjourned meetings, although less than a quorum as fixed in Section 2.6 hereof,
shall nevertheless constitute a quorum for the purpose of electing directors.

         2.16 PRESIDING OFFICER. The Chairman, the Chief Executive Officer and
the President, in that order, or in their absence, a chairman designated by the
Board, shall preside at all shareholders' meetings.

         2.17 DEFINITIONS OF SHAREHOLDER, VOTING POWER AND VOTING POWER PRESENT.
As used in these By-laws, and unless the context otherwise requires, (a) the
term "shareholder" shall mean a person who is (i) the record holder of shares of
the Corporation's voting stock or (ii) a registered holder of any bonds,
debentures or similar obligations granted voting rights by the Corporation
pursuant to La. R.S. 12:75, (b) the term "voting power" shall mean the right
vested by law, these By-laws or the Articles of Incorporation in the
shareholders to vote in the determination of a particular question or matter and
(c) the term "total voting power" shall mean the total number of votes that the
shareholders are entitled to cast in the determination of a particular question
or matter.

         2.18 NOTICE OF STOCKHOLDER BUSINESS.

              (a) Annual Meetings of Stockholders.

                  (1) The proposal of business to be considered by the
         stockholders may be made at an annual meeting of stockholders (a)
         pursuant to the Corporation's notice of meeting, (b) by or at the
         direction of the Board or (c) by any stockholder of the Corporation who
         was a stockholder of record at the time of giving of notice provided
         for in this By-Law, who is entitled to vote at the meeting and who
         complies with the notice procedures set forth in this By-Law.

                  (2) For other business to be properly brought before an annual
         meeting by a stockholder pursuant to paragraph (A) (1) (c), the
         stockholder must have given timely notice thereof in writing to the
         Secretary of the Corporation, and such other business must otherwise be
         a proper matter for stockholder action. To be timely, the notice must
         be delivered to the Secretary at the principal executive offices of the
         Corporation not later than the close of business on the 60th day nor
         earlier than the close of business on the 90th day before the first
         anniversary of the preceding year's annual meeting; but if the date of
         the annual meeting is more than 30 days before or more than 60 days
         after such anniversary date,


                                      -4-
<PAGE>


         notice by the stockholder to be timely must be so delivered not earlier
         than the close of business on the 90th day before such annual meeting
         and not later than the close of business on the later of the 60th day
         before such annual meeting or the 10th day following the day on which
         public announcement of the date of such meeting is first made by the
         Corporation. In no event shall the public announcement of an
         adjournment of an annual meeting commence a new time period for the
         giving of a stockholder's notice as described above. Such stockholder's
         notice shall set forth (a) a brief description of the business desired
         to be brought before the meeting, the reasons for conducting such
         business at the meeting and any material interest in such business of
         such stockholder and the beneficial owner, if any, on whose behalf the
         proposal is made; and (b) as to the stockholder giving the notice and
         the beneficial owner, if any, on whose behalf the proposal is made (i)
         the name and address of such stockholder, as they appear on the
         Corporation's books, and of such beneficial owner and (ii) the class
         and number of shares of the Corporation which are owned beneficially
         and of record by such stockholder and such beneficial owner.

              (b) Special Meetings of Stockholders. Only such business shall
     be conducted at a special meeting of stockholders as shall have been
     brought before the meeting pursuant to the Corporation's notice of meeting.

              (c) General.

                  (1) Only such business shall be conducted at a meeting of
         stockholders as shall have been brought before the meeting in
         accordance with the procedures set forth in this By-Law. Except as
         otherwise provided by law, the Articles of Incorporation or these
         By-Laws, the Chairman of the meeting shall have the power and duty to
         determine whether any business proposed to be brought before the
         meeting was proposed, in accordance with the procedures set forth in
         this By-Law and, if any proposed business is not in compliance with
         this By-Law, to declare that such defective proposal shall be
         disregarded.

                  (2) For purposes of this By-Law, "public announcement" shall
         mean disclosure in a press release reported by the Dow Jones News
         Service, Associated Press or comparable national news service or in a
         document publicly filed by the Corporation with the


                                      -5-
<PAGE>


         Securities and Exchange Commission pursuant to Section 13, 14 or 15(d)
         of the Exchange Act.

                  (3) Notwithstanding the foregoing provisions of this By-Law, a
         stockholder shall also comply with all applicable requirements of the
         Securities Exchange Act of 1934 and the rules and regulations
         thereunder with respect to the matters set forth in this By-Law.
         Nothing in this By-Law shall be deemed to affect any rights (i) of
         stockholders to request inclusion of proposals in the Corporation's
         proxy statement pursuant to Rule 14a-8 under the Securities Exchange
         Act of 1934 or (ii) of the holders of any series of Preferred Stock to
         elect directors under specified circumstances.

                              SECTION 3. DIRECTORS

         3.1 POWERS; NUMBER. All of the corporate powers shall be vested in, and
the business and affairs of the Corporation shall be managed by, the Board,
which shall consist of four natural persons; provided that, if after proxy
material for any meeting of shareholders at which directors are to be elected
are mailed to shareholders, any person or persons named therein to be nominated
at the direction of the Board becomes unable or unwilling to serve, the
foregoing number of authorized directors shall be automatically reduced by a
number equal to the number of such persons unless the Board, by a majority vote
of the entire Board, selects an additional nominee; provided that in no event
shall the number of directors so authorized, nominated and elected be less than
the number required by law. No amendment to this Section to decrease the number
of directors shall shorten the term of any incumbent director. No director need
be a shareholder.

         3.2 POWERS. The Board may exercise all such powers of the Corporation
and do all such lawful acts and things that are not by law, the Articles of
Incorporation or these By-laws directed or required to be done by the
shareholders.

         3.3 GENERAL ELECTION. At each annual meeting of shareholders, directors
shall be elected to succeed those directors whose terms then expire. Such newly
elected directors shall serve until the next succeeding annual meeting of
shareholders after their election and until their successors are elected and
qualified. A director elected to fill a vacancy shall hold office for a term
expiring at the next annual meeting and until his successor is elected and
qualified. No decrease in the number of directors constituting the Board shall
shorten the term of any incumbent director.


                                      -6-
<PAGE>


         3.4 VACANCIES. Except as otherwise provided in the Articles of
Incorporation or these By-laws (a) the office of a director shall become vacant
if he dies, resigns or is removed from office and (b) the Board may declare
vacant the office of a director if he (i) is interdicted or adjudicated an
incompetent, (ii) is adjudicated a bankrupt, (iii) in the sole opinion of the
Board becomes incapacitated by illness or other infirmity so that he is unable
to perform his duties for a period of six months or longer, or (iv) ceases at
any time to have the qualifications required by law, the Articles of
Incorporation or these By-laws.

         3.5 FILLING VACANCIES. In the event of a vacancy (including any vacancy
resulting from an increase in the authorized number of directors, or from
failure of the shareholders to elect the full number of authorized directors),
the remaining directors, even though not constituting a quorum, may fill any
vacancy on the Board for the unexpired term by a majority vote of the directors
remaining in office, provided that the shareholders shall have the right, at any
special meeting called for the purpose prior to such action by the Board, to
fill the vacancy.

         3.6 NOTICE OF SHAREHOLDER NOMINEES. Only persons who are nominated in
accordance with the procedures set forth in this Section 3.6 shall be eligible
for election as directors. Nominations of persons for election to the Board may
be made at a meeting of shareholders by or at the direction of the Board or by a
shareholder entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 3.6. Such
nominations, other than those made by or at the direction of the Board, shall be
made pursuant to timely notice in writing to the Corporation's Secretary. To be
timely, a shareholder's notice must be delivered or mailed and received at the
principal executive offices of the Corporation not less than 45 days nor more
than 90 days prior to the meeting; provided, however, that if less than 55 days
notice or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received no later
than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
Such shareholder's notice shall set forth the following:

                  (a) as to each person whom the shareholder proposes to
         nominate for election or e-election as a director (i) the name, age,
         business address and residence address of such person, (ii) the
         principal occupation or employment of such person, (iii) the class and
         number of shares of the capital stock of the Corporation of which such
         person is the beneficial owner and the number of votes such person is
         entitled to cast at the shareholders' meeting and (iv) any other
         information relating to such person that would be required to be
         disclosed in solicitations of proxies for


                                      -7-
<PAGE>


         election of directors, or would be otherwise required, in each case
         pursuant to Regulation 14A under the Securities Exchange Act of 1934,
         as amended (including without limitation such person's written consent
         to being named in the proxy statement as a nominee and to serving as a
         director if elected); and

                  (b) as to the shareholder giving the notice (i) the name and
         address of such shareholder and (b) the class and number of shares of
         the capital stock of the Corporation of which such shareholder is the
         beneficial owner and the number of votes such person is entitled to
         cast at the shareholders' meeting. If requested in writing by the
         Corporation's Secretary at least 15 days in advance of the meeting,
         such shareholder shall disclose to the Secretary, within 10 days of
         such request, whether such person is the sole beneficial owner of the
         shares held of record by him; and, if not, the name and address of each
         other person known by the shareholder of record to claim a beneficial
         interest in such shares.

At the request of the Board, any person nominated by or at the direction of the
Board for election as a director shall furnish to the Corporation's Secretary
that information required to be set forth in a shareholder's notice of
nomination that pertains to the nominee. If a shareholder seeks to nominate one
or more persons as directors, the Secretary shall appoint two inspectors (the
"Inspectors"), who shall not be affiliated with the Corporation, to determine
whether a shareholder has complied with this Section 3.6. If the Inspectors
shall determine that a shareholder has not complied with this Section 3.6, the
Inspectors shall direct the chairman of the meeting to declare to the meeting
that a nomination was not made in accordance with the procedures prescribed by
the Articles of Incorporation or these By-laws; and the chairman shall so
declare to the meeting and the defective nomination shall be disregarded.

         3.7 COMPENSATION OF DIRECTORS. Directors as such, shall receive such
compensation for their services as may be fixed by resolution of the Board and
shall receive their actual expenses of attendance, if any, for each regular or
special meeting of the Board; provided that nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.

                        SECTION 4. MEETINGS OF THE BOARD

         4.1 PLACE OF MEETINGS. The meetings of the Board may be held at such
place within or without the State of Louisiana as a majority of the directors
may from time to time appoint.


                                      -8-
<PAGE>


         4.2 INITIAL MEETINGS. The first meeting of each newly elected Board
shall be held immediately following the shareholders' meeting at which the Board
is elected and at the same place as such meeting, and no notice of such first
meeting shall be necessary for the newly elected directors in order legally to
constitute the meeting.

         4.3 REGULAR MEETINGS; NOTICE. Regular meetings of the Board may be held
at such times as the Board may from time to time determine. No notice of regular
meetings of the Board shall be required provided that the date, time and place
of regular meetings are fixed by the Board.

         4.4 SPECIAL MEETINGS; NOTICE. Special meetings of the Board may be
called by the Chairman on reasonable notice given to each director, either
personally or by telephone, mail, e-mail or by telegram. Special meetings shall
be called by the Secretary in like manner and on like notice on the written
request of a majority of the directors, and if such officer fails or refuses, or
is unable within 24 hours to call a meeting when requested, then the directors
making the request may call the meeting on two days' written notice given to
each director. The notice of a special meeting of directors need not state its
purpose or purposes, but if the notice states a purpose or purposes and does not
state a further purpose to consider such other business as may properly come
before the meeting, the business to be conducted at the special meeting shall be
limited to the purposes stated in the notice.

         4.5 WAIVER OF NOTICE. Directors present at any regular or special
meeting shall be deemed to have received due, or to have waived, notice thereof,
provided that a director who participates in a meeting by telephone (as
permitted by Section 4.9) shall not be deemed to have received or waived due
notice if, at the beginning of the meeting, he objects to the transaction of any
business because the meeting is not lawfully called.

         4.6 QUORUM. A majority of the Board shall be necessary to constitute a
quorum for the transaction of business, and except as otherwise provided by law
or the Articles of Incorporation or these By-laws, the acts of a majority of the
Board at a meeting at which a quorum is present shall be the acts of the Board.
If a quorum is not present at any meeting of the Board, the directors present
may adjourn the meeting from time to time without notice other than announcement
at the meeting, until a quorum is present.

         4.7 WITHDRAWAL. If a quorum is present when the meeting convened, the
directors present may continue to do business, taking action by vote of a
majority of a quorum as fixed in Section 4.6, until adjournment,


                                      -9-
<PAGE>


notwithstanding the withdrawal of enough directors to leave less than a quorum
as fixed in Section 4.6 or the refusal of any director present to vote.

         4.8 ACTION BY CONSENT. Any action that may be taken at a meeting of the
Board or any committee thereof, may be taken by a consent in writing signed by
all of the directors or by all members of the committee, as the case may be, and
filed with the records of proceedings of the Board or such committee.

         4.9 MEETINGS BY TELEPHONE OR SIMILAR COMMUNICATION. Members of the
Board may participate at and be present at any meeting of the Board or any
committee thereof by means of conference telephone or similar communications
equipment if all persons participating in such meeting can hear and communicate
with each other. Participation in a meeting pursuant to this Section 4.9 shall
constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

                       SECTION 5. COMMITTEES OF THE BOARD

         5.1 GENERAL. The Board may designate one or more committees, each
committee to consist of two or more of the directors (and one or more directors
may be named as alternate members to replace any absent or disqualified regular
members), which, to the extent provided by resolution of the Board or the
By-laws, shall have and may exercise the powers of the Board in the management
of the business and affairs of the Corporation, and may have power to authorize
the seal of the Corporation to be affixed to documents, but no such committee
shall have power or authority in reference to amending the Articles of
Incorporation, adopting an agreement of merger, consolidation, or share
exchange, recommending to the shareholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of dissolution,
removing or indemnifying directors or amending the By-laws; and unless the
resolution expressly so provides, no such committee shall have the power or
authority to declare a dividend or authorize the issuance of stock. Such
committee or committees shall have such name or names as may be stated in the
By-laws, or as may be determined, from time to time, by the Board. Any vacancy
occurring in any such committee shall be filled by the Board, but the Chairman
of the Board may designate another director to serve on the committee pending
action by the Board. Each such member of a committee shall hold office during
the term of the Board constituting it, unless otherwise ordered by the Board.


                                      -10-
<PAGE>


         5.2 COMPENSATION COMMITTEE. The Board shall establish a Compensation
Committee consisting of at least two directors each of whom shall (i) be a
"non-employee director" as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, and (ii) not serve, and shall not have served in the past, as an
officer or employee of the Corporation or any of its affiliates. The
Compensation Committee shall determine the compensation of officers and key
employees of the Corporation and administer the Corporation's stock incentive
plans.

         5.3 AUDIT COMMITTEE. The Board shall establish an Audit Committee
consisting of at least a majority of directors who are not officers or employees
of the Corporation or any of its affiliates, and who meet the qualifications of
the NASDAQ Stock Market. The Audit Committee shall have such responsibilities
and authority as is contained in a written Audit Committee Charter approved from
time to time by the Board.

         5.4 PROCEDURES FOR COMMITTEES. Each committee shall keep written
minutes of its meetings and all actions taken by a committee shall be reported
to the Board at its next meeting, whether regular or special. Failure to keep
written minutes or to make such reports shall not affect the validity of action
taken by a committee. Each committee shall adopt such rules (not inconsistent
with the Articles of Incorporation, these By-laws or any regulations specified
for such committee by the Board) as it shall deem necessary for the proper
conduct of its functions and the performance of its responsibilities.

                       SECTION 6. REMOVAL OF BOARD MEMBER

         Any director or the entire Board may be removed at any time by the
affirmative vote of not less than a majority of the total voting power at a
meeting of shareholders duly called for that purpose. The shareholders at such
meeting may proceed to elect a successor or successors for the unexpired term of
the director or directors removed. Except as provided in this Section 6,
directors shall not be subject to removal.

                               SECTION 7. NOTICES

         7.1 FORM OF DELIVERY. Whenever under the provisions of law the Articles
of Incorporation or these By-laws notice is required to be given to any
shareholder or director, it shall not be construed to mean personal notice
unless otherwise specifically provided in the Articles of Incorporation or these
By-laws, but such notice may be given by mail, addressed to such shareholder or
director at his address as it appears on the records of the Corporation, with
postage thereon prepaid. Such notices shall be deemed to have been given at the
time


                                      -11-
<PAGE>


they are deposited in the United States mail. Notice to a director pursuant to
Section 4.4 hereof may also be given personally or by telephone, e-mail or
telegram sent to his or her address as it appears on the Corporation's records.

         7.2 WAIVER. Whenever any notice is required to be given by law, the
Articles of Incorporation or these By-laws, a waiver thereof in writing signed
by the person or persons entitled to said notice, whether before or after the
time stated therein, shall be deemed equivalent thereto. In addition, notice
shall be deemed to have been given to, or waived by, any shareholder or director
who attends a meeting of shareholders or directors in person, or is represented
at such meeting by proxy, without protesting at the commencement of the meeting
the transaction of any business because the meeting is not lawfully called or
convened.

                              SECTION 8. OFFICERS

         8.1 DESIGNATIONS. The Corporation's officers shall be a Chairman, a
Chief Executive Officer, a President, a Secretary, a Chief Financial Officer, a
Controller and a Treasurer. The Corporation may also have one or more Assistant
Secretaries and Assistant Treasurers and other officers. Any two offices may be
held by one person, provided that no person holding more than one office may
sign, in more than one capacity, any certificate or other instrument required by
law to be signed by two officers.

         8.2 APPOINTMENT OF CERTAIN OFFICERS. At the first meeting of each newly
elected Board, or at such other time when there shall be a vacancy, the Board
shall elect the Corporation's officers.

         8.3 APPOINTMENT OF OTHER OFFICERS. As soon as practicable after his or
her election, the Chief Executive Officer may appoint one or more Assistant
Secretaries, Assistant Treasurers and other officers. The Chief Executive
Officer shall, following such appointment or appointments, cause to be filed
with the minutes of the meeting of the Board an instrument specifying the
officers selected. The Chief Executive Officer may also appoint such other
employees and agents of the Corporation as he or she may deem necessary, or may
vest the authority to appoint such other employees and agents in such other of
the Corporation's officers as he or she deems appropriate subject in all cases
to his or her discretion. Whenever by law or the terms of the instrument, a
vice-president is necessary to execute any instrument in the absence of
execution by the Chief Executive Officer or the President, then the Chief
Financial Officer and any officer designated as a Director of a particular
function or designated in a specific grant of authority, shall be deemed a
vice-president of the Corporation for such purpose. Subject to these By-laws,
all of the officers, employees and


                                      -12-
<PAGE>


agents of the Corporation shall hold their offices or positions for such terms
and shall exercise such powers and perform such duties as shall be specified
from time to time by the Board or, except with respect to the Chairman of the
Board, the Chief Executive Officer.

         8.4 REMOVAL. The Board or, except with respect to the Chairman of the
Board, the Chief Executive Officer may remove any officer with or without cause
at any time. Any such removal shall be without prejudice to the contractual
rights of such officers, if any, with the Corporation, but the election of an
officer shall not in and of itself create contractual rights. Any vacancy
occurring in any office of the Corporation, other than Chairman of the Board, by
death, resignation, removal or otherwise may be filled by the Chief Executive
Officer until the next regular or special meeting of the Board.

         8.5 THE CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have
general and active responsibility for the management of the Corporation's
business, shall be responsible for implementing all orders and resolutions of
the Board, shall supervise the daily operations of the Corporation's business
and shall, in the absence of the Chairman, preside at meetings of the Board and
of the shareholders.

         8.6 AUTHORITY AND DUTIES OF OFFICERS. In the absence or disability of
the Chief Executive Officer, the President shall perform the duties and exercise
the powers of the Chief Executive Officer, and shall perform such other duties
as the Board shall prescribe.

         8.7 THE SECRETARY. The Secretary shall attend all meetings of the Board
and all meetings of the shareholders, record all votes and the minutes of all
proceedings in a book to be kept for that purpose, give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the Board,
and perform such other duties as may be prescribed by the Board or Chief
Executive Officer. The Secretary shall also keep in safe custody the
Corporation's seal, if any, and affix the seal to any instrument requiring it.

         8.8 THE PRESIDENT. The President shall report to the Chief Executive
Officer and the Board and shall perform such duties as may be requested from
time to time by the Board, the Chief Executive Officer, or the By-laws.

         8.9 THE CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be
the Corporation's principal financial officer and shall manage the Corporation's
financial affairs and direct the activities of the Treasurer and other officers
responsible for the Corporation's financial affairs. The Chief


                                      -13-
<PAGE>


Financial Officer may sign, execute and deliver in the name of the Corporation
contracts, bonds and other obligations, shall be responsible for all of the
Corporation's internal and external financial reporting and shall perform such
other duties as may be prescribed from time to time by the Board, the Chief
Executive Officer or the By-laws.

         8.10 THE TREASURER. As directed by the Chief Financial Officer, the
Treasurer shall have general custody of all funds and securities of the
Corporation. The Treasurer may sign, with the Chief Executive Officer, the
President, the Chief Financial Officer or such other person or persons as may be
designated for the purpose by the Board, all bills of exchange or promissory
notes of the Corporation. The Treasurer shall perform such other duties as may
be prescribed from time to time by the Chief Financial Officer or the By-laws.

         8.11 THE CONTROLLER. The Controller shall assist the Chief Financial
Officer as directed in accounting, financial reporting, bookkeeping and
accounting procedures and perform such other duties as may be prescribed from
time to time by the Chief Financial Officer.

                                SECTION 9. STOCK

         9.1 CERTIFICATES. Every holder of stock in the Corporation shall be
entitled to have a certificate signed by the President and the Secretary or an
Assistant Secretary evidencing the number and class (and series, if any) of
shares owned by him, containing such information as required by law and bearing
the seal of the Corporation. If any stock certificate is manually signed by a
transfer agent or registrar other than the Corporation itself or an employee of
the Corporation, the signature of any such officer may be a facsimile. In case
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.

         9.2 MISSING CERTIFICATES. The President may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. As a condition
precedent to the issuance of a new certificate or certificates, the officers of
the Corporation shall, unless dispensed with by the President, require the owner
of such lost, stolen or destroyed certificate or certificates, or his legal
representative, (i) to advertise or give the Corporation a bond or (ii) enter
into a written indemnity


                                      -14-
<PAGE>


agreement, in each case in an amount appropriate to indemnify the Corporation
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.

         9.3 TRANSFERS. Upon surrender to the Corporation or the transfer agent
of the Corporation, of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

                   SECTION 10. DETERMINATION OF SHAREHOLDERS

         10.1 RECORD DATE. For the purpose of determining shareholders entitled
to notice of and to vote at a meeting, or to receive a dividend, or to receive
or exercise subscription or other rights, or to participate in a
reclassification of stock, or in order to make a determination of shareholders
for any other proper purpose, the Board may fix in advance a record date for
determination of shareholders for such purpose, such date to be not more than
sixty days and, if fixed for the purpose of determining shareholders entitled to
notice of and to vote at a meeting, not less than ten days, prior to the date on
which the action requiring the determination of shareholder is to be taken.

         10.2 REGISTERED SHAREHOLDERS. Except as otherwise provided by law, the
Corporation, and its directors, officers and agents may recognize and treat a
person registered on its records as the owner of shares, as the owner in fact
thereof for all purposes, and as the person exclusively entitled to have and to
exercise all rights and privileges incident to the ownership of such shares, and
rights under this Section 10.2 shall not be affected by any actual constructive
notice that the Corporation, or any of its directors, officers or agents, may
have to the contrary.


                            SECTION 11. MISCELLANEOUS

         11.1 DIVIDENDS. Except as otherwise provided by law or the Articles of
Incorporation, dividends upon the stock of the Corporation may be declared by
the Board at any regular or special meeting. Dividends may be paid in cash,
property, or in shares of stock.

         11.2 CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or


                                      -15-
<PAGE>


persons as the Chief Executive Officer or the Board may from time to time
designate. Signatures of the authorized signatories may be by facsimile.

         11.3 FISCAL YEAR. The Board may adopt for and on behalf of the
Corporation a fiscal or a calendar year.

         11.4 SEAL. The Board may adopt a corporate seal, which seal shall have
inscribed thereon the name of the Corporation. The seal may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Failure to affix the seal shall not, however, affect the validity of any
instrument.

         11.5 GENDER. All pronouns and variations thereof used in these By-laws
shall be deemed to refer to the masculine, feminine or neuter gender, singular
or plural, as the identity of the person, persons, entity or entities referred
to require.

         11.6 CONTROL SHARE ACQUISITIONS. Effective as of October 18, 1994, the
provisions of Sections 135 through 140.2 of the Business Corporation Law of
Louisiana (as amended) shall not apply to acquisitions of shares of the
Corporation.

                          SECTION 12. INDEMNIFICATION

         The Corporation shall indemnify to the full extent permitted by law any
director, officer or employee against any expenses or costs, including
attorneys' fees, actually or reasonably incurred by him or her in connection
with any threatened, pending or completed claim, action, suit or proceeding,
whether criminal, civil, administrative or investigative, against such person or
as to which he or she is involved solely as a witness or person required to give
evidence because he or she is a director, officer or employee of the Corporation
or serves or served at the request of the Corporation with any other enterprise
as a director, officer or employee. For purposes of this Section 12, the term
"Corporation" shall include any predecessor of this Corporation and any
constituent corporation (including any constituent of a constituent) absorbed by
the Corporation in a consolidation or merger; the term "other enterprises" shall
include any corporation, partnership, joint venture, trust or employee benefit
plan; service "at the request of the Corporation" shall include service as a
director, officer or employee of the Corporation that imposes duties on, or
involves services by, such director, officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be deemed to
be indemnifiable expenses; and action by a person with respect to an employee


                                      -16-
<PAGE>


benefit plan that such person reasonably believes to be in the interest of the
participants and beneficiaries of such plan shall be deemed to be action not
opposed to the best interests of the Corporation.

                             SECTION 13. AMENDMENTS

         The Corporation's By-laws may be amended or repealed only by a majority
of the Board or the affirmative vote of the holders of at least a majority of
the total voting power at any regular or special meeting of shareholders, the
notice of which states that the proposed amendment or repeal is to be considered
at the meeting.


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