On May 15, 2019, about 1833 central daylight time, a Sikorsky S-76D helicopter, N761AF, sustained substantial damage while in cruise flight near Morrilton, Arkansas. The pilot, 2 crewmembers, and 3 passengers were not injured. The helicopter was operated as a Title 14 Code of Federal Regulations Part 135 on-demand air medical flight. The pilot reported that, 43 minutes into the flight, he experienced fumes in the cockpit. He turned the environmental control system off and immediately descended. Within seconds, he received visual and aural warnings of smoke in the aft baggage compartment. He initiated an emergency descent and declared an emergency with air traffic control and subsequently landed without further incident. A postaccident examination of the helicopter by a Federal Aviation Administration inspector revealed that the exhaust duct from the No. 2 engine was disconnected and not in its seated position. Exhaust from the No. 2 engine entered the compartment containing the tail rotor drive shaft and resulted in heat damage to drive shaft and surrounding areas. The exhaust ducts are attached using two bolts secured at 110 ft-lbs of pressure. Upon inspection of the No. 1 engine, as well as the operator’s second helicopter, all bolts were found partially disengaged and not tightened to the specified torque value.