Helmerich & Payne, Inc. Announces Third Quarter Fiscal 2019 Results
July 24, 2019
-
Quarterly
U.S. Land adjusted average rig revenue increased by more than$495 (1) per day, up approximately 2% sequentially -
Quarterly
U.S. Land adjusted average rig margin decreased by approximately$170 (1) per day, down roughly 2% sequentially - H&P upgraded 2 FlexRigs® to super-spec(2) capacity during the third fiscal quarter of 2019 and received multi-year term contracts with attractive pricing
-
The Company incurred a non-cash impairment charge of
$224 million related to excess drilling equipment and spares, primarily driven by the reduction of 53 rigs within our FlexRig4 fleet during the quarter -
The Company sent its first super-spec FlexRig to
Argentina and has a letter of intent to deploy a second super-spec FlexRig into the country with a different customer -
H&P's drilling automation technology, AutoSlideSM, has been commercially deployed in four
U.S. shale basins, with the next deployment scheduled during the fourth fiscal quarter -
On
June 5, 2019 , Directors of the Company declared a quarterly cash dividend of$0.71 per share
-
$0.15 of after-tax gains pertaining to early termination compensation, gains on sales, and discrete tax adjustments -
$(1.97) of after-tax losses pertaining to impairments of drilling equipment and spares mainly driven by the downsizing of the Flex4 rig fleet, inventory write-downs, abandonments and accelerated depreciation, and a non-cash fair market adjustment to our equity investments
Net cash provided by operating activities was
President and CEO
“Our expectation of seeing the bottom of the Company’s rig count during the quarter turned out to be premature as the full effect of the industry’s emphasis on disciplined capital spending continues to reverberate through the oil field services sector. As such, H&P exited the quarter in the
“We believe this market environment, with its renewed emphasis on spending discipline and returns, is ideal for demonstrating the benefits of H&P’s software solutions and the meaningful impact these technologies have on well economics through enhanced wellbore quality and placement. AutoSlide, H&P’s drilling automation technology, has been deployed commercially in four
“Our leadership position in the
Vice President and CFO
"It is important to point out three considerations regarding our Flex4 fleet. First, the Flex4 designed rigs are not currently economical candidates for upgrades or conversions to super-spec. Second, H&P started building these rigs in 2005 and has already received its full investment payback as well as generated excess returns over our internal hurdle rate on the Flex4 fleet. Third, over the next few quarters we anticipate realizing over
"We are pleased with H&P’s cash flow generation this quarter driven by healthy pricing levels and contractual terms as well as improvements in working capital management. Looking forward, our strong financial position and operating cash flow generation combined with our capex discipline, sets the Company up to deliver high levels of free cash flows.”
Operating Segment Results for the Third Quarter of Fiscal 2019
Segment operating income decreased by
Adjusted average rig revenue per day improved by
The adjusted average rig expense per day increased sequentially by
The segment’s depreciation expense for the quarter includes non-cash charges of
International Land Operations:
Segment operating income decreased by
Offshore Operations:
Segment operating income increased by
H&P Technologies:
The segment had an operating loss of
Operational Outlook for the Fourth Quarter of Fiscal 2019
- Quarterly revenue days expected to decrease by approximately 5%-6% sequentially representing a roughly 6%-7% decrease in the average number of active rigs; we expect to exit the quarter at between 193-203 active rigs
-
Average rig revenue per day expected to be down slightly to between
$25,250-$25,750 (excluding any impact from early termination revenue) with the primary cause of the decline relating to FlexApps now being included in HPT revenues in the fourth fiscal quarter -
Average rig expense per day expected to be between
$14,350-$14,850 - We expect to upgrade 1-2 FlexRigs to walking super-spec capabilities during the quarter
International Land Operations:
- Quarterly revenue days expected to increase slightly, representing an average rig count of 17-18 rigs for the quarter
-
Average rig margin per day expected to be flat at
$7,500-$8,500 due to rig start-up and mobilization costs
Offshore Operations:
- Quarterly revenue days expected to increase by approximately 1% sequentially, representing an average rig count of 6 rigs for the quarter
-
Average rig margin per day expected to be flat at
$12,000-$13,000 -
Management contracts expected to generate approximately
$2 million in operating income
HP Technologies:
-
Fiscal fourth quarter revenue, inclusive of FlexApps, is expected to be between
$17-$19 million
Other Estimates for Fiscal 2019
-
Capital expenditures are now expected to be at the lower end of our previous range of approximately
$500 to$530 million with roughly 35% expected for super-spec upgrades, 33-38% expected for maintenance and 27-32% expected for continued reactivations and other bulk purchases. -
Depreciation is now expected to be approximately
$565 million , inclusive of abandonment and accelerated depreciation charges estimated at approximately$15 million .
Select Items Included in Net Income per Diluted Share
Third Quarter of Fiscal 2019 net loss of
-
$0.01 of after-tax income from long-term contract early termination compensation from customers -
$0.06 of income tax adjustments related to certain discrete tax items -
$0.08 of after-tax gains related to the sale of used drilling equipment -
$(0.02) of non-cash after-tax losses from abandonment charges and accelerated depreciation related to the decommissioning of used drilling equipment -
$(0.06) of non-cash after-tax losses from inventory write-downs, some of which result from the downsizing of the Flex4 rig fleet -
$(0.11) of non-cash after-tax losses related to the fair market adjustment of equity investments -
$(1.78) of non-cash after-tax losses from impairments of drilling equipment and spares driven by the downsizing of the Flex4 rig fleet
Second Quarter of Fiscal 2019 net income of
-
$0.01 of after-tax income from long-term contract early termination compensation from customers -
$0.04 of non-cash after-tax gains related to the fair market adjustment of equity investments -
$0.08 of after-tax gains related to the sale of used drilling equipment -
$(0.04) of non-cash after-tax losses from abandonment charges and accelerated depreciation related to the decommissioning of used drilling equipment -
$(0.10) of non-cash after-tax losses from discontinued operations related to adjustments resulting from currency fluctuations
Conference Call
A conference call will be held on
About
Founded in 1920,
Forward-Looking Statements
This release includes “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of historical facts included in this release, including, without limitation, statements regarding the registrant’s future financial position, operations outlook, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. For information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s
Note Regarding Trademarks.
(1) See the Selected Statistical & Operational Highlights table(s) for details on the revenues or charges excluded on a per revenue day basis. The inclusion or exclusion of these amounts results in adjusted revenue, expense, and/or margin per day figures, which are all non-GAAP measures.
(2) The term “super-spec” herein refers to rigs with the following specifications: AC drive, 1,500 hp drawworks, 750,000 lbs. hookload rating, 7,500 psi mud circulating system and multiple-well pad capability.
(3) See the corresponding section of this release for details regarding the select items.
|
||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
As adjusted |
|
|
|
As adjusted |
|||||||||||||||
Operating revenues |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Contract drilling |
$ |
|
684,788 |
|
|
$ |
|
717,653 |
|
|
$ |
|
637,548 |
|
|
$ |
|
2,139,798 |
|
|
$ |
|
1,763,939 |
|
Other |
|
3,186 |
|
|
|
3,215 |
|
|
|
11,324 |
|
|
|
9,642 |
|
|
|
26,504 |
|
|||||
|
|
687,974 |
|
|
|
720,868 |
|
|
|
648,872 |
|
|
|
2,149,440 |
|
|
|
1,790,443 |
|
|||||
Operating costs and expenses |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Contract drilling operating expenses, excluding depreciation and amortization |
|
443,114 |
|
|
|
441,719 |
|
|
|
443,087 |
|
|
|
1,372,426 |
|
|
|
1,199,422 |
|
|||||
Operating expenses applicable to other revenues |
|
1,414 |
|
|
|
1,620 |
|
|
|
1,424 |
|
|
|
4,308 |
|
|
|
3,728 |
|
|||||
Depreciation and amortization |
|
143,297 |
|
|
|
143,161 |
|
|
|
144,579 |
|
|
|
427,917 |
|
|
|
433,521 |
|
|||||
Asset impairment charge |
|
224,327 |
|
|
— |
|
|
— |
|
|
|
224,327 |
|
|
— |
|
||||||||
Research and development |
|
7,066 |
|
|
|
7,262 |
|
|
|
5,479 |
|
|
|
21,347 |
|
|
|
13,149 |
|
|||||
Selling, general and administrative |
|
46,590 |
|
|
|
43,506 |
|
|
|
52,310 |
|
|
|
144,604 |
|
|
|
147,005 |
|
|||||
Gain on sale of assets |
|
(9,960 |
) |
|
|
(11,546 |
) |
|
|
(4,313 |
) |
|
|
(27,050 |
) |
|
|
(15,133 |
) |
|||||
|
|
855,848 |
|
|
|
625,722 |
|
|
|
642,566 |
|
|
|
2,167,879 |
|
|
|
1,781,692 |
|
|||||
Operating income (loss) from continuing operations |
|
(167,874 |
) |
|
|
95,146 |
|
|
|
6,306 |
|
|
|
(18,439 |
) |
|
|
8,751 |
|
|||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest and dividend income |
|
2,349 |
|
|
|
2,061 |
|
|
|
2,109 |
|
|
|
6,861 |
|
|
|
5,680 |
|
|||||
Interest expense |
|
(6,257 |
) |
|
|
(6,167 |
) |
|
|
(5,993 |
) |
|
|
(17,145 |
) |
|
|
(17,794 |
) |
|||||
Gain (loss) on investment securities |
|
(13,271 |
) |
|
|
5,878 |
|
|
— |
|
|
|
(50,228 |
) |
|
— |
|
|||||||
Other |
|
(1,599 |
) |
|
|
17 |
|
|
|
(61 |
) |
|
|
(1,051 |
) |
|
|
170 |
|
|||||
|
|
(18,778 |
) |
|
|
1,789 |
|
|
|
(3,945 |
) |
|
|
(61,563 |
) |
|
|
(11,944 |
) |
|||||
Income (loss) from continuing operations before income taxes |
|
(186,652 |
) |
|
|
96,935 |
|
|
|
2,361 |
|
|
|
(80,002 |
) |
|
|
(3,193 |
) |
|||||
Income tax provision (benefit) |
|
(32,031 |
) |
|
|
25,078 |
|
|
|
10,535 |
|
|
|
(5,602 |
) |
|
|
(494,028 |
) |
|||||
Income (loss) from continuing operations |
|
(154,621 |
) |
|
|
71,857 |
|
|
|
(8,174 |
) |
|
|
(74,400 |
) |
|
|
490,835 |
|
|||||
Income from discontinued operations before income taxes |
|
7,244 |
|
|
|
2,889 |
|
|
|
8,383 |
|
|
|
22,798 |
|
|
|
9,127 |
|
|||||
Income tax provision |
|
7,306 |
|
|
|
13,855 |
|
|
|
8,217 |
|
|
|
23,231 |
|
|
|
19,743 |
|
|||||
Income (loss) from discontinued operations |
|
(62 |
) |
|
|
(10,966 |
) |
|
|
166 |
|
|
|
(433 |
) |
|
|
(10,616 |
) |
|||||
Net income (loss) |
$ |
|
(154,683 |
) |
|
$ |
|
60,891 |
|
|
$ |
|
(8,008 |
) |
|
$ |
|
(74,833 |
) |
|
$ |
|
480,219 |
|
Basic earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from continuing operations |
$ |
|
(1.42 |
) |
|
$ |
|
0.65 |
|
|
$ |
|
(0.08 |
) |
|
$ |
|
(0.71 |
) |
|
$ |
|
4.47 |
|
Loss from discontinued operations |
$ |
|
— |
|
|
$ |
|
(0.10 |
) |
|
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
(0.10 |
) |
Net income (loss) |
$ |
|
(1.42 |
) |
|
$ |
|
0.55 |
|
|
$ |
|
(0.08 |
) |
|
$ |
|
(0.71 |
) |
|
$ |
|
4.37 |
|
Diluted earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from continuing operations |
$ |
|
(1.42 |
) |
|
$ |
|
0.65 |
|
|
$ |
|
(0.08 |
) |
|
$ |
|
(0.71 |
) |
|
$ |
|
4.45 |
|
Loss from discontinued operations |
$ |
|
— |
|
|
$ |
|
(0.10 |
) |
|
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
(0.10 |
) |
Net income (loss) |
$ |
|
(1.42 |
) |
|
$ |
|
0.55 |
|
|
$ |
|
(0.08 |
) |
|
$ |
|
(0.71 |
) |
|
$ |
|
4.35 |
|
Weighted average shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic |
|
109,425 |
|
|
|
109,406 |
|
|
|
108,905 |
|
|
|
109,324 |
|
|
|
108,818 |
|
|||||
Diluted |
|
109,425 |
|
|
|
109,503 |
|
|
|
108,905 |
|
|
|
109,324 |
|
|
|
109,338 |
|
|||||
“As Adjusted” – Effective
|
|||||||||
(Unaudited) |
|||||||||
(in thousands) |
|||||||||
|
|
|
|
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
2019 |
|
2018 |
||||||
Assets |
|
|
|
||||||
Cash and cash equivalents |
$ |
|
334,775 |
|
|
$ |
|
284,355 |
|
Short-term investments |
|
45,748 |
|
|
|
41,461 |
|
||
Other current assets |
|
735,715 |
|
|
|
789,734 |
|
||
Total current assets |
|
1,116,238 |
|
|
|
1,115,550 |
|
||
Investments |
|
48,291 |
|
|
|
98,696 |
|
||
Property, plant and equipment, net |
|
4,583,673 |
|
|
|
4,857,382 |
|
||
Other noncurrent assets |
|
149,177 |
|
|
|
143,239 |
|
||
Total Assets |
$ |
|
5,897,379 |
|
|
$ |
|
6,214,867 |
|
|
|
|
|
||||||
Liabilities and Shareholders' Equity |
|
|
|
||||||
Current liabilities |
$ |
|
390,526 |
|
|
$ |
|
377,168 |
|
Long-term debt, net of debt issuance costs |
|
491,651 |
|
|
|
493,968 |
|
||
Other noncurrent liabilities |
|
905,517 |
|
|
|
946,742 |
|
||
Noncurrent liabilities - discontinued operations |
|
14,631 |
|
|
|
14,254 |
|
||
Total shareholders’ equity |
|
4,095,054 |
|
|
|
4,382,735 |
|
||
Total Liabilities and Shareholders' Equity |
$ |
|
5,897,379 |
|
|
$ |
|
6,214,867 |
|
|
|||||||
(Unaudited) |
|||||||
(in thousands) |
|||||||
|
Nine Months Ended |
||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
2019 |
|
2018 |
||||
|
|
|
As adjusted |
||||
OPERATING ACTIVITIES: |
|
|
|
||||
Net income (loss) |
$ |
(74,833 |
) |
|
$ |
480,219 |
|
Adjustment for loss from discontinued operations |
433 |
|
|
10,616 |
|
||
Income (loss) from continuing operations |
(74,400 |
) |
|
490,835 |
|
||
Depreciation and amortization |
427,917 |
|
|
433,521 |
|
||
Asset impairment charge |
224,327 |
|
|
— |
|
||
Amortization of debt discount and debt issuance costs |
1,176 |
|
|
798 |
|
||
Provision for bad debt |
544 |
|
|
598 |
|
||
Stock-based compensation |
25,467 |
|
|
23,472 |
|
||
Loss on investment securities |
50,228 |
|
|
— |
|
||
Gain on sale of assets |
(27,050 |
) |
|
(15,133 |
) |
||
Deferred income tax benefit |
(25,503 |
) |
|
(498,491 |
) |
||
Other |
5,356 |
|
|
3,735 |
|
||
Changes in assets and liabilities |
51,365 |
|
|
(67,757 |
) |
||
Net cash provided by operating activities from continuing operations |
659,427 |
|
|
371,578 |
|
||
Net cash used in operating activities from discontinued operations |
(56 |
) |
|
(150 |
) |
||
Net cash provided by operating activities |
659,371 |
|
|
371,428 |
|
||
|
|
|
|
||||
INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
(403,570 |
) |
|
(322,658 |
) |
||
Purchase of short-term investments |
(71,852 |
) |
|
(52,159 |
) |
||
Payment for acquisition of business, net of cash acquired |
(2,781 |
) |
|
(47,886 |
) |
||
Proceeds from sale of short-term investments |
68,015 |
|
|
52,470 |
|
||
Proceeds from asset sales |
36,227 |
|
|
28,049 |
|
||
Net cash used in investing activities |
(373,961 |
) |
|
(342,184 |
) |
||
|
|
|
|
||||
FINANCING ACTIVITIES: |
|
|
|
||||
Dividends paid |
(235,058 |
) |
|
(230,368 |
) |
||
Debt issuance costs paid |
(3,912 |
) |
|
— |
|
||
Proceeds from stock option exercises |
2,901 |
|
|
5,160 |
|
||
Payments for employee taxes on net settlement of equity awards |
(6,420 |
) |
|
(5,978 |
) |
||
Payment of contingent consideration from acquisition of business |
— |
|
|
(10,625 |
) |
||
Net cash used in financing activities |
(242,489 |
) |
|
(241,811 |
) |
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
42,921 |
|
|
(212,567 |
) |
||
Cash and cash equivalents and restricted cash, beginning of period |
326,185 |
|
|
560,509 |
|
||
Cash and cash equivalents and restricted cash, end of period |
$ |
369,106 |
|
|
$ |
347,942 |
|
“As Adjusted” – Effective
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
SEGMENT REPORTING (in thousands) |
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
$ |
591,455 |
|
|
$ |
622,204 |
|
|
$ |
536,582 |
|
|
$ |
1,837,900 |
|
|
$ |
1,480,951 |
|
Direct operating expenses |
374,097 |
|
|
377,984 |
|
|
362,037 |
|
|
1,160,887 |
|
|
978,789 |
|
|||||
Research and development |
165 |
|
|
— |
|
|
— |
|
|
165 |
|
|
— |
|
|||||
Selling, general and administrative expense |
11,450 |
|
|
11,169 |
|
|
14,788 |
|
|
34,276 |
|
|
42,792 |
|
|||||
Depreciation |
127,040 |
|
|
126,912 |
|
|
125,418 |
|
|
378,062 |
|
|
373,211 |
|
|||||
Asset impairment charge |
216,908 |
|
|
— |
|
|
— |
|
|
216,908 |
|
|
— |
|
|||||
Segment operating income (loss) |
$ |
(138,205 |
) |
|
$ |
106,139 |
|
|
$ |
34,339 |
|
|
$ |
47,602 |
|
|
$ |
86,159 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue days |
19,846 |
|
|
21,262 |
|
|
19,917 |
|
|
63,040 |
|
|
56,946 |
|
|||||
Average rig revenue per day |
$ |
26,155 |
|
|
$ |
25,681 |
|
|
$ |
23,698 |
|
|
$ |
25,686 |
|
|
$ |
23,027 |
|
Average rig expense per day |
$ |
15,202 |
|
|
$ |
14,195 |
|
|
$ |
14,934 |
|
|
$ |
14,947 |
|
|
$ |
14,209 |
|
Average rig margin per day |
$ |
10,953 |
|
|
$ |
11,486 |
|
|
$ |
8,764 |
|
|
$ |
10,739 |
|
|
$ |
8,818 |
|
Rig utilization |
62 |
% |
|
67 |
% |
|
63 |
% |
|
66 |
% |
|
60 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INTERNATIONAL LAND OPERATIONS |
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
$ |
46,283 |
|
|
$ |
50,808 |
|
|
$ |
63,297 |
|
|
$ |
163,378 |
|
|
$ |
178,970 |
|
Direct operating expenses |
34,146 |
|
|
33,051 |
|
|
46,810 |
|
|
114,736 |
|
|
132,796 |
|
|||||
Selling, general and administrative expense |
1,150 |
|
|
794 |
|
|
995 |
|
|
4,225 |
|
|
2,959 |
|
|||||
Depreciation |
8,591 |
|
|
8,995 |
|
|
11,160 |
|
|
27,423 |
|
|
36,044 |
|
|||||
Asset impairment charge |
7,419 |
|
|
— |
|
|
— |
|
|
7,419 |
|
|
— |
|
|||||
Segment operating income (loss) |
$ |
(5,023 |
) |
|
$ |
7,968 |
|
|
$ |
4,332 |
|
|
$ |
9,575 |
|
|
$ |
7,171 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue days |
1,510 |
|
|
1,559 |
|
|
1,762 |
|
|
4,828 |
|
|
4,878 |
|
|||||
Average rig revenue per day |
$ |
29,669 |
|
|
$ |
31,130 |
|
|
$ |
33,941 |
|
|
$ |
32,285 |
|
|
$ |
34,919 |
|
Average rig expense per day |
$ |
21,650 |
|
|
$ |
19,269 |
|
|
$ |
23,947 |
|
|
$ |
21,261 |
|
|
$ |
24,941 |
|
Average rig margin per day |
$ |
8,019 |
|
|
$ |
11,861 |
|
|
$ |
9,994 |
|
|
$ |
11,024 |
|
|
$ |
9,978 |
|
Rig utilization |
51 |
% |
|
54 |
% |
|
51 |
% |
|
55 |
% |
|
47 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OFFSHORE OPERATIONS |
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
$ |
37,674 |
|
|
$ |
34,583 |
|
|
$ |
37,669 |
|
|
$ |
109,167 |
|
|
$ |
104,018 |
|
Direct operating expenses |
28,869 |
|
|
26,984 |
|
|
30,146 |
|
|
82,158 |
|
|
74,863 |
|
|||||
Selling, general and administrative expense |
1,145 |
|
|
805 |
|
|
1,126 |
|
|
2,719 |
|
|
3,397 |
|
|||||
Depreciation |
2,582 |
|
|
2,263 |
|
|
2,617 |
|
|
7,512 |
|
|
7,804 |
|
|||||
Segment operating income |
$ |
5,078 |
|
|
$ |
4,531 |
|
|
$ |
3,780 |
|
|
$ |
16,778 |
|
|
$ |
17,954 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue days |
546 |
|
|
540 |
|
|
574 |
|
|
1,611 |
|
|
1,484 |
|
|||||
Average rig revenue per day |
$ |
39,643 |
|
|
$ |
31,361 |
|
|
$ |
35,293 |
|
|
$ |
35,561 |
|
|
$ |
34,924 |
|
Average rig expense per day |
$ |
27,222 |
|
|
$ |
25,941 |
|
|
$ |
30,607 |
|
|
$ |
26,276 |
|
|
$ |
26,394 |
|
Average rig margin per day |
$ |
12,421 |
|
|
$ |
5,420 |
|
|
$ |
4,686 |
|
|
$ |
9,285 |
|
|
$ |
8,530 |
|
Rig utilization |
75 |
% |
|
75 |
% |
|
79 |
% |
|
74 |
% |
|
68 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
H&P TECHNOLOGIES |
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
$ |
9,376 |
|
|
$ |
10,141 |
|
|
$ |
7,693 |
|
|
$ |
29,353 |
|
|
$ |
16,842 |
|
Direct operating expenses |
6,357 |
|
|
4,214 |
|
|
4,500 |
|
|
15,859 |
|
|
14,105 |
|
|||||
Research and development |
4,801 |
|
|
7,262 |
|
|
5,479 |
|
|
19,082 |
|
|
13,149 |
|
|||||
Selling, general and administrative expense |
5,204 |
|
|
4,782 |
|
|
5,071 |
|
|
16,085 |
|
|
10,889 |
|
|||||
Depreciation and amortization |
1,824 |
|
|
1,816 |
|
|
1,695 |
|
|
5,415 |
|
|
5,099 |
|
|||||
Segment operating loss |
$ |
(8,810 |
) |
|
$ |
(7,933 |
) |
|
$ |
(9,052 |
) |
|
$ |
(27,088 |
) |
|
$ |
(26,400 |
) |
Operating statistics exclude the effects of offshore platform management contracts and gains and losses from translation of foreign currency transactions and do not include reimbursements of “out-of-pocket” expenses in revenue per day, expense per day and margin calculations.
Reimbursed amounts were as follows:
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
|
$ |
72,386 |
|
|
$ |
76,172 |
|
|
$ |
64,587 |
|
|
$ |
218,648 |
|
|
$ |
169,652 |
|
International Land Operations |
1,483 |
|
|
2,277 |
|
|
3,492 |
|
|
7,506 |
|
|
8,634 |
|
|||||
Offshore Operations |
7,277 |
|
|
5,507 |
|
|
5,057 |
|
|
18,534 |
|
|
14,354 |
|
|||||
Segment operating income for all segments is a non-GAAP financial measure of the Company’s performance, as it excludes general and administrative expenses, corporate depreciation, income from asset sales, and other corporate income and expense. The Company considers segment operating income to be an important supplemental measure of operating performance for presenting trends in the Company’s core businesses. This measure is used by the Company to facilitate period-to-period comparisons in operating performance of the Company’s reportable segments in the aggregate by eliminating items that affect comparability between periods. The Company believes that segment operating income is useful to investors because it provides a means to evaluate the operating performance of the segments and the Company on an ongoing basis using criteria that are used by our internal decision makers. Additionally, it highlights operating trends and aids analytical comparisons. However, segment operating income has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect the Company’s operating performance in future periods.
The following table reconciles operating income (loss) per the information above to income (loss) from continuing operations before income taxes as reported on the Consolidated Statements of Operations.
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
(in thousands) |
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
|
|
|
|
|
As adjusted |
|
|
|
As adjusted |
||||||||||
Operating income (loss) |
|
|
|
|
|
|
|
|
|
||||||||||
|
$ |
(138,205 |
) |
|
$ |
106,139 |
|
|
$ |
34,339 |
|
|
$ |
47,602 |
|
|
$ |
86,159 |
|
International Land |
(5,023 |
) |
|
7,968 |
|
|
4,332 |
|
|
9,575 |
|
|
7,171 |
|
|||||
Offshore |
5,078 |
|
|
4,531 |
|
|
3,780 |
|
|
16,778 |
|
|
17,954 |
|
|||||
H&P Technologies |
(8,810 |
) |
|
(7,933 |
) |
|
(9,052 |
) |
|
(27,088 |
) |
|
(26,400 |
) |
|||||
Other |
(731 |
) |
|
1,165 |
|
|
1,826 |
|
|
1,988 |
|
|
4,842 |
|
|||||
Segment operating income (loss) |
$ |
(147,691 |
) |
|
$ |
111,870 |
|
|
$ |
35,225 |
|
|
$ |
48,855 |
|
|
$ |
89,726 |
|
Gain on sale of assets |
9,960 |
|
|
11,546 |
|
|
4,313 |
|
|
27,050 |
|
|
15,133 |
|
|||||
Corporate selling, general and administrative costs and corporate depreciation |
(30,143 |
) |
|
(28,270 |
) |
|
(33,232 |
) |
|
(94,344 |
) |
|
(96,108 |
) |
|||||
Operating income (loss) |
$ |
(167,874 |
) |
|
$ |
95,146 |
|
|
$ |
6,306 |
|
|
$ |
(18,439 |
) |
|
$ |
8,751 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
||||||||||
Interest and dividend income |
2,349 |
|
|
2,061 |
|
|
2,109 |
|
|
6,861 |
|
|
5,680 |
|
|||||
Interest expense |
(6,257 |
) |
|
(6,167 |
) |
|
(5,993 |
) |
|
(17,145 |
) |
|
(17,794 |
) |
|||||
Gain (loss) on investment securities |
(13,271 |
) |
|
5,878 |
|
|
— |
|
|
(50,228 |
) |
|
— |
|
|||||
Other |
(1,599 |
) |
|
17 |
|
|
(61 |
) |
|
(1,051 |
) |
|
170 |
|
|||||
Total unallocated amounts |
(18,778 |
) |
|
1,789 |
|
|
(3,945 |
) |
|
(61,563 |
) |
|
(11,944 |
) |
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations before income taxes |
$ |
(186,652 |
) |
|
$ |
96,935 |
|
|
$ |
2,361 |
|
|
$ |
(80,002 |
) |
|
$ |
(3,193 |
) |
“As Adjusted” – Effective
SUPPLEMENTARY STATISTICAL INFORMATION |
|||||||||
Unaudited |
|||||||||
|
|||||||||
SELECTED STATISTICAL & OPERATIONAL HIGHLIGHTS |
|||||||||
(Used to determine adjusted per day statistics for revenue and expense, which are non-GAAP measures) |
|||||||||
|
Three Months Ended |
||||||||
(in dollars per revenue day) |
|
|
|
||||||
|
|
|
|
||||||
Total impact on |
$ |
|
33 |
|
|
$ |
|
57 |
|
Total impact on |
|
340 |
|
|
0 |
||||
International Land Operations |
|
|
|
||||||
Total impact on International Land revenue per day: |
$ |
|
115 |
|
|
$ |
|
0 |
|
|
|||||||||||
|
|
|
|
|
|
|
Q3FY19 |
||||
|
2019 |
|
2019 |
|
2019 |
|
Average |
||||
|
|
|
|
|
|
|
|
||||
Term Contract Rigs |
138 |
|
|
143 |
|
|
146 |
|
|
142.4 |
|
Spot Contract Rigs |
69 |
|
|
71 |
|
|
80 |
|
|
75.7 |
|
Total Contracted Rigs |
207 |
|
|
214 |
|
|
226 |
|
|
218.1 |
|
Idle or Other Rigs |
92 |
|
|
85 |
|
|
124 |
|
|
131.9 |
|
Total Marketable Fleet |
299 |
|
|
299 |
|
|
350 |
|
|
350.0 |
|
H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS |
||||||||||||||||||||
Number of Rigs Already Under Long-Term Contracts(1) |
||||||||||||||||||||
(Estimated Quarterly Average — as of 07/24/19) |
||||||||||||||||||||
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|||||||
Segment |
FY19 |
|
FY20 |
|
FY20 |
|
FY20 |
|
FY20 |
|
FY21 |
|
FY21 |
|||||||
|
137.9 |
|
|
120.6 |
|
|
91.7 |
|
|
76.5 |
|
|
62.1 |
|
|
44.1 |
|
|
18.9 |
|
International Land Operations |
11.7 |
|
|
11.0 |
|
|
7.2 |
|
|
2.1 |
|
|
1.0 |
|
|
1.0 |
|
|
1.0 |
|
Offshore Operations |
0.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total |
149.6 |
|
|
131.6 |
|
|
98.9 |
|
|
78.6 |
|
|
63.1 |
|
|
45.1 |
|
|
19.9 |
|
(1) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190724005871/en/
investor.relations@hpinc.com
(918) 588‑5190
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