Helmerich & Payne, Inc. Announces Second Quarter Results
April 25, 2013
Chairman and CEO
The Company also announced today that it has entered into agreements with two exploration and production companies to build and operate two additional FlexRigs®* in the U.S. In addition, the Company entered an agreement to build a new 3,000 horsepower AC drive rig which is scheduled to begin operations in
For the six months ended
Segment operating income for U.S. land operations was
Segment operating income for the Company's offshore operations was
The Company's international land operations reported segment operating income of
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, 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 & Analysis of Results of Operations and Financial Condition" sections of the Company's
*FlexRig® is a registered trademark of
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Unaudited | |||||
(in thousands, except per share data) | |||||
Three Months Ended | Six Months Ended | ||||
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CONSOLIDATED STATEMENTS OF INCOME | 2012 | 2013 | 2012 | 2013 | 2012 |
Operating Revenues: | |||||
Drilling – U.S. Land |
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Drilling – Offshore | 57,718 | 55,605 | 43,421 | 113,323 | 94,213 |
Drilling – International Land | 87,267 | 94,092 | 64,088 | 181,359 | 124,823 |
Other | 3,557 | 2,902 | 3,669 | 6,459 | 6,951 |
844,572 | 838,309 | 769,982 | 1,682,881 | 1,502,570 | |
Operating costs and expenses: | |||||
Operating costs, excluding depreciation | 466,871 | 461,737 | 448,208 | 928,608 | 839,240 |
Depreciation | 106,599 | 112,433 | 90,934 | 219,032 | 177,222 |
General and administrative | 32,421 | 32,836 | 27,805 | 65,257 | 53,968 |
Research and development | 3,353 | 3,696 | 3,830 | 7,049 | 7,079 |
Income from asset sales | (5,219) | (5,313) | (7,820) | (10,532) | (12,503) |
604,025 | 605,389 | 562,957 | 1,209,414 | 1,065,006 | |
Operating income | 240,547 | 232,920 | 207,025 | 473,467 | 437,564 |
Other income (expense): | |||||
Interest and dividend income | 426 | 315 | 356 | 741 | 692 |
Interest expense | (1,308) | (1,186) | (2,421) | (2,494) | (4,882) |
Gain on sale of investment securities | 8,752 | -- | -- | 8,752 | -- |
Other | (2,084) | 103 | (42) | (1,981) | (21) |
5,786 | (768) | (2,107) | 5,018 | (4,211) | |
Income from continuing operations before income taxes | 246,333 | 232,152 | 204,918 | 478,485 | 433,353 |
Income tax provision | 86,722 | 81,085 | 75,155 | 167,807 | 159,293 |
Income from continuing operations | 159,611 | 151,067 | 129,763 | 310,678 | 274,060 |
Loss from discontinued operations, before income taxes | (8) | (472) | (44) | (480) | (55) |
Income tax provision | -- | (485) | -- | (485) | -- |
Income (loss) from discontinued operations | (8) | 13 | (44) | 5 | (55) |
NET INCOME |
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Basic earnings per common share: | |||||
Income from continuing operations |
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Income from discontinued operations | $ -- | $ -- | $ -- | $ -- | $ -- |
Net income |
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Diluted earnings per common share: | |||||
Income from continuing operations |
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Income from discontinued operations | $ -- | $ -- | $ -- | $ -- | $ -- |
Net income |
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Weighted average shares outstanding: | |||||
Basic | 105,867 | 106,326 | 107,385 | 106,094 | 107,285 |
Diluted | 107,412 | 107,786 | 109,042 | 107,640 | 108,925 |
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Unaudited | ||
(in thousands) | ||
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CONSOLIDATED CONDENSED BALANCE SHEETS | 2013 | 2012 |
ASSETS | ||
Cash and cash equivalents |
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Other current assets | 754,910 | 791,514 |
Current assets of discontinued operations | 4,073 | 7,619 |
Total current assets | 931,976 | 895,228 |
Investments | 501,383 | 451,144 |
Net property, plant, and equipment | 4,560,562 | 4,351,571 |
Other assets | 18,531 | 23,142 |
TOTAL ASSETS |
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LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities |
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Current liabilities of discontinued operations | 3,647 | 5,129 |
Total current liabilities | 304,537 | 381,164 |
Non-current liabilities | 1,337,857 | 1,307,433 |
Non-current liabilities of discontinued operations | 426 | 2,490 |
Long-term notes payable | 195,000 | 195,000 |
Total shareholders' equity | 4,174,632 | 3,834,998 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
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Unaudited | ||
(in thousands) | ||
Six Months Ended | ||
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | 2013 | 2012 |
OPERATING ACTIVITIES: | ||
Net income |
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Adjustment for (income) loss from discontinued operations | (5) | 55 |
Income from continuing operations | 310,678 | 274,060 |
Depreciation | 219,032 | 177,222 |
Changes in assets and liabilities | (32,408) | (8,664) |
Gain on sale of assets and investment securities | (19,284) | (12,503) |
Other | 16,290 | 8,762 |
Net cash provided by operating activities from continuing operations | 494,308 | 438,877 |
Net cash provided by (used in) operating activities from discontinued operations | 5 | (55) |
Net cash provided by operating activities | 494,313 | 438,822 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (438,473) | (492,701) |
Proceeds from sale of assets | 34,253 | 25,543 |
Net cash used in investing activities | (404,220) | (467,158) |
FINANCING ACTIVITIES: | ||
Dividends paid | (23,469) | (15,070) |
Exercise of stock options | 4,906 | 1,895 |
Tax withholdings related to net share settlements of restricted stock | (1,677) | (1,514) |
Excess tax benefit from stock-based compensation | 7,045 | 3,164 |
Net cash used in financing activities | (13,195) | (11,525) |
Net increase (decrease) in cash and cash equivalents | 76,898 | (39,861) |
Cash and cash equivalents, beginning of period | 96,095 | 364,246 |
Cash and cash equivalents, end of period |
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SEGMENT REPORTING | Three Months Ended | Six Months Ended | |||
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2012 | 2013 | 2012 | 2013 | 2012 | |
(in thousands, except days and per day amounts) | |||||
U.S. LAND OPERATIONS | |||||
Revenues |
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Direct operating expenses | 361,068 | 354,170 | 362,898 | 715,238 | 675,204 |
General and administrative expense | 9,321 | 9,057 | 8,195 | 18,378 | 15,493 |
Depreciation | 91,253 | 96,485 | 77,752 | 187,738 | 151,221 |
Segment operating income |
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Revenue days | 21,743 | 21,847 | 21,444 | 43,590 | 42,412 |
Average rig revenue per day |
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Average rig expense per day |
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Average rig margin per day |
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Rig utilization | 82% | 82% | 91% | 82% | 91% |
OFFSHORE OPERATIONS | |||||
Revenues |
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Direct operating expenses | 37,207 | 36,106 | 28,473 | 73,313 | 61,674 |
General and administrative expense | 2,235 | 2,159 | 1,955 | 4,394 | 3,687 |
Depreciation | 3,270 | 3,690 | 3,175 | 6,960 | 6,830 |
Segment operating income |
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Revenue days | 736 | 720 | 627 | 1,456 | 1,324 |
Average rig revenue per day |
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Average rig expense per day |
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Average rig margin per day |
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Rig utilization | 89% | 89% | 74% | 89% | 79% |
INTERNATIONAL LAND OPERATIONS | |||||
Revenues |
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Direct operating expenses | 68,639 | 71,692 | 56,637 | 140,331 | 101,801 |
General and administrative expense | 1,039 | 910 | 795 | 1,949 | 1,573 |
Depreciation | 8,478 | 8,321 | 7,630 | 16,799 | 14,484 |
Segment operating income (loss) |
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$ (974) |
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Revenue days | 2,237 | 2,023 | 1,761 | 4,260 | 3,490 |
Average rig revenue per day |
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Average rig expense per day |
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Average rig margin per day |
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Rig utilization | 85% | 78% | 75% | 81% | 77% |
Operating statistics exclude the effects of offshore platform management contracts, 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: | |||||
U.S. Land Operations |
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Offshore Operations |
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International Land Operations |
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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 per the information above to income from continuing operations before income taxes as reported on the Consolidated Statements of Income (in thousands).
Three Months Ended | Six Months Ended | ||||
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2012 | 2013 | 2012 | 2013 | 2012 | |
Operating income | |||||
U.S. Land |
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Offshore | 15,006 | 13,650 | 9,818 | 28,656 | 22,022 |
International Land | 9,111 | 13,169 | (974) | 22,280 | 6,965 |
Other | (1,635) | (2,539) | (1,833) | (4,174) | (3,621) |
Segment operating income |
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Corporate general and administrative | (19,826) | (20,710) | (16,860) | (40,536) | (33,215) |
Other depreciation | (2,934) | (3,307) | (1,668) | (6,241) | (3,224) |
Inter-segment elimination | 1,218 | 1,346 | 763 | 2,564 | 1,469 |
Income from asset sales | 5,219 | 5,313 | 7,820 | 10,532 | 12,503 |
Operating income |
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Other income (expense): | |||||
Interest and dividend income | 426 | 315 | 356 | 741 | 692 |
Interest expense | (1,308) | (1,186) | (2,421) | (2,494) | (4,882) |
Gain on sale of investment securities | 8,752 | -- | -- | 8,752 | -- |
Other | (2,084) | 103 | (42) | (1,981) | (21) |
Total other income (expense) | 5,786 | (768) | (2,107) | 5,018 | (4,211) |
Income from continuing operations before income taxes | |||||
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CONTACT: Investor Relations investor.relations@hpinc.com (918) 588-5207Source: