Helmerich & Payne, Inc. Announces Fourth Quarter & Fiscal Year End Results
November 14, 2019
-
H&P generated
$856 million in operating cash flow during fiscal 2019 representing an increase of approximately$300 million from the prior year -
During the fourth fiscal quarter, even though completing an acquisition, repurchasing debt and shares, the Company increased its cash and short-term investment position by approximately
$20 million from the prior quarter -
Quarterly
U.S. Land revenue decreased$39 million to$545 million sequentially, while operating margins decreased by$23 million to$188 million sequentially; revenue days decreased to 18,765 from 19,846 in the prior quarter -
Quarterly
U.S. Land adjusted average rig revenue of$25,365 per day decreased by roughly$400 (1) per day, down approximately 2% sequentially, while quarterlyU.S. Land adjusted average rig margin of roughly$10,400 per day decreased by approximately$520 (1) per day, down roughly 5% sequentially -
The Company has signed letters of intent (LOIs) to deploy rigs in
Bahrain ,Abu Dhabi andColombia -
H&P's drilling automation technology, AutoSlideSM, has been commercially deployed in four
U.S. shale basins, and has drilled over 100 wells and 1.7 million feet of hole -
On
September 4, 2019 , Directors of the Company declared a quarterly cash dividend of$0.71 per share - During a challenging year, H&P exhibited its strengths and market leadership by generating strong cash flows, gaining market share, paying an industry leading dividend, and maintaining a strong balance sheet
-
$0.13 of after-tax gains pertaining to early termination compensation, gains on sales and a reduction in the fair value of a contingent liability -
$(0.14) of after-tax losses pertaining to abandonments and accelerated depreciation, bond redemption fees, a lawsuit settlement, losses from discontinued operations, acquisition costs and a net loss related to our equity investments
Net cash provided by operating activities was
For the fiscal year 2019, the Company reported a net loss of
President and CEO
"In addition to capital spending discipline, customers are becoming more selective in the quality and capability of the rigs they employ, as the decline in legacy rigs drilling horizontal wells is more pronounced compared to the decline felt in the super-spec(3) space. In previous industry down drafts, we've experienced rigs released regardless of performance or capability, so this discernment on rig performance is welcome news. Rig contractors continue to write off legacy rig fleets, resulting from low-performing, less capable rigs in the U.S. market. Despite the softness experienced this year, super-spec utilization is still strong in the most active basins and the Company has remained disciplined in its approach to pricing. We believe services and solutions that deliver lower costs and better well performance deserve compensation that is commensurate to the value they add. Our people and technology are making that happen every day.
"The results from our H&P Technologies (HPT) segment this quarter are not only reflective of the decreased drilling activity, but also the slow and often difficult process of introducing change into the industry. HPT's purpose is to drive development of an autonomous drilling platform that improves safety, drilling consistency and accuracy, completions costs and better well economics for our customers. One example of this is AutoSlide, which is automated sliding while directional drilling, and it is currently commercialized in four
"The traction we experienced in the prior quarter with regard to our international markets continues. The Company signed letters of intent to deploy a third FlexRig in
Vice President and CFO
"Additionally, during the fourth fiscal quarter we made a decision to rationalize a portion of our equity holdings. Utilizing these proceeds and cash on hand, the Company funded debt redemptions and share repurchases. H&P’s ability to generate relatively strong cash flow and maintain our strong balance sheet positioned us well to address challenges and opportunities while we continued to fund a strong dividend during this past fiscal year.”
Operating Segment Results for the Fourth Quarter of Fiscal 2019
Segment operating income increased by
Adjusted average rig revenue per day declined by
The segment’s depreciation expense for the quarter includes non-cash charges of
International Land Operations:
The segment operating loss decreased by
Offshore Operations:
Segment operating income decreased by
H&P Technologies(4):
The segment had operating income of
Operational Outlook for the First Quarter of Fiscal 2020
- Quarterly revenue days expected to decrease by approximately 5.5%-6.5% sequentially; we expect to exit the quarter at between 187-197 active rigs
-
Average rig revenue per day expected to be down slightly to between
$24,750-$25,250 (excluding any impact from early termination revenue) -
Average rig expense per day expected to be between
$14,350-$14,850
International Land Operations:
- Quarterly revenue days expected to decrease roughly 2% sequentially, representing an average rig count of approximately 17 rigs for the quarter
-
Average rig margin per day expected to decrease to
$3,000-$4,000 as result of rig start-up costs inAbu Dhabi ,Bahrain andColombia
Offshore Operations:
- Quarterly revenue days expected to decrease by approximately 15% sequentially, representing an average rig count of 5 rigs for the quarter as one rig returns to the shipyard for repairs prior to redeployment
-
Average rig margin per day expected to increase to
$12,000-$13,000 -
Management contracts expected to generate approximately
$2 million in operating income
H&P Technologies:
-
Fiscal first quarter revenue is expected to be between
$15-$18 million
Other Estimates for Fiscal 2020
-
Capital expenditures are expected to be approximately
$275 to$300 million ; 57-62% expected for maintenance, 17-19% expected for tubular purchases, 11-15% for skidding to walking conversions, and roughly 10% for corporate and information technology projects -
General and administrative expenses for fiscal 2020 are expected to be approximately
$200 million -
Depreciation is expected to be approximately
$540 million
Select Items Included in Net Income per Diluted Share
Fourth Quarter of Fiscal 2019 net income of
-
$0.01 of after-tax income from long-term contract early termination compensation from customers -
$0.05 of after-tax gains related to the change in fair value of a contingent liability -
$0.07 of after-tax gains related to the sale of used drilling equipment -
$(0.01) of after-tax losses related to bond redemption fees -
$(0.01) of after-tax losses related to acquisition costs -
$(0.01) of after-tax losses from discontinued operations related to adjustments resulting from currency fluctuations -
$(0.02) of a net after-tax loss related to the fair market adjustments to equity investments and the sale of a portion of equity investments -
$(0.03) of non-cash after-tax losses from abandonment charges and accelerated depreciation related to the decommissioning of used drilling equipment -
$(0.06) of after-tax losses from the settlement of a lawsuit
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
Fiscal 2019 net loss of
-
$0.05 of after-tax gains related to the change in fair value of a contingent liability -
$0.07 of income tax adjustments related to certain discrete tax items -
$0.08 of after-tax income from long-term contract early termination compensation from customers -
$0.27 of after-tax gains related to the sale of used drilling equipment -
$(0.01) of after-tax losses related to acquisition costs -
$(0.01) of after-tax losses from discontinued operations related to adjustments resulting from currency fluctuations -
$(0.03) of after-tax losses related to bond exchange and redemption fees -
$(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 from abandonment charges and accelerated depreciation related to the decommissioning of used drilling equipment -
$(0.18) of after-tax losses from the settlement of lawsuits -
$(0.38) of a net after-tax loss related to the fair market adjustments of equity investments and the sale of a portion 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
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) See the corresponding section of this release for details regarding the select items.
(3) 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.
(4) Fiscal third quarter 2019 U.S. Land and H&P Technologies segment results have been adjusted to reflect the reclassification of FlexApp revenues and expenses from the
|
|||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||
(in thousands, except per share data) |
|||||||||||||||||||||
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
As adjusted |
|
|
|
As adjusted |
|||||||||||
Operating revenues |
|
|
|
|
|
|
|
|
|
|
|||||||||||
Contract drilling services |
|
$ |
645,759 |
|
|
$ |
684,788 |
|
|
$ |
693,677 |
|
|
$ |
2,785,557 |
|
|
$ |
2,474,458 |
|
|
Other |
|
3,291 |
|
|
3,186 |
|
|
3,148 |
|
|
12,933 |
|
|
12,810 |
|
||||||
|
|
649,050 |
|
|
687,974 |
|
|
696,825 |
|
|
2,798,490 |
|
|
2,487,268 |
|
||||||
Operating costs and expenses |
|
|
|
|
|
|
|
|
|
|
|||||||||||
Contract drilling services operating expenses, excluding depreciation and amortization |
|
430,778 |
|
|
443,114 |
|
|
448,135 |
|
|
1,803,204 |
|
|
1,647,557 |
|
||||||
Operating expenses applicable to other revenues |
|
1,072 |
|
|
1,414 |
|
|
1,325 |
|
|
5,382 |
|
|
5,053 |
|
||||||
Depreciation and amortization |
|
134,887 |
|
|
143,297 |
|
|
150,281 |
|
|
562,803 |
|
|
583,802 |
|
||||||
Research and development |
|
6,121 |
|
|
7,066 |
|
|
5,018 |
|
|
27,467 |
|
|
18,167 |
|
||||||
Selling, general and administrative |
|
49,812 |
|
|
46,590 |
|
|
52,252 |
|
|
194,416 |
|
|
199,257 |
|
||||||
Asset impairment charge |
|
— |
|
|
224,327 |
|
|
23,128 |
|
|
224,327 |
|
|
23,128 |
|
||||||
Gain on sale of assets |
|
(12,641 |
) |
|
(9,960 |
) |
|
(7,527 |
) |
|
(39,691 |
) |
|
(22,660 |
) |
||||||
|
|
610,029 |
|
|
855,848 |
|
|
672,612 |
|
|
2,777,908 |
|
|
2,454,304 |
|
||||||
Operating income (loss) from continuing operations |
|
39,021 |
|
|
(167,874 |
) |
|
24,213 |
|
|
20,582 |
|
|
32,964 |
|
||||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest and dividend income |
|
2,607 |
|
|
2,349 |
|
|
2,337 |
|
|
9,468 |
|
|
8,017 |
|
||||||
Interest expense |
|
(8,043 |
) |
|
(6,257 |
) |
|
(6,471 |
) |
|
(25,188 |
) |
|
(24,265 |
) |
||||||
Gain (loss) on investment securities |
|
(4,260 |
) |
|
(13,271 |
) |
|
(1 |
) |
|
(54,488 |
) |
|
1 |
|
||||||
Other |
|
(546 |
) |
|
(1,598 |
) |
|
1,146 |
|
|
(1,596 |
) |
|
(876 |
) |
||||||
|
|
(10,242 |
) |
|
(18,777 |
) |
|
(2,989 |
) |
|
(71,804 |
) |
|
(17,123 |
) |
||||||
Income (loss) from continuing operations before income taxes |
|
28,779 |
|
|
(186,651 |
) |
|
21,224 |
|
|
(51,222 |
) |
|
15,841 |
|
||||||
Income tax provision (benefit) |
|
(13,110 |
) |
|
(32,031 |
) |
|
16,859 |
|
|
(18,712 |
) |
|
(477,169 |
) |
||||||
Income (loss) from continuing operations |
|
41,889 |
|
|
(154,620 |
) |
|
4,365 |
|
|
(32,510 |
) |
|
493,010 |
|
||||||
Income (loss) from discontinued operations before income taxes |
|
10,050 |
|
|
7,244 |
|
|
14,262 |
|
|
32,848 |
|
|
23,389 |
|
||||||
Income tax provision |
|
10,763 |
|
|
7,306 |
|
|
13,984 |
|
|
33,994 |
|
|
33,727 |
|
||||||
Income (loss) from discontinued operations |
|
(713 |
) |
|
(62 |
) |
|
278 |
|
|
(1,146 |
) |
|
(10,338 |
) |
||||||
Net income (loss) |
|
$ |
41,176 |
|
|
$ |
(154,682 |
) |
|
$ |
4,643 |
|
|
$ |
(33,656 |
) |
|
$ |
482,672 |
|
|
Basic earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations |
|
$ |
0.38 |
|
|
$ |
(1.42 |
) |
|
$ |
0.02 |
|
|
$ |
(0.33 |
) |
|
$ |
4.49 |
|
|
Loss from discontinued operations |
|
$ |
(0.01 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
|
Net income (loss) |
|
$ |
0.37 |
|
|
$ |
(1.42 |
) |
|
$ |
0.02 |
|
|
$ |
(0.34 |
) |
|
$ |
4.39 |
|
|
Diluted earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations |
|
$ |
0.38 |
|
|
$ |
(1.42 |
) |
|
$ |
0.02 |
|
|
$ |
(0.33 |
) |
|
$ |
4.47 |
|
|
Loss from discontinued operations |
|
$ |
(0.01 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
|
Net income (loss) |
|
$ |
0.37 |
|
|
$ |
(1.42 |
) |
|
$ |
0.02 |
|
|
$ |
(0.34 |
) |
|
$ |
4.37 |
|
|
Weighted average shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic |
|
108,896 |
|
|
109,425 |
|
|
108,948 |
|
|
109,216 |
|
|
108,851 |
|
||||||
Diluted |
|
108,950 |
|
|
109,425 |
|
|
109,397 |
|
|
109,216 |
|
|
109,387 |
|
||||||
“As Adjusted” – Effective |
|
||||||||
(Unaudited) |
||||||||
(in thousands) |
||||||||
|
|
|
|
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
2019 |
|
2018 |
||||
Assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
347,943 |
|
|
$ |
284,355 |
|
Short-term investments |
|
52,960 |
|
|
41,461 |
|
||
Other current assets |
|
714,183 |
|
|
789,734 |
|
||
Total current assets |
|
1,115,086 |
|
|
1,115,550 |
|
||
Investments |
|
31,991 |
|
|
98,696 |
|
||
Property, plant and equipment, net |
|
4,502,084 |
|
|
4,857,382 |
|
||
Other noncurrent assets |
|
190,354 |
|
|
143,239 |
|
||
Total Assets |
|
$ |
5,839,515 |
|
|
$ |
6,214,867 |
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity |
|
|
|
|
||||
Current liabilities |
|
$ |
410,238 |
|
|
$ |
377,168 |
|
Long-term debt, net |
|
479,356 |
|
|
493,968 |
|
||
Other noncurrent liabilities |
|
922,357 |
|
|
946,742 |
|
||
Noncurrent liabilities - discontinued operations |
|
15,341 |
|
|
14,254 |
|
||
Total shareholders’ equity |
|
4,012,223 |
|
|
4,382,735 |
|
||
Total Liabilities and Shareholders' Equity |
|
$ |
5,839,515 |
|
|
$ |
6,214,867 |
|
|
||||||||
(Unaudited) |
||||||||
(in thousands) |
||||||||
|
|
Year Ended |
||||||
|
|
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
2019 |
|
2018 |
||||
|
|
|
|
As adjusted |
||||
OPERATING ACTIVITIES: |
|
|
|
|
||||
Net income (loss) |
|
$ |
(33,656 |
) |
|
$ |
482,672 |
|
Adjustment for loss from discontinued operations |
|
1,146 |
|
|
10,338 |
|
||
Income (loss) from continuing operations |
|
(32,510 |
) |
|
493,010 |
|
||
Depreciation and amortization |
|
562,803 |
|
|
583,802 |
|
||
Asset impairment charge |
|
224,327 |
|
|
23,128 |
|
||
Amortization of debt discount and debt issuance costs |
|
1,732 |
|
|
1,067 |
|
||
Provision for bad debt |
|
2,321 |
|
|
2,193 |
|
||
Stock-based compensation |
|
34,292 |
|
|
31,687 |
|
||
Pension settlement charge |
|
1,953 |
|
|
913 |
|
||
Loss (gain) on investment securities |
|
54,488 |
|
|
(1 |
) |
||
Gain on sale of assets |
|
(39,691 |
) |
|
(22,660 |
) |
||
Deferred income tax benefit |
|
(44,554 |
) |
|
(486,758 |
) |
||
Other |
|
(5,248 |
) |
|
6,710 |
|
||
Changes in assets and liabilities |
|
95,900 |
|
|
(75,070 |
) |
||
Net cash provided by operating activities from continuing operations |
|
855,813 |
|
|
558,021 |
|
||
Net cash used in operating activities from discontinued operations |
|
(62 |
) |
|
(169 |
) |
||
Net cash provided by operating activities |
|
855,751 |
|
|
557,852 |
|
||
|
|
|
|
|
||||
INVESTING ACTIVITIES: |
|
|
|
|
||||
Capital expenditures |
|
(458,402 |
) |
|
(466,584 |
) |
||
Purchase of short-term investments |
|
(97,652 |
) |
|
(71,049 |
) |
||
Payment for acquisition of business, net of cash acquired |
|
(16,163 |
) |
|
(47,886 |
) |
||
Proceeds from sale of short-term investments |
|
86,765 |
|
|
68,776 |
|
||
Proceeds from sale of marketable securities |
|
11,999 |
|
|
— |
|
||
Proceeds from asset sales |
|
50,817 |
|
|
44,381 |
|
||
Net cash used in investing activities |
|
(422,636 |
) |
|
(472,362 |
) |
||
|
|
|
|
|
||||
FINANCING ACTIVITIES: |
|
|
|
|
||||
Dividends paid |
|
(313,421 |
) |
|
(308,430 |
) |
||
Debt issuance costs paid |
|
(3,912 |
) |
|
— |
|
||
Proceeds from stock option exercises |
|
3,053 |
|
|
6,355 |
|
||
Payments for employee taxes on net settlement of equity awards |
|
(6,418 |
) |
|
(7,114 |
) |
||
Payment of contingent consideration from acquisition of business |
|
— |
|
|
(10,625 |
) |
||
Payments for early extinguishment of long term debt |
|
(12,852 |
) |
|
— |
|
||
Share repurchase |
|
(42,779 |
) |
|
— |
|
||
Net cash used in financing activities |
|
(376,329 |
) |
|
(319,814 |
) |
||
|
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
56,786 |
|
|
(234,324 |
) |
||
Cash and cash equivalents and restricted cash, beginning of period |
|
326,185 |
|
|
560,509 |
|
||
Cash and cash equivalents and restricted cash, end of period |
|
$ |
382,971 |
|
|
$ |
326,185 |
|
“As Adjusted” – Effective |
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
SEGMENT REPORTING |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
(in thousands, except operating statistics) |
|
|
|
As adjusted |
|
As adjusted |
|
|
|
As adjusted |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
|
$ |
545,060 |
|
|
$ |
584,184 |
|
|
$ |
584,870 |
|
|
$ |
2,366,201 |
|
|
$ |
2,063,362 |
|
Direct operating expenses |
|
356,704 |
|
|
372,980 |
|
|
368,896 |
|
|
1,514,641 |
|
|
1,346,192 |
|
|||||
Research and development |
|
188 |
|
|
165 |
|
|
63 |
|
|
653 |
|
|
262 |
|
|||||
Selling, general and administrative expense |
|
9,864 |
|
|
11,451 |
|
|
15,365 |
|
|
44,141 |
|
|
58,157 |
|
|||||
Depreciation |
|
119,060 |
|
|
126,922 |
|
|
131,824 |
|
|
496,770 |
|
|
504,805 |
|
|||||
Asset impairment charge |
|
— |
|
|
216,908 |
|
|
5,695 |
|
|
216,908 |
|
|
5,695 |
|
|||||
Segment operating income (loss) |
|
$ |
59,244 |
|
|
$ |
(144,242 |
) |
|
$ |
63,027 |
|
|
$ |
93,088 |
|
|
$ |
148,251 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue days |
|
18,765 |
|
|
19,846 |
|
|
21,035 |
|
|
81,805 |
|
|
77,980 |
|
|||||
Average rig revenue per day |
|
$ |
25,478 |
|
|
$ |
25,788 |
|
|
$ |
24,336 |
|
|
$ |
25,433 |
|
|
$ |
23,349 |
|
Average rig expense per day |
|
15,440 |
|
|
15,146 |
|
|
14,069 |
|
|
15,024 |
|
|
14,152 |
|
|||||
Average rig margin per day |
|
$ |
10,038 |
|
|
$ |
10,642 |
|
|
$ |
10,267 |
|
|
$ |
10,409 |
|
|
$ |
9,197 |
|
Rig utilization |
|
68 |
% |
|
62 |
% |
|
65 |
% |
|
67 |
% |
|
61 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INTERNATIONAL LAND OPERATIONS |
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
|
$ |
48,353 |
|
|
$ |
46,283 |
|
|
$ |
59,387 |
|
|
$ |
211,731 |
|
|
$ |
238,356 |
|
Direct operating expenses |
|
43,119 |
|
|
34,148 |
|
|
44,958 |
|
|
157,856 |
|
|
177,938 |
|
|||||
Selling, general and administrative expense |
|
1,399 |
|
|
1,150 |
|
|
699 |
|
|
5,624 |
|
|
3,658 |
|
|||||
Depreciation |
|
8,042 |
|
|
8,592 |
|
|
10,782 |
|
|
35,466 |
|
|
46,826 |
|
|||||
Asset impairment charge |
|
— |
|
|
7,419 |
|
|
10,616 |
|
|
7,419 |
|
|
10,616 |
|
|||||
Segment operating income (loss) |
|
$ |
(4,207 |
) |
|
$ |
(5,026 |
) |
|
$ |
(7,668 |
) |
|
$ |
5,366 |
|
|
$ |
(682 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue days |
|
1,598 |
|
|
1,510 |
|
|
1,818 |
|
|
6,426 |
|
|
6,696 |
|
|||||
Average rig revenue per day |
|
$ |
28,199 |
|
|
$ |
29,669 |
|
|
$ |
30,909 |
|
|
$ |
31,269 |
|
|
$ |
33,830 |
|
Average rig expense per day |
|
22,722 |
|
|
21,650 |
|
|
22,251 |
|
|
21,626 |
|
|
24,211 |
|
|||||
Average rig margin per day |
|
$ |
5,477 |
|
|
$ |
8,019 |
|
|
$ |
8,658 |
|
|
$ |
9,643 |
|
|
$ |
9,619 |
|
Rig utilization |
|
56 |
% |
|
51 |
% |
|
55 |
% |
|
55 |
% |
|
49 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OFFSHORE OPERATIONS |
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
|
$ |
38,468 |
|
|
$ |
37,674 |
|
|
$ |
38,482 |
|
|
$ |
147,635 |
|
|
$ |
142,500 |
|
Direct operating expenses |
|
32,148 |
|
|
28,869 |
|
|
26,615 |
|
|
114,306 |
|
|
101,477 |
|
|||||
Selling, general and administrative expense |
|
1,004 |
|
|
1,147 |
|
|
1,493 |
|
|
3,725 |
|
|
4,890 |
|
|||||
Depreciation |
|
2,499 |
|
|
2,582 |
|
|
2,589 |
|
|
10,010 |
|
|
10,394 |
|
|||||
Segment operating income |
|
$ |
2,817 |
|
|
$ |
5,076 |
|
|
$ |
7,785 |
|
|
$ |
19,594 |
|
|
$ |
25,739 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue days |
|
552 |
|
|
546 |
|
|
552 |
|
|
2,163 |
|
|
2,036 |
|
|||||
Average rig revenue per day |
|
$ |
43,072 |
|
|
$ |
39,643 |
|
|
$ |
36,424 |
|
|
$ |
37,478 |
|
|
$ |
35,331 |
|
Average rig expense per day |
|
35,612 |
|
|
27,222 |
|
|
24,972 |
|
|
28,663 |
|
|
26,009 |
|
|||||
Average rig margin per day |
|
$ |
7,460 |
|
|
$ |
12,421 |
|
|
$ |
11,452 |
|
|
$ |
8,815 |
|
|
$ |
9,322 |
|
Rig utilization |
|
75 |
% |
|
75 |
% |
|
75 |
% |
|
74 |
% |
|
70 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
H&P TECHNOLOGIES |
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
|
$ |
13,878 |
|
|
$ |
16,647 |
|
|
$ |
10,938 |
|
|
$ |
59,990 |
|
|
$ |
30,239 |
|
Direct operating expenses |
|
(874 |
) |
|
7,472 |
|
|
7,913 |
|
|
17,935 |
|
|
23,511 |
|
|||||
Research and development |
|
5,730 |
|
|
4,801 |
|
|
4,955 |
|
|
24,511 |
|
|
17,905 |
|
|||||
Selling, general and administrative expense |
|
6,471 |
|
|
5,093 |
|
|
4,699 |
|
|
22,038 |
|
|
15,588 |
|
|||||
Depreciation and amortization |
|
1,928 |
|
|
1,942 |
|
|
1,824 |
|
|
7,696 |
|
|
7,153 |
|
|||||
Asset impairment charge |
|
— |
|
|
— |
|
|
5,637 |
|
|
— |
|
|
5,637 |
|
|||||
Segment operating income (loss) |
|
$ |
623 |
|
|
$ |
(2,661 |
) |
|
$ |
(14,090 |
) |
|
$ |
(12,190 |
) |
|
$ |
(39,555 |
) |
“As Adjusted” – Effective |
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 |
|
Year Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
|
|
$ |
66,966 |
|
|
$ |
72,386 |
|
|
$ |
72,965 |
|
|
$ |
285,614 |
|
|
$ |
242,617 |
|
International Land Operations |
|
3,291 |
|
|
1,483 |
|
|
3,194 |
|
|
10,797 |
|
|
11,828 |
|
|||||
Offshore Operations |
|
7,899 |
|
|
7,277 |
|
|
5,925 |
|
|
26,433 |
|
|
20,279 |
|
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 |
|
Year Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
(in thousands) |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
|
|
|
|
As adjusted |
|
As adjusted |
|
|
|
As adjusted |
||||||||||
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
59,244 |
|
|
$ |
(144,242 |
) |
|
$ |
63,027 |
|
|
$ |
93,088 |
|
|
$ |
148,251 |
|
International Land |
|
(4,207 |
) |
|
(5,026 |
) |
|
(7,668 |
) |
|
5,366 |
|
|
(682 |
) |
|||||
Offshore |
|
2,817 |
|
|
5,076 |
|
|
7,785 |
|
|
19,594 |
|
|
25,739 |
|
|||||
H&P Technologies |
|
623 |
|
|
(2,661 |
) |
|
(14,090 |
) |
|
(12,190 |
) |
|
(39,555 |
) |
|||||
Other |
|
1,388 |
|
|
(729 |
) |
|
1,427 |
|
|
3,375 |
|
|
6,268 |
|
|||||
Segment operating income (loss) |
|
$ |
59,865 |
|
|
$ |
(147,582 |
) |
|
$ |
50,481 |
|
|
$ |
109,233 |
|
|
$ |
140,021 |
|
Gain on sale of assets |
|
12,641 |
|
|
9,960 |
|
|
7,527 |
|
|
39,691 |
|
|
22,660 |
|
|||||
Corporate selling, general and administrative costs and corporate depreciation |
|
(33,485 |
) |
|
(30,252 |
) |
|
(33,795 |
) |
|
(128,342 |
) |
|
(129,717 |
) |
|||||
Operating income (loss) |
|
$ |
39,021 |
|
|
$ |
(167,874 |
) |
|
$ |
24,213 |
|
|
$ |
20,582 |
|
|
$ |
32,964 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest and dividend income |
|
$ |
2,607 |
|
|
$ |
2,349 |
|
|
$ |
2,337 |
|
|
$ |
9,468 |
|
|
$ |
8,017 |
|
Interest expense |
|
(8,043 |
) |
|
(6,257 |
) |
|
(6,471 |
) |
|
(25,188 |
) |
|
(24,265 |
) |
|||||
Gain (loss) on investment securities |
|
(4,260 |
) |
|
(13,271 |
) |
|
(1 |
) |
|
(54,488 |
) |
|
1 |
|
|||||
Other |
|
(546 |
) |
|
(1,598 |
) |
|
1,146 |
|
|
(1,596 |
) |
|
(876 |
) |
|||||
Total unallocated amounts |
|
(10,242 |
) |
|
(18,777 |
) |
|
(2,989 |
) |
|
(71,804 |
) |
|
(17,123 |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations before income taxes |
|
$ |
28,779 |
|
|
$ |
(186,651 |
) |
|
$ |
21,224 |
|
|
$ |
(51,222 |
) |
|
$ |
15,841 |
|
“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) |
|
|
|
|
||||
|
|
|
|
|
||||
Early contract termination revenue |
|
$ |
113 |
|
|
$ |
33 |
|
Total impact on |
|
113 |
|
|
33 |
|
||
|
|
|
|
|
||||
Settlement of lawsuit |
|
506 |
|
|
— |
|
||
Inventory write-downs |
|
— |
|
|
340 |
|
||
Total impact on |
|
506 |
|
|
340 |
|
||
|
|
|
|
|
||||
International Land Operations |
|
|
|
|
||||
Early contract termination revenue |
|
— |
|
|
115 |
|
||
Total impact on International Land revenue per day: |
|
— |
|
|
115 |
|
|
||||||||||||
|
|
|
|
|
|
|
|
Q4FY19 |
||||
|
|
2019 |
|
2019 |
|
2019 |
|
Average |
||||
|
|
|
|
|
|
|
|
|
||||
Term Contract Rigs |
|
127 |
|
|
124 |
|
|
143 |
|
|
133 |
|
Spot Contract Rigs |
|
63 |
|
|
70 |
|
|
71 |
|
|
71 |
|
Total Contracted Rigs |
|
190 |
|
|
194 |
|
|
214 |
|
|
204 |
|
Idle or Other Rigs |
|
109 |
|
|
105 |
|
|
85 |
|
|
95 |
|
Total Marketable Fleet |
|
299 |
|
|
299 |
|
|
299 |
|
|
299 |
|
H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS |
|||||||||||||||||||||
Number of Rigs Already Under Long-Term Contracts(1) |
|||||||||||||||||||||
(Estimated Quarterly Average — as of 11/14/19) |
|||||||||||||||||||||
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|||||||
Segment |
|
FY20 |
|
FY20 |
|
FY20 |
|
FY20 |
|
FY21 |
|
FY21 |
|
FY21 |
|||||||
|
|
130.5 |
|
|
102.9 |
|
|
81.3 |
|
|
63.7 |
|
|
43.3 |
|
|
18.6 |
|
|
12.9 |
|
International Land Operations |
|
11.0 |
|
|
7.2 |
|
|
2.1 |
|
|
1.0 |
|
|
1.0 |
|
|
1.0 |
|
|
1.0 |
|
Offshore Operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total |
|
141.5 |
|
|
110.1 |
|
|
83.4 |
|
|
64.7 |
|
|
44.3 |
|
|
19.6 |
|
|
13.9 |
|
(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/20191114005920/en/
investor.relations@hpinc.com
(918) 588‑5190
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