Helmerich & Payne, Inc. Announces First Quarter Results
January 29, 2015
President and CEO
Operating Segment Results
Segment operating income for the Company's 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
Drilling Operations Outlook for the Second Quarter of Fiscal 2015
In the U.S. land segment, the Company expects revenue days (activity) to decrease by roughly 25 percent during the second fiscal quarter as compared to the first quarter of fiscal 2015. Excluding the impact from any early termination revenue during the second quarter of fiscal 2015, the average rig revenue per day is expected to decrease to between
In the offshore segment, the Company expects the average rig margin per day to be approximately
In the international land segment, the Company expects total revenue days during the second fiscal quarter to decrease by approximately 10 to 15 percent and the average rig margin per day to decrease by approximately 25 to 30 percent as compared to the first quarter of fiscal 2015.
Capital Expenditures and Other Estimates for Fiscal 2015
Given changes in market conditions and the Company's ongoing new FlexRig construction program, the Company now expects a total of approximately
About
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
*FlexRig® is a registered trademark of
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Unaudited | |||
(in thousands, except per share data) | |||
Three Months Ended | |||
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CONSOLIDATED STATEMENTS OF INCOME | 2014 | 2014 | 2013 |
Operating Revenues: | |||
Drilling – U.S. Land | $ 824,210 | $ 890,047 | $ 731,674 |
Drilling – Offshore | 63,927 | 69,473 | 59,054 |
Drilling – International Land | 93,391 | 92,885 | 95,341 |
Other | 3,510 | 4,180 | 3,083 |
985,038 | 1,056,585 | 889,152 | |
Operating costs and expenses: | |||
Operating costs, excluding depreciation | 540,458 | 554,243 | 474,048 |
Depreciation | 150,371 | 137,613 | 120,237 |
General and administrative | 34,243 | 32,907 | 32,243 |
Research and development | 4,159 | 4,158 | 4,257 |
Income from asset sales | (7,695) | (4,155) | (5,664) |
721,536 | 724,766 | 625,121 | |
Operating income | 263,502 | 331,819 | 264,031 |
Other income (expense): | |||
Interest and dividend income | 267 | 285 | 453 |
Interest expense | (300) | (561) | (1,194) |
Other | (605) | 314 | (345) |
(638) | 38 | (1,086) | |
Income from continuing operations before income taxes | 262,864 | 331,857 | 262,945 |
Income tax provision | 94,159 | 128,800 | 89,763 |
Income from continuing operations | 168,705 | 203,057 | 173,182 |
Loss from discontinued operations before income taxes | (17) | (15) | -- |
Income tax provision | -- | -- | -- |
Loss from discontinued operations | (17) | (15) | -- |
NET INCOME | $ 168,688 | $ 203,042 | $ 173,182 |
Basic earnings per common share: | |||
Income from continuing operations | $ 1.55 | $ 1.87 | $ 1.61 |
Income from discontinued operations | $ -- | $ -- | $ -- |
Net income | $ 1.55 | $ 1.87 | $ 1.61 |
Diluted earnings per common share: | |||
Income from continuing operations | $ 1.53 | $ 1.85 | $ 1.59 |
Income from discontinued operations | $ -- | $ -- | $ -- |
Net income | $ 1.53 | $ 1.85 | $ 1.59 |
Weighted average shares outstanding: | |||
Basic | 108,226 | 107,973 | 107,149 |
Diluted | 109,300 | 108,843 | 108,577 |
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Unaudited | ||||
(in thousands) | ||||
CONSOLIDATED CONDENSED BALANCE SHEETS |
2014 |
2014 |
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ASSETS | ||||
Cash and cash equivalents | $ 251,636 | $ 360,909 | ||
Other current assets | 950,959 | 909,251 | ||
Current assets of discontinued operations | 7,397 | 7,206 | ||
Total current assets | 1,209,992 | 1,277,366 | ||
Investments | 165,581 | 236,644 | ||
Net property, plant, and equipment | 5,400,016 | 5,188,544 | ||
Other assets | 25,930 | 19,307 | ||
TOTAL ASSETS | $6,801,519 | $6,721,861 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities | $ 444,280 | $ 504,309 | ||
Current liabilities of discontinued operations | 3,176 | 3,217 | ||
Total current liabilities | 447,456 | 507,526 | ||
Non-current liabilities | 1,388,620 | 1,279,369 | ||
Non-current liabilities of discontinued operations | 4,221 | 3,989 | ||
Long-term notes payable | 40,000 | 40,000 | ||
Total shareholders' equity | 4,921,222 | 4,890,977 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $6,801,519 | $6,721,861 |
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Unaudited | ||
(in thousands) | ||
Three Months Ended | ||
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | 2014 | 2013 |
OPERATING ACTIVITIES: | ||
Net income | $ 203,042 | $ 173,182 |
Adjustment for loss from discontinued operations | 15 | -- |
Income from continuing operations | 203,057 | 173,182 |
Depreciation | 137,613 | 120,237 |
Changes in assets and liabilities | 46,210 | 10,093 |
Gain on sale of assets | (4,155) | (5,664) |
Other | 6,982 | 7,010 |
Net cash provided by operating activities from continuing operations | 389,707 | 304,858 |
Net cash used in operating activities from discontinued operations | (15) | -- |
Net cash provided by operating activities | 389,692 | 304,858 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (369,029) | (140,643) |
Proceeds from sale of assets | 7,125 | 7,913 |
Net cash used in investing activities | (361,904) | (132,730) |
FINANCING ACTIVITIES: | ||
Dividends paid | (74,822) | (53,860) |
Repurchase of common stock | (59,654) | -- |
Proceeds from short-term debt | 1,002 | -- |
Exercise of stock options, net of tax withholding | (2,062) | 8,201 |
Tax withholdings related to net share settlements of restricted stock | (4,248) | (3,049) |
Excess tax benefit from stock-based compensation | 2,723 | 10,126 |
Net cash used in financing activities | (137,061) | (38,582) |
Net increase (decrease) in cash and cash equivalents | (109,273) | 133,546 |
Cash and cash equivalents, beginning of period | 360,909 | 447,868 |
Cash and cash equivalents, end of period | $ 251,636 | $ 581,414 |
SEGMENT REPORTING | Three Months Ended | ||
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2014 | 2014 | 2013 | |
(in thousands, except days and per day amounts) | |||
U.S. LAND OPERATIONS | |||
Revenues | $824,210 | $890,047 | $731,674 |
Direct operating expenses | 422,179 | 441,126 | 367,186 |
General and administrative expense | 11,412 | 11,715 | 9,957 |
Depreciation | 131,990 | 119,084 | 103,579 |
Segment operating income | $ 258,629 | $ 318,122 | $ 250,952 |
Revenue days | 26,812 | 27,355 | 23,464 |
Average rig revenue per day | $ 28,164 | $ 29,457 | $ 28,468 |
Average rig expense per day | $ 13,170 | $ 13,046 | $ 12,934 |
Average rig margin per day | $ 14,994 | $ 16,411 | $ 15,534 |
Rig utilization | 87% | 89% | 84% |
OFFSHORE OPERATIONS | |||
Revenues | $ 63,927 | $ 69,473 | $ 59,054 |
Direct operating expenses | 43,033 | 44,239 | 34,876 |
General and administrative expense | 2,736 | 826 | 2,330 |
Depreciation | 3,176 | 2,924 | 3,350 |
Segment operating income | $ 14,982 | $ 21,484 | $ 18,498 |
Revenue days | 736 | 809 | 736 |
Average rig revenue per day | $ 61,845 | $ 55,341 | $ 62,306 |
Average rig expense per day | $ 39,460 | $ 34,609 | $ 34,857 |
Average rig margin per day | $ 22,385 | $ 20,732 | $ 27,449 |
Rig utilization | 89% | 98% | 89% |
INTERNATIONAL LAND OPERATIONS | |||
Revenues | $ 93,391 | $ 92,885 | $ 95,341 |
Direct operating expenses | 75,326 | 68,937 | 71,930 |
General and administrative expense | 1,156 | 687 | 1,000 |
Depreciation | 10,981 | 11,047 | 9,660 |
Segment operating income | $ 5,928 | $ 12,214 | $ 12,751 |
Revenue days | 2,091 | 2,080 | 2,156 |
Average rig revenue per day | $ 37,392 | $ 39,987 | $ 38,433 |
Average rig expense per day | $ 28,623 | $ 29,217 | $ 28,091 |
Average rig margin per day | $ 8,769 | $ 10,770 | $ 10,342 |
Rig utilization | 69% | 63% | 82% |
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 | $ 69,077 | $ 84,262 | $ 63,700 |
Offshore Operations | $ 5,957 | $ 5,475 | $ 2,766 |
International Land Operations | $ 15,205 | $ 9,713 | $ 12,480 |
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 | |||
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2014 | 2014 | 2013 | |
Operating income | |||
U.S. Land |
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$250,952 |
Offshore | 14,982 | 21,484 | 18,498 |
International Land | 5,928 | 12,214 | 12,751 |
Other | (2,329) | (1,899) | (3,005) |
Segment operating income |
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$279,196 |
Corporate general and administrative | (18,939) | (19,679) | (18,956) |
Other depreciation | (3,678) | (3,881) | (3,244) |
Inter-segment elimination | 1,214 | 1,303 | 1,371 |
Income from asset sales | 7,695 | 4,155 | 5,664 |
Operating income |
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$264,031 |
Other income (expense): | |||
Interest and dividend income | 267 | 285 | 453 |
Interest expense | (300) | (561) | (1,194) |
Other | (605) | 314 | (345) |
Total other income (expense) | (638) | 38 | (1,086) |
Income from continuing operations before income taxes | $262,864 | $331,857 | $262,945 |
CONTACT: Investor Relations investor.relations@hpinc.com (918) 588-5190Source: