FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 30549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended: DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission File Number: 1-4221
HELMERICH & PAYNE, INC.
(Exact,name.of registrant as specified in its charter)
DELAWARE 73-0679879
(State or other jurisdiction of incorporation (I.R.S. Employer I.D. Number)
or organization)
UTICA AT TWENTY-FIRST STREET, TULSA, OKLAHOMA 74114
(Address of principal executive office) (Zip Code)
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Registrant's telephone number, including area code: (918) 742-5531
NONE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No
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CLASS OUTSTANDING AT DECEMBER 31, 1994
- ---------------------------- --------------------------------
Common Stock, .10 par value 24,718,660
AUTHORIZED AT DECEMBER 31, 1994
--------------------------------
26,764,476
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Total Number of Pages 9
HELMERICH & PAYNE, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Consolidated Condensed Balance Sheets -
December 31, 1994 and September 30, 1994 . . . . . . . . 3
Consolidated Condensed Statements of Income -
Three Months Ended December 31, 1994 and 1993. . . . . . . 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended December 31, 1994 and 1993. . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . . 6
Revenues and Income by Business Segments . . . . . . . . . 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . 8&9
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . 9
Signature Page . . . . . . . . . . . . . . . . . . . . . . 9
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PART I FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
(Unaudited)
December 31 September 30
1994 1994
----------- -----------
ASSETS
- ------
Current Assets
Cash and cash equivalents $ 15,434 $ 29,447
Short-term investments 8,997 8,997
Accounts receivable, net 59,923 59,897
Inventories 21,290 20,995
Prepaid expenses and other 5,581 3,603
----------- ------------
Total Current Assets 111,225 122,939
Investments 142,200 87,414
Property, Plant and Equipment, Net 408,927 400,651
Other Assets 13,932 13,823
----------- ------------
Total Assets $ 676,284 $ 624,827
=========== ============
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LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts payable $ 26,246 $ 22,645
Accrued liabilities 18,929 24,056
----------- ------------
Total Current Liabilities 45,175 46,701
----------- ------------
Noncurrent Liabilities
Deferred income taxes 63,672 44,462
Other 10,445 9,330
----------- ------------
Total Noncurrent Liabilities 74,117 53,792
----------- ------------
Shareholders' Equity
Common stock, par value $.10 per share 2,677 2,677
Preferred stock, no shares issued - -
Additional paid-in capital 48,276 48,196
Net unrealized holding gains 30,700 -
Retained earnings 498,063 496,280
----------- ------------
579,716 547,153
Less treasury stock, at cost 22,724 22,819
----------- ------------
Total Shareholders' Equity 556,992 524,334
----------- ------------
$ 676,284 $ 624,827
=========== ============
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See accompanying notes to financial statements.
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
Three Months Ended
December 31
1994 1993
------------------------------
REVENUES:
Sales and other operating revenues $ 78,555 $ 80,644
Income from investments 1,389 1,542
------------ ------------
79,944 82,186
------------ ------------
COST AND EXPENSES:
Operating costs 51,248 50,511
Depreciation, depletion and amortization 13,630 11,818
Dry holes and abandonments 2,179 1,310
Taxes, other than income taxes 3,978 4,290
General and administrative 2,094 2,682
Interest 99 182
------------ ------------
73,228 70,793
------------ ------------
INCOME BEFORE INCOME TAXES, EQUITY
IN INCOME OF AFFILIATE AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 6,716 11,393
INCOME TAX EXPENSE 2,481 4,291
EQUITY IN INCOME OF AFFILIATE,
net of income taxes 181 151
------------ ------------
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 4,416 7,253
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE - 4,000
------------ ------------
NET INCOME $ 4,416 $ 11,253
============ ============
PER COMMON SHARE:
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE $ .18 $ .30
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE - .46
------------ ------------
NET INCOME $ .18 $ .46
============ ============
CASH DIVIDENDS (Note 2) $ .125 $ .12
AVERAGE COMMON SHARES OUTSTANDING 24,479 24,368
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See accompanying notes to financial statements.
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
December 31
1994 1993
------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net Income $ 4,416 $ 11,253
Adjustments to reconcile net income to net
cash provided by operating activities-
Depreciation, depletion and amortization 13,630 11,818
Dry holes and abandonments 2,179 1,310
Cumulative effect of change in accounting
principle - ( 4,000)
Equity in income of affiliate before
income taxes ( 291) ( 243)
Amortization of deferred compensation 458 439
Other, net ( 332) ( 11)
Change in assets and liabilities-
Increase in accounts receivable ( 26) ( 5,702)
Increase in inventories ( 295) ( 1,197)
Increase in prepaid expenses and other ( 2,087) ( 6,844)
Increase(decrease) in accounts payable 3,601 ( 1,652)
Increase(decrease) in accrued liabilities ( 2,127) 4,305
Increase in deferred income taxes 393 180
Increase in other noncurrent liabilities 1,115 1,352
------------ ------------
Total Adjustments 16,218 ( 245)
------------ ------------
Net cash provided by operating activities 20,634 11,008
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital expenditures, including dry hole costs ( 27,404) ( 13,509)
Proceeds from sales of property, plant
and equipment 644 949
Purchase of investments ( 4,978) -
Purchase of short-term investments - ( 12)
Proceeds from sale of short-term investments - 112
------------ ------------
Net cash used in investing activities ( 31,738) ( 12,460)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Payments made on long-term debt - ( 3,139)
Dividends paid ( 3,084) ( 2,956)
Proceeds from exercise of stock options 175 -
------------ ------------
Net cash used in financing activities ( 2,909) ( 6,095)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS ( 14,013) ( 7,547)
CASH AND CASH EQUIVALENTS, beginning of period 29,447 61,656
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 15,434 $ 54,109
============ ============
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See accompanying notes to financial statements. Certain reclassifications have been made in the 1994 statement to conform to the 1995 presentation.
HELMERICH & PAYNE, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of December 31, 1994, and September 30, 1994, and the results of operations for the three months ended December 31, 1994, and 1993, and the statements of cash flows for the three months then ended. The results of operations for the three months ended December 31, 1994, and December 31, 1993, are not necessarily indicative of the results to be expected for the full year.
2. The $.125 cash dividend declared in September, 1994 was paid December 1, 1994. On December 7, 1994, a cash dividend of $.125 per share was declared for shareholders of record on February 15, 1995, payable March 1, 1995.
3. Inventories consisted of the following (in thousands of dollars):
12-31-94 09-30-94
-------- --------
Raw Materials $ 160 $ 75
Works in Progress 389 361
Finished Goods 1,130 1,027
Materials & Supplies 19,611 19,532
-------- --------
$ 21,290 $ 20,995
======== =========
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4. Income from investments does not include any gains on sales of securities during the first quarter of 1995 or 1994.
5. Effective October 1, 1993, the Company adopted Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes (SFAS 109). The cumulative effect on prior years of adopting the change was recorded in the quarter ended December 31, 1993, and increased net income for the quarter by $4.0 million.
6. In May, 1993 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The Company adopted the provisions of the new standard for investments held as of or acquired after October 1, 1994. In accordance with the Statement, prior period financial statements have not been restated to reflect the change in accounting principle. The change had no effect on net income. The opening balance of shareholders' equity was increased by $34,435,000 (net of $21,106,000 in deferred income taxes) to reflect the net unrealized holding gains on securities classified as available-for-sale previously carried at lower of cost or market.
During the quarter ended December 31, 1994 the net unrealized holding gains of the Company's securities classified as available-for-sale decreased $3,735,000 (net of $2,289,000 in deferred income taxes).
HELMERICH & PAYNE, INC.
REVENUES AND INCOME BY BUSINESS SEGMENTS
(in thousands)
FY 1995 FY 1994
1st Qtr 1st Qtr
------- -------
SALES AND OTHER REVENUES:
Contract Drilling-Domestic $25,488 $19,817
Contract Drilling-Intnat'l 22,150 22,319
------- -------
Total Contract Drilling
Division 47,638 42,136
------- -------
Exploration and Production 13,471 16,626
Natural Gas Marketing 9,479 14,820
------- -------
Total Oil & Gas Division 22,950 31,446
------- -------
Chemical Division 5,951 5,046
Real Estate Division 1,846 1,836
Investment and Other 1,559 1,722
------- -------
Total Revenues $79,944 $82,186
======= =======
OPERATING PROFIT:
Contract Drilling-Domestic $ 1,125 $ 1,246
Contract Drilling-Intnat'l 3,355 3,590
-------- --------
Total Contract Drilling
Division 4,480 4,836
-------- --------
Exploration and Production ( 538) 5,112
Natural Gas Marketing 287 313
-------- --------
Total Oil & Gas Division ( 251) 5,425
-------- --------
Chemical Division 2,636 1,806
Real Estate Division 1,121 1,037
-------- --------
Total Operating Profit 7,986 13,104
-------- --------
OTHER (1,270) (1,711)
INCOME BEFORE INCOME TAXES,
EQUITY IN INCOME OF
AFFILIATE AND CUMULATIVE
EFFECT OF CHANGE IN -------- --------
ACCOUNTING PRINCIPLE: $ 6,716 $11,393
======== ========
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See Accompanying notes to financial statements.
HELMERICH & PAYNE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1994
The Company reported net income of $4,416,000 ($0.18 per share) on revenues of $79,944,000 for the first quarter of fiscal year 1995, compared with net income of $11,253,000 ($0.46 per share) on revenues of $82,186,000 during the first quarter of fiscal 1994. Last year's first quarter net income includes the cumulative effect on prior years' income ($0.16 per share) caused by the change in accounting method for deferred taxes as required by FASB Statement 109.
Exploration and Production reported an operating loss of $538,000 in the first quarter of fiscal 1995, compared with an operating profit of $5,112,000 for the first quarter of fiscal 1994. The difference was due mainly to a significant drop in natural gas prices from an average of $1.83 per Mcf during the first quarter of 1994 to $1.37 per Mcf for the first quarter of 1995. Production volumes were reduced from 84.1 Mmcf/day during the first quarter of 1994, to approximately 78.2 Mmcf/day in the same period of 1995. Additionally, dry hole expense for the first quarter of 1995 was $1,325,000 compared with $74,000 in the first quarter of 1994.
The Contract Drilling Division reported an operating profit of $4,480,000 for the first quarter, compared with $4,836,000 for the same period in fiscal 1994. Operating profit from our international drilling operations declined 6.5% to $3,355,000 for the first quarter of fiscal 1995, compared with $3,590,000 for the first quarter of 1994. Operating profit for the quarter in Venezuela and Colombia improved slightly over the same period last year, but operations ceased in both Yemen and Trinidad, resulting in an overall decline in our international operating profit.
The Chemical Division continues to show improved operating profit as the result of price increases effective in the first quarter of fiscal 1994. An operating profit of $2,636,000 was reported in the first quarter of 1995, compared with $1,806,000 for the first quarter of fiscal 1994.
General and Administrative costs were $2,094,000 for the first quarter of 1995, compared with $2,682,000 for the same period in 1994. There was little change from 1994 to 1995. The decrease was due primarily to decreased costs of employee healthcare benefits.
During the first quarter of 1994, the Company paid off all of its remaining long-term debt. The only long-term liabilities that presently remain on the balance sheet are associated with workers compensation and general liability accruals, deferred income taxes, and other miscellaneous long-term payables and deferred items.
The Company has funded capital expenditures in excess of its cash flow internally over the past several years. However, the Company anticipates that it will either sell a portion of its investment portfolio or incur debt in order to help fund planned capital expenditures for 1995. Capital expenditures budgeted for 1995 include expanded exploration activities, rig purchases and construction for Colombian and Venezuelan operations, as well as the Company's investment in a joint venture with its equity affiliate, Atwood Oceanics, Inc. The joint venture will construct a new generation offshore platform rig for work offshore Australia.
During the first quarter of fiscal 1995, effective 10-1-94, the Company adopted FASB Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The effect of adopting this Statement on the December 31, 1994 balance sheet was to increase investments by $49,517,000, increase deferred tax liabilities by $18,817,000 and increase shareholders' equity by $30,700,000.
There were no other significant changes to the Company's financial position since September 30, 1994.
PART II. OTHER INFORMATION
HELMERICH & PAYNE, INC.
Item 6(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months ended December 31, 1994.
HELMERICH & PAYNE, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HELMERICH & PAYNE, INC.
Date: FEBRUARY 14, 1995 /S/ DOUGLAS E. FEARS
---------------------- -------------------------------
Douglas E. Fears,
Chief Financial Officer
Date: FEBRUARY 14, 1995 /S/ HANS C. HELMERICH
----------------------- -------------------------------
Hans C. Helmerich, President
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| ARTICLE 5 |
| PERIOD TYPE | 3 MOS |
| FISCAL YEAR END | SEP 30 1995 |
| PERIOD START | OCT 01 1994 |
| PERIOD END | DEC 31 1994 |
| CASH | 15,434 |
| SECURITIES | 142,200 |
| RECEIVABLES | 60,953 |
| ALLOWANCES | 1,030 |
| INVENTORY | 21,290 |
| CURRENT ASSETS | 111,225 |
| PP&E | 963,255 |
| DEPRECIATION | 554,328 |
| TOTAL ASSETS | 676,284 |
| CURRENT LIABILITIES | 45,175 |
| BONDS | 0 |
| COMMON | 2,677 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| OTHER SE | 554,315 |
| TOTAL LIABILITY AND EQUITY | 676,284 |
| SALES | 78,555 |
| TOTAL REVENUES | 79,944 |
| CGS | 71,035 |
| TOTAL COSTS | 71,035 |
| OTHER EXPENSES | 2,094 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 99 |
| INCOME PRETAX | 6,716 |
| INCOME TAX | 2,481 |
| INCOME CONTINUING | 4,416 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 4,416 |
| EPS PRIMARY | .18 |
| EPS DILUTED | .18 |