SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) | |||
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OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
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For quarterly period ended: December 31, 2004 | |||
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OR | |||
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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.
Delaware | 73-0679879 | |||
(State or other jurisdiction of | (I.R.S. Employer I.D. Number) | |||
incorporation or organization) |
1437 South Boulder
Avenue, Tulsa, Oklahoma, 74119
(Address of principal executive office) (Zip Code)
(918) 742-5531
(Registrants telephone number, including area code)
N/A
(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 þ No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act).
Yes
þ
No
o
OUTSTANDING AT JANUARY 31, 2005
50,751,546
Total Number of Pages 20
HELMERICH & PAYNE, INC.
INDEX
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Certification of CEO Pursuant to Section 302 | ||||||||
Certification of CFO Pursuant to Section 302 | ||||||||
Certification of CEO & CFO Pursuant to Section 906 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying notes are an integral part of these statements.
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HELMERICH & PAYNE, INC.
The accompanying notes are an integral part of these statements.
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HELMERICH & PAYNE, INC.
The accompanying notes are an integral part of these statements.
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HELMERICH & PAYNE, INC.
The accompanying notes are an integral part of these statements.
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HELMERICH & PAYNE, INC.
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HELMERICH & PAYNE, INC.
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HELMERICH & PAYNE, INC.
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HELMERICH & PAYNE, INC.
Summarized financial information of the Companys reportable segments for the quarters ended
December 31, 2004, and 2003, is shown in the following tables:
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HELMERICH & PAYNE, INC.
The following table reconciles operating income per the table above to income before income
taxes and equity in income (loss) of affiliate as reported on the Consolidated Condensed
Statements of Income.
The following table presents operating revenues from external customers by country
based on the location of service provided.
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HELMERICH & PAYNE, INC.
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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
Risk Factors and Forward-Looking Statements
The following discussion should be read in conjunction with the consolidated condensed
financial statements and related notes included elsewhere herein and the consolidated
financial statements and notes thereto included in the Companys 2004 Annual Report on Form
10-K. The Companys future operating results may be affected by various trends and factors,
which are beyond the Companys control. These include, among other factors, fluctuations in
natural gas and crude oil prices, expiration or termination of drilling contracts, currency
exchange losses, changes in general economic and political conditions, rapid or unexpected
changes in technologies and uncertain business conditions that affect the Companys
businesses. Accordingly, past results and trends should not be used by investors to
anticipate future results or trends.
With the exception of historical information, the matters discussed in Managements Discussion
& Analysis of Financial Condition and Results of Operations includes forward-looking
statements. These forward-looking statements are based on various assumptions. The Company
cautions that, while it believes such assumptions to be reasonable and makes them in good
faith, assumed facts almost always vary from actual results. The differences between assumed
facts and actual results can be material. The Company is including this cautionary statement
to take advantage of the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 for any forward-looking statements made by, or on behalf of, the Company. The
factors identified in this cautionary statement are important factors (but not necessarily all
important factors) that could cause actual results to differ materially from those expressed
in any forward-looking statement made by, or on behalf of, the Company.
RESULTS OF OPERATIONS
The Company reported net income of $39.3 million ($0.77 per diluted share) from operating
revenues of $174.7 million for the first quarter of fiscal 2005 ended December 31, 2004,
compared with net income of $6.6 million ($0.13 per diluted share) from operating revenues of
$134.3 million for the first quarter of fiscal year 2004. Net income for this years first
quarter includes $16.0 million ($0.31 per diluted share) of gains from the sale securities. Net
income for the first quarter of fiscal 2004 includes $1.9 million ($0.04 per diluted share) of
gains from the sale of available-for-sale securities and a non-monetary investment gain of $1.1
million ($0.02 per diluted share). Also included in net income in the first quarter 2005 is
approximately $5.5 million (0.11 per diluted share) from the sale of two drilling rigs.
Operating income increased $21.8 million for the first quarter of fiscal 2005 compared to the
first quarter of fiscal 2004 due to increased U.S. land rig dayrates and cash margins and
increased International rig utilization.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following tables summarize operations by business segment for the three months ended
December 31, 2004 and 2003. Operating statistics in the tables exclude the effects of
offshore platform management contracts, and do not include reimbursements of out-of-pocket
expenses in revenue, expense and margin per day calculations. Per day calculations for
international operations also exclude gains and losses from translation of foreign currency
transactions.
U.S. LAND operating income totaled $25.6 million and $6.5 million in the first quarter of
fiscal 2005 and 2004, respectively. Revenues were $109.2 million in the first quarter of
fiscal 2005, compared with $74.9 million in last years first quarter. Increases in land rig
dayrates and activity days accounted for the increase in revenue. Included in land revenues
for the three months ended December 31, 2004, and December 31, 2003 are reimbursements for
out-of-pocket expenses of $7.8 million and $4.3 million, respectively. The $19.1 million
increase in operating income was primarily the result of higher land rig margins and increased
rig days.
During the quarter, the Company returned five rigs to its U.S. land fleet from its
international land fleet. Two of these rigs are presently under contract and three of the
rigs will require additional investment and term contracts before returning to work. Also in
the first quarter of 2005, two land rigs were sold. One additional international land rig will
be returned to the U.S. in the Companys second quarter of fiscal 2005.
Average land rig margin per day was $5,563 and $3,414 for the first quarter of fiscal 2005 and
2004, respectively. The 63% increase in margins was due to higher dayrates in the first
quarter of 2005. Land rig utilization was 92% and 81% for the first quarter of fiscal 2005 and
2004, respectively. Land rig revenue days for the first quarter of 2005 were 7,588 compared
with 6,280 for the same period of 2004, with an average of 82.5 and 68.3 rigs working during
the first quarter of fiscal 2005 and 2004, respectively. The increase in rig days and average
rigs working is attributable to increased activity days for the same rigs working in the
comparable quarters, the addition of two rigs during the first quarter of 2005 and the
addition of two rigs during fiscal 2004 subsequent to the first quarter of 2004. Land
depreciation expense increased to $14.7 million in the first quarter of fiscal 2005, compared
to $13.0 million in the same period of fiscal 2004. The increase is the result of two new
rigs added during fiscal 2004 and five additional rigs transferred from International
operations in the first quarter of 2005.
In late December 2004 and into January 2005, average dayrates have increased
indicating strong margins for the U.S. land segment in the second quarter of 2005.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
U.S. OFFSHORE operating revenues and income declined slightly when compared to the first
quarter of 2004. While rig days increased to 563 for the first quarter of fiscal 2005 as
compared to 460 in the first quarter of 2004, average revenue per day declined. Rig
utilization for the same periods was 56% and 42%, respectively. Revenues were $20.4 million
in the first quarter of fiscal 2005, compared with $20.7 million in last years first quarter.
Included in offshore revenues for the three months ended December 31, 2004 and December 31,
2003 are reimbursements for out-of-pocket expenses of $1.5 million and $1.6 million,
respectively.
Five of the Companys eleven platform rigs are contracted and no significant change in
offshore platform results is anticipated for the second quarter of fiscal 2005. The Company
continues to forecast a slow recovery in our platform rig activity, but is encouraged by
inquiries for future possibilities.
INTERNATIONAL DRILLINGS operating income for the first quarter of fiscal 2005 was $6.2
million, compared to $3.6 million in the same period of 2004. Rig utilization for
international operations averaged 71% for this years first quarter, compared with 53% for the
first quarter of fiscal 2004. An average of 20.0 rigs worked during the current quarter,
compared to 16.9 rigs in the first quarter of fiscal 2004. International revenues were $42.5
million and $36.0 million for the first quarter of fiscal 2005 and 2004, respectively. The
increase in revenue is attributable to increased activity days.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
In Venezuela, there are currently eight deep rigs operating for PDVSA, with a ninth deep rig
to begin work in mid-February. During the first quarter of 2005, a rig was returned to the
U.S. land fleet from Venezuela. The Company is also bidding on other contracts that offer
possibilities for idle rigs in Venezuela and Bolivia.
Colombia had one rig working during the first quarter of 2005 and a second rig will commence
work in early February 2005. The Company moved three rigs to the U.S. from Bolivia and two of
the remaining three rigs in Bolivia worked during the first quarter of 2005. At the end of
the quarter, Bolivia had no rigs working or contracted. Argentina and Hungary each had one
rig working during the quarter. Operations ceased in Hungary in early December 2004. The rig
has been contracted and will be moved to the U.S. in late February 2005. The rig in Chad,
which ceased operations at the end of fiscal 2004, was moved during the first quarter of 2005
to the U.S. land fleet.
OTHER
Dividend and interest income increased to $.9 million in the first quarter of 2005 compared to
$.6 million in the first quarter of 2004. The increase is due to higher earnings from
increased cash and cash equivalent balances.
Income from the sale of investment securities increased to $26.3 million in the first quarter
of 2005, compared to $4.9 million in the first quarter of 2004. The first quarter of 2005
includes gains from the sale of securities of $26.3 million,
$16.0 million after-tax ($0.31 per diluted
share), primarily from the sale of 1,000,000 shares of Atwood Oceanics, Inc. The first quarter
of 2004 includes gains from the sale of available-for-sale securities of $3.0 million, $1.9
million after-tax ($0.04 per diluted share) and a non-monetary investment gain of $1.9 million,
$1.1 million after-tax ($0.02 per diluted share).
The fair value of the Companys remaining portfolio, including our investment in Atwood
Oceanics, Inc. which is accounted for on the equity method, was approximately $204.2 million at
December 31, 2004. The after-tax value was approximately $137.2 million.
Income from asset sales increased to $10.8 million in the first quarter of 2005 compared to $.8
million in the first quarter of 2004. The increase of $10 million is primarily due to the sale
of two deep domestic land rigs.
Interest expense was $3.3 million in the first quarter of fiscal 2005, compared to $3.2 million
in the same period of fiscal 2004. Interest expense is primarily attributable to the $200
million long-term debt for both comparable quarters and short-term borrowings in fiscal 2004.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalent balances increased to $177.5 million at December 31, 2004 from $65.3
million at September 30, 2004. Cash equivalents are made up of short-term investment grade
money market securities. The increase in cash and cash equivalents is a result of proceeds
from sales of securities of $62.4 million, proceeds from asset sales of $25.1 million and net
cash provided by operating activities of $33.7 million. In the first quarter of 2004, net cash
provided by operating activities was $25.7
million.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
Capital expenditures were $9.4 million and $29.7 million for the first quarter of fiscal 2005
and 2004, respectively. The significant decrease in capital expenditures from 2004 is the
result of the Companys FlexRig3 construction project completing in fiscal 2004. The Company
anticipates capital expenditures to be approximately $55 million for fiscal 2005. Capital
expenditures will be financed primarily by internally generated cash flows.
Our current cash, investments in short-term money market securities and cash generated from
projected operating activities are expected to meet our estimated capital expenditures and
other expected cash requirements for fiscal 2005. The Companys indebtedness totaled $200
million at December 31, 2004, as described in note 8 to the Consolidated Condensed Financial
Statements.
There were no other significant changes in the Companys financial position since September 30,
2004.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
For a description of the Companys market risks, see Item 7 (a). Quantitative and Qualitative
Disclosures About Market Risk in the Companys Annual Report on Form 10-K for the fiscal year
ended September 30, 2004, and Note 8 to the Consolidated Condensed Financial Statements contained
in Part I Item I hereof with regard to interest rate risk.
Item 4. CONTROLS AND PROCEDURES
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
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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.
Exhibit Index
-19-
Table of Contents
(Unaudited)
(in thousands, except per share data)
Three Months Ended
December 31,
2004
2003
$
109,188
$
74,933
20,356
20,702
42,471
35,961
2,664
2,677
174,679
134,273
111,252
93,781
23,262
22,268
9,246
9,102
143,760
125,151
30,919
9,122
961
645
(3,309
)
(3,222
)
26,349
4,904
10,816
881
(2
)
9
34,815
3,217
65,734
12,339
27,130
5,131
706
(620
)
$
39,310
$
6,588
$
0.78
$
0.13
$
0.77
$
0.13
50,543
50,154
51,256
50,667
$
0.0825
$
0.0800
Table of Contents
(Unaudited)
(in thousands)
Table of Contents
(in thousands - except per share data)
Accumulated
Additional
Other
Total
Common Stock
Paid-In
Unearned
Retained
Treasury Stock
Comprehensive
Shareholders
Shares
Amount
Capital
Compensation
Earnings
Shares
Amount
Income
Equity
53,529
$
5,353
$
85,466
$
$
828,763
3,084
$
(41,724
)
$
36,252
$
914,110
39,310
39,310
1,030
1,030
1,030
40,340
4,326
4,326
(4,186
)
(4,186
)
1,314
(238
)
3,221
4,535
93
(160
)
(5
)
67
1,041
1,041
3
3
53,529
$
5,353
$
92,240
$
(157
)
$
863,887
2,841
$
(38,436
)
$
37,282
$
960,169
Table of Contents
(Unaudited)
1.
Basis of Presentation
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments, consisting only of those of a normal
recurring nature, necessary to present fairly the results of the periods presented. The
results of operations for the three months ended December 31, 2004, and December 31,
2003, are not necessarily indicative of the results to be expected for the full year.
These consolidated condensed financial statements should be read in conjunction with the
consolidated financial statements and notes thereto in the Companys 2004 Annual Report
on Form 10K.
Certain reclassifications have been made to the prior period amounts to conform to the
current period presentation.
2.
Employee Stock-Based Awards
Employee stock-based awards are accounted for under Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees and related interpretations. Fixed
plan common stock options generally do not result in compensation expense, because the
exercise price of the options issued by the Company equals the market price of the
underlying stock on the date of grant. The following table illustrates the effect on net
income and earnings per share as if the Company had applied the fair value recognition
provisions of SFAS No. 123, Accounting for Stock-Based Compensation.
Three Months Ended
December 31,
2004
2003
(in thousands except per share amounts)
$
39,310
$
6,588
2
6
(993
)
(1,109
)
$
38,319
$
5,485
$
0.78
$
0.13
$
0.76
$
0.11
$
0.77
$
0.13
$
0.75
$
0.11
3.
Cash Dividends
The $.0825 cash dividend declared in September, 2004, was paid December 1, 2004. On
December 1, 2004, a cash dividend of $.0825 per share was declared for shareholders
of record on February 11, 2005, payable March 1, 2005.
4.
Inventories
Inventories consist primarily of replacement parts and
supplies held for use in the Companys drilling operations.
5.
Sale of Investment Securities
Net income includes after-tax gains from the sales of securities of $16.0 million ($0.31
per diluted share) and $1.9 million ($0.04 per diluted share) for the three months ended
December 31, 2004 and 2003, respectively. The activity
Table of Contents
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Continued
(Unaudited)
in the first quarter of 2005 was comprised primarily of the sale of shares in our
equity investee, Atwood Oceanics (Atwood), in conjunction with an equity offering
by Atwood. As a result of Atwoods capital transaction, our equity investment and
paid-in-capital increased by $4.3 million. Also, included in net income for the
first quarter of fiscal 2004 is a non-monetary investment gain of $1.2 million
($0.02 per diluted share).
6.
Summary of Available-for-Sale Securities
The following is a summary of available-for-sale securities, which excludes those
accounted for under the equity method of accounting and assets held in a Non-qualified
Supplemental Savings Plan. The assets held in the Non-qualified Supplemental Savings
Plan are valued at fair market which totaled $6.2 million at December 31, 2004 and $5.6
million at September 30, 2004. The recorded amounts for investments accounted for under
the equity method are $43.9 million and $57.8 million at December 31, 2004 and September
30, 2004, respectively.
Gross
Gross
Est.
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
(in thousands)
$
27,629
$
71,939
$
$
99,568
$
27,811
$
70,448
$
170
$
98,089
7.
Comprehensive Income
Comprehensive income, net of related tax, is as follows (in thousands):
Three Months Ended
December 31,
2004
2003
$
39,310
$
6,588
1,030
5,312
72
1,030
5,384
$
40,340
$
11,972
The components of accumulated other comprehensive income, net of related taxes, are as
follows (in thousands):
December 31,
September 30,
2004
2004
$
44,602
$
43,572
(7,320
)
(7,320
)
$
37,282
$
36,252
8.
Notes Payable and Long-term Debt
At December 31, 2004, the Company had $200 million in long-term debt outstanding at fixed
rates and maturities as summarized in the following table.
Issue Amount
Maturity Date
Interest Rate
August 15, 2007
5.51%
August 15, 2009
5.91%
August 15, 2012
6.46%
August 15, 2014
6.56%
Table of Contents
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Continued
(Unaudited)
The terms of the debt obligations require the Company to maintain a minimum ratio of debt
to total capitalization.
At December 31, 2004, the Company had a committed unsecured line of credit totaling $50
million. Letters of credit totaling $14.9 million were outstanding against the line,
leaving $35.1 million available to borrow. Under terms of the line of credit, the
Company must maintain certain financial ratios including debt to total capitalization and debt to earnings before interest, taxes, depreciation, and
amortization, and maintain a certain level of tangible net worth. The interest rate
varies based on LIBOR plus .875 to 1.125 percent or prime minus 1.75 percent to prime
minus 1.50 percent, depending on ratios described above. The line of credit matures in
July, 2005.
9.
Earnings per Share
Basic earnings per share is based on the weighted-average number of common shares
outstanding during the period. Diluted earnings per share include the dilutive effect of
stock options and restricted stock.
A reconciliation of the weighted-average common shares outstanding on a basic and diluted
basis is as follows:
Three Months Ended
December 31,
2004
2003
(in thousands)
50,543
50,154
713
513
51,256
50,667
Options to purchase 463,000 and 1,049,186 shares of common stock at a weighted average
price of $32.02 and $27.84 were outstanding at December 31, 2004 and 2003, respectively,
but were not included in the computation of diluted earnings per common share. Inclusion
of these shares would be anti-dilutive.
10.
Income Taxes
The Companys effective tax rate was 41.0% in the first quarter of fiscal 2005, compared
to 42.0% in the first quarter of fiscal 2004.
11.
Commitments
The Company, on a regular basis, makes commitments for the purchase of contract drilling
equipment. At December 31, 2004, the Company had commitments outstanding of
approximately $9 million for the purchase of drilling equipment.
12.
Segment Information
The Company operates principally in the contract drilling industry. The Companys
contract drilling business includes the following operating segments: U.S. Land, U.S.
Offshore Platform, and International. The contract drilling operations consist primarily
of contracting Company-owned drilling equipment primarily to major oil and gas
exploration companies. The Companys primary
Table of Contents
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Continued
(Unaudited)
international areas of operation include Venezuela, Colombia, Ecuador, Argentina and
Bolivia. The Company also has a Real Estate Segment whose operations are conducted
exclusively in the metropolitan area of Tulsa, Oklahoma. The primary areas of operations include a major shopping center and several multi-tenant
warehouses. Each reportable segment is a strategic business unit which is managed
separately. Other includes investments and corporate operations.
The Company evaluates performance of its segments based upon operating income or loss
from operations before income taxes which includes revenues from external and internal
customers, direct operating costs, depreciation, and allocated general and administrative
costs, but excludes corporate costs for other depreciation and other income and expense.
General and administrative costs are allocated to the segments based primarily on
specific identification and, to the extent that such identification was not practical, on
other methods which the Company believes to be a reasonable reflection of the utilization
of services provided.
External
Inter-
Total
Operating
(in thousands)
Sales
Segment
Sales
Income
$
109,188
$
$
109,188
$
25,588
20,356
20,356
4,168
42,471
42,471
6,197
172,015
172,015
35,953
2,664
191
2,855
1,075
(6,564
)
(191
)
(191
)
455
$
174,679
$
$
174,679
$
30,919
External
Inter-
Total
Operating
(in thousands)
Sales
Segment
Sales
Income
$
74,933
$
$
74,933
$
6,455
20,702
20,702
4,212
35,961
35,961
3,640
131,596
131,596
14,307
2,677
320
2,997
1,256
(6,441
)
(320
)
(320
)
$
134,273
$
$
134,273
$
9,122
Table of Contents
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Continued
(Unaudited)
Three Months Ended
December 31,
2004
2003
(in thousands)
$
30,919
$
9,122
961
645
(3,309
)
(3,222
)
26,349
4,904
10,816
881
(2
)
9
34,815
3,217
$
65,734
$
12,339
December 31,
September 30,
2004
2004
(in thousands)
$
747,612
$
742,642
99,533
102,557
241,198
261,893
1,088,343
1,107,092
32,421
33,044
352,328
266,708
$
1,473,092
$
1,406,844
Three Months Ended
December 31,
2004
2003
(in thousands)
$
132,208
$
98,312
17,232
13,749
13,365
12,424
11,874
9,788
$
174,679
$
134,273
Table of Contents
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Continued
(Unaudited)
Three Months Ended
December 31,
2004
2003
(in thousands)
$
1,137
$
1,006
1,154
1,101
(1,095
)
(1,059
)
5
239
189
$
1,435
$
1,242
Plan Assets
The weighted-average asset allocations for the pension plan
by asset category follow:
At December 31,
2004
2003
73.0
%
73.9
%
24.8
%
23.9
%
2.2
%
2.2
%
100.0
%
100.0
%
Employer Contributions
The Company anticipates that no funding of the pension plan
will be required in fiscal 2005.
14.
Recently Issued Accounting Standards
In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123
(revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123,
Accounting for Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees and amends FASB Statement No. 95, Statement of
Cash Flows. The Statement requires all share-based payments to employees, including
grants of employee stock options, to be recognized in the financial statements based on
their fair value. The Statement is effective at the beginning of the first interim or
annual period beginning after June 15, 2005. The Company plans to adopt the new standard
July 1, 2005, its fourth quarter ending September 30, 2005, under the
modified-prospective-transition method. The Company will recognize compensation cost for
share-based payments to employees based on their grant-date fair value from the beginning
of the fiscal period in which the recognition provisions are first applied. Measurement
and attribution of compensation cost for awards that were granted but not vested prior to
the date the Company adopts will be based on the same estimate of the grant-date fair value
and the same attribution method used previously under Statement 123 for pro forma
disclosure. For those awards that are granted, modified or settled after the Company
adopts the Statement, compensation cost will be measured and recognized in the financial
statements in accordance with the provisions of Statement 123(R). The Company expects to
incur additional compensation expense of approximately $1 million in the fourth quarter
ending September 30, 2005.
Table of Contents
AND RESULTS OF OPERATIONS
DECEMBER 31, 2004
Table of Contents
AND RESULTS OF OPERATIONS
DECEMBER 31, 2004
(continued)
2005
2004
(in 000s, except days and per day amounts)
$
109,188
$
74,933
66,978
53,490
1,866
1,925
14,756
13,063
$
25,588
$
6,455
7,588
6,280
$
13,363
$
11,255
$
7,800
$
7,841
$
5,563
$
3,414
92
%
81
%
Table of Contents
AND RESULTS OF OPERATIONS
DECEMBER 31, 2004
(continued)
2005
2004
(in 000s, except days and per day amounts)
$
20,356
$
20,702
12,847
12,722
834
729
2,507
3,039
$
4,168
$
4,212
563
460
$
25,793
$
32,570
$
14,251
$
17,584
$
11,542
$
14,986
56
%
42
%
2005
2004
(in 000s, except days and per day amounts)
$
42,471
$
35,961
30,855
26,672
653
628
4,766
5,021
$
6,197
$
3,640
1,823
1,534
$
19,208
$
19,089
$
13,346
$
13,399
$
5,862
$
5,690
71
%
53
%
Table of Contents
AND RESULTS OF OPERATIONS
DECEMBER 31, 2004
(continued)
Table of Contents
AND RESULTS OF OPERATIONS
DECEMBER 31, 2004
(continued)
a)
Evaluation of disclosure controls and procedures. As of the end of the period
covered by this Quarterly Report on Form 10-Q, the Companys management, under the
supervision and with the participation of the Companys Chief Executive Officer and
Chief Financial Officer, evaluated the effectiveness of the design and operation of the
Companys disclosure controls and procedures. Based on that evaluation, the Companys
Chief Executive Officer and Chief Financial Officer believe that:
the Companys disclosure controls and procedures are designed to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the SECs rules and
forms; and
the Companys disclosure controls and procedures operate such that important
information flows to appropriate collection and disclosure points in a timely
manner and are effective to ensure that such information is accumulated and
communicated to the Companys management, and made known to the Companys Chief
Executive Officer and Chief Financial Officer, particularly during the period
when this Quarterly Report on Form 10-Q was prepared, as appropriate to allow
timely decision regarding the required disclosure.
b)
Changes in internal control over financial reporting. There have been no changes in
the Companys internal control over financial reporting during the Companys last fiscal
quarter that have materially affected, or are reasonably likely to materially affect,
the Companys internal control over financial reporting.
Table of Contents
AND RESULTS OF OPERATIONS
DECEMBER 31, 2004
(continued)
c)
Section 404 of the Sarbanes-Oxley Act of 2002 will require the Company to include an
internal control report of management with our annual report on Form 10-K for the fiscal
year ending September 30, 2005. The internal control report must contain (1) a
statement of managements responsibility for establishing and maintaining adequate
internal control over financial reporting for the Company, (2) a statement identifying
the framework used by management to conduct the required evaluation of the effectiveness
of our internal control over financial reporting, (3) managements assessment of the
effectiveness of the Companys internal control over financial reporting as of the end
of our most recent fiscal year, including a statement as to whether or not the Companys
internal control over financial reporting is effective, and (4) a statement that our
independent auditors have issued an attestation report on managements assessment of the
Companys internal control over financial reporting.
In order to comply with Section 404 of the Sarbanes-Oxley Act of 2002, we have been
undergoing a comprehensive effort to assess the adequacy of our internal control over
financial reporting and to test that controls are functioning as documented. We
anticipate being able to comply with Section 404 of the Sarbanes-Oxley Act.
(a)
Exhibits
31.1
Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Table of Contents
HELMERICH & PAYNE, INC.
(Registrant)
By:
/s/ HANS C. HELMERICH
Hans C. Helmerich, President
By:
/s/ DOUGLAS E. FEARS
Douglas E. Fears, Chief Financial Officer
31.1
Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
EXHIBIT 31.1
CERTIFICATION
I, Hans Helmerich, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Helmerich & Payne, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included
in this quarterly report, fairly present in all material respects the financial condition, results
of operations and cash flows of the Registrant as of, and for, the periods presented in this
quarterly report;
4. The Registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Registrant and have:
5. The Registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrants auditors and the audit
committee of the Registrants board of directors (or persons performing the equivalent functions):
a)
designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b)
evaluated the effectiveness of the Registrants disclosure
controls and procedures and presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this quarterly report based on such evaluation;
and
c)
disclosed in this quarterly report any change in the
Registrants internal control over financial reporting that occurred during the
Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the Registrants internal control over financial
reporting; and
a)
all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrants ability to record,
process, summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrants internal
control over financial reporting.
/s/ Hans Helmerich
Hans Helmerich, Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION
I, Douglas E. Fears, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Helmerich & Payne, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included
in this quarterly report, fairly present in all material respects the financial condition, results
of operations and cash flows of the Registrant as of, and for, the periods presented in this
quarterly report;
4. The Registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Registrant and have:
5. The Registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrants auditors and the audit
committee of the Registrants board of directors (or persons performing the equivalent functions):
a)
designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b)
evaluated the effectiveness of the Registrants disclosure
controls and procedures and presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this quarterly report based on such evaluation;
and
c)
disclosed in this quarterly report any change in the
Registrants internal control over financial reporting that occurred during the
Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the Registrants internal control over financial
reporting; and
a)
all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrants ability to record,
process, summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrants internal
control over financial reporting.
/s/ Douglas E. Fears
Douglas E. Fears, Chief Financial Officer
EXHIBIT 32
Certification of CEO and CFO Pursuant to
In connection with the Quarterly Report of Helmerich & Payne, Inc. (the Company) on Form
10-Q for the period ending December 31, 2004 as filed with the Securities and Exchange Commission
on the date hereof (the Report), Hans Helmerich, as Chief Executive Officer of the Company, and
Douglas E. Fears, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the
best of his knowledge, that:
(1) The Report fully complies with the requirements of Section 13(a) of the Securities
Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the
financial condition and result of operations of the Company.
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
/s/ Douglas E. Fears
Douglas E. Fears
Chief Financial Officer
February 8, 2005