UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF EARLIEST EVENT REPORTED: January 26, 2005
HELMERICH & PAYNE, INC.
State of Incorporation: Delaware
COMMISSION FILE NUMBER 1-4221
Internal Revenue Service – Employer Identification No. 73-0679879
1437 South Boulder Avenue, Suite 1400, Tulsa, Oklahoma 74119
(918)742-5531
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
-1-
| ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| Press Release | ||||||||
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On January 26, 2005, Helmerich & Payne, Inc. (“Registrant”) issued a press release announcing its financial results for its first quarter ended December 31, 2004. A copy of the press release is attached as Exhibit 99 to this Report on Form 8-K. This information is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly authorized the undersigned to sign this report on its behalf.
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HELMERICH & PAYNE, INC.
(Registrant) |
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/s/ Steven R. Mackey
Steven R. Mackey Vice President |
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DATE: January 26, 2005
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EXHIBIT INDEX
| Exhibit No. | Description | |
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99
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Helmerich & Payne, Inc. earnings press release dated January 26, 2005 |
-2-
Exhibit 99
January 26, 2005
HELMERICH & PAYNE, INC. ANNOUNCES FIRST QUARTER RESULTS
Helmerich & Payne, Inc. reported net income of $39,310,000 ($0.77 per diluted share) from operating revenues of $174,679,000 for its first fiscal quarter ended December 31, 2004, compared with net income of $6,588,000 ($0.13 per diluted share) from operating revenues of $134,273,000 during last year’s first fiscal quarter ended December 31, 2003.
Included in this year’s net income are gains from the sale of portfolio securities of $16,060,000 ($0.31 per share), primarily from the sale of 1,000,000 shares of Atwood Oceanics, Inc. Also included in net income is approximately $5,500,000 ($0.11 per share) income from the sale of two drilling rigs. Last year’s first quarter net income included $3,057,000 ($.06 per share) of gains from the sale of portfolio securities.
This year’s first quarter operating income for the Company’s drilling operations was up significantly from last year’s first quarter and from last year’s fourth quarter, exclusive of the $51.5 million asset impairment charge. The increase was primarily due to improvements in U.S. land rig dayrates and cash margins, which resulted in U.S. land rig operating income reaching its highest quarterly level since the peak of the 2001 up cycle. This year’s first quarter average U.S. land rig revenues and cash margins were up by $926 and $1,340 per day, respectively, over last year’s fourth quarter. Cash margins for this year’s first quarter averaged $5,563 per rig day, compared with $3,414 per rig day during last year’s first quarter, and $4,223 per rig day during last year’s fourth quarter. U.S. land rig utilization was 92% for both this year’s first quarter and last year’s fourth quarter, an increase from 81% utilization recorded during last year’s first quarter.
U. S. offshore platform rig operating income for this year’s first quarter was relatively flat from last year’s first quarter and from last year’s fourth quarter (when adjusted for the $51.5 million asset impairment charge). U.S. offshore platform rig utilization was 56% during this year’s first quarter, 42% during last year’s first quarter, and 54% during last year’s fourth quarter.
International operating income was $6,197,000 for this year’s first quarter, up substantially from last year’s first quarter operating profit of $3,640,000 and up 20% from last year’s fourth quarter operating profit of $5,185,000. Rig activity as measured in total quarterly revenue days has increased by about 16% over the past six months. This year’s first quarter international land rig utilization was 71%, compared with 53% during the first quarter last year, and 57% during last year’s fourth quarter.
(over)
Page 2
January 26, 2005
News Release
Company President and C.E.O., Hans Helmerich commented, “We are very encouraged by the improved profit recorded this quarter as tightening U.S. rig supply has translated into meaningful dayrate and margin increases. We believe these conditions in the U.S. will continue and that international rig activity will likely improve if crude oil and natural gas prices remain within recent price ranges.”
Financial Presentation
Beginning with this quarter, there is a new presentation of the Company’s Statement of Operations. Income and expense derived from transactions not related to operating activities are now recorded separately under other income (expense). The most notable change involves revenue and expense from the sale of equipment and other assets, which are no longer included in total operating revenues, segment operating results, or operating statistics such as average revenue, expense or margin per rig day. Additionally, investment income is no longer included in total revenue, but listed under other income. Prior year balances have been reclassified to conform to the current presentation. To view this new presentation for the past twelve quarters, you may go to the Company’s website at http://www.hpinc.com under Investors/Segment Income.
Helmerich & Payne, Inc. (HP/NYSE) is a contract drilling company that owns 90 U.S. land rigs, 11 U.S. platform rigs located in the Gulf of Mexico, 26 rigs located in South America, and one rig in Hungary, for a total of 128 rigs. Included in the total fleet of 128 rigs are 50 H&P-designed and operated FlexRigs.
Helmerich & Payne, Inc.’s conference call/webcast is scheduled for this morning and can be accessed at http://www.hpinc.com under Investor Relations and will begin at 11:00 a.m. ET (10:00 a.m. CT). If you are unable to participate during the live webcast, the call will be archived for a year on H&P’s website indicated above.
The information to be disclosed in the conference call and webcast shall include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by H&P in its Form 10-K filed with the Securities and Exchange Commission on December 13, 2004. As a result of these factors, H&P’s actual results may differ materially from those indicated or implied by such forward-looking statements.
Contact: Doug Fears
(918) 588-5208
(more)
Page 3
January 26, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands, except per share data)
| Three Months Ended | ||||||||||||
| September 30 | December 31 | |||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | 2004 | 2004 | 2004 | |||||||||
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Operating revenues:
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Drilling – U.S. Land
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$ | 100,055 | $ | 109,188 | $ | 74,933 | ||||||
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Drilling – U.S. Offshore
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23,601 | 20,356 | 20,702 | |||||||||
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Drilling – International
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38,029 | 42,471 | 35,961 | |||||||||
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Real Estate
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2,383 | 2,664 | 2,677 | |||||||||
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||||||||||||
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164,068 | 174,679 | 134,273 | |||||||||
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||||||||||||
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Operating costs and expenses:
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||||||||||||
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Operating costs
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113,423 | 111,252 | 93,781 | |||||||||
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Depreciation
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24,821 | 23,262 | 22,268 | |||||||||
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Asset impairment
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51,516 | — | — | |||||||||
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General and administrative
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9,254 | 9,246 | 9,102 | |||||||||
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||||||||||||
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199,014 | 143,760 | 125,151 | |||||||||
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Operating income (loss)
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(34,946 | ) | 30,919 | 9,122 | ||||||||
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Other income (expense):
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||||||||||||
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Interest and dividend income
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476 | 961 | 645 | |||||||||
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Interest expense
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(3,247 | ) | (3,309 | ) | (3,222 | ) | ||||||
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Gain on sale of investment securities
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13,442 | 26,349 | 4,904 | |||||||||
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Income from asset sales
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3,639 | 10,816 | 881 | |||||||||
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Other
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66 | (2 | ) | 9 | ||||||||
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||||||||||||
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14,376 | 34,815 | 3,217 | |||||||||
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Income (loss) before income taxes and equity
in income (loss) of affiliates
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(20,570 | ) | 65,734 | 12,339 | ||||||||
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Income tax provision (benefit)
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(7,772 | ) | 27,130 | 5,131 | ||||||||
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Equity in income (loss) of affiliates
net of income taxes
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174 | 706 | (620 | ) | ||||||||
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NET INCOME (LOSS)
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$ | (12,624 | ) | $ | 39,310 | $ | 6,588 | |||||
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Earnings (loss) per common share:
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Basic
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$ | (0.25 | ) | $ | 0.78 | $ | 0.13 | |||||
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Diluted
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$ | (0.25 | ) | $ | 0.77 | $ | 0.13 | |||||
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Average common shares outstanding:
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Basic
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50,426 | 50,543 | 50,154 | |||||||||
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Diluted
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50,426 | 51,256 | 50,667 | |||||||||
(more)
Page 4
January 26, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
| CONSOLIDATED CONDENSED BALANCE SHEETS | 12/31/04 | 9/30/04 | ||||||
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ASSETS
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Cash and cash equivalents
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$ | 177,524 | $ | 65,296 | ||||
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Other current assets
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174,715 | 180,590 | ||||||
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Total current assets
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352,239 | 245,886 | ||||||
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Investments
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145,341 | 161,532 | ||||||
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Net property, plant, and equipment
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970,443 | 998,674 | ||||||
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Other assets
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743 | 752 | ||||||
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TOTAL ASSETS
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$ | 1,468,766 | $ | 1,406,844 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Total current liabilities
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$ | 58,342 | $ | 59,903 | ||||
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Total noncurrent liabilities
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254,581 | 232,831 | ||||||
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Long-term notes payable
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200,000 | 200,000 | ||||||
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Total shareholders’ equity
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955,843 | 914,110 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 1,468,766 | $ | 1,406,844 | ||||
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(more)
Page 5
January 26, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
| Three Months Ended | ||||||||
| December 31 | ||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | 2004 | 2003 | ||||||
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OPERATING ACTIVITIES:
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Net income
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$ | 39,310 | $ | 6,588 | ||||
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Depreciation
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23,262 | 22,268 | ||||||
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Changes in assets and liabilities
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9,409 | 1,280 | ||||||
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Gain on sale of assets
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(37,165 | ) | (4,090 | ) | ||||
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Non-monetary investment gain
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— | (1,564 | ) | |||||
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Other
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(1,140 | ) | 1,254 | |||||
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Net cash provided by operating activities
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33,676 | 25,736 | ||||||
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INVESTING ACTIVITIES:
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Capital expenditures
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(9,370 | ) | (29,746 | ) | ||||
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Proceeds from sale of assets
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87,553 | 4,757 | ||||||
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Net cash provided by (used in) investing activities
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78,183 | (24,989 | ) | |||||
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FINANCING ACTIVITIES:
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||||||||
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Dividends paid
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(4,166 | ) | (4,015 | ) | ||||
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Proceeds from exercise of stock options
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4,535 | 576 | ||||||
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Net cash provided by (used in) financing activities
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369 | (3,439 | ) | |||||
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Net increase (decrease) in cash and cash equivalents
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112,228 | (2,692 | ) | |||||
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Cash and cash equivalents, beginning of period
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65,296 | 38,189 | ||||||
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Cash and cash equivalents, end of period
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$ | 177,524 | $ | 35,497 | ||||
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(more)
Page 6
January 26, 2005
| SEGMENT REPORTING | Three Months Ended | |||||||||||
| September 30, | December 31, | |||||||||||
| 2004 | 2004 | 2003 | ||||||||||
| (in thousands except days and per day amounts) | ||||||||||||
|
US LAND OPERATIONS
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Revenues
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$ | 100,055 | $ | 109,188 | $ | 74,933 | ||||||
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Direct operating expenses
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68,960 | 66,978 | 53,490 | |||||||||
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General and administrative expense
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2,142 | 1,866 | 1,925 | |||||||||
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Depreciation
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15,097 | 14,756 | 13,063 | |||||||||
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||||||||||||
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Operating income
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$ | 13,856 | $ | 25,588 | $ | 6,455 | ||||||
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Activity days
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7,363 | 7,588 | 6,280 | |||||||||
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Average rig revenue per day
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$ | 12,437 | $ | 13,363 | $ | 11,255 | ||||||
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Average rig expense per day
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$ | 8,214 | $ | 7,800 | $ | 7,841 | ||||||
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Average rig margin per day
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$ | 4,223 | $ | 5,563 | $ | 3,414 | ||||||
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Rig utilization
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92 | % | 92 | % | 81 | % | ||||||
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US OFFSHORE OPERATIONS
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Revenues
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$ | 23,601 | $ | 20,356 | $ | 20,702 | ||||||
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Direct operating expenses
|
15,653 | 12,847 | 12,722 | |||||||||
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General and administrative expense
|
968 | 834 | 729 | |||||||||
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Depreciation
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3,004 | 2,507 | 3,039 | |||||||||
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Asset impairment
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51,516 | — | — | |||||||||
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|
||||||||||||
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Operating income (loss)*
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$ | (47,540 | ) | $ | 4,168 | $ | 4,212 | |||||
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Activity days
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601 | 563 | 460 | |||||||||
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Average rig revenue per day
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$ | 27,777 | $ | 25,793 | $ | 32,570 | ||||||
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Average rig expense per day
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$ | 17,377 | $ | 14,251 | $ | 17,584 | ||||||
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Average rig margin per day
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$ | 10,400 | $ | 11,542 | $ | 14,986 | ||||||
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Rig utilization
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54 | % | 56 | % | 42 | % | ||||||
*NOTE: The following is a reconciliation of operating income (loss) for the offshore
platform segment for the fourth quarter of 2004, which is provided to assist with quarterly
comparisons.
$
(47,540
)
51,516
$
3,976
(more)
Page 7
January 26, 2005
| SEGMENT REPORTING | Three Months Ended | |||||||||||
| September 30, | December 31, | |||||||||||
| 2004 | 2004 | 2003 | ||||||||||
| (in thousands except days and per day amounts) | ||||||||||||
|
INTERNATIONAL OPERATIONS
|
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Revenues
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$ | 38,029 | $ | 42,471 | $ | 35,961 | ||||||
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Direct operating expenses
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27,050 | 30,855 | 26,672 | |||||||||
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General and administrative expense
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527 | 653 | 628 | |||||||||
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Depreciation
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5,267 | 4,766 | 5,021 | |||||||||
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Operating income
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$ | 5,185 | $ | 6,197 | $ | 3,640 | ||||||
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Activity days
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1,692 | 1,823 | 1,534 | |||||||||
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Average rig revenue per day
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$ | 18,746 | $ | 19,208 | $ | 19,089 | ||||||
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Average rig expense per day
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$ | 12,739 | $ | 13,346 | $ | 13,399 | ||||||
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Average rig margin per day
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$ | 6,007 | $ | 5,862 | $ | 5,690 | ||||||
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Rig utilization
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57 | % | 71 | % | 53 | % | ||||||
Per day calculations for international operations exclude gains and losses from translation of foreign currency transactions.
Operating statistics exclude the effects of offshore platform and international management contracts, and do not include reimbursement of “out-of-pocket” expenses in revenue per day, expense per day and margin calculations.
Reimbursed amounts were as follows:
(more)
Three Months Ended
September 30,
December 31,
2004
2004
2003
$
8,478
$
7,789
$
4,252
$
1,680
$
1,471
$
1,601
$
2,481
$
3,099
$
3,261
$
2,383
$
2,664
$
2,677
1,760
1,027
897
589
562
524
$
34
$
1,075
$
1,256
Page 8
January 26, 2005
The following table reconciles operating income (loss) per the information above to income (loss) before income taxes and equity in income (loss) of affiliates as reported on the Consolidated Statements of Operations (in thousands).
| Three Months Ended | ||||||||||||
| September 30, | December 31, | |||||||||||
| 2004 | 2004 | 2003 | ||||||||||
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Operating income (loss)
|
||||||||||||
|
US Land
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$ | 13,856 | $ | 25,588 | $ | 6,455 | ||||||
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US Offshore
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(47,540 | ) | 4,168 | 4,212 | ||||||||
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International
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5,185 | 6,197 | 3,640 | |||||||||
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Real Estate
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34 | 1,075 | 1,256 | |||||||||
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Segment
operating income (loss)
|
$ | (28,465 | ) | $ | 37,028 | $ | 15,563 | |||||
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Corporate general & administrative
|
(5,617 | ) | (5,893 | ) | (5,820 | ) | ||||||
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Other depreciation
|
(864 | ) | (671 | ) | (621 | ) | ||||||
|
Inter-segment elimination
|
— | 455 | — | |||||||||
|
|
||||||||||||
|
Operating income (loss)
|
$ | (34,946 | ) | $ | 30,919 | $ | 9,122 | |||||
|
Other income (expense):
|
||||||||||||
|
Interest and dividend income
|
476 | 961 | 645 | |||||||||
|
Interest expense
|
(3,247 | ) | (3,309 | ) | (3,222 | ) | ||||||
|
Gain on sale of investment securities
|
13,442 | 26,349 | 4,904 | |||||||||
|
Income from asset sales
|
3,639 | 10,816 | 881 | |||||||||
|
Other
|
66 | (2 | ) | 9 | ||||||||
|
|
||||||||||||
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Total other income (expense)
|
14,376 | 34,815 | 3,217 | |||||||||
|
|
||||||||||||
|
Income (loss) before income taxes and
equity in income (loss) of affiliates
|
$ | (20,570 | ) | $ | 65,734 | $ | 12,339 | |||||
|
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###