UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF EARLIEST EVENT REPORTED: July 27, 2005
HELMERICH & PAYNE, INC.
(Exact name of registrant as specified in its charter)
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))
 
 

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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
     On July 27, 2005, Helmerich & Payne, Inc. (“Registrant”) issued a press release announcing its financial results for its third quarter ended June 30, 2005. 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.
     
    HELMERICH & PAYNE, INC.
(Registrant)
     
    /s/ Steven R. Mackey
Steven R. Mackey
Vice President
    DATE: July 27, 2005
EXHIBIT INDEX
     
Exhibit No.
  Description
 
   
99
  Helmerich & Payne, Inc. earnings press release dated July 27, 2005

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Exhibit 99
 
July 27, 2005
HELMERICH & PAYNE, INC. ANNOUNCES THIRD QUARTER RESULTS
      Helmerich & Payne, Inc. reported net income of $29,825,000 ($0.57 per diluted share) from operating revenues of $207,387,000 for its third fiscal quarter ended June 30, 2005, compared with net income of $4,347,000 ($0.09 per diluted share) from operating revenues of $147,691,000 during last year’s third fiscal quarter ended June 30, 2004.
      For the nine months ended June 30, 2005, the Company reported net income of $91,485,000 ($1.77 per diluted share) from operating revenues of $567,516,000, compared with net income of $16,983,000 ($0.33 per diluted share) from operating revenues of $424,988,000 during the first nine months ended June 30, 2004. Included in net income were gains from the sale of portfolio securities and drilling equipment of $0.45 per share for the first nine months of fiscal 2005, and $0.17 per share for the first nine months of fiscal 2004.
      This year’s third quarter operating income was up in all four of the Company’s business segments compared with both last year’s third quarter and this year’s second quarter. The most significant impact came from the U.S. land rig operations with operating profit totaling $47,244,000 for the third quarter, compared with $9,487,000 for last year’s third quarter and $35,797,000 for this year’s second quarter. Third quarter U.S. land profit margins per rig day rose 18% over the previous quarter from $6,944 to $8,219 per day, despite labor cost increases that drove daily rig expenses up by 4.5% during the same period. Third quarter average rig revenue reached an all time high of $16,658 per day. (See attached financial reports for additional operating statistics.)
      Since March 2005, the Company has announced separate agreements with six companies to construct and operate a total of 22 newly designed FlexRigs, all under three-year contracts with attractive dayrates and economics. The first of the new rigs will be delivered this November.
      Company President and CEO, Hans Helmerich commented, “As the land rig industry experiences capacity limitations resulting in improved profitability and an intensified demand for new rigs, Helmerich & Payne is in the enviable position as the market leader in new-build orders. We are excited about the growth opportunities that lie ahead for the Company and the value created for our shareholders.”
(over)

 

 

Page 2
July 27, 2005
News Release
      Helmerich & Payne, Inc. (HP/NYSE) is a contract drilling company that owns 91 U.S. land rigs, 11 U.S. platform rigs located in the Gulf of Mexico, 26 rigs located in South America, 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.
*FlexRig® is a registered trademark of Helmerich & Payne, Inc.
Contact: Doug Fears
(918) 588-5208
(more)

 

 

Page 3
News Release
July 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands, except per share data)
                                         
    Three Months Ended     Nine Months Ended  
    March 31     June 30     June 30  
CONSOLIDATED STATEMENTS OF INCOME   2005     2005     2004     2005     2004  
 
Operating Revenues:
                                       
Drilling — U.S. Land
  $ 122,394     $ 138,720     $ 88,550     $ 370,302     $ 245,960  
Drilling — U.S. Offshore
    18,649       19,905       21,260       58,910       60,637  
Drilling — International
    41,799       46,030       35,487       130,300       110,759  
Real Estate
    2,608       2,732       2,394       8,004       7,632  
 
                             
 
    185,450       207,387       147,691       567,516       424,988  
 
                             
 
                                       
Operating costs and expenses:
                                       
Operating costs
    114,321       121,470       105,562       347,043       304,293  
Depreciation
    23,950       23,419       23,934       70,631       69,604  
General and administrative
    9,593       11,680       9,516       30,519       28,407  
 
                             
 
    147,864       156,569       139,012       448,193       402,304  
 
                             
 
                                       
Operating income
    37,586       50,818       8,679       119,323       22,684  
 
                                       
Other income (expense):
                                       
Interest and dividend income
    1,193       1,671       328       3,825       1,489  
Interest expense
    (3,246 )     (3,127 )     (3,114 )     (9,682 )     (9,448 )
Gain on sale of investment securities
    (36 )     —       —       26,313       11,976  
Income from asset sales
    971       603       102       12,390       1,738  
Other
    348       29       13       375       131  
 
                             
 
                                       
 
    (770 )     (824 )     (2,671 )     33,221       5,886  
 
                             
 
                                       
Income before income taxes and equity in income of affiliates
    36,816       49,994       6,008       152,544       28,570  
 
                                       
Income tax provision
    15,153       20,627       2,522       62,910       12,137  
 
                                       
Equity in income of affiliates net of income taxes
    687       458       861       1,851       550  
 
                             
NET INCOME
  $ 22,350     $ 29,825     $ 4,347     $ 91,485     $ 16,983  
 
                             
 
                                       
Earnings per common share:
                                       
Basic
  $ 0.44     $ 0.58     $ 0.09     $ 1.80     $ 0.34  
Diluted
  $ 0.43     $ 0.57     $ 0.09     $ 1.77     $ 0.33  
 
                                       
Average common shares outstanding:
                                       
Basic
    50,955       51,233       50,404       50,909       50,273  
Diluted
    51,891       52,236       50,880       51,793       50,816  
(more)

 

 

Page 4
News Release
July 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
                 
CONSOLIDATED CONDENSED BALANCE SHEETS   6/30/05     9/30/04  
 
               
ASSETS
               
Cash and cash equivalents
  $ 236,285     $ 65,296  
Other current assets
    198,998       180,590  
 
           
Total current assets
    435,283       245,886  
 
           
Investments
    165,500       161,532  
Net property, plant, and equipment
    967,153       998,674  
Other assets
    2,652       752  
 
           
TOTAL ASSETS
  $ 1,570,588     $ 1,406,844  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Total current liabilities
  $ 65,584     $ 59,903  
Total noncurrent liabilities
    278,724       232,831  
Long-term notes payable
    200,000       200,000  
Total shareholders’ equity
    1,026,280       914,110  
 
           
 
               
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 1,570,588     $ 1,406,844  
 
           
(more)

 

 

Page 5
News Release
July 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
                 
    Nine Months Ended  
    June 30
  		 
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS   2005     2004  
 
               
OPERATING ACTIVITIES:
               
Net Income
  $ 91,485     $ 16,983  
Depreciation
    70,631       69,604  
Changes in assets and liabilities
    13,578       2,166  
Gain on sale of assets and investment securities
    (38,703 )     (11,766 )
Non-monetary investment gain
    —       (1,946 )
Other
    (3,316 )     (801 )
 
           
Net cash provided by operating activities
    133,675       74,240  
 
           
 
               
INVESTING ACTIVITIES:
               
Capital expenditures
    (54,082 )     (70,536 )
Purchase of investments
    (5,000 )     —  
Proceeds from sale of assets and investment securities
    92,207       17,313  
 
           
Net cash provided by (used in) investing activities
    33,125       (53,223 )
 
           
 
               
FINANCING ACTIVITIES:
               
Net proceeds (payments) from short-term notes
    379       (27,000 )
Dividends paid
    (12,607 )     (12,083 )
Proceeds from exercise of stock options
    16,417       4,324  
 
           
Net cash provided by (used in) financing activities
    4,189       (34,759 )
 
           
 
               
Net increase (decrease) in cash and cash equivalents
    170,989       (13,742 )
Cash and cash equivalents, beginning of period
    65,296       38,189  
 
           
Cash and cash equivalents, end of period
  $ 236,285     $ 24,447  
 
           
(more)

 

 

Page 6
News Release
July 27, 2005
                                         
SEGMENT REPORTING   Three Months Ended     Nine Months Ended  
    March 31     June 30     June 30  
    2005     2005     2004     2005     2004  
            (in thousands, except days and per day amounts)          
U.S. LAND OPERATIONS
                                       
Revenues
  $ 122,394     $ 138,720     $ 88,550     $ 370,302     $ 245,960  
Direct operating expenses
    69,695       74,639       62,784       211,312       177,217  
General and administrative expense
    1,839       2,346       1,831       6,051       5,623  
Depreciation
    15,063       14,491       14,448       44,310       41,431  
Operating income
  $ 35,797     $ 47,244     $ 9,487     $ 108,629     $ 21,689  
 
                                       
Activity days
    7,589       7,797       7,071       22,974       20,109  
Average rig revenue per day
  $ 15,018     $ 16,658     $ 11,537     $ 15,028     $ 11,342  
Average rig expense per day
  $ 8,074     $ 8,439     $ 7,893     $ 8,108     $ 7,924  
Average rig margin per day
  $ 6,944     $ 8,219     $ 3,644     $ 6,920     $ 3,418  
Rig utilization
    94 %     94 %     89 %     93 %     85 %
 
                                       
U.S. OFFSHORE OPERATIONS
                                       
Revenues
  $ 18,649     $ 19,905     $ 21,260     $ 58,910     $ 60,637  
Direct operating expenses
    10,992       11,504       13,615       35,343       37,334  
General and administrative expense
    817       1,071       792       2,722       2,288  
Depreciation
    2,668       2,682       3,033       7,857       9,103  
 
                             
Operating income
  $ 4,172     $ 4,648     $ 3,820     $ 12,988     $ 11,912  
 
                                       
Activity days
    450       455       572       1,468       1,487  
Average rig revenue per day
  $ 29,297     $ 32,614     $ 27,955     $ 28,981     $ 29,593  
Average rig expense per day
  $ 14,928     $ 16,426     $ 16,347     $ 15,133     $ 16,158  
Average rig margin per day
  $ 14,369     $ 16,188     $ 11,608     $ 13,848     $ 13,435  
Rig utilization
    45 %     45 %     52 %     49 %     45 %
(more)

 

 

Page 7
News Release
July 27, 2005
                                         
SEGMENT REPORTING   Three Months Ended     Nine Months Ended  
    March 31     June 30     June 30  
    2005     2005     2004     2005     2004  
            (in thousands, except days and per day amounts)          
INTERNATIONAL OPERATIONS
                                       
Revenues
  $ 41,799     $ 46,030     $ 35,487     $ 130,300     $ 110,759  
Direct operating expenses
    32,920       35,192       28,210       98,967       86,938  
General and administrative expense
    497       619       428       1,769       1,617  
Depreciation
    4,800       4,935       5,103       14,501       15,263  
 
                             
Operating income
  $ 3,582     $ 5,284     $ 1,746     $ 15,063     $ 6,941  
 
                                       
Activity days
    1,728       1,916       1,567       5,467       4,574  
Average rig revenue per day
  $ 19,430     $ 19,536     $ 18,827     $ 19,393     $ 19,888  
Average rig expense per day
  $ 13,672     $ 14,633     $ 14,577     $ 13,900     $ 14,846  
Average rig margin per day
  $ 5,758     $ 4,903     $ 4,250     $ 5,493     $ 5,042  
Rig utilization
    71 %     80 %     53 %     74 %     52 %
 
                                       
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 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
  $ 8,419     $ 8,838     $ 6,971     $ 25,046     $ 17,889  
U.S. Offshore Operations
  $ 1,410     $ 2,412     $ 1,180     $ 5,293     $ 4,332  
International Operations
  $ 3,794     $ 4,115     $ 2,479     $ 11,008     $ 9,250  
 
                                       
REAL ESTATE
                                       
Revenues
  $ 2,608     $ 2,732     $ 2,394     $ 8,004     $ 7,632  
Direct operating expenses
    1,174       838       953       3,039       2,804  
Depreciation
    573       628       579       1,763       1,664  
 
                             
Operating income
  $ 861     $ 1,266     $ 862     $ 3,202     $ 3,164  
(more)

 

 

Page 8
News Release
July 27, 2005
The following table reconciles operating income per the information above to income before income taxes and equity in income of affiliates as reported on the Consolidated Statements of Income (in thousands).
                                         
SEGMENT REPORTING   Three Months Ended     Nine Months Ended  
    March 31     June 30     June 30  
    2005     2005     2004     2005     2004  
 
                                       
Operating income
                                       
U.S. Land
  $ 35,797     $ 47,244     $ 9,487     $ 108,629     $ 21,689  
U.S. Offshore
    4,172       4,648       3,820       12,988       11,912  
International
    3,582       5,284       1,746       15,063       6,941  
Real Estate
    861       1,266       862       3,202       3,164  
 
                             
Segment operating income
  $ 44,412     $ 58,442     $ 15,915     $ 139,882     $ 43,706  
Corporate general and administrative
    (6,440 )     (7,644 )     (6,465 )     (19,977 )     (18,879 )
Other depreciation
    (846 )     (683 )     (771 )     (2,200 )     (2,143 )
Inter-segment elimination
    460       703       —       1,618       —  
 
                             
Operating income
  $ 37,586     $ 50,818     $ 8,679     $ 119,323     $ 22,684  
 
                                       
Other income (expense):
                                       
Interest and dividend income
    1,193       1,671       328       3,825       1,489  
Interest expense
    (3,246 )     (3,127 )     (3,114 )     (9,682 )     (9,448 )
Gain on sale of investment securities
    (36 )     —       —       26,313       11,976  
Income from asset sales
    971       603       102       12,390       1,738  
Other
    348       29       13       375       131  
 
                             
Total other income (expense)
    (770 )     (824 )     (2,671 )     33,221       5,886  
 
                             
 
                                       
Income before income taxes and equity in income of affiliates
  $ 36,816     $ 49,994     $ 6,008     $ 152,544     $ 28,570  
 
                             
###