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: MARCH 31, 1998
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
(State or other jurisdiction of incorporation or organization)
73-0679879
(I.R.S. Employer I.D. Number)
UTICA AT TWENTY-FIRST STREET, TULSA, OKLAHOMA 74114
(Address of principal executive office) (zip code)
Registrant's telephone number, including area code: (918) 742-5531
Former name, former address and former fiscal year, if changed since last
report: NONE
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 [ ]
CLASS OUTSTANDING AT MARCH 31, 1998
Common Stock, .10 par value 50,294,714
AUTHORIZED AT MARCH 31, 1998
53,528,952
|
HELMERICH & PAYNE, INC.
INDEX
PART I FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
March 31, 1998 and September 30, 1997. . . . . . . . . . . . . . 3
Consolidated Condensed Statements of Income -
Three Months and Six Months Ended
March 31, 1998 and 1997. . . . . . . . . . . . . . . . . . . . . 4
Consolidated Condensed Statements of Cash Flows -
Six Months Ended March 31, 1998 and 1997 . . . . . . . . . . . . 5
Consolidated Condensed Statement of Shareholders' Equity -
Six Months Ended March 31, 1998. . . . . . . . . . . . . . . . . 6
Notes to Consolidated Condensed Financial Statements . . . . . . 7,8 & 9
Revenues and Income by Business Segments . . . . . . . . . . . . 10
Management's Discussion and Analysis of Financial 11,12,
Condition and Results of Operations. . . . . . . . . . . . . . . 13 & 14
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . 14
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . 15
|
PART I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
(Unaudited)
March 31 September 30
1998 1997
---------- ------------
ASSETS
Current Assets
Cash and cash equivalents .................................. $ 35,639 $ 27,963
Short-term investments ..................................... 1,278 1,318
Accounts receivable, net ................................... 120,687 98,697
Inventories ................................................ 22,155 19,639
Prepaid expenses and other ................................. 14,344 10,387
---------- ----------
Total Current Assets ................................... 194,103 158,004
---------- ----------
Investments ..................................................... 304,644 323,510
Property, Plant and Equipment, Net .............................. 583,561 539,025
Other Assets .................................................... 13,599 13,056
---------- ----------
Total Assets ........................................... $1,095,907 $1,033,595
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable ........................................... $ 40,530 $ 42,642
Accrued liabilities ........................................ 39,458 47,525
Notes payable .............................................. 28,000 5,000
---------- ----------
Total Current Liabilities .............................. 107,988 95,167
---------- ----------
Noncurrent Liabilities
Deferred income taxes ...................................... 141,458 141,331
Other ...................................................... 27,935 16,517
---------- ----------
Total Noncurrent Liabilities............................ 169,393 157,848
---------- ----------
SHAREHOLDERS' EQUITY
Common stock, $0.10 par value, 80,000,000
shares authorized, 53,528,952 shares issued ............... 5,353 5,353
Preferred stock, no shares issued .......................... -- --
Additional paid-in capital ................................. 57,771 51,316
Retained earnings .......................................... 671,102 629,562
Unearned compensation ...................................... (6,284) --
Net unrealized holding gains ............................... 109,206 114,454
---------- ----------
837,148 800,685
Treasury stock - 3,234,238 and 3,500,698
shares, respectively, at cost ............................. (18,622) (20,105)
---------- ----------
Total Shareholders' Equity ...................................... 818,526 780,580
---------- ----------
Total Liabilities and Shareholders' Equity ...................... $1,095,907 $1,033,595
========== ==========
|
See accompanying notes to financial statements.
PART I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(in thousands except per share data)
Quarter Ended Six Months Ended
March 31 March 31
1998 1997 1998 1997
--------- --------- --------- ---------
REVENUES:
Sales and other operating revenues ...................... $ 140,822 $ 130,773 $ 284,934 $ 247,499
Income from investments ................................. 1,567 1,706 9,278 3,242
--------- --------- --------- ---------
142,389 132,479 294,212 250,741
--------- --------- --------- ---------
COST AND EXPENSES:
Operating costs ......................................... 81,382 70,407 157,872 134,307
Depreciation, depletion and
amortization ........................................... 19,186 17,379 37,837 32,851
Dry holes and abandonments .............................. 3,169 2,412 7,306 2,972
Taxes, other than income taxes .......................... 5,783 5,418 10,977 10,105
General and administrative .............................. 3,839 2,945 6,395 5,204
Interest ................................................ 34 (3) 59 --
--------- --------- --------- ---------
113,393 98,558 220,446 185,439
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES AND
EQUITY IN INCOME OF AFFILIATE ................................ 28,996 33,921 73,766 65,302
INCOME TAX EXPENSE ........................................... 11,218 12,094 28,040 23,850
EQUITY IN INCOME OF AFFILIATE,
net of income taxes ......................................... 1,559 591 2,776 1,091
--------- --------- --------- ---------
NET INCOME ................................................... $ 19,337 $ 22,418 $ 48,502 $ 42,543
========= ========= ========= =========
EARNINGS PER COMMON SHARE:
Basic ................................................... $ 0.39 $ 0.45 $ 0.97 $ 0.86
Diluted ................................................. $ 0.38 $ 0.44 $ 0.95 $ 0.84
CASH DIVIDENDS (Note 2) ...................................... $ 0.07 $ 0.065 $ 0.14 $ 0.13
AVERAGE COMMON SHARES OUTSTANDING:
Basic ................................................... 50,052 49,714 50,029 49,682
Diluted ................................................. 50,609 50,379 50,837 50,431
|
Certain amounts have been restated to reflect the effect of the two-for-one common stock split and distribution as discussed in Note 7. The accompanying notes are an integral part of these statements.
PART I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
March 31
1998 1997
--------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income .................................................... $ 48,502 $ 42,543
Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation, depletion, and amortization .................... 37,837 32,851
Dry holes and abandonments ................................... 7,306 2,972
Equity in income of affiliate before income taxes ............ (4,477) (1,760)
Amortization of deferred compensation ........................ 591 737
Gain on sale of securities ................................... (6,012) (59)
Gain on sale of property, plant & equipment .................. (1,446) (1,677)
Other - net .................................................. 268 119
Change in assets and liabilities--
Accounts receivable ....................................... (21,990) (11,334)
Inventories ............................................... (2,516) (979)
Prepaid expenses and other ................................ (4,500) (6,272)
Accounts payable .......................................... (1,515) 3,292
Accrued liabilities ....................................... (8,067) 4,917
Deferred income taxes ..................................... 3,345 918
Other noncurrent liabilities .............................. 11,418 3,610
---------- ----------
Total adjustments ......................................... 10,242 27,335
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES ....................... 58,744 69,878
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, including dry hole costs ................ (101,387) (63,337)
Proceeds from sales of property, plant, and
equipment .................................................... 11,999 4,033
Purchase of investments ....................................... (52) (770)
Proceeds from sale of investments ............................. 21,070 103
Proceeds from sale of short-term investments .................. 40 --
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES ........................... (68,330) (59,971)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable ................................... 71,000 25,000
Payments made on notes payable ................................ (48,000) (27,000)
Dividends paid ................................................ (6,776) (6,485)
Proceeds from exercise of stock options ....................... 1,038 1,163
---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ............. 17,262 (7,322)
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS ....................... 7,676 2,585
CASH AND CASH EQUIVALENTS, beginning of period .................. 27,963 16,892
---------- ----------
CASH AND CASH EQUIVALENTS, end of period ........................ $ 35,639 $ 19,477
========== ==========
|
I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands - except per share data)
Net
Unrealized
Common Stock Paid-In Holding Unearned Retained Treasury Stock
Shares Amount Capital Gains Compensation Earnings Shares Amount
---------------- ------- --------- ------------ -------- ---------------------
Balance, September 30, 1997 ....... 53,529 $5,353 $51,316 $ 114,454 $ -- $629,562 3,501 $(20,105)
Change in net unrealized
holding gains, net of
income taxes of ($3,218) ........ -- -- -- (5,248) -- -- -- --
Cash dividends
($0.14 per share) ............... -- -- -- -- -- (7,046) -- --
Exercise of stock options ....... -- -- 698 -- -- -- (87) 449
Stock, issued under
Restricted Stock Award Plan ..... -- -- 5,757 -- (6,791) -- (180) 1,034
Amortization of deferred
compensation .................... -- -- -- -- 507 84 -- --
Net income ...................... -- -- -- -- -- 48,502 -- --
-------------------------------------------------------------------------------------------
Balance, March 31, 1998 ........... 53,529 $5,353 $57,771 $ 109,206 $ (6,284) $671,102 3,234 $ (18,622)
===========================================================================================
|
See accompanying notes to financial statements.
I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the results of the periods presented. The results of operations for the six months ended March 31, 1998, and March 31, 1997, are not necessarily indicative of the results to be expected for the full year.
2. The $.07 cash dividend declared in December, 1997, was paid March 2, 1998. On March 4, 1998, a cash dividend of $.07 per share was declared for shareholders of record on May 15, 1998, payable June 1, 1998.
3. Inventories consist of materials and supplies.
4. Income from investments includes $6,012,000 and $59,000 from gains on sales of available-for-sale securities during the first six months of 1998 and 1997, respectively.
5. The following is a summary of available-for-sale securities, which excludes those accounted for under the equity method of accounting. The recorded investment in securities accounted for under the equity method is $33,372,000.
Gross Gross Est.
Unrealized Unrealized Fair
Cost Gains Losses Value
(in thousands)
-----------------------------------------
Equity Securities 03/31/98 $ 95,134 $178,091 $1,953 $271,272
Equity Securities 09/30/97 $110,011 $184,708 $ 104 $294,615
|
6. The Company maintains a line of credit agreement with certain banks which provides for maximum borrowing of $40,000,000 at adjustable interest rates. Under the agreement, $40,000,000 may be borrowed through May 1998, and $10,000,000 may be borrowed through May 1999. As of March 31, 1998, the Company had borrowed $28,000,000 at a rate of 6.04% and had letters of credit outstanding in the amount of $8,171,000, leaving $3,829,000 available. The Company anticipates renewing a similar line of credit agreement with certain banks in May 1998. Under the line of credit agreement the Company must meet certain requirements regarding levels of debt, net worth and earnings.
The Company has an additional $14.5 million line of credit with a bank to be used primarily for letters of credit. As of March 31, 1998, the Company had letters of credit outstanding in the amount of $1,347,222 leaving $13,152,778 available.
PART I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
7. Stock Split and Earnings per Share - On December 3, 1997, the Board of Directors of the Company declared a two-for-one stock split and distribution; approximately 26.8 million shares were issued on December 31, 1997, to stockholders of record on December 15, 1997. All references in the financial statements and notes to the number of common shares outstanding and per share amounts reflect the impact of the split.
The Financial Accounting Standards Board has issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share", effective for financial statement reporting periods ending after December 15, 1997. This statement establishes standards for computing and presenting earnings per share (EPS). It replaces the presentation of primary and fully diluted EPS with a presentation of basic and diluted EPS. The Company's primary EPS, as reported in prior periods, did not change after applying the method required in computing the new basic EPS.
Basic earnings per common share is calculated based on the weighted average shares outstanding during the period. Diluted earnings per common share includes, in average common shares outstanding, employee stock options which are dilutive (557,011 shares and 770,600 shares for the second quarter and first six months of fiscal 1998, respectively, and 645,737 shares and 704,014 shares for the same periods of fiscal 1997)and non-vested restricted stock (zero shares and 37,759 shares for the second quarter and first six months of fiscal 1998, respectively, and 19,757 shares and 45,142 shares for the same periods of fiscal 1997).
8. New Accounting Pronouncements - The Financial Accounting Standards Board has issued two new accounting standards, SFAS NO. 130, "Reporting Comprehensive Income", (SFAS 130) and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", (SFAS 131), both effective for fiscal years beginning after December 15, 1997. SFAS 130 establishes standards for the reporting and display of comprehensive income. While the Company does have certain comprehensive income items, management does not believe that adopting SFAS 130 will materially change the Company's financial reporting and disclosures. SFAS 131 establishes standards for reporting financial and descriptive information about a company's operating segments. Management is currently analyzing the impact of SFAS 131, but does not expect the standard to materially change its current segment reporting disclosures.
PART I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
9. Restricted Stock Awards - In the first quarter of fiscal year 1998, the Company issued to certain employees 180,000 shares of treasury stock as restricted stock awards under the 1996 Stock Incentive Plan. The Company recognized unearned compensation of $6,791,000, which was the fair market value of the stock at the time of issuance. Treasury stock was reduced by the book value of the shares issued ($1,034,000) with the difference recognized as an increase in paid-in-capital. The unearned compensation is being amortized over a five-year period as compensation expense.
I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
REVENUES AND INCOME BY BUSINESS SEGMENTS
(in thousands)
Fiscal Year 1998 FY 1997
1st Qtr 2nd Qtr Six Mos. Six Mos.
-------------------------------------- --------
SALES AND OTHER REVENUES:
Contract Drilling-Domestic ............................ $ 41,736 $ 42,604 $ 84,340 $ 61,155
Contract Drilling-International ....................... 51,994 61,677 113,671 78,317
--------- --------- --------- ---------
Total Contract Drilling Div ......................... 93,730 104,281 198,011 139,472
--------- --------- --------- ---------
Exploration and Production ............................ 32,171 22,230 54,401 64,014
Natural Gas Marketing ................................. 16,056 12,099 28,155 39,357
--------- --------- --------- ---------
Total Oil & Gas Division ............................ 48,227 34,329 82,556 103,371
--------- --------- --------- ---------
Real Estate Division .................................. 2,091 2,141 4,232 4,494
Investment and Other .................................. 7,775 1,638 9,413 3,404
--------- --------- --------- ---------
Total Revenues .......................................... $ 151,823 $ 142,389 $ 294,212 $ 250,741
========= ========= ========= =========
OPERATING PROFIT:
Contract Drilling-Domestic ............................ $ 9,371 $ 8,275 $ 17,646 $ 9,165
Contract Drilling-International ....................... 14,055 14,803 28,858 15,825
--------- --------- --------- ---------
Total Contract Drilling Div ......................... 23,426 23,078 46,504 24,990
--------- --------- --------- ---------
Exploration and Production ............................ 14,859 6,636 21,495 38,470
Natural Gas Marketing ................................. 587 448 1,035 1,895
--------- --------- --------- ---------
Total Oil & Gas Division ............................ 15,446 7,084 22,530 40,365
--------- --------- --------- ---------
Real Estate Division .................................. 1,308 1,412 2,720 3,069
--------- --------- --------- ---------
Total Operating Profit .............................. 40,180 31,574 71,754 68,424
--------- --------- --------- ---------
OTHER ................................................... 4,590 (2,578) 2,012 (3,122)
INCOME BEFORE INCOME TAXES AND --------- --------- --------- ---------
EQUITY IN INCOME OF AFFILIATE ........................... $ 44,770 $ 28,996 $ 73,766 $ 65,302
========= ========= ========= =========
|
See accompanying notes to financial statements.
I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1998
Business Environment and Risk Factors
The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere herein. The Company's future operating results may be affected by various trends and factors which are beyond the Company's control. These include, among other factors, fluctuations in natural gas and crude oil prices, expiration or termination of drilling contracts, changes in general economic conditions, rapid or unexpected changes in technologies and uncertain business conditions that affect the Company's 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 below under the headings "Results of Operations" and "Liquidity and Capital Resources" include forward-looking statements that involve risks and uncertainties. The Company wishes to caution readers that a number of important factors discussed in this report and in the Company's other reports filed with the Securities and Exchange Commission, could affect the Company's actual results and cause actual results to differ materially from those in the forward-looking statements.
Results of Operations
The Company reported net income of $19,337,000 ($0.38 per share, on a diluted basis) from revenues of $142,389,000 for the second quarter ended March 31, 1998, compared with net income of $22,418,000 ($0.44 per share, diluted) from revenues of $132,479,000 for the second quarter of the prior fiscal year. Net income for the first six months of fiscal 1998 totaled $48,502,000 ($0.95 per share, diluted) from revenues of $294,212,000, compared with net income of $42,543,000 ($0.84 per share, diluted) from revenues of $250,741,000 recorded for the same period last year.
The Company's Exploration and Production Division reported operating profit of $6,636,000 and $21,495,000 for the second quarter and six months ended March 31, 1998, respectively, compared with operating profit of $20,196,000 and $38,470,000 for the same periods in fiscal 1997.
The sharp decrease in the second quarter of 1998 compared with the second quarter of 1997 was primarily due to a 29% decrease in natural gas prices ($1.89 versus $2.65 per mcf) and a 35% decrease in crude oil prices ($14.43 versus $22.04 per bbl). The Company also recorded a 34% reduction in oil production during the second quarter of 1998, primarily due to the sale of its Louisiana
I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1998
(Continued)
Austin Chalk production in November 1997. Average second quarter natural gas production volumes rose to 115 mmcf/d, from approximately 111 mmcf/d during the second quarter of last year. Dry hole, abandonment and geophysical expenses were up significantly during the second quarter and first half of fiscal 1998 because of the Company's more aggressive exploration program.
During the second quarter, the Company completed two exploratory wells, one in east Texas and one in south Louisiana. In east Texas, the Company completed its first Cotton Valley Lime Pinnacle reef discovery in southeast Limestone County with a 25% working interest. The Marathon #1 Willis is producing at approximately 20 million cubic feet of gas per day and had first sales April 9, 1998. In Vermilion Parish in south Louisiana, the Company tested its #1 Anna Lou Cormier at a rate of 467 barrels of oil per day and 0.9 million cubic feet of gas per day in the Marg Howe formation. This was a secondary objective after drilling to the Bol Mex formation and finding it non-productive. In the second quarter of fiscal 1998, $1.7 million dry hole expense was recorded associated with the non-productive Bol Mex test. The Company operates the Anna Lou with a 75% working interest.
Operating profit from the Company's Contract Drilling Division for both the second quarter and six month periods was up dramatically compared with last year, due to an increase in rig activity and a sharp increase in dayrates in both domestic and international operations. In the Company's U.S. offshore market, there has been a sharp increase in total active rig days compared with last year's first six months. The major reason for the increase is the addition of Company rigs on Shell's Ram/Powell Tension Leg Platform and Shell's Enchilada Platform, both of which began operations in the second half of last year. Total domestic drilling operating profit for the second quarter rose to $8,275,000, up 67% from last year's second quarter.
International rig utilization increased to an average of 95% for the second quarter of this year, from 90% for the second quarter of last year. Operating profit from international operations increased to $14,803,000, up 66% from last year's second quarter.
Although the Company's rig utilization and dayrate structure remained relatively stable during the second quarter, there has been a recent softening in both the domestic and international drilling markets. It is anticipated that operating profit from the Company's drilling division in the last six (6) months of fiscal 1998 could be 10% to 15% lower than the first six (6) months of this fiscal year due to lower rig utilization and downward pressure on dayrates. Any further reduction in oil prices or continued softening of dayrates could have a material affect on operating profit.
I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1998
(Continued)
Impact of Year 2000 -
Some of the Company's older computer programs were written using two
digits rather than four to define the applicable year. As a result, those
computer programs have time-sensitive software that recognize a date using "00"
as the year 1900 rather than the year 2000.
The Company has completed a Year 2000 assessment and is in the process of modifying or replacing portions of its software so that its computer systems will function properly with respect to dates in the Year 2000 and thereafter. To date, the Year 2000 Project cost has been less than $400,000 and the Company estimates that the total cost associated with the Year 2000 Project will be less than $500,000.
The project is estimated to be completed no later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The Company believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Company.
The costs of the project and the date on which the Company believes it will complete the Year 2000 modifications are based on management's best estimates, which were derived utilizing numerous assumptions of future events, including the continued availability of certain resources and other factors. However, there can be no guarantee that these estimates will be achieved and actual results could differ materially from those anticipated. Specific factors that might cause such material differences include, but are not limited to, the availability and cost of personnel trained in this area, the ability to locate and correct all relevant computer codes, and similar uncertainties.
Liquidity and Capital Resources
Net cash provided by operating activities was $58,744,000 for the first six months of fiscal 1998, compared with $69,878,000 for the same period in 1997. Capital expenditures were $101,387,000 and $63,337,000 for the first six months of fiscal 1998 and 1997, respectively.
I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1998
(Continued)
It is anticipated for fiscal 1998 that capital expenditures will approach $240 million, exceeding internally generated cash flows, and that the Company will borrow under its line of credit agreement or sell a portion of its investment portfolio to fund capital expenditures.
In April and May of 1998, the Company sold a portion of its investment portfolio to fund expected capital expenditures in the current year. The Company sold 200,000 shares of Atwood Oceanics, 300,000 shares of Sun Company and 400,000 shares of Occidental Petroleum. The total gain on the sales was approximately $12 million, net of tax ($0.24 per share, diluted).
There were no other significant changes in the Company's financial position since September 30, 1997.
PART II. OTHER INFORMATION
HELMERICH & PAYNE, INC.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Helmerich & Payne, Inc. was held on March 4, 1998, for the purpose of electing three members of the Board of Directors. No other matters were submitted for vote to the stockholders. Proxies for the meeting were solicited by and on behalf of the management of Helmerich & Payne, Inc., and there was no solicitation in opposition to management's solicitation. Each of management's incumbent nominees for directorship were elected by the affirmative vote of a plurality of the shares of voted common stock. The number of votes for and withheld from each Director, respectively, were as follows: Hans Helmerich, 45,588,946 for, and 221,319 withheld; George S. Dotson, 45,599,769 for, and 210,496 withheld; and George A. Schaefer, 45,595,306 for, and 214,959 withheld. There were no broker non-votes nor other abstentions. The other Directors whose term of office as Director continued after the meeting are W. H. Helmerich, III, Glenn A. Cox, Edward B. Rust, Jr., John D. Zeglis, William L. Armstrong, and L. F. Rooney, III.
Item 6(b) Reports on Form 8-K
For the three months ended March 31, 1998, there was one Form 8-K filed on January 8, 1998.
PART II. OTHER INFORMATION
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.
Date: MAY 14, 1998 /s/ DOUGLAS E. FEARS
---------------------- -----------------------------------------
Douglas E. Fears, Chief Financial Officer
Date: MAY 14, 1998 /s/ HANS C. HELMERICH
---------------------- -----------------------------------------
Hans C. Helmerich, President
|
INDEX TO EXHIBITS
Exhibit Description ------- ----------- 27 Financial Data Schedule |
| ARTICLE 5 |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | 3 MOS |
| FISCAL YEAR END | SEP 30 1998 |
| PERIOD START | OCT 01 1997 |
| PERIOD END | MAR 31 1998 |
| CASH | 35,639 |
| SECURITIES | 304,644 |
| RECEIVABLES | 121,995 |
| ALLOWANCES | 1,308 |
| INVENTORY | 22,155 |
| CURRENT ASSETS | 194,103 |
| PP&E | 1,222,788 |
| DEPRECIATION | 639,227 |
| TOTAL ASSETS | 1,095,907 |
| CURRENT LIABILITIES | 107,988 |
| BONDS | 0 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 5,353 |
| OTHER SE | 813,173 |
| TOTAL LIABILITY AND EQUITY | 1,095,907 |
| SALES | 284,934 |
| TOTAL REVENUES | 294,212 |
| CGS | 211,231 |
| TOTAL COSTS | 211,231 |
| OTHER EXPENSES | 2,761 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 59 |
| INCOME PRETAX | 73,766 |
| INCOME TAX | 28,040 |
| INCOME CONTINUING | 48,502 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 48,502 |
| EPS PRIMARY | .97 |
| EPS DILUTED | .95 |