Helmerich & Payne, Inc. Announces Record First Quarter Results TULSA, Okla., Jan. 31, 2013 (GLOBE NEWSWIRE) -- Helmerich & Payne, Inc. (NYSE:HP) reported record income from continuing operations of $159,611,000 ($1.48 per diluted share) from operating revenues of $844,572,000 for the first quarter of fiscal 2013, compared to income from continuing operations of $144,297,000 ($1.32 per diluted share) from operating revenues of $732,588,000 during the first fiscal quarter of 2012, and income from continuing operations of $149,606,000 ($1.39 per diluted share) from operating revenues of $829,447,000 during the fourth fiscal quarter of 2012. Included in income from continuing operations for the first fiscal quarters of 2013 and 2012, and for the fourth fiscal quarter of 2012, is income (after-tax) related to the sale of used drilling assets and investment securities of $0.08, $0.03 and $0.03 per diluted share, respectively. Net income for the first quarter of fiscal 2013 was also reported at a record level of $159,603,000 ($1.48 per diluted share), compared to net income of $144,286,000 ($1.32 per diluted share) during the first fiscal quarter of 2012, and net income of $157,115,000 ($1.46 per diluted share) during the fourth fiscal quarter of 2012. Segment operating income for U.S. land operations was $234,388,000 for the first fiscal quarter of 2013, compared with $224,706,000 for last year's first fiscal quarter and $236,619,000 for last year's fourth fiscal quarter. As compared to the prior year's fourth fiscal quarter, the number of revenue days for the segment sequentially decreased by 208 to 21,743. The average rig revenue per day decreased by $285 to $28,040 during the first fiscal quarter of 2013, but the decline was mostly attributable to lower revenue from early termination fees during the first fiscal quarter. Also as compared to the prior year's fourth fiscal quarter, average rig expense per day for the segment increased by $14 to $12,634 during the first fiscal quarter, resulting in a $299 average rig margin per day decline to $15,406. The rig revenue and margin per day averages included $37 per day of early termination fees during the first fiscal quarter of 2013 as compared to $283 per day during the previous quarter. Rig utilization for the Company's U.S. land segment was 82% for this year's first fiscal quarter, compared with 91% for last year's first fiscal quarter and 85% for last year's fourth fiscal quarter. At December 31, 2012, the Company's U.S. land segment had 239 contracted rigs (including 161 under term contracts) and 54 idle rigs. The Company also announced today that it has entered into agreements to build and operate three additional FlexRigs®* ^ in the U.S. with two exploration and production companies.The three rigs will be built under multi-year term contracts and are expected to generate attractive economic returns for the Company. Including the new builds announced today, five contracted FlexRigs remain to be delivered. Once these rigs are delivered, the Company's global fleet is expected to include 299 FlexRigs. Chairman and CEO Hans Helmerich commented, "We are pleased that the Company remains on a record-breaking pace with the results from our most recent quarter. Going forward, E&P spending plans appear poised for increases as our customers remain focused on innovative technology and productivity improvements that are transforming the energy sector in this country. Our competitive advantages are well aligned with this ongoing industry transformation and should allow us to continue to expand our market share while sustaining premium dayrates and margins." Segment operating income for the Company's offshore operations was $15,006,000 for the first fiscal quarter of 2013, compared with $12,204,000 for last year's first fiscal quarter and $12,033,000 for last year's fourth fiscal quarter. The sequential increase in operating income was attributable to a higher number of revenue days along with higher average rig margin per day during the first fiscal quarter of 2013. Rig utilization in the segment was reported at 89% for the first fiscal quarter of 2013, as compared to 84% for the immediately preceding quarter. The Company's international land operations reported segment operating income of $9,111,000 for this year's first fiscal quarter, compared with $7,939,000 for last year's first fiscal quarter and $7,126,000 for the fourth fiscal quarter of 2012. The increase in segment operating income as compared to last year's fourth fiscal quarter was mostly attributable to a 12% increase in revenue days. The average rig margin per day for the first fiscal quarter of 2013 increased sequentially to $8,400, from $8,210 per day during the fourth quarter of fiscal 2012. Helmerich & Payne, Inc. is primarily a contract drilling company.As of January 31, 2013, the Company's existing fleet included 296 land rigs in the U.S., 29 international land rigs and nine offshore platform rigs. In addition, the Company has commitments to deliver another five new H&P-designed and operated FlexRigs under long-term contracts with customers. Upon completion of these commitments, the Company's global fleet is expected to have a total of 330 land rigs, including 299 FlexRigs. Helmerich & Payne, Inc.'s conference call/webcast is scheduled to begin this morning at 11:00 a.m. ET (10:00 a.m. CT) and can be accessed at http://www.hpinc.com under Investors. If you are unable to participate during the live webcast, the call will be archived on H&P's website indicated above. This release includes "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of historical facts included in this release, including, without limitation, statements regarding the registrant's future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. For information regarding risks and uncertainties associated with the Company's business, please refer to the "Risk Factors" and "Management's Discussion & Analysis of Results of Operations and Financial Condition" sections of the Company's SEC filings, including but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. As a result of these factors, Helmerich & Payne, Inc.'s actual results may differ materially from those indicated or implied by such forward-looking statements. We undertake no duty to update or revise our forward-looking statements based on changes in internal estimates, expectations or otherwise, except as required by law. *FlexRig® is a registered trademark of Helmerich & Payne, Inc. HELMERICH & PAYNE, INC. Unaudited (in thousands, except per share data) Three Months Ended September 30 December 31 CONSOLIDATED STATEMENTS OF INCOME 2012 2012 2011 Operating Revenues: Drilling – U.S. Land $695,106 $696,030 $617,779 Drilling – Offshore 53,256 57,718 50,792 Drilling – International Land 77,722 87,267 60,735 Other 3,363 3,557 3,282 829,447 844,572 732,588 Operating costs and expenses: Operating costs, excluding depreciation 447,335 466,871 391,032 Depreciation 115,145 106,599 86,288 General and administrative 27,763 32,421 26,163 Research and development 4,682 3,353 3,249 Income from asset sales (4,858) (5,219) (4,683) 590,067 604,025 502,049 Operating income 239,380 240,547 230,539 Other income (expense): Interest and dividend income 359 426 336 Interest expense (1,360) (1,308) (2,461) Gain on sale of investment securities -- 8,752 -- Other (34) (2,084) 21 (1,035) 5,786 (2,104) Income from continuing operations before 238,345 246,333 228,435 income taxes Income tax provision 88,739 86,722 84,138 Income from continuing operations 149,606 159,611 144,297 Income (loss) from discontinued operations 7,509 (8) (11) before income taxes Income tax provision -- -- -- Income (loss) from discontinued operations 7,509 (8) (11) NET INCOME $157,115 $159,603 $144,286 Basic earnings per common share: Income from continuing operations $1.41 $1.50 $1.34 Income from discontinued operations $.07 $-- $-- Net income $1.48 $1.50 $1.34 Diluted earnings per common share: Income from continuing operations $1.39 $1.48 $1.32 Income from discontinued operations $.07 $ -- $ -- Net income $1.46 $1.48 $1.32 Weighted average shares outstanding: Basic 105,695 105,867 107,186 Diluted 107,086 107,412 108,788 HELMERICH & PAYNE, INC. Unaudited (in thousands) CONSOLIDATED CONDENSED BALANCE SHEETS December 31 September 30 2012 2012 ASSETS Cash and cash equivalents $241,146 $96,095 Other current assets 730,498 791,514 Current assets of discontinued operations 7,788 7,619 Total current assets 979,432 895,228 Investments 441,794 451,144 Net property, plant, and equipment 4,491,051 4,351,571 Other assets 22,011 23,142 TOTAL ASSETS $ 5,934,288 $ 5,721,085 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $422,028 $376,035 Current liabilities of discontinued operations 5,205 5,129 Total current liabilities 427,233 381,164 Non-current liabilities 1,319,077 1,307,433 Non-current liabilities of discontinued operations 2,583 2,490 Long-term notes payable 195,000 195,000 Total shareholders' equity 3,990,395 3,834,998 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,934,288 $ 5,721,085 HELMERICH & PAYNE, INC. Unaudited (in thousands) Three Months Ended December 31 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS 2012 2011 OPERATING ACTIVITIES: Net income $159,603 $144,286 Adjustment for loss from discontinued operations 8 11 Income from continuing operations 159,611 144,297 Depreciation 106,599 86,288 Changes in assets and liabilities 83,660 6,823 Gain on sale of assets and investment securities (13,971) (4,683) Other 6,031 3,924 Net cash provided by operating activities from continuing 341,930 236,649 operations Net cash used in operating activities from discontinued (8) (11) operations Net cash provided by operating activities 341,922 236,638 INVESTING ACTIVITIES: Capital expenditures (219,444) (256,943) Proceeds from sale of assets and investment securities 25,516 10,155 Net cash used in investing activities (193,928) (246,788) FINANCINGACTIVITIES: Dividends paid (7,432) (7,522) Exercise of stock options 473 373 Tax withholdings related to net share settlements of (1,677) (1,514) restricted stock Excess tax benefit from stock-based compensation 5,693 2,426 Net cash used in financing activities (2,943) (6,237) Net increase (decrease) in cash and cash equivalents 145,051 (16,387) Cash and cash equivalents, beginning of period 96,095 364,246 Cash and cash equivalents, end of period $241,146 $347,859 SEGMENT REPORTING Three Months Ended September 30 December 31 2012 2012 2011 (in thousands, except days and per day amounts) U.S. LAND OPERATIONS Revenues $ 695,106 $ 696,030 $ 617,779 Direct operating expenses 350,364 361,068 312,306 General and administrative 8,078 9,321 7,298 expense Depreciation 100,045 91,253 73,469 Segment operating income $ 236,619 $ 234,388 $ 224,706 Revenue days 21,951 21,743 20,968 Average rig revenue per $28,325 $28,040 $26,861 day Average rig expense per $ 12,620 $12,634 $12,292 day Average rig margin per day $15,705 $15,406 $14,569 Rig utilization 85% 82% 91% OFFSHORE OPERATIONS Revenues $53,256 $57,718 $ 50,792 Direct operating expenses 35,824 37,207 33,201 General and administrative 1,974 2,235 1,732 expense Depreciation 3,425 3,270 3,655 Segment operating income $12,033 $15,006 $12,204 Revenue days 695 736 697 Average rig revenue per $62,018 $61,936 $53,644 day Average rig expense per $38,688 $36,154 $31,473 day Average rig margin per day $23,330 $25,782 $22,171 Rig utilization 84% 89% 84% INTERNATIONAL LAND OPERATIONS Revenues $77,722 $ 87,267 $60,735 Direct operating expenses 61,346 68,639 45,164 General and administrative 806 1,039 778 expense Depreciation 8,444 8,478 6,854 Segment operating income $7,126 $9,111 $7,939 Revenue days 2,001 2,237 1,729 Average rig revenue per $35,732 $35,511 $31,072 day Average rig expense per $27,522 $27,111 $22,057 day Average rig margin per day $8,210 $8,400 $9,015 Rig utilization 79% 85% 78% Operating statistics exclude the effects of offshore platform management contracts, gains and losses from translation of foreign currency transactions, 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 $73,346 $86,359 $54,562 Offshore Operations $4,731 $6,259 $5,798 International Land $6,221 $7,828 $7,012 Operations Segment operating income for all segments is a non-GAAP financial measure of the Company's performance, as it excludes general and administrative expenses, corporate depreciation, income from asset sales and other corporate income and expense.The Company considers segment operating income to be an important supplemental measure of operating performance for presenting trends in the Company's core businesses.This measure is used by the Company to facilitate period-to-period comparisons in operating performance of the Company's reportable segments in the aggregate by eliminating items that affect comparability between periods.The Company believes that segment operating income is useful to investors because it provides a means to evaluate the operating performance of the segments and the Company on an ongoing basis using criteria that are used by our internal decision makers.Additionally, it highlights operating trends and aids analytical comparisons.However, segment operating income has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect the Company's operating performance in future periods. The following table reconciles operating income per the information above to income from continuing operations before income taxes as reported on the Consolidated Statements of Income (in thousands). Three Months Ended September 30 December 31 2012 2012 2011 Operating income U.S. Land $ 236,619 $ 234,388 $ 224,706 Offshore 12,033 15,006 12,204 International Land 7,126 9,111 7,939 Other (3,042) (1,635) (1,788) Segment operating income $ 252,736 $ 256,870 $ 243,061 Corporate general and administrative (16,905) (19,826) (16,355) Other depreciation (2,510) (2,934) (1,556) Inter-segment elimination 1,201 1,218 706 Income from asset sales 4,858 5,219 4,683 Operating income $ 239,380 $ 240,547 $ 230,539 Other income (expense): Interest and dividend income 359 426 336 Interest expense (1,360) (1,308) (2,461) Gain on sale of investment securities -- 8,752 -- Other (34) (2,084) 21 Total other income (expense) (1,035) 5,786 (2,104) Income from continuing operations before $ 238,345 $ 246,333 $ 228,435 income taxes CONTACT: Investor Relations firstname.lastname@example.org (918) 588-5207 Helmerich & Payne, Incorporated Logo
Helmerich & Payne, Inc. Announces Record First Quarter Results
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