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Helmerich & Payne, Inc. Announces Second Quarter Results



Helmerich & Payne, Inc. Announces Second Quarter Results

TULSA, Okla., April 25, 2013 (GLOBE NEWSWIRE) -- Helmerich & Payne, Inc.
(NYSE:HP) reported income from continuing operations of $151,067,000 ($1.39
per diluted share) from operating revenues of $838,309,000 for the second
quarter of fiscal 2013, compared to income from continuing operations of
$129,763,000 ($1.18 per diluted share) from operating revenues of $769,982,000
during the second fiscal quarter of 2012, and income from continuing
operations of $159,611,000 ($1.48 per diluted share) from operating revenues
of $844,572,000 during the first fiscal quarter of 2013. Included in income
from continuing operations for the second fiscal quarters of 2013 and 2012 are
after-tax gains equivalent to $0.03 and $0.05 per diluted share, respectively,
related to the sale of used drilling assets. Included in income from
continuing operations for the first fiscal quarter of 2013 are after-tax gains
equivalent to $0.08 per diluted share related to the sale of used drilling
assets and investment securities. Net income for the second quarter of fiscal
2013 was $151,080,000 ($1.39 per diluted share), compared to net income of
$129,719,000 ($1.18 per diluted share) during the second fiscal quarter of
2012, and net income of $159,603,000 ($1.48 per diluted share) during the
first fiscal quarter of 2013.

Chairman and CEO Hans Helmerich commented, "We are pleased with our solid
financial results for the quarter and continue to expect 2013 to improve as
the year unfolds. Assuming some measure of oil price resiliency, we anticipate
slow activity improvement ahead with customer focus around capturing potential
efficiencies, performance reliability and safety providing attractive
opportunities for the Company."

The Company also announced today that it has entered into agreements with two
exploration and production companies to build and operate two additional
FlexRigs®* in the U.S. In addition, the Company entered an agreement to build
a new 3,000 horsepower AC drive rig which is scheduled to begin operations in
Colombia in the spring of 2014. All three rigs are under multi-year term
contracts and expected to generate attractive economic returns for the
Company. 

For the six months ended March 31, 2013, the Company reported income from
continuing operations of $310,678,000 ($2.87 per diluted share) from operating
revenues of $1,682,881,000 compared with income from continuing operations of
$274,060,000 ($2.51 per diluted share) from operating revenues of
$1,502,570,000 during the six months ended March 31, 2012. Included in income
from continuing operations for the first six months of fiscal 2013 and 2012
were approximately $0.11 and $0.07 per share, respectively, of after-tax gains
from the sale of used drilling equipment and investment securities. Net income
for the first six months of fiscal 2013 was $310,683,000 ($2.87 per diluted
share), compared to net income of $274,005,000 ($2.51 per diluted share)
during the first six months of fiscal 2012.

Segment operating income for U.S. land operations was $225,998,000 for the
second fiscal quarter of 2013, compared with $209,959,000 for last year's
second fiscal quarter and $234,388,000 for this year's first fiscal quarter.
Quarterly revenue days for the U.S. land segment sequentially increased by 104
days to 21,847 revenue days, and the corresponding average rig revenue per day
increased by $215 to $28,255 during the second fiscal quarter of 2013. The
average rig expense per day increased by $451 to $13,085, generating a
sequential decline of $236 in average rig margin per day, from $15,406 during
this year's first fiscal quarter to $15,170 during this year's second fiscal
quarter. Both the average rig margin and average rig expense per day were
negatively impacted by a bad debt reserve during the quarter equivalent to
$174 per day. Rig utilization for the Company's U.S. land segment was 82% for
this year's second fiscal quarter, compared with 91% for last year's second
fiscal quarter and 82% for this year's first fiscal quarter. At March 31,
2013, the Company's U.S. land segment had 246 active rigs, including 161 under
term contracts.

Segment operating income for the Company's offshore operations was $13,650,000
for the second fiscal quarter of 2013, compared with $9,818,000 for last
year's second fiscal quarter and $15,006,000 for this year's first fiscal
quarter. The sequential decline in operating income was attributable to a
slightly lower number of revenue days along with a lower average rig margin
per day during the most recent quarter. Average rig margin per day for this
year's second fiscal quarter was $24,838 as compared to $25,782 for this
year's first fiscal quarter.

The Company's international land operations reported segment operating income
of $13,169,000 for this year's second fiscal quarter, compared with an
operating loss of $974,000 for last year's second fiscal quarter and operating
income of $9,111,000 for this year's first fiscal quarter. The sequential
increase in segment operating income was primarily attributable to early
termination compensation equivalent to approximately $2,600 of rig revenue per
day during this year's second fiscal quarter. As a result, average rig margin
per day increased to $11,053 in the second fiscal quarter of 2013 from $8,400
in the first fiscal quarter of 2013. As compared to this year's first fiscal
quarter, the level of activity for the second fiscal quarter decreased by
approximately ten percent to a total of 2,023 revenue days.

Helmerich & Payne, Inc. is primarily a contract drilling company. As of April
25, 2013, the Company's existing fleet included 302 land rigs in the U.S., 29
international land rigs and nine offshore platform rigs. In addition, the
Company is scheduled to complete two new rigs under long-term contracts. Upon
completion of these commitments, the Company's global fleet is expected to
have a total of 333 land rigs, including 301 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            Six Months Ended
                           December 31 March 31          March 31
CONSOLIDATED STATEMENTS OF 2012        2013     2012     2013       2012
INCOME
                                                                     
Operating Revenues:                                                  
Drilling – U.S. Land       $696,030    $685,710 $658,804 $1,381,740 $1,276,583
Drilling – Offshore        57,718      55,605   43,421   113,323    94,213
Drilling – International   87,267      94,092   64,088   181,359    124,823
Land
Other                      3,557       2,902    3,669    6,459      6,951
                           844,572     838,309  769,982  1,682,881  1,502,570
                                                                     
Operating costs and expenses:                                        
Operating costs, excluding 466,871     461,737  448,208  928,608    839,240
depreciation
Depreciation               106,599     112,433  90,934   219,032    177,222
General and administrative 32,421      32,836   27,805   65,257     53,968
Research and development   3,353       3,696    3,830    7,049      7,079
Income from asset sales    (5,219)     (5,313)  (7,820)  (10,532)   (12,503)
                           604,025     605,389  562,957  1,209,414  1,065,006
                                                                     
Operating income           240,547     232,920  207,025  473,467    437,564
                                                                     
Other income (expense):                                              
Interest and dividend      426         315      356      741        692
income
Interest expense           (1,308)     (1,186)  (2,421)  (2,494)    (4,882)
Gain on sale of investment 8,752       --       --       8,752      --
securities
Other                      (2,084)     103      (42)     (1,981)    (21)
                           5,786       (768)    (2,107)  5,018      (4,211)
                                                                     
Income from continuing
operations before income   246,333     232,152  204,918  478,485    433,353
taxes 
Income tax provision       86,722      81,085   75,155   167,807    159,293
Income from continuing     159,611     151,067  129,763  310,678    274,060
operations
                                                                     
Loss from discontinued
operations, before income  (8)         (472)    (44)     (480)      (55)
taxes 
Income tax provision       --          (485)    --       (485)      --
Income (loss) from         (8)         13       (44)     5          (55)
discontinued operations 
                                                                     
NET INCOME                 $159,603    $151,080 $129,719 $310,683   $274,005
                                                                     
Basic earnings per common share:                                     
Income from continuing     $1.50       $1.41    $1.20    $2.91      $2.54
operations
Income from discontinued   $ --        $ --     $ --     $ --        $ --
operations
                                                                     
Net income                 $1.50       $1.41    $1.20    $2.91      $2.54
                                                                     
Diluted earnings per common share:                                   
Income from continuing     $1.48       $1.39    $1.18    $2.87      $2.51
operations
Income from discontinued   $ --        $ --     $ --     $ --       $ --
operations
                                                                     
Net income                 $1.48       $1.39    $1.18    $2.87      $2.51
                                                                     
Weighted average shares outstanding:                                 
 Basic                     105,867     106,326  107,385  106,094    107,285
 Diluted                   107,412     107,786  109,042  107,640    108,925

HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
                                                               
                                                   March 31   September 30
CONSOLIDATED CONDENSED BALANCE SHEETS              2013       2012
                                                               
ASSETS                                                         
Cash and cash equivalents                          $172,993   $96,095
Other current assets                               754,910    791,514
Current assets of discontinued operations          4,073      7,619
Total current assets                               931,976    895,228
Investments                                        501,383    451,144
Net property, plant, and equipment                 4,560,562  4,351,571
Other assets                                       18,531     23,142
TOTAL ASSETS                                       $6,012,452 $5,721,085
                                                               
                                                               
LIABILITIES AND SHAREHOLDERS' EQUITY                           
Current liabilities                                $300,890   $376,035
Current liabilities of discontinued operations     3,647      5,129
Total current liabilities                          304,537    381,164
Non-current liabilities                            1,337,857  1,307,433
Non-current liabilities of discontinued operations 426        2,490
Long-term notes payable                            195,000    195,000
Total shareholders' equity                         4,174,632  3,834,998
                                                               
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $6,012,452 $5,721,085

HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
                                                                      
                                                           Six Months Ended
                                                           March 31
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS             2013      2012
OPERATING ACTIVITIES:                                                 
Net income                                                 $310,683  $274,005
Adjustment for (income) loss from discontinued operations  (5)       55
Income from continuing operations                          310,678   274,060
Depreciation                                               219,032   177,222
Changes in assets and liabilities                          (32,408)  (8,664)
Gain on sale of assets and investment securities           (19,284)  (12,503)
Other                                                      16,290    8,762
Net cash provided by operating activities from continuing  494,308   438,877
operations
Net cash provided by (used in) operating activities from   5         (55)
discontinued operations
Net cash provided by operating activities                  494,313   438,822
                                                                      
INVESTING ACTIVITIES:                                                 
Capital expenditures                                       (438,473) (492,701)
Proceeds from sale of assets                               34,253    25,543
Net cash used in investing activities                      (404,220) (467,158)
                                                                      
FINANCING ACTIVITIES:                                                 
Dividends paid                                             (23,469)  (15,070)
Exercise of stock options                                  4,906     1,895
Tax withholdings related to net share settlements of       (1,677)   (1,514)
restricted stock
Excess tax benefit from stock-based compensation           7,045     3,164
Net cash used in financing activities                      (13,195)  (11,525)
                                                                      
Net increase (decrease) in cash and cash equivalents       76,898    (39,861)
Cash and cash equivalents, beginning of period             96,095    364,246
Cash and cash equivalents, end of period                   $172,993  $324,385

SEGMENT REPORTING    Three Months Ended                Six Months Ended
                     December 31   March 31            March 31
                     2012          2013      2012      2013        2012
                     (in thousands, except days and per day amounts)
U.S. LAND OPERATIONS                                                
Revenues             $696,030      $685,710  $658,804  $1,381,740  $1,276,583
Direct operating     361,068       354,170   362,898   715,238     675,204
expenses
General and
administrative       9,321         9,057     8,195     18,378      15,493
expense
Depreciation         91,253        96,485    77,752    187,738     151,221
Segment operating    $234,388      $225,998  $209,959  $460,386    $434,665
income
                                                                    
Revenue days         21,743        21,847    21,444    43,590      42,412
Average rig revenue  $28,040       $28,255   $27,625   $28,148     $27,247
per day
Average rig expense  $12,634       $13,085   $13,826   $12,860     $13,068
per day
Average rig margin   $15,406       $15,170   $13,799   $15,288     $14,179
per day
Rig utilization      82%           82%       91%       82%         91%
                                                                    
OFFSHORE OPERATIONS                                                 
Revenues             $57,718       $55,605   $43,421   $113,323    $94,213
Direct operating     37,207        36,106    28,473    73,313      61,674
expenses
General and
administrative       2,235         2,159     1,955     4,394       3,687
expense
Depreciation         3,270         3,690     3,175     6,960       6,830
Segment operating    $15,006       $13,650   $9,818    $28,656     $22,022
income 
                                                                    
Revenue days         736           720       627       1,456       1,324
Average rig revenue  $61,936       $60,536   $49,514   $61,243     $51,688
per day
Average rig expense  $36,154       $35,698   $28,953   $35,928     $30,280
per day
Average rig margin   $25,782       $24,838   $20,561   $25,315     $21,408
per day
Rig utilization      89%           89%       74%       89%         79%
                                                                    
INTERNATIONAL LAND                                                  
OPERATIONS
Revenues             $87,267       $94,092   $64,088   $181,359    $124,823
Direct operating     68,639        71,692    56,637    140,331     101,801
expenses
General and
administrative       1,039         910       795       1,949       1,573
expense
Depreciation         8,478         8,321     7,630     16,799      14,484
Segment operating    $9,111        $13,169    $ (974)  $22,280     $6,965
income (loss) 
                                                                    
Revenue days         2,237         2,023     1,761     4,260       3,490
Average rig revenue  $35,511       $40,677   $31,401   $37,964     $31,238
per day
Average rig expense  $27,111       $29,624   $26,517   $28,304     $24,307
per day
Average rig margin   $8,400        $11,053   $4,884    $9,660      $6,931
per day
Rig utilization      85%           78%       75%       81%         77%
                                                                    
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 $86,359       $68,421   $66,419   $154,780    $120,981
Offshore Operations  $6,259        $6,130    $4,267    $12,389     $10,065
International Land   $7,828        $11,804   $8,791    $19,632     $15,803
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           Six Months Ended
                               December 31 March 31          March 31
                               2012        2013     2012     2013     2012
Operating income                                                       
U.S. Land                      $234,388    $225,998 $209,959 $460,386 $434,665
Offshore                       15,006      13,650   9,818    28,656   22,022
International Land             9,111       13,169   (974)    22,280   6,965
Other                          (1,635)     (2,539)  (1,833)  (4,174)  (3,621)
Segment operating income       $256,870    $250,278 $216,970 $507,148 $460,031
Corporate general and          (19,826)    (20,710) (16,860) (40,536) (33,215)
administrative
Other depreciation             (2,934)     (3,307)  (1,668)  (6,241)  (3,224)
Inter-segment elimination      1,218       1,346    763      2,564    1,469
Income from asset sales        5,219       5,313    7,820    10,532   12,503
Operating income               $240,547    $232,920 $207,025 $473,467 $437,564
                                                                       
Other income (expense):                                                
Interest and dividend income   426         315      356      741      692
Interest expense               (1,308)     (1,186)  (2,421)  (2,494)  (4,882)
Gain on sale of investment     8,752       --       --       8,752    --
securities
Other                          (2,084)     103      (42)     (1,981)  (21)
Total other income (expense)   5,786       (768)    (2,107)  5,018    (4,211)
                                                                       
Income from continuing
operations before income                                               
taxes 
                               $246,333    $232,152 $204,918 $478,485 $433,353

CONTACT:  Investor Relations
          investor.relations@hpinc.com
          (918) 588-5207

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