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Helmerich & Payne, Inc. Announces Record First Quarter Results

*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 income taxes  238,345  246,333 228,435
Income tax provision 88,739 86,722 84,138
Income from continuing operations 149,606 159,611 144,297
       
Income (loss) from discontinued operations before income taxes  7,509 (8) (11)
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 2012 September 30 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 operations 341,930 236,649
Net cash used in operating activities from discontinued operations (8) (11)
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)
     
FINANCING ACTIVITIES:    
Dividends paid (7,432) (7,522)
Exercise of stock options 473 373
Tax withholdings related to net share settlements of restricted stock (1,677) (1,514)
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 expense 8,078 9,321 7,298
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 day  $ 28,325  $ 28,040  $ 26,861
Average rig expense per day  $ 12,620  $ 12,634  $ 12,292
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 expense 1,974 2,235 1,732
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 day  $ 62,018  $ 61,936  $ 53,644
Average rig expense per day  $ 38,688  $ 36,154  $ 31,473
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 expense 806 1,039 778
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 day  $ 35,732  $ 35,511  $ 31,072
Average rig expense per day  $ 27,522  $ 27,111  $ 22,057
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 Operations  $ 6,221  $ 7,828  $ 7,012

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.

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