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Helmerich & Payne, Inc. Announces Second Quarter Results

*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 INCOME 2012 2013 2012 2013 2012
           
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 Land 87,267 94,092 64,088 181,359 124,823
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 depreciation 466,871 461,737 448,208 928,608 839,240
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 income 426 315 356 741 692
Interest expense (1,308) (1,186) (2,421) (2,494) (4,882)
Gain on sale of investment securities 8,752 -- -- 8,752 --
Other (2,084) 103 (42) (1,981) (21)
  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
Income tax provision  86,722 81,085 75,155 167,807 159,293
Income from continuing operations 159,611 151,067 129,763 310,678 274,060
           
Loss from discontinued operations, before income taxes  (8) (472) (44) (480) (55)
Income tax provision -- (485) -- (485) --
Income (loss) from discontinued operations  (8) 13 (44) 5 (55)
           
NET INCOME $159,603 $151,080 $129,719 $310,683 $274,005
           
Basic earnings per common share:        
Income from continuing operations $1.50 $1.41 $1.20 $2.91 $2.54
Income from discontinued operations $ -- $ -- $ -- $ --  $ --
           
Net income  $1.50 $1.41 $1.20 $2.91 $2.54
           
Diluted earnings per common share:        
Income from continuing operations $1.48 $1.39 $1.18 $2.87 $2.51
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 operations 494,308 438,877
Net cash provided by (used in) operating activities from discontinued operations 5 (55)
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 restricted stock (1,677) (1,514)
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 expenses 361,068 354,170 362,898 715,238 675,204
General and administrative expense 9,321 9,057 8,195 18,378 15,493
Depreciation 91,253 96,485 77,752 187,738 151,221
Segment operating income $234,388 $225,998 $209,959 $460,386 $434,665
           
Revenue days 21,743 21,847 21,444 43,590 42,412
Average rig revenue per day $28,040 $28,255 $27,625 $28,148 $27,247
Average rig expense per day $12,634 $13,085 $13,826 $12,860 $13,068
Average rig margin per day $15,406 $15,170 $13,799 $15,288 $14,179
Rig utilization 82% 82% 91% 82% 91%
           
OFFSHORE OPERATIONS          
Revenues $57,718 $55,605 $43,421 $113,323 $94,213
Direct operating expenses 37,207 36,106 28,473 73,313 61,674
General and administrative expense 2,235 2,159 1,955 4,394 3,687
Depreciation 3,270 3,690 3,175 6,960 6,830
Segment operating income  $15,006 $13,650 $9,818 $28,656 $22,022
           
Revenue days 736 720 627 1,456 1,324
Average rig revenue per day $61,936 $60,536 $49,514 $61,243 $51,688
Average rig expense per day $36,154 $35,698 $28,953 $35,928 $30,280
Average rig margin per day $25,782 $24,838 $20,561 $25,315 $21,408
Rig utilization  89% 89% 74% 89% 79%
           
INTERNATIONAL LAND OPERATIONS          
Revenues $87,267 $94,092 $64,088 $181,359 $124,823
Direct operating expenses 68,639 71,692 56,637 140,331 101,801
General and administrative expense 1,039 910 795 1,949 1,573
Depreciation 8,478 8,321 7,630 16,799 14,484
Segment operating income (loss)  $9,111 $13,169  $ (974) $22,280 $6,965
           
Revenue days 2,237 2,023 1,761 4,260 3,490
Average rig revenue per day $35,511 $40,677 $31,401 $37,964 $31,238
Average rig expense per day $27,111 $29,624 $26,517 $28,304 $24,307
Average rig margin per day $8,400 $11,053 $4,884 $9,660 $6,931
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 Operations $7,828 $11,804 $8,791 $19,632 $15,803

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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