This item is part of Stockwatch's value added news feed and is only available to Stockwatch subscribers.Here is a sample of this item:Helmerich & Payne, Inc. Announces Fourth Quarter and Fiscal Year-End Earnings 2009-11-19 08:45 ET - News Release TULSA, Okla., Nov. 19 /PRNewswire-FirstCall/ -- Helmerich & Payne, Inc. reported net income of $353,545,000 ($3.32 per diluted share) from operating revenues of $1,894,038,000 for its fiscal year ended September 30, 2009, compared with net income of $461,738,000 ($4.34 per diluted share) from operating revenues of $2,036,543,000 during the prior fiscal year ended September 30, 2008. Included in fiscal 2009 and 2008 net income is non-operating related income (after-tax) of $0.04 and $0.27 per diluted share, respectively. Non-operating items included are gains on the sales of investment securities, gains from involuntary conversion of long-lived assets, and income from asset sales. Net income for the fourth quarter of fiscal 2009 was $51,488,000 ($0.48 per diluted share) from operating revenues of $362,217,000, compared with net income of $126,485,000 ($1.18 per diluted share) from operating revenues of $583,719,000 during last year's fourth quarter. Included in net income were gains from non-operating items that totaled $0.01 per diluted share for the fourth quarter of 2009 and $0.05 per diluted share for the fourth quarter of 2008. Segment operating income for U.S. land operations was $90,137,000 for this year's fourth fiscal quarter, compared with $158,724,000 for last year's fourth fiscal quarter and $96,593,000 for this year's third fiscal quarter. The decline as compared to last year's fourth quarter was primarily a result of significantly lower activity levels in the U.S. land drilling market. The segment's average rig revenue per day declined from $28,325 to $25,895, a drop of $2,430 per day from the third to the fourth fiscal quarter. The corresponding average rig margin per day also sequentially declined from $16,052 to $14,551, a drop of $1,501 per day. Excluding the impact of income corresponding to early contract terminations and to compensation from customers that requested delivery delays for new builds under long-term contracts during this year's third and fourth fiscal quarters, the average rig revenue per day declined sequentially by $909 to $23,018 for the fourth fiscal quarter, and the average rig margin per day only slightly declined sequentially by $34 to $11,696 for the fourth fiscal quarter. Approximately $2,850 of the average rig revenue and margin per day corresponding to U.S. land operations for this year's fourth fiscal quarter was primarily a result of early contract termination revenue and of revenue corresponding to requested delivery delays for new builds under long-term contracts. This compares to approximately $4,400 included in the rig revenue and margin per day averages corresponding to this year's third fiscal quarter for the same type of revenue. Additional revenues of approximately $40 million corresponding to new build early terminations (all of which took place before the fourth fiscal quarter of 2009) and to requested delivery delays are expected to be recognized after fiscal 2009. At this point, the Company expects about 40% of this amount to favorably impact revenue during the first fiscal quarter of 2010, and the remainder to favorably impact the last three quarters of fiscal 2010. Rig utilization for the Company's U.S. land segment was 55% for this year's fourth fiscal quarter, compared with 98% for last year's fourth fiscal quarter and 51% for this year's third fiscal quarter. At the end of fiscal 2009, the Company's U.S. land segment had 122 contracted rigs and 79 idle and available rigs. The 122 contracted rigs included 94 rigs under term contracts, eight of which were new FlexRigs(R)* waiting on customers that requested delivery delays. These eight completed but delayed FlexRigs were not considered for purposes of calculating the rig utilization rate for the quarter. In its U.S. land segment, the Company now expects an average of approximately 95 rigs to remain under term contracts during the first fiscal quarter of 2010, and an average of approximately 90 rigs to remain under term contracts during all of fiscal 2010. Segment operating income for the Company's offshore operations was $12,023,000 for the fourth fiscal quarter of 2009, compared with $13,664,000 for last year's fourth fiscal quarter and $12,723,000 for this year's third fiscal quarter. Average rig utilization of the Company's nine platform rigs in the offshore segment was reported at 78% for this year's fourth fiscal quarter, compared with 89% during last year's fourth fiscal quarter and 93% during this year's third fiscal quarter. Lower utilization as compared to this year's third fiscal quarter was offset by improving margins. Average rig margins per day increased to $20,679 during this year's fourth fiscal quarter from $18,555 during this year's third fiscal quarter. The Company's international land operations segment recorded a loss of $6,252,000 for this year's fourth fiscal quarter, compared with operating income of $18,573,000 for last year's fourth fiscal quarter, and an operating loss of $8,321,000 for this year's third fiscal quarter. This year's fourth quarter results in international land operations were negatively impacted by the Company's decision earlier this year (due to the uncertainty of the timing of collections from PDVSA) to not record revenue from its operations in Venezuela until the corresponding cash is collected. A devaluation loss of approximately $1.0 million recorded in Argentina operations also had a negative impact on this year's fourth quarter results. Average international rig utilization for the fourth fiscal quarter was 41%, compared with 97% during last year's fourth fiscal quarter, and 62% during this year's third fiscal quarter. The rig utilization rate during the fourth quarter of fiscal 2009 was unfavorably impacted by five idle rigs in the U.S. that were transferred to the Company's international land operations segment during the quarter for international bidding purposes. Furthermore, the rig utilization rate excludes three new FlexRigs built under long-term contracts that had not commenced operations by the end of the fiscal year. Including these three new rigs, the Company's international land segment had 23 rigs contracted (13 of which were under term contracts) and 21 rigs idle and available at the end of fiscal 2009. The Company is proactively continuing efforts to collect unpaid invoice amounts in Venezuela. Since its last quarterly earnings release on July 30, 2009, the Company has collected approximately $32 million (U.S. currency equivalent) from PDVSA. As of today, the total invoiced amount by the Company that remains pending payment from PDVSA is approximately $73 million (U.S. currency equivalent), including approximately $61 million in invoices issued since the Company changed its revenue recognition to cash basis for its Venezuelan operation. Invoices issued under cash basis revenue recognition include approximately $55 million in potential future revenue and approximately $6 million in non-revenue billings. All 11 H&P rigs that formerly worked for PDVSA have completed their contract obligations and are currently idle. The Company will continue to pursue future drilling opportunities in Venezuela, but it does not expect to commit to new contracts until additional progress is made on pending receivable collections and on conversion of local currency to U.S. dollars. President and C.E.O. Hans Helmerich commented, "We are encouraged by signs of improvement in the U.S. land rig market. The Company's FlexRigs are clearly well suited for the more prolific shale plays and other horizontal and directional work that greatly benefits from our newer drilling technology. We are also pleased to be working in Mexico under a Schlumberger Integrated Project Management (IPM) contract with PEMEX where six of our FlexRigs are now operating. We believe FlexRig performance will add significant value under these types of contracts where large number of wells are drilled and valuable savings can be achieved with faster drilling and move times. In a little over one year, we have taken our international FlexRig footprint from one rig to 14 rigs." Helmerich & Payne, Inc. is primarily a contract drilling company. As of November 19, 2009, the Company's existing fleet included 247 land rigs and nine offshore platform rigs. In addition, the Company is scheduled to complete another five new H&P-designed and operated FlexRigs during fiscal 2010. Upon completion of these commitments, the Company's global land fleet will include a total of 190 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. Statements in this release and information disclosed in the conference call and webcast that are "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 are based on current expectations and assumptions that are subject to risks and uncertainties. For information regarding risks and uncertainties associated with the Company's business, please refer to the "Risk Factors" and "Management's Discussion & Analysis of Financial Condition and Results of Operations" 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. *FlexRig(R) is a registered trademark of Helmerich & Payne, Inc.
HELMERICH & PAYNE, INC.
Unaudited
(in thousands, except per share data)
Three Months Ended Fiscal Year Ended
------------------ -----------------
CONSOLIDATED STATEMENTS June 30 September 30 September 30
OF INCOME 2009 2009 2008 2009 2008
----------------------- ---- ---- ---- ---- ----
Operating Revenues:
Drilling - U.S. Land $282,358 $269,088 $437,376 $1,441,164 $1,542,038
Drilling -Offshore 55,605 47,278 50,084 204,702 154,452
Drilling -
International Land 47,290 43,100 93,300 237,397 328,244
Other 2,514 2,751 2,959 10,775 11,809
----- ----- ----- ------ ------
387,767 362,217 583,719 1,894,038 2,036,543
------- ------- ------- --------- ---------
Operating costs and
expenses:
Operating costs,
excluding
depreciation 220,339 196,997 322,745 1,011,558 1,086,666
Depreciation 61,043 63,509 63,700 236,437 210,766
General and
administrative 14,225 13,606 14,343 59,413 57,059
Research and
development 2,777 3,041 1,311 9,671 1,833
In-process research
and development - - - - 11,129
Gain from involuntary
conversion of
long-lived assets (264) - - (541) (10,236)
Income from asset
sales (1,785) (1,278) (9,086) (6,032) (13,490)
------ ------ ------ ------ -------
296,335 275,875 393,013 1,310,506 1,343,727
------- ------- ------- --------- ---------
Operating income 91,432 86,342 190,706 583,532 692,816
Other income (expense):
Interest and dividend
income 542 487 1,669 4,965 5,038
Interest expense (2,793) (4,443) (4,434) (13,490) (18,689)
Gain on sale of
investment securities - - - - 21,994
Other 514 194 (860) 808 (1,230)
--- --- ---- --- ------
(1,737) (3,762) (3,625) (7,717) 7,113
------ ------ ------ ------ -----
Income before income
taxes and equity in
income of affiliate 89,695 82,580 187,081 575,815 699,929
Income tax provision 36,651 31,092 66,440 232,381 255,557
Equity in income of
affiliate net of
income taxes - - 5,844 10,111 17,366
--- --- ----- ------ ------
NET INCOME $53,044 $51,488 $126,485 $353,545 $461,738
======= ======= ======== ======== ========
Earnings per common
share:
Basic $0.50 $0.49 $1.20 $3.36 $4.43
Diluted $0.50 $0.48 $1.18 $3.32 $4.34
Average common shares
outstanding:
Basic 105,425 105,464 105,211 105,364 104,284
Diluted 106,829 106,967 107,300 106,650 106,424
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
CONSOLIDATED CONDENSED BALANCE SHEETS 9/30/09 9/30/08
------------------------------------- ------- -------
ASSETS
Cash and cash equivalents $141,486 $121,513
Other current assets 381,446 569,134
------- -------
Total current assets 522,932 690,647
------- -------
Investments 356,404 199,266
Net property, plant, and equipment 3,265,907 2,682,251
Other assets 15,781 15,881
------ ------
TOTAL ASSETS $4,161,024 $3,588,045
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities 301,906 $308,957
Total noncurrent liabilities 756,109 538,614
Long-term notes payable 420,000 475,000
Total shareholders' equity 2,683,009 2,265,474
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,161,024 $3,588,045
========== ==========
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
Years Ended
September 30
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS 2009 2008
----------------------------------------------- ---- ----
OPERATING ACTIVITIES:
Net income $353,545 $461,738
Depreciation 236,437 210,766
In-process research and development - 11,129
Changes in assets and liabilities 322,513 (7,366)
Gain from involuntary conversion of
long-lived assets (541) (10,236)
Gain on sale of assets and investment
securities (6,032) (35,354)
Other (8,603) (19,849)
------ -------
Net cash provided by operating activities 897,319 610,828
------- -------
INVESTING ACTIVITIES:
Capital expenditures (880,753) (705,635)
Insurance proceeds from involuntary
conversion of long-lived assets 541 13,926
Proceeds from sale of assets and
investments 8,699 48,415
Purchase of short-term investments (12,500) -
Acquisition of business, net of cash
acquired (16) (12,041)
--- -------
Net cash used in investing activities (884,029) (655,335)
-------- --------
FINANCING ACTIVITIES:
Dividends paid (21,111) (19,333)
Increase in bank overdraft 2,038 -
Proceeds from exercise of stock options 1,272 14,537
Net proceeds from short-term and long-term
debt 23,267 56,733
Excess tax benefit from stock-based
compensation 1,217 24,868
----- ------
Net cash provided by financing activities 6,683 76,805
----- ------
Net increase in cash and cash equivalents 19,973 32,298
Cash and cash equivalents, beginning of period 121,513 89,215
------- ------
Cash and cash equivalents, end of period $141,486 $121,513
======== ========
SEGMENT REPORTING Three Months Ended Fiscal Year Ended
------------------ -----------------
June 30 September 30 September 30
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
(in thousands, except days and per day amounts)
U.S. LAND OPERATIONS
--------------------
Revenues $282,358 $269,088 $437,376 $1,441,164 $1,542,038
Direct operating
expenses 133,041 125,005 221,735 663,385 756,828
General and
administrative
expense 4,133 3,978 4,147 16,812 17,599
Depreciation 48,591 49,968 52,770 187,259 161,893
------ ------ ------ ------- -------
Segment operating
income $96,593 $90,137 $158,724 $573,708 $605,718
Revenue days 9,302 9,902 16,382 48,055 59,804
Average rig
revenue per day $28,325 $25,895 $25,034 $28,194 $24,522
Average rig expense
per day $12,273 $11,344 $11,871 $12,009 $11,393
Average rig margin
per day $16,052 $14,551 $13,163 $16,185 $13,129
Rig utilization 51% 55% 98% 68% 96%
OFFSHORE OPERATIONS
-------------------
Revenues $55,605 $47,278 $50,084 $204,702 $154,452
Direct operating
expenses 38,854 31,423 32,159 133,442 104,454
General and
administrative
expense 1,004 975 964 4,095 4,452
Depreciation 3,024 2,857 3,297 11,872 12,152
----- ----- ----- ------ ------
Segment operating
income $12,723 $12,023 $13,664 $55,293 $33,394
Revenue days 763 644 736 2,938 2,442
Average rig
revenue per day $45,531 $47,547 $52,452 $48,677 $47,743
Average rig expense
per day $26,976 $26,868 $30,054 $27,373 $29,655
Average rig margin
per day $18,555 $20,679 $22,398 $21,304 $18,088
Rig utilization 93% 78% 89% 89% 75%
SEGMENT REPORTING Three Months Ended Fiscal Year Ended
June 30 September 30 September 30
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
(in thousands, except days and per day amounts)
INTERNATIONAL LAND
OPERATIONS
------------------
Revenues $47,290 $43,100 $93,300 $237,397 $328,244
Direct operating expenses 47,913 40,204 68,679 213,552 224,683
General and
administrative expense 555 857 554 2,892 3,974
Depreciation 7,143 8,291 5,494 28,180 29,614
----- ----- ----- ----- ------
Segment operating
income (loss) $(8,321) $(6,252) $18,573 $(7,227) $69,973
Revenue days 1,622 1,319 2,299 7,374 8,026
Average rig revenue
per day $27,340 $29,406 $37,691 $29,650 $37,604
Average rig expense
per day $26,433 $26,162 $26,447 $25,993 $24,489
Average rig margin
per day $907 $3,244 $11,244 $3,657 $13,115
Rig utilization 62% 41% 97% 68% 82%
Operating statistics exclude the effects of offshore 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 $18,877 $12,676 $27,275 $86,297 $75,519
Offshore Operations $13,409 $8,498 $5,829 $34,125 $16,330
International Land
Operations $2,945 $4,312 $6,647 $18,755 $26,431
Segment operating income 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 segment operating income (loss) per the information above to income before income taxes and equity in income of affiliates as reported on the Consolidated Statements of Income (in thousands).
SEGMENT REPORTING Three Months Ended Fiscal Year Ended
June 30 September 30 September 30
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Operating income (loss)
----------------------
U.S. Land $96,593 $90,137 $158,724 $573,708 $605,718
Offshore 12,723 12,023 13,664 55,293 33,394
International Land (8,321) (6,252) 18,573 (7,227) 69,973
Other (2,304) (2,376) (400) (7,032) (7,996)
------ ------ ---- ------ ------
Segment operating
income $98,691 $93,532 $190,561 $614,742 $701,089
Corporate general and
administrative (8,533) (7,796) (8,678) (35,614) (31,034)
Other depreciation (1,305) (1,349) (1,137) (5,124) (4,156)
Inter-segment elimination 530 677 874 2,955 3,191
Gain from involuntary
conversion of long-lived
assets 264 - - 541 10,236
Income from asset sales 1,785 1,278 9,086 6,032 13,490
----- ----- ----- ----- ------
Operating income $91,432 $86,342 $190,706 $583,532 $692,816
Other income (expense):
Interest and dividend
income 542 487 1,669 4,965 5,038
Interest expense (2,793) (4,443) (4,434) (13,490) (18,689)
Gain on sale of
investment securities - - - - 21,994
Other 514 194 (860) 808 (1,230)
--- --- ---- --- ------
Total other income
(expense) (1,737) (3,762) (3,625) (7,717) 7,113
------ ------ ------ ------ -----
Income before income
taxes and equity in
income of affiliate $89,695 $82,580 $187,081 $575,815 $699,929
======= ======= ======== ======== ========
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