HELMERICH & PAYNE, INC. 
By Segment operating income for U.S. land operations was
During the quarter, the Company completed the construction of nine FlexRigs(R)* under long-term contracts. At the pace of approximately three rigs per month, the Company is scheduled to continue to complete the construction of rigs that are under previously announced long-term contracts. In the U.S. Land segment, approximately 56% of the Company's potential revenue days for the remainder of fiscal 2009 are committed to work for customers under term contracts, and approximately 42% are committed during fiscal 2010.
President and
Segment operating income for the Company's offshore operations was
Segment operating income for the Company's international land operations was
On
Helmerich & Payne, Inc. is primarily a contract drilling company. As of
Helmerich & Payne, Inc.'s conference call/webcast is scheduled to begin this morning at
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 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.
*FlexRig(R) 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 2008 2008 2007
Operating revenues:
Drilling - U.S. Land $437,376 $475,204 $347,644
Drilling - Offshore 50,084 50,488 27,281
Drilling - International 93,300 95,178 78,602
Other 2,959 2,884 3,136
583,719 623,754 456,663
Operating costs and expenses:
Operating costs, excluding
depreciation 322,745 330,928 235,795
Depreciation 63,700 54,772 43,984
General and administrative 14,343 15,148 13,903
Research and development 1,311 1,677 -
Gain from involuntary conversion
of long-lived assets - (277) (4,810)
Income from asset sales (9,086) (914) (842)
393,013 401,334 288,030
Operating income 190,706 222,420 168,633
Other income (expense):
Interest and dividend income 1,669 1,786 1,115
Interest expense (4,434) (3,700) (4,831)
Gain on sale of investment
securities - - 130
Other (860) 128 (616)
(3,625) (1,786) (4,202)
Income before income
taxes and equity in income
of affiliates 187,081 220,634 164,431
Income tax provision 66,440 81,248 60,146
Equity in income of affiliates
net of income taxes 5,844 5,889 3,545
NET INCOME $126,485 $145,275 $107,830
Earnings per common share:
Basic $1.20 $1.38 $1.04
Diluted $1.18 $1.36 $1.02
Average common shares outstanding:
Basic 105,211 105,249 103,509
Diluted 107,300 106,431 105,615
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
CONSOLIDATED CONDENSED BALANCE SHEETS 12/31/08 9/30/08
ASSETS
Cash and cash equivalents $138,024 $121,513
Other current assets 578,317 569,134
Total current assets 716,341 690,647
Investments 173,549 199,266
Net property, plant, and equipment 2,885,454 2,682,251
Other assets 12,667 15,881
TOTAL ASSETS $3,788,011 $3,588,045
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities $360,073 $308,957
Total noncurrent liabilities 551,493 538,614
Long-term notes payable 490,000 475,000
Total shareholders' equity 2,386,445 2,265,474
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,788,011 $3,588,045
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
Three Months Ended
December 31
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS 2008 2007
OPERATING ACTIVITIES:
Net income $145,275 $107,830
Depreciation 54,772 43,984
Changes in assets and liabilities 63,014 (32,292)
Gain from involuntary conversion of
long-lived assets (277) (4,810)
Gain on sale of assets and investment
securities (914) (842)
Other (7,291) (2,979)
Net cash provided by operating activities 254,579 110,891
INVESTING ACTIVITIES:
Capital expenditures (250,381) (149,844)
Insurance proceeds from involuntary
conversion of long-lived assets 277 8,500
Proceeds from sale of assets and
investments 1,411 1,386
Other (16) -
Net cash used in investing activities (248,709) (139,958)
FINANCING ACTIVITIES:
Dividends paid (5,273) (4,668)
Net increase in bank overdraft 2,330 -
Proceeds from exercise of stock options 300 1,365
Net proceeds from short-term notes and
long-term debt 13,267 40,000
Excess tax benefit from stock-based
compensation 17 662
Net cash provided by financing activities 10,641 37,359
Net increase in cash and cash equivalents 16,511 8,292
Cash and cash equivalents, beginning of period 121,513 89,215
Cash and cash equivalents, end of period $138,024 $97,507
SEGMENT REPORTING Three Months Ended
September 30 December 31
2008 2008 2007
(in thousands except days and per day amounts)
U.S. LAND OPERATIONS
Revenues $437,376 $475,204 $347,644
Direct operating expenses 221,735 233,306 165,565
General and administrative expense 4,147 4,427 4,394
Depreciation 52,770 43,423 33,844
Segment operating income $158,724 $194,048 $143,841
Revenue days 16,382 16,322 13,877
Average rig revenue per day $25,034 $27,066 $24,006
Average rig expense per day $11,871 $12,246 $10,895
Average rig margin per day $13,163 $14,820 $13,111
Rig utilization 98% 95% 95%
OFFSHORE OPERATIONS
Revenues $50,084 $50,488 $27,281
Direct operating expenses 32,159 31,762 19,211
General and administrative expense 964 1,052 1,098
Depreciation 3,297 2,964 2,858
Segment operating income $13,664 $14,710 $4,114
Revenue days 736 735 460
Average rig revenue per day $52,452 $53,057 $41,833
Average rig expense per day $30,054 $29,468 $27,160
Average rig margin per day $22,398 $23,589 $14,673
Rig utilization 89% 89% 56%
SEGMENT REPORTING Three Months Ended
September 30 December 31
2008 2008 2007
(in thousands except days and per day amounts)
INTERNATIONAL LAND OPERATIONS
Revenues $93,300 $95,178 $78,602
Direct operating expenses 68,679 65,648 50,782
General and administrative
expense 554 696 938
Depreciation 5,494 6,206 5,726
Segment operating income $18,573 $22,628 $21,156
Revenue days 2,299 2,383 1,981
Average rig revenue per day $37,691 $36,737 $34,522
Average rig expense per day $26,447 $24,320 $20,353
Average rig margin per day $11,244 $12,417 $14,169
Rig utilization 97% 98% 81%
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 $27,275 $33,435 $14,277
Offshore Operations $5,829 $5,466 $2,862
International Land Operations $6,647 $7,633 $10,213
With the growth of the drilling segments, the previously reported Real
Estate segment has become a smaller percentage of total segment operating
income. As a result, the Real Estate segment previously shown as a
reportable segment, has been included with all other non-reportable
business segments. The amounts for the three months ended December 31,
2007 have been restated to reflect this change.
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 operating income 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).
Three Months Ended
September 30 December 31
2008 2008 2007
Operating income
U.S. Land $158,724 $194,048 $143,841
Offshore 13,664 14,710 4,114
International Land 18,573 22,628 21,156
Other (400) (861) 1,524
Segment operating income $190,561 $230,525 $170,635
Corporate general &
administrative (8,678) (8,973) (7,473)
Other depreciation (1,137) (1,197) (929)
Inter-segment elimination 874 874 748
Gain from involuntary conversion
of long-lived assets - 277 4,810
Income from asset sales 9,086 914 842
Operating income $190,706 $222,420 $168,633
Other income (expense):
Interest and dividend income 1,669 1,786 1,115
Interest expense (4,434) (3,700) (4,831)
Gain on sale of investment
securities - - 130
Other (860) 128 (616)
Total other income (expense) (3,625) (1,786) (4,202)
Income before income taxes and
equity in income of affiliates $187,081 $220,634 $164,431
SOURCE Helmerich & Payne, Inc.
