TULSA, Okla., Nov. 19 /PRNewswire-FirstCall/ -- Helmerich &
Payne, Inc. (NYSE:HP) 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®* 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® 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 ======= ======= ========
======== ======== DATASOURCE: Helmerich & Payne, Inc. CONTACT:
Juan Pablo Tardio of Helmerich & Payne, Inc., +1-918-588-5383
Web Site: http://www.hpinc.com/
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