Helmerich & Payne, Inc. Announces Earnings for Fiscal Year 2004
TULSA, Okla., Nov. 10 /PRNewswire-FirstCall/ -- Helmerich &
Payne, Inc. announced net income of $4,359,000 ($0.09 per diluted
share) from revenues of $620,928,000 for its fiscal year ended
September 30, 2004, compared with net income of $17,873,000 ($0.35
per diluted share) from revenues of $515,284,000 for the previous
fiscal year. Net income includes gains from the sale of portfolio
securities of $0.31 per share for 2004, and $0.07 per share for
2003. As previously announced on October 19, 2004, net income for
fiscal 2004 includes a non-cash charge of $51,516,000 ($0.63 per
diluted share) for impairment of a portion of the Company's Gulf of
Mexico offshore platform rigs. Due to the impairment charge, the
Company recorded a loss for its fourth fiscal quarter 2004 of
$12,624,000 ($0.25 per diluted share) from revenues of
$181,410,000, compared with net income of $6,530,000 ($0.13 per
diluted share) from revenues of $138,626,000 for last year's fourth
quarter. Included in fourth quarter results were gains from the
sale of portfolio securities of $0.16 per share for 2004, and $0.06
per share in 2003. Operating profit in the Company's U.S. land rig
operations increased to $14,439,000 for the fourth quarter of
fiscal 2004, from $6,361,000 for the same period last year, and
from $9,579,000 for this year's third quarter. Average fourth
quarter revenue per rig day rose to $12,517 and cash margins per
rig day to $4,303, compared with $11,550 revenue per rig day and
$3,657 cash margins per rig day for the previous quarter. Average
U.S. land rig utilization during the fourth quarter of 2004 was
92%, compared with 83% during last year's fourth quarter, and 89%
during this year's third quarter. The Company's offshore platform
rig business reported an operating loss of $47,180,000 for the
fourth quarter 2004, compared with an operating profit of
$8,860,000 for the fourth quarter of fiscal 2003, and operating
profit of $3,826,000 for this year's third quarter. For quarterly
comparisons, the offshore operations would have reported an
operating profit of $4,336,000 for the fourth quarter of 2004
without the $51,516,000 impairment charge. Rig utilization was 54%
during the quarter, compared with 48% during last year's fourth
quarter, and 52% during this year's third quarter. As previously
announced, the Company retired Rig 108 and currently has five
active offshore platform rigs out of its eleven available offshore
platform rigs in the Gulf of Mexico. International operating profit
improved significantly during the fourth quarter of 2004 to
$6,936,000, from $609,000 for last year's fourth quarter, and
$1,756,000 for this year's third quarter. In addition to improved
operating profit in Venezuela, Ecuador, Argentina and Equatorial
Guinea, this quarter's operating profit included a pre-tax gain of
$1,682,000 from an insurance settlement resulting from rig damage
sustained earlier in the year. Fourth quarter cash margins per rig
day were $6,048 (excluding effects of the previously mentioned
insurance gain), down slightly from $6,103 per rig day during last
year's fourth quarter, but up from the $4,257 per day recorded
during this year's third quarter. Additionally, rig utilization for
international operations rose to 57% for the quarter, up from 38%
during last year's fourth quarter, and 53% during this year's third
quarter. The Company has recently shipped five rigs from
international locations to the U.S. with four now in transit and
one being mobilized for work in Florida. Of the 27 rigs now in
international locations, 24 are currently working or committed for
work. Company President and C.E.O., Hans Helmerich commented: "The
long-awaited tightening in the U.S. land rig market resulted in
significant improvement of land rig revenue and margins per day.
While the offshore platform rig business continues to underperform
from year ago levels, operating profit (excluding the impairment
charge) has been relatively flat for the past four quarters. We are
encouraged by the improved operating profit and increased rig
activity in both our U.S. and international land rig segments, and
believe customer interest and market conditions bode well for 2005
and beyond." Separately, the Company reported that during the
year-end financial statement closing process, it identified an
after-tax gain of $959,000 that related to a non-monetary exchange
of an investment security and that should have been recorded in the
first quarter of 2004. First quarter net income, earlier reported
as $5,629,000 ($0.11 per diluted share), will be reported as
$6,588,000 ($0.13 per diluted share) in all future public filings.
Helmerich & Payne, Inc. (HP/NYSE) is a contract drilling
company that owns 90 U.S. land rigs, 11 U.S. offshore platform rigs
located in the Gulf of Mexico, 26 rigs located in South America,
one rig in Hungary and 2 rigs in transit to the U.S. from
international operations, for a total of 130 rigs. Included in the
total fleet of 130 rigs are 50 H&P-designed and operated
FlexRigs. Helmerich & Payne, Inc.'s conference call/webcast is
scheduled for this morning and can be accessed at http:
http://www.hpinc.com/ under Investor Relations and will begin at
11:00a.m. ET (10:00a.m. CT). If you are unable to participate
during the live webcast, the call will be archived for a year on
H&P's website indicated above. The information to be disclosed
in the conference call and webcast shall include forward-looking
statements within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Such forward-looking statements
are subject to certain risks and uncertainties, as disclosed by
H&P from time to time in its filings with the Securities and
Exchange Commission. As a result of these factors, H&P's actual
results may differ materially from those indicated or implied by
such forward-looking statements. HELMERICH & PAYNE, INC.
Unaudited (in thousands, except per share data) Fiscal Year Three
Months Ended Ended June 30 September 30 September 30 CONSOLIDATED
STATEMENTS OF OPERATIONS 2004 2004 2003 2004 2003 REVENUES
Operating revenues $147,498 $167,495 $132,815 $593,326 $507,331
Income from investments 376 13,915 5,811 27,602 7,953 147,874
181,410 138,626 620,928 515,284 COSTS AND EXPENSES Direct operating
costs 105,302 113,142 88,408 416,631 345,537 Depreciation 23,934
24,821 22,817 94,425 82,513 Asset impairment --- 51,516 --- 51,516
--- General and administrative 9,516 9,254 9,119 37,661 41,003
Interest 3,114 3,247 3,240 12,695 12,289 141,866 201,980 123,584
612,928 481,342 Income (loss) before income taxes and equity in
income (loss) of affiliates 6,008 (20,570) 15,042 8,000 33,942
Income tax provision (benefit) 2,522 (7,772) 6,473 4,365 14,649
Equity in income (loss) of affiliates net of income taxes 861 174
(2,039) 724 (1,420) NET INCOME (LOSS) $4,347 $(12,624) $6,530
$4,359 $17,873 Earnings (loss) per common share: Basic $0.09
$(0.25) $0.13 $0.09 $0.36 Diluted $0.09 $(0.25) $0.13 $0.09 $0.35
Average common shares outstanding: Basic 50,404 50,426 50,108
50,312 50,039 Diluted 50,880 50,426 50,695 50,833 50,596 HELMERICH
& PAYNE, INC. Unaudited (in thousands) CONSOLIDATED CONDENSED
BALANCE SHEETS 9/30/04 9/30/03 ASSETS Cash and cash equivalents
$65,296 $38,189 Other current assets 175,327 159,342 Total current
assets 240,623 197,531 Investments 161,532 158,770 Net property,
plant, and equipment 998,674 1,058,205 Other assets 16,159 1,329
TOTAL ASSETS $1,416,988 $1,415,835 LIABILITIES AND SHAREHOLDERS'
EQUITY Total current liabilities $59,903 $88,618 Total noncurrent
liabilities 242,975 209,966 Long-term notes payable 200,000 200,000
Total shareholders' equity 914,110 917,251 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,416,988 $1,415,835 HELMERICH & PAYNE,
INC. Unaudited (in thousands) Years Ended September 30 CONSOLIDATED
CONDENSED STATEMENT OF CASH FLOWS 2004 2003 OPERATING ACTIVITIES:
Net Income $4,359 $17,873 Depreciation 94,425 82,513 Asset
impairment 51,516 --- Changes in assets and liabilities 289 2,530
Gain on sale of assets (28,274) (9,218) Non-monetary investment
gain (2,521) --- Other (1,257) 2,806 Net cash provided by operating
activities 118,537 96,504 INVESTING ACTIVITIES: Capital
expenditures (88,972) (246,301) Proceeds from sale of assets 38,944
24,935 Net cash used in investing activities (50,028) (221,366)
FINANCING ACTIVITIES: Net proceeds (payments) from notes payable
(30,000) 130,000 Dividends paid (16,372) (16,026) Proceeds from
exercise of stock options 4,970 2,194 Net cash (used in) provided
by financing activities (41,402) 116,168 Net increase (decrease) in
cash and cash equivalents 27,107 (8,694) Cash and cash equivalents,
beginning of period 38,189 46,883 Cash and cash equivalents, end of
period $65,296 $38,189 SEGMENT REPORTING Three Months Ended Fiscal
Year Ended June 30 September 30 September 30 2004 2004 2003 2004
2003 (Amounts in thousands, except operating statistics) US LAND
OPERATIONS Revenues $88,642 $100,638 $75,507 $347,793 $273,993
Direct operating expenses 62,784 68,960 54,079 246,177 201,398
General and administrative expense 1,831 2,142 1,711 7,765 9,304
Depreciation 14,448 15,097 13,356 56,528 44,726 Operating profit
$9,579 $14,439 $6,361 $37,323 $18,565 Activity days 7,071 7,363
6,304 27,472 22,588 Average rig revenue per day $11,550 $12,517
$11,236 $11,700 $11,436 Average rig expense per day $7,893 $8,214
$7,837 $7,978 $8,221 Average rig margin per day $3,657 $4,303
$3,399 $3,722 $3,215 Rig utilization 89% 92% 83% 87% 81% US
OFFSHORE OPERATIONS Revenues $21,266 $23,961 $26,247 $84,993
$112,633 Direct operating expenses 13,615 15,653 13,449 52,987
60,589 General and administrative expense 792 968 626 3,256 2,939
Depreciation 3,033 3,004 3,312 12,107 12,799 Asset impairment ---
51,516 --- 51,516 --- Operating profit (loss)* $3,826 $(47,180)
$8,860 $(34,873) $36,306 Activity days 572 601 529 2,088 2,233
Average rig revenue per day $27,963 $28,380 $37,514 $29,432 $38,239
Average rig expense per day $16,347 $17,377 $17,067 $16,509 $17,822
Average rig margin per day $11,616 $11,003 $20,447 $12,923 $20,417
Rig utilization 52% 54% 48% 48% 51% *NOTE: The following is a
reconciliation of operating profit (loss) for the offshore platform
segment for the fourth quarter of 2004, which is provided to assist
with quarterly comparisons. Operating loss $(47,180) Impairment
charge 51,516 Operating profit as adjusted $4,336 SEGMENT REPORTING
Three Months Ended Fiscal Year Ended June 30 September 30 September
30 2004 2004 2003 2004 2003 (Amounts in thousands) INTERNATIONAL
OPERATIONS Revenues $35,497 $39,780 $26,856 $150,698 $109,812
Direct operating expenses 28,210 27,050 20,429 113,988 81,461
General and administrative expense 428 527 723 2,144 3,110
Depreciation 5,103 5,267 5,095 20,530 20,092 Operating profit
$1,756 $6,936 $609 $14,036 $5,149 Activity days 1,567 1,692 1,108
6,266 4,515 Average rig revenue per day $18,833 $19,781 $19,820
$19,884 $19,603 Average rig expense per day $14,576 $12,739 $13,717
$14,278 $14,140 Average rig margin per day $4,257 $7,042 $6,103
$5,606 $5,463 Rig utilization 53% 57% 38% 54% 39% Per day
calculations for international operations exclude gains and losses
from translation of foreign currency transactions. Included in
international operations revenue and margin per day calculation for
the fourth quarter and fiscal 2004 is an insurance gain of $1.68
million. Without the insurance gain, the revenue per day and margin
per day would have been $18,787 and $6,048, respectively, in the
fourth quarter of 2004. For the fiscal year, the revenue and margin
would have been $19,616 and $5,338, respectively. Operating
statistics exclude the effects of offshore platform and
international management contracts, 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: US Land Operations $6,971 $8,478 $4,676 $26,367 $15,686 US
Offshore Operations $1,180 $1,680 $1,537 $6,012 $7,304
International Operations $2,479 $2,481 $1,537 $11,731 $7,996 REAL
ESTATE Revenues $2,093 $3,116 $4,205 $9,842 $10,893 Direct
operating expenses 652 $1,450 429 $3,347 1,789 Depreciation 579
$589 544 $2,253 2,535 Operating profit $862 $1,077 $3,232 $4,242
$6,569 SEGMENT REPORTING Three Months Ended Fiscal Year Ended June
30 September 30 September 30 2004 2004 2003 2004 2003 The following
table reconciles segment operating profit (loss) per the
information above to income (loss) before income taxes and equity
in income (loss)of affiliates as reported on the Consolidated
Condensed Statements of Operations (in thousands). Operating Profit
(Loss) US Land $9,579 $14,439 $6,361 $37,323 $18,565 US Offshore
3,826 (47,180) 8,860 (34,873) 36,306 International 1,756 6,936 609
14,036 5,149 Real Estate 862 1,077 3,232 4,242 6,569 Segment
operating profit (loss) $16,023 $(24,728) $19,062 $20,728 $66,589
Unallocated amounts: Income from investments 376 13,915 5,811
27,602 7,953 Corporate general & administrative (6,465) (5,617)
(6,059) (24,496) (25,650) Interest expense (3,114) (3,247) (3,240)
(12,695) (12,289) Other depreciation (771) (864) (510) (3,007)
(2,361) Other expense (41) (29) (22) (132) (300) Total unallocated
amounts (10,015) 4,158 (4,020) (12,728) (32,647) Income (loss)
before income taxes and equity in income (loss) of affiliates
$6,008 $(20,570) $15,042 $8,000 $33,942 DATASOURCE: Helmerich &
Payne, Inc. CONTACT: Doug Fears of Helmerich & Payne, Inc.,
+1-918-588-5208 Web site: http://www.hpinc.com/
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