EX-99 2 ex-99.htm EX-99 hp_Ex99

 

 

 

Picture 1

Exhibit 99

NEWS RELEASE

FOR IMMEDIATE RELEASE: November 15, 2018

 

 

HELMERICH & PAYNE, INC. ANNOUNCES FOURTH QUARTER &  FISCAL YEAR END RESULTS

·

Quarterly U.S. Land revenue days (activity) increased approximately 6%

·

H&P’s spot pricing in the U.S. land market increased by approximately 25% during fiscal 2018;  roughly 5% during the fourth fiscal quarter

·

Quarterly U.S. Land adjusted average rig revenue increased by more than $900(1) per day, up 4% sequentially

·

H&P upgraded/converted 54 FlexRigs® to super-spec(2) capacity during fiscal 2018; 16 FlexRigs upgraded/converted during the fourth fiscal quarter

·

H&P’s U.S. Land contracted rig count increased by 35 rigs to 232 rigs from September 30, 2017 to September 30, 2018 

·

On September 5, 2018, Directors of the Company declared a quarterly cash dividend of $0.71 per share

 

 

Helmerich & Payne, Inc. (NYSE:HP) reported income of  $2.5 million or $0.02 per diluted share from operating revenues of $697 million for the quarter ended September 30, 2018,  compared to a net loss of $8 million, or $(0.08) per diluted share, on revenues of $649 million for the quarter ended June 30, 2018.  Net income per diluted share for the fourth fiscal quarter and the net loss for the third fiscal quarter include $(0.17) and $(0.07), respectively, of after-tax losses comprised of select items(3).  For the fourth fiscal quarter select items(3) were comprised of:

·

$0.08 of after-tax gains related to early termination,  gains on sales and tax adjustments 

·

$(0.25) of after-tax losses related impairments, abandonments and accelerated depreciation

 

Net cash provided by operating activities was $186 million for the fourth quarter of fiscal 2018 compared to $161 million for the third fiscal quarter of fiscal 2018. 

For the fiscal year 2018, the Company reported net income of $483 million or $4.37 per diluted share from operating revenues of $2.5 billion.  Net income per diluted share includes $4.24  of after-tax income comprised of select items(3), the most significant of which is a non-cash gain of approximately $502 million related to a reduction of H&P’s deferred income tax liability as a result of applying the new corporate tax rate enacted by the Tax Cuts and Jobs Act(4).    Net cash provided by operating activities was $545 million in fiscal 2018.

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Page 2

News Release

November 15, 2018

President and CEO John Lindsay commented, “H&P’s leadership position in the super-spec rigs space contributed to another strong quarter of operational results. In accordance with the trend toward greater well complexity,  we  expect to see additional demand for the Company’s super-spec FlexRigs heading into our new fiscal year particularly as customers continue to push increased lateral lengths and their use of pad drilling.  Our new lines of technology-based solutions gained further traction during the quarter as more and more customers realized the value these services provide.

“The super-spec rig market in the U.S. is effectively fully utilized and we continue to see indications that additional demand is forthcoming, even as oil prices have recently moved lower.  This robust demand is supportive of the overall pricing environment and there is a  persistent, upward pressure on dayrates primarily as a result of the value proposition we are able to deliver to our customers.  We upgraded and converted 54 FlexRigs to super-spec during fiscal 2018, which is more than any company in the industry. This brought the total number of super-spec FlexRigs in our U.S. land fleet to 207 at the close of the fiscal year.  We are experiencing further demand for these rigs and expect to maintain an average upgrade/conversion cadence of 12 rigs per quarter for the next few quarters.    Our ongoing investment in these upgrades generates good returns for our shareholders and enhances the overall value of the H&P fleet.

“We have long noted the benefits of our uniform FlexRig fleet design from a safety, operations and efficiency standpoint, and have further capitalized on that design benefit as a digital platform with the roll out of our FlexApp™ solutions  during the latter half of fiscal 2018.  These FlexApps are software-based applications that can be layered on top of our drilling control systems and utilized to improve reliability and performance, increasing the value proposition of H&P’s Family of Solutions™.  

“The wellbore quality and placement services provided by our technology subsidiaries, MOTIVE® Drilling Technologies, Inc. (“Motive”) and Magnetic Variation Services, LLC (“MagVAR”) also continue to gain momentum with customers.  Combining these disruptive technologies with our digital FlexRig platform, we have recently completed initial beta customer testing of our AutoSlideSM technology with very promising results.  AutoSlide takes an evolutionary step in drilling automation by eliminating human intervention during slide operations for all sections of a horizontal well, resulting in greater reliability and performance for customers.”

Vice President and CFO Mark Smith also commented, “Throughout this fiscal year our results and cash flows from operations have shown sequential improvement.  These improvements were not only the result of our employees providing the best possible service to our customers, but also by our investments in super-spec upgrades and value-added technologies.  We expect a similar environment in fiscal 2019 and have set our initial capex budget reflective of those expectations. The increase in our capex budget is driven by continued opportunities to invest in our current FlexRig fleet along with further planned rig reactivations and super-spec upgrades.

“One of the cornerstones of H&P’s success has been its attention to maintaining a strong financial position.  We plan to continue in that vein by keeping an appropriate store of liquidity and a balance sheet that can weather the cyclical nature of our business.  The Company recently refreshed its revolving credit facility by extending the term and by expanding its size to $750 million. This represents a significant increase over the previous facility and is more appropriately sized to our Company’s operations.  Given our operational and capex outlook for fiscal 2019 we do not currently anticipate utilizing this facility, but see it as a prudent step for our capital structure.”

John Lindsay concluded, “The results we’ve been able to achieve as a Company this year would not have been possible without the dedication and determination of our employees.  The Company is in a superb position for the coming year.”

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News Release

November 15, 2018

Operating Segment Results for the Fourth Quarter of Fiscal 2018

 

U.S. Land Operations:

 

Segment operating income increased by $30.2 million to $64.5 million sequentially.  The increase in operating results was primarily driven  by sequential increases in both quarterly revenue days and average rig margin per day.  The number of quarterly revenue days increased sequentially by approximately 6%.  Adjusted average rig revenue per day increased by $921 or 4% to $24,321(1) as pricing continued to improve throughout the quarter.

 

The average rig expense per day decreased sequentially by $825 to $14,109 as the prior quarter was impacted unfavorably by certain one-time costs combined with favorable adjustments to self-insurance expenses that benefited the fourth fiscal quarter.  Corresponding adjusted average rig margin per day increased roughly 21% to $10,212(1)

 

The segment’s depreciation expense for the quarter includes non-cash charges of $13.9 million for abandonments and accelerated depreciation of used drilling rig components related to rig upgrades, compared to similar non-cash charges of $7.0 million during the third fiscal quarter of 2018.

 

Offshore Operations:

 

Segment operating income increased by $4.4 million to $8.2 million sequentially.  The number of quarterly revenue days on H&P-owned platform rigs decreased sequentially by approximately 4%,  while the average rig margin per day increased sequentially by $6,766 to $11,452 primarily due to higher self-insurance expenses and rig start-up costs incurred in the prior quarter.    Management contracts on customer-owned platform rigs contributed approximately $5.5 million to the segment’s operating income, compared to approximately $4.8 million during the prior quarter. 

 

International Land Operations:

 

The segment had an operating loss of $7.9 million this quarter as compared to operating income of $4.3 million during the previous quarter.  The $12.0 million sequential decrease in operating income was primarily attributable to asset impairments resulting from the Company ceasing operations in Ecuador.  Revenue days increased during the quarter by 3% to 1,818 while the average rig margin per day decreased by $1,336 to $8,658. 

 

Operational Outlook for the First Quarter of Fiscal 2019

 

U.S. Land Operations:

·

Quarterly revenue days expected to increase by approximately 4-5% sequentially,  implying a likely exit to the quarter at between 243 – 247 active rigs

·

Average rig revenue per day expected to be between  $24,500-$25,000 (excluding any impact from early termination revenue)

·

Average rig expense per day expected to be between $14,500-$14,900

 

Offshore Operations:

·

Quarterly revenue days expected to decrease by approximately 5% sequentially, representing an average rig count of 5-6 rigs for the quarter as one rig undergoes planned maintenance on its offshore platform

·

Average rig margin per day expected to be approximately $8,500-$11,000

·

Management contracts expected to generate approximately  $4-5 million in operating income

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News Release

November 15, 2018

 

International Land Operations:

·

Quarterly revenue days expected to be flat to down approximately 2% sequentially, representing an average rig count of 19-20 rigs for the quarter

·

Average rig margin per day expected to be roughly $8,000-$9,000 

Other Estimates for Fiscal 2019

 

·

Capital expenditures are expected to be approximately $650 to $680 million; roughly 40% expected for super-spec upgrades, and with a larger, more capable FlexRig fleet, 30-35% expected for maintenance and 25-30% expected for continued reactivations and other bulk purchases.

·

General and administrative expenses for fiscal 2019 are expected to remain relatively flat at approximately $200 million.

·

Depreciation is expected to be approximately $590 million, inclusive of abandonment and accelerated depreciation charges estimated at approximately $30 million.

 

Select Items Included in Net Income (or Loss) per Diluted Share

 

Fourth Quarter of Fiscal 2018 net income of $0.02 per diluted share included $(0.17) in after-tax losses comprised of the following:

·

$0.05 of after-tax gains related to the sale of used drilling equipment

·

$0.02 of after-tax income from long-term contract early termination compensation from customers

·

$0.01 of incremental income tax adjustments related to the recognition of the new corporate tax rate under the Tax Cuts and Jobs Act(4) in calculating the Company’s deferred income tax liability

·

$(0.09) of after-tax losses from abandonment charges and accelerated depreciation related to the decommissioning of used drilling equipment

·

$(0.16) of after-tax losses related to the impairment of decommissioned rigs and related equipment primarily in international markets as well as other intangible assets

 

Third Quarter of Fiscal 2018 net loss of $(0.08) per diluted share included $(0.07) in after-tax losses comprised of the following:

·

$0.04 of after-tax income from long-term contract early termination compensation from customers

·

$0.03 of after-tax gains related to the sale of used drilling equipment

·

$(0.01) of incremental income tax adjustments related to the recognition of the new corporate tax rate under the Tax Cuts and Jobs Act(4) in calculating the Company’s deferred income tax liability

·

$(0.05) of after-tax losses from abandonment charges related to the decommissioning of used drilling equipment

·

$(0.08) of additional discrete tax items impacting the quarter

 

Fiscal 2018 net income of $4.37 per diluted share included $4.24 in after-tax gains comprised of the following:

·

$4.56 of incremental income tax adjustments related to the recognition of the new corporate tax rate under the Tax Cuts and Jobs Act(4) in calculating the Company’s deferred income tax liability

·

$0.15 of after-tax gains related to the sale of used drilling equipment

·

$0.11 of after-tax income from long-term contract early termination compensation from customers

·

$(0.08) of additional discrete tax items

·

$(0.09) of after-tax losses from discontinued operations primarily related to adjustments resulting from currency devaluation

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News Release

November 15, 2018

·

$(0.16) of after-tax losses related to the impairment of decommissioned rigs and related equipment primarily in international markets as well as other intangible assets

·

$(0.25) of after-tax losses from abandonment charges and accelerated depreciation related to the decommissioning of used drilling equipment

 

Revolving Credit Facility

 

On November 13, 2018, we entered into a $750 million unsecured revolving credit facility, which will mature on November 13, 2023. The credit facility has a maximum of $75 million available to use as letters of credit and permits aggregate commitments under the facility to be increased by $300 million, subject to the satisfaction of certain conditions and the procurement of additional commitments from new or existing lenders. The credit facility is currently guaranteed by Helmerich & Payne International Drilling Co., our direct, wholly owned subsidiary (“HPIDC”). The guarantee is subject to release following certain events set forth in the credit agreement.

 

In connection with entering into the credit facility, we terminated our $300 million unsecured credit facility under the credit agreement dated as of July 13, 2016, with HPIDC, as borrower, and the Company, as guarantor.

 

Conference Call

 

A conference call will be held on Friday, November 16, 2018 at 11:00 a.m. (ET) with John Lindsay, President and CEO, Mark Smith, Vice President and CFO, and Dave Wilson, Director of Investor Relations to discuss the Company’s fourth quarter and fiscal year 2018 results. Dial-in information for the conference call is (877) 876-9176 for domestic callers or (785) 424-1667 for international callers.  The call access code is ‘Helmerich’.  You may also listen to the conference call that will be broadcast live over the Internet by logging on to the Company’s website at http://www.hpinc.com and accessing the corresponding link through the Investor Relations section by clicking on “INVESTORS” and then clicking on “Event Calendar” to find the event and the link to the webcast.

 

About Helmerich & Payne, Inc.

 

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for our customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world.  H&P also develops and implements advanced automation, directional drilling and survey management technologies. H&P’s fleet includes 350 land rigs in the U.S., 32 international land rigs and eight offshore platform rigs. For more information, see H&P online at www.hpinc.com.

 

Forward-Looking Statements

 

This release includes “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties.  All statements other than statements of historical facts included in this release, including, without limitation, statements regarding the registrant’s future financial position, operations outlook, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements.  For information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” and “Management’s Discussion and 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.  We undertake no duty to

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News Release

November 15, 2018

update or revise our forward-looking statements based on changes in internal estimates, expectations or otherwise, except as required by law.


 

Note Regarding Trademarks.  Helmerich & Payne, Inc. owns or has rights to the use of trademarks, service marks and trade names that it uses in conjunction with the operation of its business.  Some of the trademarks that appear in this release or otherwise used by H&P include FlexRig and Family of Solutions, which may be registered or trademarked in the U.S. and other jurisdictions.

 

(1) See the Selected Statistical & Operational Highlights table(s) for details on the revenues or charges excluded on a per revenue day basis.  The inclusion or exclusion of these amounts results in adjusted revenue, expense, and/or margin per day figures, which are all non-GAAP measures.

(2)  The term “super-spec” herein refers to rigs with the following specifications: AC drive, 1,500 hp drawworks, 750,000 lbs. hookload rating, 7,500 psi mud circulating system and multiple-well pad capability.

(3) See the corresponding section of this release for details regarding the select items.

(4)  On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law, effective January 1, 2018. 

 

 

Contact:  Dave Wilson, Director of Investor Relations

investor.relations@hpinc.com

(918) 588‑5190

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HELMERICH & PAYNE, INC.

Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

September 30

 

June 30 

 

September 30

 

September 30

CONSOLIDATED STATEMENTS OF OPERATIONS

    

2018

    

2018

    

2017

    

2018

    

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

685,112

 

$

637,548

 

$

527,018

 

$

2,449,051

 

$

1,788,758

Other

 

 

11,713

 

 

11,324

 

 

5,286

 

 

38,217

 

 

15,983

 

 

$

696,825

 

$

648,872

 

$

532,304

 

$

2,487,268

 

$

1,804,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling operating expenses, excluding depreciation and amortization

 

 

441,070

 

 

438,587

 

 

364,596

 

 

1,626,387

 

 

1,242,605

Operating expenses applicable to other revenues

 

 

8,390

 

 

5,924

 

 

2,750

 

 

26,223

 

 

6,712

Depreciation and amortization

 

 

150,281

 

 

144,579

 

 

153,876

 

 

583,802

 

 

585,543

Research and development

 

 

5,018

 

 

5,479

 

 

3,462

 

 

18,167

 

 

12,047

Selling, general and administrative

 

 

53,347

 

 

52,399

 

 

40,331

 

 

200,619

 

 

151,002

Asset impairment charge

 

 

23,128

 

 

 —

 

 

 —

 

 

23,128

 

 

 —

(Gain)/loss on sale of assets

 

 

(7,527)

 

 

(4,313)

 

 

(3,034)

 

 

(22,660)

 

 

(20,627)

 

 

 

673,707

 

 

642,655

 

 

561,981

 

 

2,455,666

 

 

1,977,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) from continuing operations

 

 

23,118

 

 

6,217

 

 

(29,677)

 

 

31,602

 

 

(172,541)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

2,337

 

 

2,109

 

 

1,887

 

 

8,017

 

 

5,915

Interest expense

 

 

(6,471)

 

 

(5,993)

 

 

(2,244)

 

 

(24,265)

 

 

(19,747)

Gain (loss) on investment securities

 

 

(1)

 

 

28

 

 

 —

 

 

 1

 

 

 —

Other

 

 

51

 

 

 —

 

 

2,125

 

 

486

 

 

1,775

 

 

 

(4,084)

 

 

(3,856)

 

 

1,768

 

 

(15,761)

 

 

(12,057)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

 

19,034

 

 

2,361

 

 

(27,909)

 

 

15,841

 

 

(184,598)

Income tax provision (benefit)

 

 

16,859

 

 

10,535

 

 

(6,198)

 

 

(477,169)

 

 

(56,735)

Income (loss) from continuing operations

 

 

2,175

 

 

(8,174)

 

 

(21,711)

 

 

493,010

 

 

(127,863)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations, before income taxes

 

 

14,262

 

 

8,383

 

 

580

 

 

23,389

 

 

3,285

Income tax provision

 

 

13,984

 

 

8,217

 

 

1,401

 

 

33,727

 

 

3,634

Income (loss) from discontinued operations

 

 

278

 

 

166

 

 

(821)

 

 

(10,338)

 

 

(349)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

2,453

 

$

(8,008)

 

$

(22,532)

 

$

482,672

 

$

(128,212)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

0.02

 

$

(0.08)

 

$

(0.20)

 

$

4.49

 

$

(1.20)

Loss from discontinued operations

 

$

 —

 

$

 —

 

$

(0.01)

 

$

(0.10)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

0.02

 

$

(0.08)

 

$

(0.21)

 

$

4.39

 

$

(1.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

0.02

 

$

(0.08)

 

$

(0.20)

 

$

4.47

 

$

(1.20)

Loss from discontinued operations

 

$

 —

 

$

 —

 

$

(0.01)

 

$

(0.10)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

0.02

 

$

(0.08)

 

$

(0.21)

 

$

4.37

 

$

(1.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

108,948

 

 

108,905

 

 

108,588

 

 

108,851

 

 

108,500

Diluted

 

 

109,397

 

 

108,905

 

 

108,588

 

 

109,387

 

 

108,500

 

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Page 8

News Release

November 15, 2018

HELMERICH & PAYNE, INC.

Unaudited

(in thousands)

 

 

 

 

 

 

 

 

    

September 30

    

September 30

CONSOLIDATED CONDENSED BALANCE SHEETS

 

2018

 

2017

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

284,355

 

$

521,375

Short-term investments

 

 

41,461

 

 

44,491

Other current assets

 

 

789,734

 

 

669,401

Total current assets

 

 

1,115,550

 

 

1,235,267

Investments

 

 

98,696

 

 

84,026

Property, plant and equipment, net

 

 

4,857,382

 

 

5,001,051

Other noncurrent assets

 

 

143,239

 

 

119,644

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

6,214,867

 

$

6,439,988

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities

 

$

377,168

 

$

344,385

Long-term debt

 

 

493,968

 

 

492,902

Other noncurrent liabilities

 

 

946,742

 

 

1,434,098

Noncurrent liabilities of discontinued operations

 

 

14,254

 

 

4,012

Total shareholders’ equity

 

 

4,382,735

 

 

4,164,591

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

6,214,867

 

$

6,439,988

 

(more)


 

Page 9

News Release

November 15, 2018

HELMERICH & PAYNE, INC.

Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

Year Ended

 

 

September 30

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

    

2018

    

2017

 

 

 

 

 

As adjusted

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income (loss)

 

$

482,672

 

$

(128,212)

Adjustment for loss from discontinued operations

 

 

10,338

 

 

349

Income (loss) from continuing operations

 

 

493,010

 

 

(127,863)

Depreciation and amortization

 

 

583,802

 

 

585,543

Changes in assets and liabilities

 

 

(88,391)

 

 

(82,598)

Gain on sale of assets

 

 

(22,660)

 

 

(20,627)

Asset impairment charge

 

 

23,128

 

 

 —

Other

 

 

(444,189)

 

 

7,326

Net cash provided by operating activities from continuing operations

 

 

544,700

 

 

361,781

Net cash used in operating activities from discontinued operations

 

 

(169)

 

 

(150)

Net cash provided by operating activities

 

 

544,531

 

 

361,631

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

Capital expenditures

 

 

(466,584)

 

 

(397,567)

Purchase of short-term investments

 

 

(71,049)

 

 

(69,866)

Payment for acquisition of business, net of cash acquired

 

 

(47,886)

 

 

(70,416)

Proceeds from sale of short-term investments

 

 

68,776

 

 

69,449

Proceeds from asset sales

 

 

44,381

 

 

23,412

Net cash used in investing activities

 

 

(472,362)

 

 

(444,988)

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

Dividends paid

 

 

(308,430)

 

 

(305,515)

Proceeds from stock option exercises

 

 

6,355

 

 

11,285

Payments for employee taxes on net settlement of equity awards

 

 

(7,114)

 

 

(6,599)

Net cash used in financing activities

 

 

(309,189)

 

 

(300,829)

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(237,020)

 

 

(384,186)

Cash and cash equivalents, beginning of period

 

 

521,375

 

 

905,561

Cash and cash equivalents, end of period

 

$

284,355

 

$

521,375

 


“As adjusted” – Effective October 1, 2017, we adopted Accounting Standards Update No.  2016-09,  Improvements to Employee Share-Based Payment Accounting. The cash flow statement for the twelve months ended September 30, 2017 has been adjusted to reflect changes that were applied retrospectively from that adoption.

(more)


 

Page 10

News Release

November 15, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

September 30

 

June 30 

 

September 30

 

September 30

 

SEGMENT REPORTING

 

2018

 

2018

 

2017

 

2018

 

2017

 

 

 

(in thousands, except operating statistics)

 

U.S. LAND OPERATIONS

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Operating revenues

 

$

587,244

 

$

536,582

 

$

439,404

 

$

2,068,195

 

$

1,439,523

 

Direct operating expenses

 

 

369,744

 

 

362,037

 

 

297,978

 

 

1,348,533

 

 

984,205

 

Selling, general and administrative expense

 

 

15,365

 

 

14,788

 

 

13,150

 

 

58,157

 

 

50,712

 

Depreciation

 

 

131,901

 

 

125,418

 

 

132,438

 

 

505,112

 

 

499,486

 

Asset impairment charge

 

 

5,695

 

 

 —

 

 

 —

 

 

5,695

 

 

 —

 

Segment operating income (loss)

 

$

64,539

 

$

34,339

 

$

(4,162)

 

$

150,698

 

$

(94,880)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue days

 

 

21,035

 

 

19,917

 

 

17,593

 

 

77,980

 

 

57,120

 

Average rig revenue per day

 

$

24,449

 

$

23,698

 

$

21,944

 

$

23,411

 

$

22,607

 

Average rig expense per day

 

$

14,109

 

$

14,934

 

$

13,905

 

$

14,182

 

$

14,623

 

Average rig margin per day

 

$

10,340

 

$

8,764

 

$

8,039

 

$

9,229

 

$

7,984

 

Rig utilization

 

 

65

%  

 

63

%  

 

55

%  

 

61

%  

 

45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OFFSHORE OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

38,482

 

$

37,669

 

$

32,505

 

$

142,500

 

$

136,263

 

Direct operating expenses

 

 

26,614

 

 

30,146

 

 

24,069

 

 

101,477

 

 

96,593

 

Selling, general and administrative expense

 

 

1,110

 

 

1,126

 

 

918

 

 

4,507

 

 

3,705

 

Depreciation

 

 

2,588

 

 

2,617

 

 

2,469

 

 

10,392

 

 

11,764

 

Segment operating income

 

$

8,170

 

$

3,780

 

$

5,049

 

$

26,124

 

$

24,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue days

 

 

552

 

 

574

 

 

491

 

 

2,036

 

 

2,277

 

Average rig revenue per day

 

$

36,424

 

$

35,293

 

$

34,797

 

$

35,331

 

$

34,332

 

Average rig expense per day

 

$

24,972

 

$

30,607

 

$

22,709

 

$

26,009

 

$

23,172

 

Average rig margin per day

 

$

11,452

 

$

4,686

 

$

12,088

 

$

9,322

 

$

11,160

 

Rig utilization

 

 

75

%  

 

79

%  

 

67

%  

 

70

%  

 

74

%

 

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

 

INTERNATIONAL LAND OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

59,386

 

$

63,297

 

$

55,109

 

$

238,356

 

$

212,972

 

Direct operating expenses

 

 

45,142

 

 

46,810

 

 

42,949

 

 

177,938

 

 

163,486

 

Selling, general and administrative expense

 

 

699

 

 

995

 

 

785

 

 

3,658

 

 

3,088

 

Depreciation

 

 

10,782

 

 

11,160

 

 

13,374

 

 

46,826

 

 

53,622

 

Asset impairment charge

 

 

10,617

 

 

 —

 

 

 —

 

 

10,617

 

 

 —

 

Segment operating income (loss)

 

$

(7,854)

 

$

4,332

 

$

(1,999)

 

$

(683)

 

$

(7,224)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue days

 

 

1,818

 

 

1,762

 

 

1,291

 

 

6,696

 

 

4,951

 

Average rig revenue per day

 

$

30,909

 

$

33,941

 

$

40,540

 

$

33,830

 

$

40,979

 

Average rig expense per day

 

$

22,251

 

$

23,947

 

$

28,154

 

$

24,211

 

$

29,761

 

Average rig margin per day

 

$

8,658

 

$

9,994

 

$

12,386

 

$

9,620

 

$

11,218

 

Rig utilization

 

 

55

%  

 

50

%  

 

37

%  

 

49

%  

 

36

%

 

Operating statistics exclude the effects of offshore platform management contracts and 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

September 30

 

June 30 

 

September 30

 

September 30

 

 

2018

 

2018

 

2017

 

2018

 

2017

U.S. Land Operations

   

$

72,965

    

$

64,587

    

$

53,357

    

$

242,617

    

$

148,218

Offshore Operations

 

$

5,925

 

$

5,057

 

$

5,900

 

$

20,279

 

$

21,578

International Land Operations

 

$

3,194

 

$

3,492

 

$

2,762

 

$

11,828

 

$

10,074

 

(more)


 

Page 11

News Release

November 15, 2018

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, acquisition related costs, 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 (loss) per the information above to income (loss) from continuing operations before income taxes as reported on the Consolidated Statements of Operations (in thousands).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

September 30

 

June 30 

 

September 30

 

September 30

 

    

2018

    

2018

    

2017

    

2018

    

2017

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

64,539

 

$

34,339

 

$

(4,162)

 

$

150,698

 

$

(94,880)

Offshore

 

 

8,170

 

 

3,780

 

 

5,049

 

 

26,124

 

 

24,201

International Land

 

 

(7,854)

 

 

4,332

 

 

(1,999)

 

 

(683)

 

 

(7,224)

Other

 

 

(14,410)

 

 

(5,468)

 

 

(3,697)

 

 

(27,790)

 

 

(9,449)

Segment operating income (loss)

 

$

50,445

 

$

36,983

 

$

(4,809)

 

$

148,349

 

$

(87,352)

Acquisition related costs

 

 

175

 

 

(1,758)

 

 

 —

 

 

(8,153)

 

 

 —

Corporate general and administrative

 

 

(31,411)

 

 

(30,419)

 

 

(24,506)

 

 

(118,496)

 

 

(91,948)

Other depreciation

 

 

(4,048)

 

 

(3,308)

 

 

(3,796)

 

 

(14,319)

 

 

(15,547)

Inter-segment elimination

 

 

430

 

 

406

 

 

400

 

 

1,561

 

 

1,679

Gain on sale of assets

 

 

7,527

 

 

4,313

 

 

3,034

 

 

22,660

 

 

20,627

Operating income (loss)

 

$

23,118

 

$

6,217

 

$

(29,677)

 

$

31,602

 

$

(172,541)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

2,337

 

 

2,109

 

 

1,887

 

 

8,017

 

 

5,915

Interest expense

 

 

(6,471)

 

 

(5,993)

 

 

(2,244)

 

 

(24,265)

 

 

(19,747)

Gain (loss) on investment securities

 

 

(1)

 

 

 —

 

 

 —

 

 

 1

 

 

 —

Other

 

 

51

 

 

28

 

 

2,125

 

 

486

 

 

1,775

Total other income (expense)

 

 

(4,084)

 

 

(3,856)

 

 

1,768

 

 

(15,761)

 

 

(12,057)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

$

19,034

 

$

2,361

 

$

(27,909)

 

$

15,841

 

$

(184,598)

 

 

 

(more)


 

Page 12

News Release

November 15, 2018

SUPPLEMENTARY STATISTICAL INFORMATION 

Unaudited

 

SELECTED STATISTICAL & OPERATIONAL HIGHLIGHTS

(Used to determine adjusted per revenue day statistics, which is a non-GAAP measure)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

    

September 30

    

June 30 

 

 

2018

 

2018

 

 

(in dollars per revenue day)

U.S. Land Operations

 

 

 

 

 

 

Early contract termination revenues

 

$

128

 

$

298

Total impact per revenue day:

 

$

128

 

$

298

 

U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS

 

 

 

 

 

 

 

 

 

 

    

November 15

    

September 30

    

June 30 

    

Q4FY18

 

 

2018

 

2018

 

2018

 

Average

U.S. Land Operations

 

 

 

 

 

 

 

 

Term Contract Rigs

 

148

 

138

 

136

 

134.5

Spot Contract Rigs

 

90

 

94

 

88

 

94.1

Total Contracted Rigs

 

238

 

232

 

224

 

228.6

Idle or Other Rigs

 

112

 

118

 

126

 

121.4

Total Marketable Fleet

 

350

 

350

 

350

 

350.0

 

 

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS

Number of Rigs Already Under Long-Term Contracts(1)

(Estimated Quarterly Average — as of 11/15/18)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Q1

    

Q2

    

Q3

    

Q4

    

Q1

    

Q2

    

Q3

Segment

 

FY19

 

FY19

 

FY19

 

FY19

 

FY20

 

FY20

 

FY20

U.S. Land Operations

 

140.6

 

124.3

 

105.5

 

83.7

 

63.8

 

40.0

 

32.9

International Land Operations

 

11.0

 

11.0

 

11.0

 

11.0

 

10.0

 

6.2

 

1.1

Offshore Operations

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

Total

 

151.6

 

135.3

 

116.5

 

94.7

 

73.8

 

46.2

 

34.0

 


(1) The above term contract coverage excludes long-term contracts for which the Company received early contract termination notifications as of 11/15/18. Given notifications as of 11/15/18, the Company expects to generate approximately $2 million in the first fiscal quarter of 2019 from early terminations corresponding to long-term contracts and related to its U.S. Land segment. All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.

###