- Quarterly U.S. Land adjusted average rig revenue increased
by more than $495(1) per day, up approximately 2%
sequentially
- Quarterly U.S. Land adjusted average rig margin decreased by
approximately $170(1) per day, down roughly 2%
sequentially
- H&P upgraded 2 FlexRigs® to super-spec(2) capacity
during the third fiscal quarter of 2019 and received multi-year
term contracts with attractive pricing
- The Company incurred a non-cash impairment charge of $224
million related to excess drilling equipment and spares, primarily
driven by the reduction of 53 rigs within our FlexRig4 fleet during
the quarter
- The Company sent its first super-spec FlexRig to Argentina
and has a letter of intent to deploy a second super-spec FlexRig
into the country with a different customer
- H&P's drilling automation technology, AutoSlideSM, has
been commercially deployed in four U.S. shale basins, with the next
deployment scheduled during the fourth fiscal quarter
- On June 5, 2019, Directors of the Company declared a
quarterly cash dividend of $0.71 per share
Helmerich & Payne, Inc. (NYSE:HP) reported a net loss of
$155 million or $(1.42) per diluted share from operating revenues
of $688 million for the quarter ended June 30, 2019, compared to
income of $61 million, or $0.55 per diluted share, on revenues of
$721 million for the quarter ended March 31, 2019. The net loss per
diluted share for the third fiscal quarter and the net income for
second fiscal quarter include $(1.82) and $(0.01), respectively, of
after-tax losses comprised of select items(3). For the third fiscal
quarter select items(3) were comprised of:
- $0.15 of after-tax gains pertaining to early termination
compensation, gains on sales, and discrete tax adjustments
- $(1.97) of after-tax losses pertaining to impairments of
drilling equipment and spares mainly driven by the downsizing of
the Flex4 rig fleet, inventory write-downs, abandonments and
accelerated depreciation, and a non-cash fair market adjustment to
our equity investments
Net cash provided by operating activities was $250 million for
the third quarter of fiscal 2019 compared to $200 million for the
second fiscal quarter of fiscal 2019.
President and CEO John Lindsay commented, “The industry saw
further softening in U.S. drilling activity resulting from a
combination of crude oil price volatility and budget discipline by
our customers. Against this backdrop, H&P produced solid
quarterly operating results and maintained FlexRig super-spec
utilization close to 90% during the quarter.
“Our expectation of seeing the bottom of the Company’s rig count
during the quarter turned out to be premature as the full effect of
the industry’s emphasis on disciplined capital spending continues
to reverberate through the oil field services sector. As such,
H&P exited the quarter in the U.S. with 214 active rigs, which
was slightly below the low end of our guidance range. We are
reluctant to predict another bottom and see further softening
during our fourth fiscal quarter as our guidance would indicate.
That said, the U.S. land industry super-spec utilization is close
to 90%, and pricing remains firm for the best-in-class fleet.
“We believe this market environment, with its renewed emphasis
on spending discipline and returns, is ideal for demonstrating the
benefits of H&P’s software solutions and the meaningful impact
these technologies have on well economics through enhanced wellbore
quality and placement. AutoSlide, H&P’s drilling automation
technology, has been deployed commercially in four U.S. shale
basins; the Midland, the Eagle Ford, Scoop/Stack and the Bakken.
The Company anticipates introducing this technology to the Delaware
Basin later this fiscal year. Additionally, the adoption of our
FlexApps continues as customers see the value of these technologies
as demonstrated by their requests to use them on non-H&P rigs.
Our preparation to respond to this type of demand includes
migrating our FlexApp offerings into our H&P Technologies (HPT)
business segment and developing rig-neutral solutions to operate
the software on non-H&P rigs.
“Our leadership position in the U.S. unconventional basins with
FlexRigs and software solutions is allowing us to gain more
traction in international markets. The Company saw a pick-up in
activity in Bahrain and now has two active rigs. Last quarter we
announced a contract to deliver our first super-spec rig into
Argentina, and we expect it to commence operations in the fourth
fiscal quarter. An additional letter of intent was signed to send a
second super-spec FlexRig from the U.S. to Argentina to drill in
the Vaca Muerta basin.”
Vice President and CFO Mark Smith also commented, “Despite the
lower than expected activity in the U.S. during the quarter,
H&P still performed well, generating $250 million in cash flow
from operations. During the quarter, we also concluded an extensive
evaluation of our Flex4 rig fleet and the expected future
utilization of the related drilling equipment and spares on hand.
This assessment resulted in downsizing the FlexRig4 fleet and
non-cash impairment charges of approximately $225 million.
"It is important to point out three considerations regarding our
Flex4 fleet. First, the Flex4 designed rigs are not currently
economical candidates for upgrades or conversions to super-spec.
Second, H&P started building these rigs in 2005 and has already
received its full investment payback as well as generated excess
returns over our internal hurdle rate on the Flex4 fleet. Third,
over the next few quarters we anticipate realizing over $1.5
million or roughly $25-50 per revenue day in permanent cash cost
savings resulting from the reduced costs associated with the
decommissioned FlexRig4s as they are removed from the H&P
fleet.
"We are pleased with H&P’s cash flow generation this quarter
driven by healthy pricing levels and contractual terms as well as
improvements in working capital management. Looking forward, our
strong financial position and operating cash flow generation
combined with our capex discipline, sets the Company up to deliver
high levels of free cash flows.”
John Lindsay concluded, “H&P remains well positioned with
the largest fleet of super-spec rigs and software solutions that
provide improved wellbore quality and placement to deliver economic
value. We believe we have the people, the rig fleet and the
technology solutions to provide superior value for our customers
and to achieve mutual, long-term success in this changing industry
climate."
Operating Segment Results for the Third
Quarter of Fiscal 2019
U.S. Land Operations:
Segment operating income decreased by $244.3 million to a loss
of $138.2 million sequentially. The decrease in operating results
was primarily attributable to the impairment of drilling equipment
and spares mainly driven by the downsizing of the Flex4 rig fleet,
sequential decreases in revenue days and the adjusted average rig
margin per day. The number of quarterly revenue days decreased
sequentially by approximately 7%.
Adjusted average rig revenue per day improved by $498 to
$26,122(1) largely due to increased contributions from FlexApps and
a slight increase in the average dayrate during the quarter.
The adjusted average rig expense per day increased sequentially
by $667 to $14,862(1) as the quarter was impacted by unfavorable
adjustments to self-insurance expenses compared to the prior
quarter that benefited from favorable adjustments to self-insurance
expenses. Corresponding adjusted average rig margin per day
decreased $169 to $11,260(1).
The segment’s depreciation expense for the quarter includes
non-cash charges of $2.1 million for abandonments and accelerated
depreciation of used drilling rig components related to rig
upgrades, compared to similar non-cash charges of $5.3 million
during the second fiscal quarter of 2019.
International Land Operations:
Segment operating income decreased by $13.0 million to a loss of
$5.0 million sequentially. The decrease in operating income was
primarily attributable to an impairment of drilling equipment and
spares driven by the downsizing of the Flex4 rig fleet, sequential
decreases in revenue days, and start-up costs for rigs in Argentina
and Bahrain. Revenue days decreased during the quarter by 3% to
1,510 while the adjusted average rig margin per day decreased by
$3,957 to $7,904(1).
Offshore Operations:
Segment operating income increased by $0.5 million to $5.1
million sequentially. The number of quarterly revenue days on
H&P-owned platform rigs increased sequentially by approximately
1%, while the average rig margin per day increased sequentially by
$7,001 to $12,421 primarily due to higher margin work during the
quarter. Segment operating income from management contracts on
customer-owned platform rigs contributed approximately $2.0
million, compared to approximately $4.7 million during the prior
quarter.
H&P Technologies:
The segment had an operating loss of $8.8 million this quarter
as compared to an operating loss of $7.9 million during the
previous quarter. The $0.9 million sequential increase in the
operating loss was due primarily to lower revenues associated with
the lower industry rig count.
Operational Outlook for the Fourth Quarter
of Fiscal 2019
U.S. Land Operations:
- Quarterly revenue days expected to decrease by approximately
5%-6% sequentially representing a roughly 6%-7% decrease in the
average number of active rigs; we expect to exit the quarter at
between 193-203 active rigs
- Average rig revenue per day expected to be down slightly to
between $25,250-$25,750 (excluding any impact from early
termination revenue) with the primary cause of the decline relating
to FlexApps now being included in HPT revenues in the fourth fiscal
quarter
- Average rig expense per day expected to be between
$14,350-$14,850
- We expect to upgrade 1-2 FlexRigs to walking super-spec
capabilities during the quarter
International Land Operations:
- Quarterly revenue days expected to increase slightly,
representing an average rig count of 17-18 rigs for the
quarter
- Average rig margin per day expected to be flat at $7,500-$8,500
due to rig start-up and mobilization costs
Offshore Operations:
- Quarterly revenue days expected to increase by approximately 1%
sequentially, representing an average rig count of 6 rigs for the
quarter
- Average rig margin per day expected to be flat at
$12,000-$13,000
- Management contracts expected to generate approximately $2
million in operating income
HP Technologies:
- Fiscal fourth quarter revenue, inclusive of FlexApps, is
expected to be between $17-$19 million
Other Estimates for Fiscal 2019
- Capital expenditures are now expected to be at the lower end of
our previous range of approximately $500 to $530 million with
roughly 35% expected for super-spec upgrades, 33-38% expected for
maintenance and 27-32% expected for continued reactivations and
other bulk purchases.
- Depreciation is now expected to be approximately $565 million,
inclusive of abandonment and accelerated depreciation charges
estimated at approximately $15 million.
Select Items Included in Net Income per
Diluted Share
Third Quarter of Fiscal 2019 net loss of $(1.42) per diluted
share included $(1.82) in after-tax losses comprised of the
following:
- $0.01 of after-tax income from long-term contract early
termination compensation from customers
- $0.06 of income tax adjustments related to certain discrete tax
items
- $0.08 of after-tax gains related to the sale of used drilling
equipment
- $(0.02) of non-cash after-tax losses from abandonment charges
and accelerated depreciation related to the decommissioning of used
drilling equipment
- $(0.06) of non-cash after-tax losses from inventory
write-downs, some of which result from the downsizing of the Flex4
rig fleet
- $(0.11) of non-cash after-tax losses related to the fair market
adjustment of equity investments
- $(1.78) of non-cash after-tax losses from impairments of
drilling equipment and spares driven by the downsizing of the Flex4
rig fleet
Second Quarter of Fiscal 2019 net income of $0.55 per diluted
share included $(0.01) in after-tax losses comprised of the
following:
- $0.01 of after-tax income from long-term contract early
termination compensation from customers
- $0.04 of non-cash after-tax gains related to the fair market
adjustment of equity investments
- $0.08 of after-tax gains related to the sale of used drilling
equipment
- $(0.04) of non-cash after-tax losses from abandonment charges
and accelerated depreciation related to the decommissioning of used
drilling equipment
- $(0.10) of non-cash after-tax losses from discontinued
operations related to adjustments resulting from currency
fluctuations
Conference Call
A conference call will be held on Thursday, July 25, 2019 at
11:00 a.m. (EDT) with John Lindsay, President and CEO, Mark Smith,
Vice President and CFO, and Dave Wilson, Director of Investor
Relations to discuss the Company’s fiscal third quarter 2019
results. Dial-in information for the conference call is (866)
342-8591 for domestic callers or (203) 518-9713 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 its 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 299 land rigs in the U.S.,
31 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 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, FlexApp and AutoSlide, 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.
HELMERICH & PAYNE,
INC.
(Unaudited)
(in thousands, except per
share data)
Three Months Ended
Nine Months Ended
June 30,
March 31,
June 30,
June 30,
2019
2019
2018
2019
2018
CONSOLIDATED STATEMENTS OF
OPERATIONS
As adjusted
As adjusted
Operating revenues
Contract drilling
$
684,788
$
717,653
$
637,548
$
2,139,798
$
1,763,939
Other
3,186
3,215
11,324
9,642
26,504
687,974
720,868
648,872
2,149,440
1,790,443
Operating costs and expenses
Contract drilling operating expenses,
excluding depreciation and amortization
443,114
441,719
443,087
1,372,426
1,199,422
Operating expenses applicable to other
revenues
1,414
1,620
1,424
4,308
3,728
Depreciation and amortization
143,297
143,161
144,579
427,917
433,521
Asset impairment charge
224,327
—
—
224,327
—
Research and development
7,066
7,262
5,479
21,347
13,149
Selling, general and administrative
46,590
43,506
52,310
144,604
147,005
Gain on sale of assets
(9,960
)
(11,546
)
(4,313
)
(27,050
)
(15,133
)
855,848
625,722
642,566
2,167,879
1,781,692
Operating income (loss) from continuing
operations
(167,874
)
95,146
6,306
(18,439
)
8,751
Other income (expense)
Interest and dividend income
2,349
2,061
2,109
6,861
5,680
Interest expense
(6,257
)
(6,167
)
(5,993
)
(17,145
)
(17,794
)
Gain (loss) on investment securities
(13,271
)
5,878
—
(50,228
)
—
Other
(1,599
)
17
(61
)
(1,051
)
170
(18,778
)
1,789
(3,945
)
(61,563
)
(11,944
)
Income (loss) from continuing operations
before income taxes
(186,652
)
96,935
2,361
(80,002
)
(3,193
)
Income tax provision (benefit)
(32,031
)
25,078
10,535
(5,602
)
(494,028
)
Income (loss) from continuing
operations
(154,621
)
71,857
(8,174
)
(74,400
)
490,835
Income from discontinued operations before
income taxes
7,244
2,889
8,383
22,798
9,127
Income tax provision
7,306
13,855
8,217
23,231
19,743
Income (loss) from discontinued
operations
(62
)
(10,966
)
166
(433
)
(10,616
)
Net income (loss)
$
(154,683
)
$
60,891
$
(8,008
)
$
(74,833
)
$
480,219
Basic earnings (loss) per common
share:
Income (loss) from continuing
operations
$
(1.42
)
$
0.65
$
(0.08
)
$
(0.71
)
$
4.47
Loss from discontinued operations
$
—
$
(0.10
)
$
—
$
—
$
(0.10
)
Net income (loss)
$
(1.42
)
$
0.55
$
(0.08
)
$
(0.71
)
$
4.37
Diluted earnings (loss) per common
share:
Income (loss) from continuing
operations
$
(1.42
)
$
0.65
$
(0.08
)
$
(0.71
)
$
4.45
Loss from discontinued operations
$
—
$
(0.10
)
$
—
$
—
$
(0.10
)
Net income (loss)
$
(1.42
)
$
0.55
$
(0.08
)
$
(0.71
)
$
4.35
Weighted average shares outstanding (in
thousands):
Basic
109,425
109,406
108,905
109,324
108,818
Diluted
109,425
109,503
108,905
109,324
109,338
“As Adjusted” – Effective October 1, 2018, we adopted Accounting
Standards Update No. 2017-07, Compensation-Retirement Benefits –
(Topic 715): Improving the Presentation of Net Periodic Pension
Cost and Net Periodic Postretirement Benefit Cost. The statement of
operations for the three and nine months ended June 30, 2018 have
been adjusted to reflect changes that were applied retrospectively
from that adoption.
HELMERICH & PAYNE,
INC.
(Unaudited)
(in thousands)
June 30,
September 30,
CONDENSED CONSOLIDATED BALANCE
SHEETS
2019
2018
Assets
Cash and cash equivalents
$
334,775
$
284,355
Short-term investments
45,748
41,461
Other current assets
735,715
789,734
Total current assets
1,116,238
1,115,550
Investments
48,291
98,696
Property, plant and equipment, net
4,583,673
4,857,382
Other noncurrent assets
149,177
143,239
Total Assets
$
5,897,379
$
6,214,867
Liabilities and Shareholders'
Equity
Current liabilities
$
390,526
$
377,168
Long-term debt, net of debt issuance
costs
491,651
493,968
Other noncurrent liabilities
905,517
946,742
Noncurrent liabilities - discontinued
operations
14,631
14,254
Total shareholders’ equity
4,095,054
4,382,735
Total Liabilities and Shareholders'
Equity
$
5,897,379
$
6,214,867
HELMERICH & PAYNE,
INC.
(Unaudited)
(in thousands)
Nine Months Ended June
30,
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
2019
2018
As adjusted
OPERATING ACTIVITIES:
Net income (loss)
$
(74,833
)
$
480,219
Adjustment for loss from discontinued
operations
433
10,616
Income (loss) from continuing
operations
(74,400
)
490,835
Depreciation and amortization
427,917
433,521
Asset impairment charge
224,327
—
Amortization of debt discount and debt
issuance costs
1,176
798
Provision for bad debt
544
598
Stock-based compensation
25,467
23,472
Loss on investment securities
50,228
—
Gain on sale of assets
(27,050
)
(15,133
)
Deferred income tax benefit
(25,503
)
(498,491
)
Other
5,356
3,735
Changes in assets and liabilities
51,365
(67,757
)
Net cash provided by operating activities
from continuing operations
659,427
371,578
Net cash used in operating activities from
discontinued operations
(56
)
(150
)
Net cash provided by operating
activities
659,371
371,428
INVESTING ACTIVITIES:
Capital expenditures
(403,570
)
(322,658
)
Purchase of short-term investments
(71,852
)
(52,159
)
Payment for acquisition of business, net
of cash acquired
(2,781
)
(47,886
)
Proceeds from sale of short-term
investments
68,015
52,470
Proceeds from asset sales
36,227
28,049
Net cash used in investing
activities
(373,961
)
(342,184
)
FINANCING ACTIVITIES:
Dividends paid
(235,058
)
(230,368
)
Debt issuance costs paid
(3,912
)
—
Proceeds from stock option exercises
2,901
5,160
Payments for employee taxes on net
settlement of equity awards
(6,420
)
(5,978
)
Payment of contingent consideration from
acquisition of business
—
(10,625
)
Net cash used in financing
activities
(242,489
)
(241,811
)
Net increase (decrease) in cash and
cash equivalents and restricted cash
42,921
(212,567
)
Cash and cash equivalents and
restricted cash, beginning of period
326,185
560,509
Cash and cash equivalents and
restricted cash, end of period
$
369,106
$
347,942
“As Adjusted” – Effective October 1, 2018, we adopted Accounting
Standards Update No. 2016-18, Statement of Cash Flows – (Topic
230): Restricted Cash and Accounting Standards Update No. 2016-15,
Statement of Cash Flows – (Topic 230): Classification of Certain
Cash Receipts and Cash Payments. The cash flow statement for the
nine months ended June 30, 2018 has been adjusted to reflect
changes that were applied retrospectively from those adoptions.
Three Months Ended
Nine Months Ended
June 30,
March 31,
June 30,
June 30,
SEGMENT REPORTING (in
thousands)
2019
2019
2018
2019
2018
U.S. LAND OPERATIONS
Operating revenues
$
591,455
$
622,204
$
536,582
$
1,837,900
$
1,480,951
Direct operating expenses
374,097
377,984
362,037
1,160,887
978,789
Research and development
165
—
—
165
—
Selling, general and administrative
expense
11,450
11,169
14,788
34,276
42,792
Depreciation
127,040
126,912
125,418
378,062
373,211
Asset impairment charge
216,908
—
—
216,908
—
Segment operating income (loss)
$
(138,205
)
$
106,139
$
34,339
$
47,602
$
86,159
Revenue days
19,846
21,262
19,917
63,040
56,946
Average rig revenue per day
$
26,155
$
25,681
$
23,698
$
25,686
$
23,027
Average rig expense per day
$
15,202
$
14,195
$
14,934
$
14,947
$
14,209
Average rig margin per day
$
10,953
$
11,486
$
8,764
$
10,739
$
8,818
Rig utilization
62
%
67
%
63
%
66
%
60
%
INTERNATIONAL LAND OPERATIONS
Operating revenues
$
46,283
$
50,808
$
63,297
$
163,378
$
178,970
Direct operating expenses
34,146
33,051
46,810
114,736
132,796
Selling, general and administrative
expense
1,150
794
995
4,225
2,959
Depreciation
8,591
8,995
11,160
27,423
36,044
Asset impairment charge
7,419
—
—
7,419
—
Segment operating income (loss)
$
(5,023
)
$
7,968
$
4,332
$
9,575
$
7,171
Revenue days
1,510
1,559
1,762
4,828
4,878
Average rig revenue per day
$
29,669
$
31,130
$
33,941
$
32,285
$
34,919
Average rig expense per day
$
21,650
$
19,269
$
23,947
$
21,261
$
24,941
Average rig margin per day
$
8,019
$
11,861
$
9,994
$
11,024
$
9,978
Rig utilization
51
%
54
%
51
%
55
%
47
%
OFFSHORE OPERATIONS
Operating revenues
$
37,674
$
34,583
$
37,669
$
109,167
$
104,018
Direct operating expenses
28,869
26,984
30,146
82,158
74,863
Selling, general and administrative
expense
1,145
805
1,126
2,719
3,397
Depreciation
2,582
2,263
2,617
7,512
7,804
Segment operating income
$
5,078
$
4,531
$
3,780
$
16,778
$
17,954
Revenue days
546
540
574
1,611
1,484
Average rig revenue per day
$
39,643
$
31,361
$
35,293
$
35,561
$
34,924
Average rig expense per day
$
27,222
$
25,941
$
30,607
$
26,276
$
26,394
Average rig margin per day
$
12,421
$
5,420
$
4,686
$
9,285
$
8,530
Rig utilization
75
%
75
%
79
%
74
%
68
%
H&P TECHNOLOGIES
Operating revenues
$
9,376
$
10,141
$
7,693
$
29,353
$
16,842
Direct operating expenses
6,357
4,214
4,500
15,859
14,105
Research and development
4,801
7,262
5,479
19,082
13,149
Selling, general and administrative
expense
5,204
4,782
5,071
16,085
10,889
Depreciation and amortization
1,824
1,816
1,695
5,415
5,099
Segment operating loss
$
(8,810
)
$
(7,933
)
$
(9,052
)
$
(27,088
)
$
(26,400
)
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
Nine Months Ended
June 30,
March 31,
June 30,
June 30,
2019
2019
2018
2019
2018
U.S. Land Operations
$
72,386
$
76,172
$
64,587
$
218,648
$
169,652
International Land Operations
1,483
2,277
3,492
7,506
8,634
Offshore Operations
7,277
5,507
5,057
18,534
14,354
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, 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.
Three Months Ended
Nine Months Ended
June 30,
March 31,
June 30,
June 30,
(in thousands)
2019
2019
2018
2019
2018
As adjusted
As adjusted
Operating income (loss)
U.S. Land
$
(138,205
)
$
106,139
$
34,339
$
47,602
$
86,159
International Land
(5,023
)
7,968
4,332
9,575
7,171
Offshore
5,078
4,531
3,780
16,778
17,954
H&P Technologies
(8,810
)
(7,933
)
(9,052
)
(27,088
)
(26,400
)
Other
(731
)
1,165
1,826
1,988
4,842
Segment operating income (loss)
$
(147,691
)
$
111,870
$
35,225
$
48,855
$
89,726
Gain on sale of assets
9,960
11,546
4,313
27,050
15,133
Corporate selling, general and
administrative costs and corporate depreciation
(30,143
)
(28,270
)
(33,232
)
(94,344
)
(96,108
)
Operating income (loss)
$
(167,874
)
$
95,146
$
6,306
$
(18,439
)
$
8,751
Other income (expense):
Interest and dividend income
2,349
2,061
2,109
6,861
5,680
Interest expense
(6,257
)
(6,167
)
(5,993
)
(17,145
)
(17,794
)
Gain (loss) on investment securities
(13,271
)
5,878
—
(50,228
)
—
Other
(1,599
)
17
(61
)
(1,051
)
170
Total unallocated amounts
(18,778
)
1,789
(3,945
)
(61,563
)
(11,944
)
Income (loss) from continuing
operations before income taxes
$
(186,652
)
$
96,935
$
2,361
$
(80,002
)
$
(3,193
)
“As Adjusted” – Effective October 1, 2018, we implemented
organizational changes, consistent with the manner in which our
chief operating decision maker evaluates performance and allocates
resources. Certain operations previously reported in “other” within
our segment disclosures are now managed and presented within the
new H&P Technologies reportable segment. All segment
disclosures have been recast for these segment changes.
Additionally, effective October 1, 2018, we adopted Accounting
Standards Update No. 2017-07, Compensation-Retirement Benefits –
(Topic 715): Improving the Presentation of Net Periodic Pension
Cost and Net Periodic Postretirement Benefit Cost. Operating
results for the three and nine months ended June 30, 2019 have been
adjusted to reflect changes that were applied retrospectively from
that adoption.
SUPPLEMENTARY STATISTICAL
INFORMATION
Unaudited
SELECTED STATISTICAL &
OPERATIONAL HIGHLIGHTS
(Used to determine adjusted per
day statistics for revenue and expense, which are non-GAAP
measures)
Three Months Ended
(in dollars per revenue day)
June 30, 2019
March 31, 2019
U.S. Land Operations
Total impact on U.S. Land revenue per
day:
$
33
$
57
Total impact on U.S. Land expense per
day:
340
0
International Land Operations
Total impact on International Land revenue
per day:
$
115
$
0
U.S. LAND RIG COUNTS &
MARKETABLE FLEET STATISTICS
July 24,
June 30,
March 31,
Q3FY19
2019
2019
2019
Average
U.S. Land Operations
Term Contract Rigs
138
143
146
142.4
Spot Contract Rigs
69
71
80
75.7
Total Contracted Rigs
207
214
226
218.1
Idle or Other Rigs
92
85
124
131.9
Total Marketable Fleet
299
299
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 07/24/19)
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Segment
FY19
FY20
FY20
FY20
FY20
FY21
FY21
U.S. Land Operations
137.9
120.6
91.7
76.5
62.1
44.1
18.9
International Land Operations
11.7
11.0
7.2
2.1
1.0
1.0
1.0
Offshore Operations
0.0
—
—
—
—
—
—
Total
149.6
131.6
98.9
78.6
63.1
45.1
19.9
(1) All of the above rig contracts have original terms equal to
or in excess of six months and include provisions for early
termination fees.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190724005871/en/
Dave Wilson, Director of Investor Relations
investor.relations@hpinc.com (918)
588‑5190
Helmerich and Payne (NYSE:HP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Helmerich and Payne (NYSE:HP)
Historical Stock Chart
From Apr 2023 to Apr 2024