HP Hello Pal International Inc

TULSA, Okla., May 2 /PRNewswire-FirstCall/ -- Helmerich & Payne, Inc. reported net income of $106,861,000 ($1.02 per diluted share) from operating revenues of $372,536,000 for its second fiscal quarter ended March 31, 2007, compared with net income of $64,573,000 ($0.61 per diluted share) from operating revenues of $290,830,000 during last year's second fiscal quarter ended March 31, 2006. Included in net income for the second fiscal quarter of 2007 was approximately $0.18 per share from after-tax gains related to the sale of two platform rigs, and $0.05 per share from after-tax gains related to an ongoing insurance settlement for hurricane damages to offshore platform Rig 201 and other asset sales. Comparable after-tax gains from the sale of assets totaled $0.02 per share net income for the second quarter of 2006. For the six months ended March 31, 2007, the Company reported net income of $217,647,000 ($2.08 per diluted share) from operating revenues of $758,935,000, compared with net income of $115,387,000 ($1.09 per diluted share) from operating revenues of $546,218,000 during the six months ended March 31, 2006. Included in net income were after-tax gains from the sale of portfolio securities and drilling equipment, including insurance proceeds, of $0.39 per share for the first six months of fiscal 2007 and $0.05 per share for the first six months of fiscal 2006. Segment operating income from the Company's U.S. land rig operations was up substantially from one year ago, but declined sequentially from $118,408,000 during this year's first fiscal quarter to $109,782,000 during this year's second quarter. The sequential decline resulted from decreases in rig revenue and margin per day of 5% and 9%, respectively. The Company's U.S. land rig utilization was 97% during this year's second quarter, compared with 98% for both last year's second quarter and this year's first quarter. Additionally, total U.S. land rig activity increased 6% sequentially to 11,156 days during this year's second quarter as newly constructed rigs were deployed to the field. The Company continues to deploy additional new builds at the rate of approximately four per month. The Company's U.S. offshore operations reported segment operating income of $2,198,000 for the second quarter of fiscal 2007, compared with $7,369,000 for the second quarter of fiscal 2006, and $5,691,000 for the first quarter of fiscal 2007. Total activity days in U.S. offshore operations during the quarter decreased to 522, compared with 699 activity days during the same period last year and 588 activity days during the first quarter of fiscal 2007. The decline in segment operating income during this second fiscal quarter was mostly attributable to two rigs that transitioned into standby status under substantially lower dayrates, and to another two that completed drilling operations and demobilized during the quarter. Segment operating income from the Company's international operations was $21,481,000 during this year's second quarter, compared with $13,112,000 during last year's second quarter and $25,763,000 during this year's first quarter. The sequential decline in operating income resulted primarily from a higher number of activity days devoted to well-to-well moves at lower dayrates and margins as compared to those of normal drilling days. However, the Company anticipates that segment operating income for the last six months of this fiscal year will slightly increase from the segment operating income reported for the first six months due to expected increases in dayrates and margins, even though activity days are projected to be lower due to recent rig releases. International rig utilization was 93% during this year's second quarter, compared with 89% during last year's second quarter, and 96% during this year's first quarter. Company President and C.E.O., Hans Helmerich commented, "We have long believed that the technological advances introduced with the Company's FlexRig(R)* technology would help differentiate the Company from the rest of the field. As many of our competitors report significant numbers of rigs currently stacked, our land rig utilization in the U.S. remains high at 97%. Dayrates continue to experience some softening in the face of uncertain natural gas pricing and new capacity displacing less capable rigs. During increased market volatility, the overall rig count has held up nicely and is slightly above year-ago levels, suggesting resiliency to the energy cycle. "With the sale of two of our offshore platform rigs, the remaining nine platform rigs represent only 5% of our entire fleet and less than 2% of total Company segment operating income. We expect that segment's operating income during the next two to three quarters to be slightly improved over that reported in this year's second quarter." Helmerich & Payne, Inc. is a contract drilling company with a rig fleet that currently includes 140 U.S. land rigs, nine U.S. platform rigs located in the Gulf of Mexico and 27 international land rigs. In addition, the Company is committed to complete another 24 new H&P-designed and operated FlexRigs, expanding its total number of FlexRigs to 125 and its total number of U.S. land rigs to 164. The Company expects to complete 18 of these 24 new FlexRigs by September 30, 2007, the end of its fiscal year. 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 for a year 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 Results of Operations and Financial Condition" sections of the Company's SEC filings, including but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. As a result of these factors, Helmerich & Payne, Inc.'s actual results may differ materially from those indicated or implied by such forward-looking statements. * FlexRig(R) is a registered trademark of Helmerich & Payne, Inc. HELMERICH & PAYNE, INC. Unaudited (in thousands, except per share data) CONSOLIDATED Three Months Ended Six Months Ended STATEMENTS Dec. 31 March 31 March 31 OF INCOME 2006 2007 2006 2007 2006 Operating Revenues: Drilling - U.S. Land $269,900 $269,145 $193,668 $539,045 $366,422 Drilling - U.S. Offshore 30,986 24,062 33,703 55,048 63,223 Drilling - International 82,614 76,591 61,117 159,205 111,374 Real Estate 2,899 2,738 2,342 5,637 5,199 386,399 372,536 290,830 758,935 546,218 Operating costs and other: Operating costs, excluding depreciation 199,467 199,456 156,800 398,923 297,396 Depreciation 30,151 32,952 23,385 63,103 46,308 General and administrative 10,613 13,350 13,957 23,963 25,895 Gain from involuntary conversion of long-lived assets --- (5,170) --- (5,170) --- Income from asset sales (486) (32,336) (3,563) (32,822) (4,536) 239,745 208,252 190,579 447,997 365,063 Operating income 146,654 164,284 100,251 310,938 181,155 Other income (expense): Interest and dividend income 1,244 1,034 2,456 2,278 4,986 Interest expense (919) (1,913) (1,946) (2,832) (4,526) Gain on sale of investment securities 26,337 177 --- 26,514 2,720 Other 64 66 27 130 (486) 26,726 (636) 537 26,090 2,694 Income before income taxes and equity in income of affiliate 173,380 163,648 100,788 337,028 183,849 Income tax provision 64,098 59,338 38,240 123,436 71,042 Equity in income of affiliate net of income taxes 1,504 2,551 2,025 4,055 2,580 NET INCOME $110,786 $106,861 $64,573 $217,647 $115,387 Earnings per common share: Basic $1.07 $1.04 $0.62 $2.11 $1.11 Diluted $1.06 $1.02 $0.61 $2.08 $1.09 Average common shares outstanding: Basic 103,312 103,239 104,627 103,276 104,303 Diluted 104,776 104,832 106,114 104,841 105,771 HELMERICH & PAYNE, INC. Unaudited (in thousands) CONSOLIDATED CONDENSED BALANCE SHEETS 3/31/07 9/30/06 ASSETS Cash and cash equivalents $89,140 $33,853 Short-term investments 344 48,673 Other current assets 374,538 346,165 Total current assets 464,022 428,691 Investments 206,013 218,309 Net property, plant, and equipment 1,807,965 1,483,134 Other assets 6,537 4,578 TOTAL ASSETS $2,484,537 $2,134,712 LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities $247,732 $264,548 Total noncurrent liabilities 337,674 313,272 Long-term notes payable 330,000 175,000 Total shareholders' equity 1,569,131 1,381,892 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,484,537 $2,134,712 HELMERICH & PAYNE, INC. Unaudited (in thousands) Six Months Ended CONSOLIDATED CONDENSED STATEMENTS March 31 OF CASH FLOWS 2007 2006 OPERATING ACTIVITIES: Net income $217,647 $115,387 Depreciation 63,103 46,308 Changes in assets and liabilities 32,364 (20,136) Gain from involuntary conversion of long-lived assets (5,170) --- Gain on sale of assets and investment securities (59,198) (7,120) Other (2,881) 1,657 Net cash provided by operating activities 245,865 136,096 INVESTING ACTIVITIES: Capital expenditures (433,900) (170,900) Purchase of investments --- (83,010) Insurance proceeds from involuntary conversion of long-lived assets 5,170 --- Proceeds from sale of assets and investments 122,759 12,983 Other 214 --- Net cash provided used in investing activities (305,757) (240,927) FINANCING ACTIVITIES: Dividends paid (9,311) (8,624) Repurchase of common stock (17,621) --- Net decrease in bank overdraft (10,195) --- Proceeds from exercise of stock options 872 11,860 Net proceeds from short-term and long-term debt 151,279 --- Excess tax benefit from stock-based compensation 155 7,998 Net cash provided by financing activities 115,179 11,234 Net increase (decrease) in cash and cash equivalents 55,287 (93,597) Cash and cash equivalents, beginning of period 33,853 288,752 Cash and cash equivalents, end of period $89,140 $195,155 SEGMENT REPORTING Three Months Ended Six Months Ended Dec. 31 March 31 March 31 2006 2007 2006 2007 2006 (in thousands, except days and per day amounts) U.S. LAND OPERATIONS Revenues $269,900 $269,145 $193,668 $539,045 $366,422 Direct operating expenses 127,357 132,399 92,051 259,756 176,266 General and administrative expense 3,452 3,151 3,908 6,603 6,990 Depreciation 20,683 23,813 14,832 44,496 29,298 Segment operating income $118,408 $109,782 $82,877 $228,190 $153,868 Activity days 10,548 11,156 8,086 21,704 16,121 Average rig revenue per day $24,231 $23,032 $22,593 $23,615 $21,399 Average rig expense per day $10,717 $10,774 $10,026 $10,747 $9,603 Average rig margin per day $13,514 $12,258 $12,567 $12,868 $11,796 Rig utilization 98% 97% 98% 98% 97% U.S. OFFSHORE OPERATIONS Revenues $30,986 $24,062 $33,703 $55,048 $63,223 Direct operating expenses 21,104 17,745 21,820 38,849 42,128 General and administrative expense 1,421 1,435 1,828 2,856 3,265 Depreciation 2,770 2,684 2,686 5,454 5,350 Segment operating income $5,691 $2,198 $7,369 $7,889 $12,480 Activity days 588 522 699 1,110 1,343 Average rig revenue per day $38,824 $29,603 $39,707 $34,488 $38,092 Average rig expense per day $23,901 $19,885 $23,642 $22,012 $23,328 Average rig margin per day $14,923 $9,718 $16,065 $12,476 $14,764 Rig utilization 71% 64% 71% 68% 67% SEGMENT REPORTING Three Months Ended Six Months Ended Dec. 31 March 31 March 31 2006 2007 2006 2007 2006 (in thousands, except days and per day amounts) INTERNATIONAL OPERATIONS Revenues $82,614 $76,591 $61,117 $159,205 $111,374 Direct operating expenses 50,694 48,668 42,398 99,362 78,091 General and administrative expense 600 1,096 872 1,696 1,478 Depreciation 5,557 5,346 4,735 10,903 9,391 Segment operating income $25,763 $21,481 $13,112 $47,244 $22,414 Activity days 2,366 2,262 2,160 4,628 4,188 Average rig revenue per day $27,690 $27,001 $22,979 27,354 $21,674 Average rig expense per day $14,878 $15,722 $15,003 15,291 $14,281 Average rig margin per day $12,812 $11,279 $7,976 12,063 $7,393 Rig utilization 96% 93% 89% 95% 86% Per day calculations for international operations exclude gains and losses from translation of foreign currency transactions. 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: U.S. Land Operations $14,309 $12,196 $10,978 $26,505 $21,441 U.S. Offshore Operations $3,344 $3,598 $3,489 $6,942 $7,242 International Operations $12,516 $11,066 $6,796 $23,582 $11,921 REAL ESTATE Revenues $2,899 $2,738 $2,342 $5,637 $5,199 Direct operating expenses 843 1,165 1,010 2,008 1,811 Depreciation 589 612 606 1,201 1,209 Segment operating income $1,467 $961 $726 $2,428 $2,179 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 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 Six Months Ended Dec. 31 March 31 March 31 2006 2007 2006 2007 2006 Operating Income U.S. Land $118,408 $109,782 $82,877 $228,190 $153,868 U.S. Offshore 5,691 2,198 7,369 7,889 12,480 International 25,763 21,481 13,112 47,244 22,414 Real Estate 1,467 961 726 2,428 2,179 Segment operating income $151,329 $134,422 $104,084 $285,751 $190,941 Corporate general and administrative (5,140) (7,668) (7,349) (12,808) (14,162) Other depreciation (552) (497) (526) (1,049) (1,060) Inter-segment elimination 531 521 479 1,052 900 Gain from involuntary conversion of long-lived assets --- 5,170 --- 5,170 --- Income from asset sales 486 32,336 3,563 32,822 4,536 Operating income $146,654 $164,284 $100,251 $310,938 $181,155 Other income (expense): Interest and dividend income 1,244 1,034 2,456 2,278 4,986 Interest expense (919) (1,913) (1,946) (2,832) (4,526) Gain on sale of investment securities 26,337 177 --- 26,514 2,720 Other 64 66 27 130 (486) Total other income (expense) 26,726 (636) 537 26,090 2,694 Income before income taxes and equity in income of affiliate $173,380 $163,648 $100,788 $337,028 $183,849 DATASOURCE: Helmerich & Payne, Inc. CONTACT: Juan Pablo Tardio, +1-918-588-5383, for Helmerich & Payne, Inc. Web site: http://www.hpinc.com/

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