SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
| (MARK ONE) | ||
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For quarterly period ended: December 31, 2003
OR
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 1-4221
HELMERICH & PAYNE, INC.
| Delaware | 73-0679879 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. Number) |
| 1437 South Boulder Ave., Tulsa, Oklahoma | 74119 | |
| (Address of principal executive office) | (Zip Code) |
(918) 742-5531
| Utica at Twenty-First Street, Tulsa, Oklahoma 74114 | ||
| (Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
| CLASS | OUTSTANDING AT JANUARY 31, 2004 | |||||
| Common Stock, $0.10 par value | 50,204,751 |
|||||
Total Number of Pages — 17
HELMERICH & PAYNE, INC.
INDEX
| Page No. | ||||||||
PART I |
FINANCIAL INFORMATION |
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Item 1 |
Financial Statements |
|||||||
Consolidated Condensed Balance Sheets as of December 31, 2003 and September 30, 2003 |
3 | |||||||
Consolidated Condensed Statements of Income for the Three Months Ended December 31, 2003 and 2002 |
4 | |||||||
Consolidated Condensed Statements of Cash Flows for the Three Months Ended December 31, 2003 and 2002 |
5 | |||||||
Consolidated Condensed Statement of Shareholders' Equity for the Three Months Ended December 31, 2003 |
6 | |||||||
Notes to Consolidated Condensed Financial Statements |
7-11 | |||||||
Item 2 |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
12-15 | ||||||
Item 3 |
Quantitative and Qualitative Disclosures about Market Risk |
15 | ||||||
Item 4 |
Controls and Procedures |
16 | ||||||
PART II |
OTHER INFORMATION |
16 | ||||||
Item 6 |
Exhibits and Reports on Form 8-K |
16 | ||||||
Signatures |
17 | |||||||
-2-
PART I. FINANCIAL INFORMATION
HELMERICH & PAYNE, INC.
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
| Unaudited | ||||||||||
| December 31, | September 30, | |||||||||
| 2003 | 2003 | |||||||||
ASSETS |
||||||||||
Current assets: |
||||||||||
Cash and cash equivalents |
$ | 35,497 | $ | 38,189 | ||||||
Accounts receivable, net |
89,598 | 91,088 | ||||||||
Inventories |
22,070 | 22,533 | ||||||||
Prepaid expenses and other |
58,170 | 45,721 | ||||||||
Total current assets |
205,335 | 197,531 | ||||||||
Investments |
168,157 | 158,770 | ||||||||
Property, plant and equipment, net |
1,065,268 | 1,058,205 | ||||||||
Other assets |
1,315 | 1,329 | ||||||||
Total assets |
$ | 1,440,075 | $ | 1,415,835 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||
Current liabilities: |
||||||||||
Notes payable |
$ | 30,000 | $ | 30,000 | ||||||
Accounts payable |
30,361 | 29,630 | ||||||||
Accrued liabilities |
28,110 | 28,988 | ||||||||
Total current liabilities |
88,471 | 88,618 | ||||||||
Noncurrent liabilities: |
||||||||||
Long-term notes payable |
200,000 | 200,000 | ||||||||
Deferred income taxes |
195,451 | 181,737 | ||||||||
Other |
30,106 | 28,229 | ||||||||
Total noncurrent liabilities |
425,557 | 409,966 | ||||||||
SHAREHOLDERS’ EQUITY |
||||||||||
Common stock, par value $.10 per share |
5,353 | 5,353 | ||||||||
Preferred stock, no shares issued |
— | — | ||||||||
Additional paid-in capital |
83,609 | 83,302 | ||||||||
Retained earnings |
842,390 | 840,776 | ||||||||
Unearned compensation |
— | (10 | ) | |||||||
Accumulated other comprehensive income |
40,022 | 33,668 | ||||||||
| 971,374 | 963,089 | |||||||||
Less treasury stock, at cost |
45,327 | 45,838 | ||||||||
Total shareholders’ equity |
926,047 | 917,251 | ||||||||
Total liabilities and shareholders’ equity |
$ | 1,440,075 | $ | 1,415,835 | ||||||
The accompanying notes are an integral part of these statements.
-3-
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
| Three Months Ended | |||||||||
| December 31, | |||||||||
| 2003 | 2002 | ||||||||
REVENUES |
|||||||||
Operating revenues |
$ | 134,870 | $ | 112,504 | |||||
Income from investments |
4,024 | 809 | |||||||
| 138,894 | 113,313 | ||||||||
COST AND EXPENSES |
|||||||||
Direct operating costs |
93,527 | 81,056 | |||||||
Depreciation |
22,268 | 18,236 | |||||||
General and administrative |
9,102 | 10,980 | |||||||
Interest |
3,222 | 2,770 | |||||||
| 128,119 | 113,042 | ||||||||
Income before income taxes and equity
in income (loss) of affiliates |
10,775 | 271 | |||||||
Provision for income taxes |
4,526 | 117 | |||||||
Equity in income (loss) of affiliates
net of income taxes |
(620 | ) | 453 | ||||||
NET INCOME |
$ | 5,629 | $ | 607 | |||||
Earnings per common share: |
|||||||||
Basic |
$ | 0.11 | $ | 0.01 | |||||
Diluted |
$ | 0.11 | $ | 0.01 | |||||
Cash Dividends (Note 3) |
$ | 0.08 | $ | 0.08 | |||||
AVERAGE COMMON SHARES OUTSTANDING: |
|||||||||
Basic |
50,154 | 49,979 | |||||||
Diluted |
50,667 | 50,467 | |||||||
The accompanying notes are an integral part of these statements.
-4-
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
| Three Months Ended | ||||||||||||
| December 31, | ||||||||||||
| 2003 | 2002 | |||||||||||
OPERATING ACTIVITIES: |
||||||||||||
Net income |
$ | 5,629 | $ | 607 | ||||||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||||||
Depreciation |
22,268 | 18,236 | ||||||||||
Equity in (income) loss of affiliates before
income taxes |
1,000 | (731 | ) | |||||||||
Amortization of deferred compensation |
10 | 137 | ||||||||||
Gain on sale of securities |
(3,209 | ) | — | |||||||||
Gain on sale of property, plant & equipment |
(881 | ) | (20 | ) | ||||||||
Other, net |
244 | — | ||||||||||
Change in assets and liabilities-
|
||||||||||||
Accounts receivables |
1,490 | 8,760 | ||||||||||
Inventories |
463 | 497 | ||||||||||
Prepaid expenses and other |
(12,435 | ) | (14,177 | ) | ||||||||
Accounts payable |
731 | 3,049 | ||||||||||
Accrued liabilities |
(761 | ) | 877 | |||||||||
Deferred income taxes |
9,819 | 8,471 | ||||||||||
Other noncurrent liabilities |
1,368 | 1,325 | ||||||||||
Net cash provided by operating activities |
25,736 | 27,031 | ||||||||||
INVESTING ACTIVITIES: |
||||||||||||
Capital expenditures |
(29,746 | ) | (69,255 | ) | ||||||||
Proceeds from sale of investments |
3,462 | — | ||||||||||
Proceeds from sales of property, plant and equipment |
1,295 | 351 | ||||||||||
Net cash used in investing activities |
(24,989 | ) | (68,904 | ) | ||||||||
FINANCING ACTIVITIES: |
||||||||||||
Proceeds from notes payable |
— | 100,000 | ||||||||||
Dividends paid |
(4,015 | ) | (4,002 | ) | ||||||||
Proceeds from exercise of stock options |
576 | 223 | ||||||||||
Net cash provided by (used in) financing activities |
(3,439 | ) | 96,221 | |||||||||
Net increase (decrease) in cash and cash equivalents |
(2,692 | ) | 54,348 | |||||||||
Cash and cash equivalents, beginning of period |
38,189 | 46,883 | ||||||||||
Cash and cash equivalents, end of period |
$ | 35,497 | $ | 101,231 | ||||||||
The accompanying notes are an integral part of these statements.
-5-
HELMERICH & PAYNE, INC.
CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS’ EQUITY
(in thousands — except per share data)
| Accumulated | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional | Treasury Stock | Other | Total | ||||||||||||||||||||||||||||||||||
| Paid-In | Unearned | Retained | Comprehensive | Shareholders' | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Compensation | Earnings | Shares | Amount | Income | Equity | ||||||||||||||||||||||||||||||
Balance, September 30, 2003 |
53,529 | $ | 5,353 | $ | 83,302 | $ | (10 | ) | $ | 840,776 | 3,389 | $ | (45,838 | ) | $ | 33,668 | $ | 917,251 | ||||||||||||||||||||
Comprehensive Income: |
||||||||||||||||||||||||||||||||||||||
Net Income |
5,629 | 5,629 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income,
Unrealized gains on available-
for-sale securities, net |
6,282 | 6,282 | ||||||||||||||||||||||||||||||||||||
Amortization of unrealized loss
on derivative instruments, net |
72 | 72 | ||||||||||||||||||||||||||||||||||||
Total other comprehensive income |
6,354 | |||||||||||||||||||||||||||||||||||||
Comprehensive income |
11,983 | |||||||||||||||||||||||||||||||||||||
Cash dividends ($0.08 per share) |
(4,015 | ) | (4,015 | ) | ||||||||||||||||||||||||||||||||||
Exercise of Stock Options |
65 | (39 | ) | 511 | 576 | |||||||||||||||||||||||||||||||||
Tax benefit of stock-based awards |
242 | 242 | ||||||||||||||||||||||||||||||||||||
Amortization of deferred
compensation |
10 | 10 | ||||||||||||||||||||||||||||||||||||
Balance, December 31, 2003 |
53,529 | $ | 5,353 | $ | 83,609 | $ | — | $ | 842,390 | 3,350 | $ | (45,327 | ) | $ | 40,022 | $ | 926,047 | |||||||||||||||||||||
-6-
HELMERICH & PAYNE, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
| 1. | Basis of Presentation - |
| In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments, consisting only of those of a normal recurring nature, necessary to present fairly the results of the periods presented. The results of operations for the three months ended December 31, 2003, and December 31, 2002, are not necessarily indicative of the results to be expected for the full year. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s 2003 Annual Report on Form 10K. |
| 2. | Employee Stock-Based Awards – |