0001104659-13-036837.txt : 20130503 0001104659-13-036837.hdr.sgml : 20130503 20130503090219 ACCESSION NUMBER: 0001104659-13-036837 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20130331 FILED AS OF DATE: 20130503 DATE AS OF CHANGE: 20130503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELMERICH & PAYNE INC CENTRAL INDEX KEY: 0000046765 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 730679879 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04221 FILM NUMBER: 13810458 BUSINESS ADDRESS: STREET 1: UTICA AT 21ST ST CITY: TULSA STATE: OK ZIP: 74114 BUSINESS PHONE: 9187425531 MAIL ADDRESS: STREET 1: UTICA AT 21ST ST CITY: TULSA STATE: OK ZIP: 74114 10-Q 1 a13-7679_110q.htm QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(D)

Table of Contents

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For quarterly period ended:  March 31, 2013

 

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.

(Exact name of registrant as specified in its charter)

 

Delaware

 

73-0679879

(State or other jurisdiction of

 

(I.R.S. Employer I.D. Number)

incorporation or organization)

 

 

 

1437 South Boulder Avenue, Tulsa, Oklahoma,74119

(Address of principal executive office)(Zip Code)

 

(918) 742-5531

(Registrant’s telephone number, including area code)

 

N/A

(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer x

 

Accelerated filer o

 

 

 

Non-accelerated filer o

 

Smaller reporting company o

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

 

CLASS

 

OUTSTANDING AT April 30, 2013

Common Stock, $0.10 par value

 

106,414,352

 

 

 



Table of Contents

 

HELMERICH & PAYNE, INC. AND SUBSIDIARIES

 

TABLE OF CONTENTS

 

 

 

Page No.

 

 

 

PART  I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Condensed Balance Sheets as of March 31, 2013 and September 30, 2012

3

 

 

 

 

Consolidated Condensed Statements of Income for the Three and Six Months Ended March 31, 2013 and 2012

4

 

 

 

 

Consolidated Condensed Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2013 and 2012

5

 

 

 

 

Consolidated Condensed Statements of Cash Flows for the Six Months Ended March 31, 2013 and 2012

6

 

 

 

 

Consolidated Condensed Statement of Shareholders’ Equity for the Six Months Ended March 31, 2013

7

 

 

 

 

Notes to Consolidated Condensed Financial Statements

8-18

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19-25

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

26

 

 

 

Item 4.

Controls and Procedures

26

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

26

 

 

 

Item 1A.

Risk Factors

27

 

 

 

Item 6.

Exhibits

28

 

 

 

Signatures

29

 

2



Table of Contents

 

PART I. FINANCIAL INFORMATION

HELMERICH & PAYNE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share amounts)

 

ITEM 1. FINANCIAL STATEMENTS

 

 

 

March 31,

 

September 30,

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

172,993

 

$

96,095

 

Accounts receivable, less reserve of $4,715 at March 31, 2013 and $942 at September 30, 2012

 

603,238

 

620,489

 

Inventories

 

82,725

 

78,777

 

Deferred income taxes

 

18,497

 

17,555

 

Prepaid expenses and other

 

50,450

 

74,693

 

Current assets of discontinued operations

 

4,073

 

7,619

 

Total current assets

 

931,976

 

895,228

 

 

 

 

 

 

 

Investments

 

501,383

 

451,144

 

Property, plant and equipment, net

 

4,560,562

 

4,351,571

 

Other assets

 

18,531

 

23,142

 

 

 

 

 

 

 

Total assets

 

$

6,012,452

 

$

5,721,085

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

94,653

 

$

159,420

 

Accrued liabilities

 

166,237

 

176,615

 

Long-term debt due within one year

 

40,000

 

40,000

 

Current liabilities of discontinued operations

 

3,647

 

5,129

 

Total current liabilities

 

304,537

 

381,164

 

 

 

 

 

 

 

Noncurrent liabilities:

 

 

 

 

 

Long-term debt

 

195,000

 

195,000

 

Deferred income taxes

 

1,252,297

 

1,209,040

 

Other

 

85,560

 

98,393

 

Noncurrent liabilities of discontinued operations

 

426

 

2,490

 

Total noncurrent liabilities

 

1,533,283

 

1,504,923

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, $.10 par value, 160,000,000 shares authorized, 108,425,884 shares and 107,598,889 shares issued as of March 31, 2013 and September 30, 2012, respectively and 106,404,277 and 105,697,693 shares outstanding as of March 31, 2013 and September 30, 2012, respectively

 

10,843

 

10,760

 

Preferred stock, no par value, 1,000,000 shares authorized, no shares issued

 

 

 

Additional paid-in capital

 

265,943

 

236,240

 

Retained earnings

 

3,783,890

 

3,505,295

 

Accumulated other comprehensive income

 

205,054

 

166,807

 

Treasury stock, at cost

 

(91,098

)

(84,104

)

Total shareholders’ equity

 

4,174,632

 

3,834,998

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

6,012,452

 

$

5,721,085

 

 

The accompanying notes are an integral part of these statements.

 

3



Table of Contents

 

HELMERICH & PAYNE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

Operating revenues:

 

 

 

 

 

 

 

 

 

Drilling — U.S. Land

 

$

685,710

 

$

658,804

 

$

1,381,740

 

$

1,276,583

 

Drilling — Offshore

 

55,605

 

43,421

 

113,323

 

94,213

 

Drilling — International Land

 

94,092

 

64,088

 

181,359

 

124,823

 

Other

 

2,902

 

3,669

 

6,459

 

6,951

 

 

 

838,309

 

769,982

 

1,682,881

 

1,502,570

 

 

 

 

 

 

 

 

 

 

 

Operating costs and other:

 

 

 

 

 

 

 

 

 

Operating costs, excluding depreciation

 

461,737

 

448,208

 

928,608

 

839,240

 

Depreciation

 

112,433

 

90,934

 

219,032

 

177,222

 

General and administrative

 

32,836

 

27,805

 

65,257

 

53,968

 

Research and development

 

3,696

 

3,830

 

7,049

 

7,079

 

Income from asset sales

 

(5,313

)

(7,820

)

(10,532

)

(12,503

)

 

 

605,389

 

562,957

 

1,209,414

 

1,065,006

 

 

 

 

 

 

 

 

 

 

 

Operating income from continuing operations

 

232,920

 

207,025

 

473,467

 

437,564

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

315

 

356

 

741

 

692

 

Interest expense

 

(1,186

)

(2,421

)

(2,494

)

(4,882

)

Gain from sale of investment securities

 

 

 

8,752

 

 

Other

 

103

 

(42

)

(1,981

)

(21

)

 

 

(768

)

(2,107

)

5,018

 

(4,211

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

232,152

 

204,918

 

478,485

 

433,353

 

Income tax provision

 

81,085

 

75,155

 

167,807

 

159,293

 

Income from continuing operations

 

151,067

 

129,763

 

310,678

 

274,060

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations before income taxes

 

(472

)

(125

)

(480

)

(136

)

Income tax provision

 

(485

)

(81

)

(485

)

(81

)

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations

 

13

 

(44

)

5

 

(55

)

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

151,080

 

$

129,719

 

$

310,683

 

$

274,005

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.41

 

$

1.20

 

$

2.91

 

$

2.54

 

Income from discontinued operations

 

$

 

$

 

$

 

$

 

Net income

 

$

1.41

 

$

1.20

 

$

2.91

 

$

2.54

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.39

 

$

1.18

 

$

2.87

 

$

2.51

 

Income from discontinued operations

 

$

 

$

 

$

 

$

 

Net income

 

$

1.39

 

$

1.18

 

$

2.87

 

$

2.51

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

106,326

 

107,385

 

106,094

 

107,285

 

Diluted

 

107,786

 

109,042

 

107,640

 

108,925

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.15

 

$

0.07

 

$

0.30

 

$

0.14

 

 

The accompanying notes are an integral part of these statements.

 

4



Table of Contents

 

HELMERICH & PAYNE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

151,080

 

$

129,719

 

$

310,683

 

$

274,005

 

Other comprehensive income, net of income taxes:

 

 

 

 

 

 

 

 

 

Unrealized appreciation on securities, net of income taxes of $21.9 million and $21.8 million at March 31, 2013 and $15.9 million and $35.3 million at March 31, 2012

 

37,516

 

26,479

 

37,382

 

58,817

 

Minimum pension liability adjustments, net of income taxes of $0.3 million and $0.5 million at March 31, 2013 and $0.3 million and $0.6 million at March 31, 2012

 

432

 

540

 

865

 

1,079

 

Other comprehensive income

 

37,948

 

27,019

 

38,247

 

59,896

 

Comprehensive income

 

$

189,028

 

$

156,738

 

$

348,930

 

$

333,901

 

 

The accompanying notes are an integral part of these statements.

 

5



Table of Contents

 

HELMERICH & PAYNE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

 

 

 

Six Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

310,683

 

$

274,005

 

Adjustment for (income) loss from discontinued operations

 

(5

)

55

 

Income from continuing operations

 

310,678

 

274,060

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation

 

219,032

 

177,222

 

Provision for bad debt

 

3,792

 

2

 

Stock-based compensation

 

11,726

 

8,758

 

Other

 

772

 

2

 

Gain on sale of investment securities

 

(8,752

)

 

Income from asset sales

 

(10,532

)

(12,503

)

Deferred income tax expense

 

20,127

 

100,143

 

Change in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

13,459

 

(50,665

)

Inventories

 

(6,148

)

(7,003

)

Prepaid expenses and other

 

31,046

 

(22,719

)

Accounts payable

 

(70,000

)

(12,253

)

Accrued liabilities

 

(7,826

)

(14,083

)

Deferred income taxes

 

(1,211

)

205

 

Other noncurrent liabilities

 

(11,855

)

(2,289

)

Net cash provided by operating activities from continuing operations

 

494,308

 

438,877

 

Net cash provided by (used in) operating activities from discontinued operations

 

5

 

(55

)

Net cash provided by operating activities

 

494,313

 

438,822

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

Capital expenditures

 

(438,473

)

(492,701

)

Proceeds from sale of investment securities

 

18,102

 

 

Proceeds from asset sales

 

16,151

 

25,543

 

Net cash used in investing activities

 

(404,220

)

(467,158

)

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

Dividends paid

 

(23,469

)

(15,070

)

Exercise of stock options

 

4,906

 

1,895

 

Tax withholdings related to net share settlements of restricted stock

 

(1,677

)

(1,514

)

Excess tax benefit from stock-based compensation

 

7,045

 

3,164

 

Net cash used in financing activities

 

(13,195

)

(11,525

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

76,898

 

(39,861

)

Cash and cash equivalents, beginning of period

 

96,095

 

364,246

 

Cash and cash equivalents, end of period

 

$

172,993

 

$

324,385

 

 

The accompanying notes are an integral part of these statements.

 

6



Table of Contents

 

HELMERICH & PAYNE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS’ EQUITY

SIX MONTHS ENDED MARCH 31, 2013

(Unaudited)

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

Paid-In

 

Retained

 

Comprehensive

 

Treasury Stock

 

Shareholders’

 

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

Income

 

Shares

 

Amount

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2012

 

107,599

 

$

10,760

 

$

236,240

 

$

3,505,295

 

$

166,807

 

1,901

 

$

(84,104

)

$

3,834,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

310,683

 

 

 

 

 

 

 

310,683

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in value on available-for-sale securities, net of income taxes

 

 

 

 

 

 

 

 

 

37,382

 

 

 

 

 

37,382

 

Amortization of net periodic benefit costs-net of actuarial gain, net of income taxes

 

 

 

 

 

 

 

 

 

865

 

 

 

 

 

865

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

348,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends ($0.30 per share)

 

 

 

 

 

 

 

(32,088

)

 

 

 

 

 

 

(32,088

)

Exercise of stock options

 

744

 

75

 

13,366

 

 

 

 

 

162

 

(8,535

)

4,906

 

Tax benefit of stock-based awards, including excess tax benefits of $10.2 million

 

 

 

 

 

7,837

 

 

 

 

 

 

 

 

 

7,837

 

Stock issued for vested restricted stock, net of shares withheld for employee taxes

 

83

 

8

 

(3,226

)

 

 

 

 

(41

)

1,541

 

(1,677

)

Stock-based compensation

 

 

 

 

 

11,726

 

 

 

 

 

 

 

 

 

11,726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2013

 

108,426

 

$

10,843

 

$

265,943

 

$

3,783,890

 

$

205,054

 

2,022

 

$

(91,098

)

$

4,174,632

 

 

The accompanying notes are an integral part of these statements.

 

7



Table of Contents

 

HELMERICH & PAYNE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

 

1.              Basis of Presentation

 

Unless the context otherwise requires, the use of the terms “the Company”, “we”, “us” and “our” in these Notes to Consolidated Condensed Financial Statements refers to Helmerich & Payne, Inc. and its consolidated subsidiaries.

 

The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “Commission”) pertaining to interim financial information.  Accordingly, these interim financial statements do not include all information or footnote disclosures required by GAAP for complete financial statements and, therefore, should be read in conjunction with the Consolidated Financial Statements and notes thereto in our 2012 Annual Report on Form 10-K and other current filings with the Commission.  In the opinion of management, all adjustments, consisting of those of a normal recurring nature, necessary to present fairly the results of the periods presented have been included.  The results of operations for the interim periods presented may not necessarily be indicative of the results to be expected for the full year.

 

As more fully described in our 2012 Annual Report on Form 10-K, our contract drilling revenues are comprised of daywork drilling contracts for which the related revenues and expenses are recognized as services are performed.  For contracts that are terminated by customers prior to the expirations of their fixed terms, contractual provisions customarily require early termination amounts to be paid to us. Revenues from early terminated contracts are recognized when all contractual requirements have been met.

 

2.              Discontinued Operations

 

On June 30, 2010, the Official Gazette of Venezuela published the Decree of Venezuelan President Hugo Chavez, which authorized the “forceful acquisition” of 11 rigs owned by our Venezuelan subsidiary.  The Decree also authorized the seizure of “all the personal and real property and other improvements” used by our Venezuelan subsidiary in its drilling operations.  The seizing of our assets became effective June 30, 2010 and met the criteria established for recognition as discontinued operations under accounting standards for presentation of financial statements.  Therefore, operations from the Venezuelan subsidiary, an operating segment previously within the International Land segment, have been classified as discontinued operations in our Consolidated Condensed Financial Statements.

 

Current assets of discontinued operations consist of restricted cash to meet remaining in-country current obligations.  Current and noncurrent liabilities of discontinued operations consist of municipal and income taxes payable and social obligations due within the country of Venezuela.

 

3.     Earnings per Share

 

Accounting Standards Codification (“ASC”) 260, Earnings per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividend or dividend equivalents as a separate class of securities in calculating earnings per share.  We have granted and expect to continue to grant to employees restricted stock grants that contain non-forfeitable rights to dividends.  Such grants are considered participating securities under ASC 260.  As such, we are required to include these grants in the calculation of our basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.

 

Basic earnings per share is computed utilizing the two-class method and is calculated based on the weighted-average number of common shares outstanding during the periods presented.

 

Diluted earnings per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options and nonvested restricted stock.

 

8



Table of Contents

 

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

Numerator:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

151,067

 

$

129,763

 

$

310,678

 

$

274,060

 

Income (loss) from discontinued operations

 

13

 

(44

)

5

 

(55

)

Net income

 

151,080

 

129,719

 

310,683

 

274,005

 

Adjustment for basic earnings per share:

 

 

 

 

 

 

 

 

 

Earnings allocated to unvested shareholders

 

(820

)

(530

)

(1,553

)

(1,009

)

Numerator for basic earnings per share:

 

 

 

 

 

 

 

 

 

From continuing operations

 

150,247

 

129,233

 

309,125

 

273,051

 

From discontinued operations

 

13

 

(44

)

5

 

(55

)

 

 

150,260

 

129,189

 

309,130

 

272,996

 

Adjustment for diluted earnings per share:

 

 

 

 

 

 

 

 

 

Effect of reallocating undistributed earnings of unvested shareholders

 

10

 

7

 

19

 

14

 

Numerator for diluted earnings per share:

 

 

 

 

 

 

 

 

 

From continuing operations

 

150,257

 

129,240

 

309,144

 

273,065

 

From discontinued operations

 

13

 

(44

)

5

 

(55

)

 

 

$

150,270

 

$

129,196

 

$

309,149

 

$

273,010

 

Denominator:

 

 

 

 

 

 

 

 

 

Denominator for basic earnings per share — weighted-average shares

 

106,326

 

107,385

 

106,094

 

107,285

 

Effect of dilutive shares from stock options and restricted stock

 

1,460

 

1,657

 

1,546

 

1,640

 

Denominator for diluted earnings per share — adjusted weighted-average shares

 

107,786

 

109,042

 

107,640

 

108,925

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.41

 

$

1.20

 

$

2.91

 

$

2.54

 

Loss from discontinued operations

 

 

 

 

 

Net income

 

$

1.41

 

$

1.20

 

$

2.91

 

$

2.54

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.39

 

$

1.18

 

$

2.87

 

$

2.51

 

Loss from discontinued operations

 

 

 

 

 

Net income

 

$

1.39

 

$

1.18

 

$

2.87

 

$

2.51

 

 

The following shares attributable to outstanding equity awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive (in thousands, except per share amounts):

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Shares excluded from calculation of diluted earnings per share

 

752

 

435

 

365

 

453

 

Weighted-average price per share

 

$

57.30

 

$

59.76

 

$

54.18

 

$

59.76

 

 

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Table of Contents

 

4.     Financial Instruments and Fair Value Measurement

 

The estimated fair value of our available-for-sale securities, reflected on our Consolidated Condensed Balance Sheets as Investments, is based on market quotes.  The following is a summary of available-for-sale securities, which excludes assets held in a Non-qualified Supplemental Savings Plan:

 

 

 

 

 

Gross

 

Gross

 

Estimated

 

 

 

 

 

Unrealized

 

Unrealized

 

Fair

 

 

 

Cost

 

Gains

 

Losses

 

Value

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Equity securities March 31, 2013

 

$

129,183

 

$

363,593

 

$

 

$

492,776

 

Equity securities September 30, 2012

 

$

129,183

 

$

304,396

 

$

 

$

433,579

 

 

On an ongoing basis, we evaluate the marketable equity securities to determine if a decline in fair value below cost is other-than-temporary.  If a decline in fair value below cost is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis established.  We review several factors to determine whether a loss is other-than-temporary.  These factors include, but are not limited to, (i) the length of time a security is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer and (iv) our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. The cost of securities used in determining realized gains and losses is based on the average cost basis of the security sold.  We had no sales of marketable equity available-for-sale securities during the first six months of fiscal 2013 and 2012.

 

During the first quarter ended December 31, 2012, we sold our shares in three limited partnerships that were primarily invested in international equities, realizing a gain of $8.8 million that is included in gain from sale of investment securities in the Consolidated Condensed Statements of Income.

 

Assets held in the Non-qualified Supplemental Savings Plan are carried at fair market value which totaled $8.6 million at March 31, 2013 and $8.2 million at September 30, 2012.

 

The majority of cash equivalents are invested in taxable and non-taxable money-market mutual funds. The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those investments.

 

Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.  We use the fair value hierarchy established in ASC 820-10 to measure fair value to prioritize the inputs:

 

·                  Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

 

·                  Level 2 — Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

 

·                  Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  This includes pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

 

At March 31, 2013, our financial instruments utilizing Level 1 inputs include cash equivalents, equity securities with active markets and money market funds we have elected to classify as restricted assets that are included in other current assets and other assets.  Also included is cash denominated in a foreign currency that we have elected to classify as restricted, which is included in current assets of discontinued operations and limited to remaining liabilities of discontinued operations.  For these items, quoted current market prices are readily available.

 

At March 31, 2013, financial instruments utilizing level 2 inputs include a bank certificate of deposit included in other current assets.

 

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Table of Contents

 

Currently, we do not have any financial instruments utilizing Level 3 inputs.

 

The following table summarizes our assets measured at fair value on a recurring basis presented in our Consolidated Condensed Balance Sheet as of March 31, 2013:

 

 

 

 

 

Quoted Prices

 

 

 

 

 

 

 

Total

 

in Active

 

Significant

 

 

 

 

 

Measure

 

Markets for

 

Other

 

Significant

 

 

 

at

 

Identical

 

Observable

 

Unobservable

 

 

 

Fair

 

Assets

 

Inputs

 

Inputs

 

 

 

Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

172,993

 

$

172,993

 

$

 

$

 

Equity securities

 

492,776

 

492,776

 

 

 

Other current assets

 

7,606

 

7,356

 

250

 

 

Other assets

 

2,000

 

2,000

 

 

 

Total assets measured at fair value

 

$

675,375

 

$

675,125

 

$

250

 

$

 

 

The following information presents the supplemental fair value information about fixed-rate debt at March 31, 2013 and September 30, 2012:

 

 

 

March 31,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(in thousands)

 

 

 

 

 

 

 

Carrying value of fixed-rate debt

 

$

235.0

 

$

235.0

 

Fair value of fixed-rate debt

 

$

248.8

 

$

252.7

 

 

The fair value for fixed-rate debt was estimated using cash flows discounted at rates reflecting current interest rates at similar maturities plus a credit spread which was estimated using market information on debt instruments with a similar credit profile to us.  The debt was valued using a Level 2 input.

 

5.              Cash Dividends

 

The $0.15 cash dividend declared December 4, 2012, was paid March 1, 2013.  On March 6, 2013, a cash dividend of $0.15 per share was declared for shareholders of record on May 15, 2013, payable May 31, 2013. The dividend payable is included in accounts payable in the Consolidated Condensed Balance Sheet.

 

6.              Stock-Based Compensation

 

On March 2, 2011, the 2010 Long-Term Incentive Plan (the “2010 Plan”) was approved by our stockholders.  The 2010 Plan, among other things, authorizes the Board of Directors to grant non-qualified stock options, restricted stock awards and stock appreciation rights to selected employees and to non-employee Directors.  Restricted stock may be granted for no consideration other than prior and future services.  The purchase price per share for stock options may not be less than market price of the underlying stock on the date of grant.  Stock options expire ten years after the grant date.  There were 364,624 non-qualified stock options and 307,100 shares of restricted stock awards granted in the six months ended March 31, 2013.  Awards outstanding in the 2005 Long-Term Incentive Plan (the “2005 Plan”) and one prior equity plan remain subject to the terms and conditions of those plans.

 

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Table of Contents

 

A summary of compensation cost for stock-based payment arrangements recognized in general and administrative expense is as follows (in thousands):

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

 

 

 

 

 

 

 

Stock options

 

$

2,649

 

$

2,543

 

$

6,132

 

$

5,031

 

Restricted stock

 

3,049

 

2,293

 

5,594

 

3,727

 

 

 

$

5,698

 

$

4,836

 

$

11,726

 

$

8,758

 

 

STOCK OPTIONS

 

The following summarizes the weighted-average assumptions utilized in determining the fair value of options granted during the six months ended March 31, 2013 and 2012:

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Risk-free interest rate

 

0.7

%

1.0

%

Expected stock volatility

 

53.87

%

53.3

%

Dividend yield

 

1.1

%

0.4

%

Expected term (in years)

 

5.5

 

5.5

 

 

Risk-Free Interest Rate.  The risk-free interest rate is based on U.S. Treasury securities for the expected term of the option.

 

Expected Volatility Rate.  Expected volatility is based on the daily closing price of our stock based upon historical experience over a period which approximates the expected term of the option.

 

Dividend Yield.  The expected dividend yield is based on our current dividend yield.

 

Expected Term.  The expected term of the options granted represents the period of time that they are expected to be outstanding.  We estimate the expected term of options granted based on historical experience with grants and exercises.

 

A summary of stock option activity under the Plan for the three and six months ended March 31, 2013 is presented in the following tables:

 

 

 

Three Months Ended March 31, 2013

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

Weighted-

 

Average

 

Aggregate

 

 

 

 

 

Average

 

Remaining

 

Intrinsic

 

 

 

Shares

 

Exercise

 

Contractual Term

 

Value

 

Options

 

(in thousands)

 

Price

 

(in years)

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

Outstanding at January 1, 2013

 

4,472

 

$

33.38

 

 

 

 

 

Granted

 

 

 

 

 

 

 

Exercised

 

(164

)

27.14

 

 

 

 

 

Forfeited/Expired

 

(2

)

51.86

 

 

 

 

 

Outstanding at March 31, 2013

 

4,306

 

$

33.61

 

5.3

 

$

116.7

 

Vested and expected to vest at March 31, 2013

 

4,286

 

$

33.55

 

5.2

 

$

116.4

 

 

 

 

 

 

 

 

 

 

 

Exercisable at March 31, 2013

 

3,376

 

$

28.33

 

4.3

 

$

109.3

 

 

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Table of Contents

 

 

 

Six Months Ended
March 31, 2013

 

 

 

 

 

Weighted-

 

 

 

 

 

Average

 

 

 

Shares

 

Exercise

 

Options

 

(in thousands)

 

Price

 

 

 

 

 

 

 

Outstanding at October 1, 2012

 

4,690

 

$

29.56

 

Granted

 

365

 

54.18

 

Exercised

 

(745

)

18.06

 

Forfeited/Expired

 

(4

)

52.82

 

Outstanding at March 31, 2013

 

4,306

 

$

33.61

 

 

The weighted-average fair value of options granted in the first quarter of fiscal 2013 was $23.80.  No options were granted in the second quarter of fiscal 2013.

 

The total intrinsic value of options exercised during the three and six months ended March 31, 2013 was $4.4 million and $13.4 million, respectively.

 

As of March 31, 2013 the unrecognized compensation cost related to stock options was $14.7 million which is expected to be recognized over a weighted-average period of 2.8 years.

 

RESTRICTED STOCK

 

Restricted stock awards consist of our common stock and are time-vested over three to six years.  We recognize compensation expense on a straight-line basis over the vesting period.  The fair value of restricted stock awards under the 2010 Plan is determined based on the closing price of our shares on the grant date.  As of March 31, 2013, there was $23.8 million of total unrecognized compensation cost related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 3.2 years.

 

A summary of the status of our restricted stock awards as of March 31, 2013 and changes in restricted stock outstanding during the six months then ended is presented below:

 

 

 

Six Months Ended

 

 

 

March 31, 2013

 

 

 

 

 

Weighted-

 

 

 

 

 

Average

 

 

 

Shares

 

Grant-Date

 

Restricted Stock Awards

 

(in thousands)

 

Fair Value

 

 

 

 

 

 

 

Unvested at October 1, 2012

 

430

 

$

52.52

 

Granted

 

307

 

54.18

 

Vested (1)

 

(155

)

45.88

 

Forfeited

 

(2

)

55.38

 

Unvested at March 31, 2013

 

580

 

$

55.17

 

 


(1)         The number of restricted stock awards vested includes shares that we withheld on behalf of our employees to satisfy the statutory tax withholding requirements.

 

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Table of Contents

 

7.              Debt

 

At March 31, 2013 and September 30, 2012, we had the following unsecured long-term debt outstanding (in thousands):

 

 

 

March 31,

 

September 30,

 

 

 

2013

 

2012

 

Unsecured intermediate debt issued August 15, 2002:

 

 

 

 

 

Series D, due August 15, 2014, 6.56%

 

$

75,000

 

$

75,000

 

Unsecured senior notes issued July 21, 2009:

 

 

 

 

 

Due July 21, 2013, 6.10%

 

40,000

 

40,000

 

Due July 21, 2014, 6.10%

 

40,000

 

40,000

 

Due July 21, 2015, 6.10%

 

40,000

 

40,000

 

Due July 21, 2016, 6.10%

 

40,000

 

40,000

 

 

 

$

235,000

 

$

235,000

 

Less long-term debt due within one year

 

40,000

 

40,000

 

Long-term debt

 

$

195,000

 

$

195,000

 

 

The intermediate unsecured debt outstanding at March 31, 2013 matures August 15, 2014 and carries an interest rate of 6.56 percent, which is paid semi-annually.  The terms require that we maintain a ratio of debt to total capitalization of less than 55 percent.  The debt is held by various entities.

 

We have $160 million in senior unsecured fixed-rate notes outstanding at March 31, 2013 that mature over a period from July 2013 to July 2016.  Interest on the notes is paid semi-annually based on an annual rate of 6.10 percent.  Annual principal repayments of $40 million are due July 2013 through July 2016.  We have complied with our financial covenants which require us to maintain a funded leverage ratio of less than 55 percent and an interest coverage ratio (as defined) of not less than 2.50 to 1.00.

 

We have a $300 million unsecured revolving credit facility that will mature May 25, 2017.  We anticipate that the majority of any borrowings under the facility will accrue interest at a spread over the London Interbank Offered Rate (LIBOR).  We will also pay a commitment fee based on the unused balance of the facility.  Borrowing spreads as well as commitment fees are determined according to a scale based on a ratio of our total debt to total capitalization.  The LIBOR spread ranges from 1.125 percent to 1.75 percent per annum and commitment fees range from .15 percent to .35 percent per annum.  Based on our debt to total capitalization on March 31, 2013, the LIBOR spread and commitment fees would be 1.125 percent and .15 percent, respectively.  Financial covenants in the facility require us to maintain a funded leverage ratio (as defined) of less than 50 percent and an interest coverage ratio (as defined) of not less than 3.00 to 1.00.  The credit facility contains additional terms, conditions, restrictions, and covenants that we believe are usual and customary in unsecured debt arrangements for companies of similar size and credit quality.  As of March 31, 2013, there were no borrowings, but there were three letters of credit outstanding in the amount of $30.7 million.  Two of the outstanding letters of credit replaced two collateral trusts that were terminated during the first quarter of fiscal 2013.  Upon termination, an amount totaling $26.1 million was returned to us.  At March 31, 2013, we had $269.3 million available to borrow under our $300 million unsecured credit facility.

 

At March 31, 2013, we had two letters of credit outstanding, totaling $12 million, that were issued to support international operations.  These letters of credit were issued separately from the $300 million credit facility so they do not reduce the available borrowing capacity discussed in the previous paragraph.

 

8.     Income Taxes

 

Our effective tax rate for the first six months of fiscal 2013 and 2012 was 35.1 percent and 36.8 percent, respectively.  Our effective tax rate for the three months ended March 31, 2013 and 2012 was 34.9 percent and 36.7 percent, respectively.  Effective tax rates differ from the U.S. federal statutory rate of 35.0 percent primarily due to an increase in Internal Revenue Code Section 199 deduction for domestic production activities.

 

For the next 12 months, we cannot predict with certainty whether we will achieve ultimate resolution of any uncertain tax positions associated with our U.S. and international operations that could result in increases or decreases of our unrecognized tax benefits.  However, we believe it is reasonably possible that the reserve for uncertain tax positions may increase by approximately $7.0 million to $10.2 million during the next 12 months due to an international matter.

 

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Table of Contents

 

9.     Commitments and Contingencies

 

In conjunction with our current drilling rig construction program, purchase commitments for equipment, parts and supplies of approximately $118.4 million are outstanding at March 31, 2013.

 

Various legal actions, the majority of which arise in the ordinary course of business, are pending.  We maintain insurance against certain business risks subject to certain deductibles.  None of these legal actions are expected to have a material adverse effect on our financial condition, cash flows or results of operations.

 

We are contingently liable to sureties in respect of bonds issued by the sureties in connection with certain commitments entered into by us in the normal course of business.  We have agreed to indemnify the sureties for any payments made by them in respect of such bonds.

 

During the ordinary course of our business, contingencies arise resulting from an existing condition, situation or set of circumstances involving an uncertainty as to the realization of a possible gain contingency.  We account for gain contingencies in accordance with the provisions of ASC 450, Contingencies, and, therefore, we do not record gain contingencies and recognize income until realized.  As discussed in Note 2, Discontinued Operations, property and equipment of our Venezuelan subsidiary was seized by the Venezuelan government on June 30, 2010.  Our wholly-owned subsidiaries, Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A., filed a lawsuit in the United States District Court for the District of Columbia on September 23, 2011 against the Bolivarian Republic of Venezuela, Petroleos de Venezuela, S.A. (“Petroleo”) and PDVSA Petroleo, S.A. (“PDVSA”).  Our subsidiaries seek damages for the taking of their Venezuelan drilling business in violation of international law and for breach of contract.  Additionally, we are participating in arbitration against a third party not affiliated with the Venezuelan government, Petroleo or PDVSA in an attempt to collect an aggregate $50 million relating to the seizure of our property in Venezuela.  The arbitration hearing is presently scheduled for late May 2013.

 

While there exists the possibility of realizing a recovery, we are currently unable to determine the timing or amounts we may receive, if any, or the likelihood of recovery.  No gain contingencies are recognized in our Consolidated Financial Statements.

 

10.       Segment Information

 

We operate principally in the contract drilling industry. Our contract drilling business includes the following reportable operating segments: U.S. Land, Offshore, and International Land.  The contract drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies.  To provide information about the different types of business activities in which we operate, we have included Offshore and International Land, along with our U.S. Land reportable operating segment, as separate reportable operating segments.  Additionally, each reportable operating segment is a strategic business unit which is managed separately.  Our primary international areas of operation include Colombia, Ecuador, Argentina, Tunisia, Bahrain, U.A.E. and other South American countries.  Other includes additional non-reportable operating segments.  Revenues included in Other consist primarily of rental income.  Consolidated revenues and expenses reflect the elimination of all material intercompany transactions.

 

We evaluate segment performance based on income or loss from operations (segment operating income) before income taxes which includes:

 

·                  revenues from external and internal customers

·                  direct operating costs

·                  depreciation and

·                  allocated general and administrative costs

 

but excludes corporate costs for other depreciation, income from asset sales and other corporate income and expense.

 

General and administrative costs are allocated to the segments based primarily on specific identification and, to the extent that such identification is not practical, on other methods which we believe to be a reasonable reflection of the utilization of services provided.

 

Segment operating income is a non-GAAP financial measure of our performance, as it excludes certain general and administrative expenses, corporate depreciation, income from asset sales and other corporate income and expense.  We consider segment operating income to be an important supplemental measure of operating performance by presenting trends in our core businesses.  We use this measure to facilitate period-to-period comparisons in operating performance of our reportable segments in the aggregate by eliminating items that affect comparability between periods.  We believe that segment operating income is useful to investors because it provides a means to evaluate the operating performance of the segments 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

 

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Table of Contents

 

performance measure determined in accordance with GAAP, as it excludes certain costs that may affect our operating performance in future periods.

 

Summarized financial information of our reportable segments for the six months ended March 31, 2013, and 2012, is shown in the following tables:

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

March 31, 2013

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

1,381,740

 

$

 

$

1,381,740

 

$

460,386

 

Offshore

 

113,323

 

 

113,323

 

28,656

 

International Land

 

181,359

 

 

181,359

 

22,280

 

 

 

1,676,422

 

 

1,676,422

 

511,322

 

Other

 

6,459

 

429

 

6,888

 

(4,174

)

 

 

1,682,881

 

429

 

1,683,310

 

507,148

 

Eliminations

 

 

(429

)

(429

)

 

Total

 

$

1,682,881

 

$

 

$

1,682,881

 

$

507,148

 

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

March 31, 2012

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

1,276,583

 

$

 

$

1,276,583

 

$

434,665

 

Offshore

 

94,213

 

 

94,213

 

22,022

 

International Land

 

124,823

 

 

124,823

 

6,965

 

 

 

1,495,619

 

 

1,495,619

 

463,652

 

Other

 

6,951

 

420

 

7,371

 

(3,621

)

 

 

1,502,570

 

420

 

1,502,990

 

460,031

 

Eliminations

 

 

(420

)

(420

)

 

Total

 

$

1,502,570

 

$

 

$

1,502,570

 

$

460,031

 

 

Summarized financial information of our reportable segments for the three months ended March 31, 2013, and 2012, is shown in the following tables:

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

March 31, 2013

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

685,710

 

$

 

$

685,710

 

$

225,998

 

Offshore

 

55,605

 

 

55,605

 

13,650

 

International Land

 

94,092

 

 

94,092

 

13,169

 

 

 

835,407

 

 

835,407

 

252,817

 

Other

 

2,902

 

214

 

3,116

 

(2,539

)

 

 

838,309

 

214

 

838,523

 

250,278

 

Eliminations

 

 

(214

)

(214

)

 

Total

 

$

838,309

 

$

 

$

838,309

 

$

250,278

 

 

16



Table of Contents

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

March 31, 2012

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

658,804

 

$

 

$

658,804

 

$

209,959

 

Offshore

 

43,421

 

 

43,421

 

9,818

 

International Land

 

64,088

 

 

64,088

 

(974

)

 

 

766,313

 

 

766,313

 

218,803

 

Other

 

3,669

 

210

 

3,879

 

(1,833

)

 

 

769,982

 

210

 

770,192

 

216,970

 

Eliminations

 

 

(210

)

(210

)

 

Total

 

$

769,982

 

$

 

$

769,982

 

$

216,970

 

 

The following table reconciles segment operating income per the table above to income from continuing operations before income taxes as reported on the Consolidated Condensed Statements of Income.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Segment operating income

 

$

250,278

 

$

216,970

 

$

507,148

 

$

460,031

 

Income from asset sales

 

5,313

 

7,820

 

10,532

 

12,503

 

Corporate general and administrative costs and corporate depreciation

 

(22,671

)

(17,765

)

(44,213

)

(34,970

)

Operating income

 

232,920

 

207,025

 

473,467

 

437,564

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

315

 

356

 

741

 

692

 

Interest expense

 

(1,186

)

(2,421

)

(2,494

)

(4,882

)

Gain on sale of investment securities

 

 

 

8,752

 

 

Other

 

103

 

(42

)

(1,981

)

(21

)

Total other income (expense)

 

(768

)

(2,107

)

5,018

 

(4,211

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

$

232,152

 

$

204,918

 

$

478,485

 

$

433,353

 

 

The following table presents total assets by reportable segment.

 

 

 

March 31,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(in thousands)

 

Total assets

 

 

 

 

 

U.S. Land

 

$

4,627,120

 

$

4,422,297

 

Offshore

 

146,570

 

160,135

 

International Land

 

470,054

 

467,538

 

Other

 

32,244

 

33,539

 

 

 

5,275,988

 

5,083,509

 

Investments and corporate operations

 

732,391

 

629,957

 

Total assets from continued operations

 

6,008,379

 

5,713,466

 

Discontinued operations

 

4,073

 

7,619

 

 

 

$

6,012,452

 

$

5,721,085

 

 

17



Table of Contents

 

The following table presents revenues from external customers by country based on the location of service provided.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

 

 

 

United States

 

$

742,635

 

$

699,741

 

$

1,499,120

 

$

1,362,092

 

Colombia

 

24,069

 

19,660

 

51,474

 

39,325

 

Ecuador

 

15,611

 

13,939

 

32,241

 

26,575

 

Argentina

 

17,572

 

11,701

 

31,168

 

24,108

 

Other foreign

 

38,422

 

24,941

 

68,878

 

50,470

 

Total

 

$

838,309

 

$

769,982

 

$

1,682,881

 

$

1,502,570

 

 

11.       Pensions and Other Post-retirement Benefits

 

The following provides information at March 31, 2013 and 2012 related to the Company-sponsored domestic defined benefit pension plan.

 

Components of Net Periodic Benefit Cost

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Interest cost

 

$

1,105

 

$

1,103

 

$

2,210

 

$

2,206