10-Q 1 a13-13614_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:  June 30, 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 July 31, 2013

Common Stock, $0.10 par value

 

106,488,532

 

 

 



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 June 30, 2013 and September 30, 2012

3

 

 

 

 

Consolidated Condensed Statements of Income for the Three and Nine Months Ended June 30, 2013 and 2012

4

 

 

 

 

Consolidated Condensed Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2013 and 2012

5

 

 

 

 

Consolidated Condensed Statements of Cash Flows for the Nine Months Ended June 30, 2013 and 2012

6

 

 

 

 

Consolidated Condensed Statement of Shareholders’ Equity for the Nine Months Ended June 30, 2013

7

 

 

 

 

Notes to Consolidated Condensed Financial Statements

8-18

 

 

 

Item 2.

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

19-26

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

27

 

 

 

Item 4.

Controls and Procedures

27

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

27

 

 

 

Item 1A.

Risk Factors

28

 

 

 

Item 6.

Exhibits

29

 

 

 

Signatures

30

 

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

 

 

 

June 30,

 

September 30,

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

480,480

 

$

96,095

 

Accounts receivable, less reserve of $4,697 at June 30, 2013 and $942 at September 30, 2012

 

622,405

 

620,489

 

Inventories

 

86,586

 

78,777

 

Deferred income taxes

 

18,282

 

17,555

 

Prepaid expenses and other

 

68,277

 

74,693

 

Current assets of discontinued operations

 

4,460

 

7,619

 

Total current assets

 

1,280,490

 

895,228

 

 

 

 

 

 

 

Investments

 

287,634

 

451,144

 

Property, plant and equipment, net

 

4,613,301

 

4,351,571

 

Other assets

 

16,186

 

23,142

 

 

 

 

 

 

 

Total assets

 

$

6,197,611

 

$

5,721,085

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

134,153

 

$

159,420

 

Accrued liabilities

 

254,732

 

176,615

 

Long-term debt due within one year

 

40,000

 

40,000

 

Current liabilities of discontinued operations

 

3,969

 

5,129

 

Total current liabilities

 

432,854

 

381,164

 

 

 

 

 

 

 

Noncurrent liabilities:

 

 

 

 

 

Long-term debt

 

195,000

 

195,000

 

Deferred income taxes

 

1,193,634

 

1,209,040

 

Other

 

80,608

 

98,393

 

Noncurrent liabilities of discontinued operations

 

491

 

2,490

 

Total noncurrent liabilities

 

1,469,733

 

1,504,923

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, $.10 par value, 160,000,000 shares authorized, 108,476,709 shares and 107,598,889 shares issued as of June 30, 2013 and September 30, 2012, respectively and 106,455,102 and 105,697,693 shares outstanding as of June 30, 2013 and September 30, 2012, respectively

 

10,848

 

10,760

 

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

 

 

 

Additional paid-in capital

 

273,287

 

236,240

 

Retained earnings

 

3,996,530

 

3,505,295

 

Accumulated other comprehensive income

 

105,457

 

166,807

 

Treasury stock, at cost

 

(91,098

)

(84,104

)

Total shareholders’ equity

 

4,295,024

 

3,834,998

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

6,197,611

 

$

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

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Operating revenues:

 

 

 

 

 

 

 

 

 

Drilling — U.S. Land

 

$

695,816

 

$

706,786

 

$

2,077,556

 

$

1,983,369

 

Drilling — Offshore

 

53,859

 

41,617

 

167,182

 

135,830

 

Drilling — International Land

 

86,978

 

67,482

 

268,337

 

192,305

 

Other

 

3,544

 

3,900

 

10,003

 

10,851

 

 

 

840,197

 

819,785

 

2,523,078

 

2,322,355

 

 

 

 

 

 

 

 

 

 

 

Operating costs and other:

 

 

 

 

 

 

 

 

 

Operating costs, excluding depreciation

 

450,990

 

463,935

 

1,379,598

 

1,303,175

 

Depreciation

 

117,790

 

95,182

 

336,822

 

272,404

 

General and administrative

 

31,090

 

25,576

 

96,347

 

79,544

 

Research and development

 

4,373

 

4,299

 

11,422

 

11,378

 

Income from asset sales

 

(4,006

)

(1,862

)

(14,538

)

(14,365

)

 

 

600,237

 

587,130

 

1,809,651

 

1,652,136

 

 

 

 

 

 

 

 

 

 

 

Operating income from continuing operations

 

239,960

 

232,655

 

713,427

 

670,219

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

341

 

329

 

1,082

 

1,021

 

Interest expense

 

(2,091

)

(2,411

)

(4,585

)

(7,293

)

Gain from sale of investment securities

 

153,369

 

 

162,121

 

 

Other

 

(1,214

)

309

 

(3,195

)

288

 

 

 

150,405

 

(1,773

)

155,423

 

(5,984

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

390,365

 

230,882

 

868,850

 

664,235

 

Income tax provision

 

139,387

 

80,939

 

307,194

 

240,232

 

Income from continuing operations

 

250,978

 

149,943

 

561,656

 

424,003

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before income taxes

 

15,181

 

(18

)

14,701

 

(154

)

Income tax provision

 

 

 

(485

)

(81

)

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations

 

15,181

 

(18

)

15,186

 

(73

)

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

266,159

 

$

149,925

 

$

576,842

 

$

423,930

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.35

 

$

1.40

 

$

5.26

 

$

3.94

 

Income from discontinued operations

 

$

0.14

 

$

 

$

0.14

 

$

 

Net income

 

$

2.49

 

$

1.40

 

$

5.40

 

$

3.94

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.32

 

$

1.38

 

$

5.19

 

$

3.88

 

Income from discontinued operations

 

$

0.14

 

$

 

$

0.14

 

$

 

Net income

 

$

2.46

 

$

1.38

 

$

5.33

 

$

3.88

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

106,430

 

107,016

 

106,206

 

107,196

 

Diluted

 

107,826

 

108,425

 

107,717

 

108,798

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.50

 

$

0.07

 

$

0.80

 

$

0.21

 

 

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

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

266,159

 

$

149,925

 

$

576,842

 

$

423,930

 

Other comprehensive income (loss), net of income taxes:

 

 

 

 

 

 

 

 

 

Unrealized appreciation (depreciation) on securities, net of income taxes of ($1.2) million and $23.0 million at June  30, 2013 and ($23.2) million and $12.1 million at June 30, 2012

 

(7,495

)

(38,072

)

29,887

 

20,745

 

Reclassification of realized gains in net income, net of income taxes of ($60.8) million for the three and nine months ended June 30, 2013

 

(92,543

)

 

(92,543

)

 

Minimum pension liability adjustments, net of income taxes of $0.3 million and $0.8 million at June 30, 2013 and $0.3 million and $1.0 million at June 30, 2012

 

441

 

556

 

1,306

 

1,635

 

Other comprehensive income (loss)

 

(99,597

)

(37,516

)

(61,350

)

22,380

 

Comprehensive income

 

$

166,562

 

$

112,409

 

$

515,492

 

$

446,310

 

 

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)

 

 

 

Nine Months Ended

 

 

 

June 30,

 

 

 

2013

 

2012

 

OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

576,842

 

$

423,930

 

Adjustment for (income) loss from discontinued operations

 

(15,186

)

73

 

Income from continuing operations

 

561,656

 

424,003

 

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

 

 

 

 

 

Depreciation

 

336,822

 

272,404

 

Provision for bad debt

 

3,781

 

2

 

Stock-based compensation

 

17,471

 

13,300

 

Other

 

1,156

 

134

 

Gain on sale of investment securities

 

(162,121

)

 

Income from asset sales

 

(14,538

)

(14,365

)

Deferred income tax expense

 

15,822

 

144,729

 

Change in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(5,697

)

(143,809

)

Inventories

 

(10,009

)

(16,012

)

Prepaid expenses and other

 

15,564

 

(41,287

)

Accounts payable

 

(62,830

)

(13,899

)

Accrued liabilities

 

83,290

 

(7,768

)

Deferred income taxes

 

(1,291

)

(326

)

Other noncurrent liabilities

 

(17,619

)

(4,055

)

Net cash provided by operating activities from continuing operations

 

761,457

 

613,051

 

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

 

186

 

(73

)

Net cash provided by operating activities

 

761,643

 

612,978

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

Capital expenditures

 

(618,550

)

(774,243

)

Proceeds from sale of investment securities

 

232,221

 

 

Proceeds from asset sales

 

21,729

 

31,838

 

Net cash used in investing activities from continuing operations

 

(364,600

)

(742,405

)

Net cash provided by investing activities from discontinued operations

 

15,000

 

 

Net cash used in investing activities

 

(349,600

)

(742,405

)

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

Repurchase of common stock

 

 

(71,404

)

Increase in bank overdraft

 

 

3,955

 

Dividends paid

 

(39,519

)

(22,620

)

Exercise of stock options

 

6,118

 

2,374

 

Tax withholdings related to net share settlements of restricted stock

 

(1,677

)

(1,514

)

Excess tax benefit from stock-based compensation

 

7,420

 

3,256

 

Net cash used in financing activities

 

(27,658

)

(85,953

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

384,385

 

(215,380

)

Cash and cash equivalents, beginning of period

 

96,095

 

364,246

 

Cash and cash equivalents, end of period

 

$

480,480

 

$

148,866

 

 

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

NINE MONTHS ENDED JUNE 30, 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

 

 

 

 

 

 

 

576,842

 

 

 

 

 

 

 

576,842

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

(62,656

)

 

 

 

 

(62,656

)

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

 

 

 

 

 

 

 

 

 

1,306

 

 

 

 

 

1,306

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

515,492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends ($0.80 per share)

 

 

 

 

 

 

 

(85,607

)

 

 

 

 

 

 

(85,607

)

Exercise of stock options

 

795

 

80

 

14,573

 

 

 

 

 

162

 

(8,535

)

6,118

 

Tax benefit of stock-based awards, including excess tax benefits of $11.0 million

 

 

 

 

 

8,229

 

 

 

 

 

 

 

 

 

8,229

 

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

 

 

 

 

 

17,471

 

 

 

 

 

 

 

 

 

17,471

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2013

 

108,477

 

$

10,848

 

$

273,287

 

$

3,996,530

 

$

105,457

 

2,022

 

$

(91,098

)

$

4,295,024

 

 

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:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

250,978

 

$

149,943

 

$

561,656

 

$

424,003

 

Income (loss) from discontinued operations

 

15,181

 

(18

)

15,186

 

(73

)

Net income

 

266,159

 

149,925

 

576,842

 

423,930

 

Adjustment for basic earnings per share:

 

 

 

 

 

 

 

 

 

Earnings allocated to unvested shareholders

 

(1,441

)

(606

)

(2,972

)

(1,612

)

Numerator for basic earnings per share:

 

 

 

 

 

 

 

 

 

From continuing operations

 

249,537

 

149,337

 

558,684

 

422,391

 

From discontinued operations

 

15,181

 

(18

)

15,186

 

(73

)

 

 

264,718

 

149,319

 

573,870

 

422,318

 

Adjustment for diluted earnings per share:

 

 

 

 

 

 

 

 

 

Effect of reallocating undistributed earnings of unvested shareholders

 

15

 

7

 

35

 

22

 

Numerator for diluted earnings per share:

 

 

 

 

 

 

 

 

 

From continuing operations

 

249,552

 

149,344

 

558,719

 

422,413

 

From discontinued operations

 

15,181

 

(18

)

15,186

 

(73

)

 

 

$

264,733

 

$

149,326

 

$

573,905

 

$

422,340

 

Denominator:

 

 

 

 

 

 

 

 

 

Denominator for basic earnings per share — weighted-average shares

 

106,430

 

107,016

 

106,206

 

107,196

 

Effect of dilutive shares from stock options and restricted stock

 

1,396

 

1,409

 

1,511

 

1,602

 

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

 

107,826

 

108,425

 

107,717

 

108,798

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.35

 

$

1.40

 

$

5.26

 

$

3.94

 

Income from discontinued operations

 

0.14

 

 

0.14

 

 

Net income

 

$

2.49

 

$

1.40

 

$

5.40

 

$

3.94

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.32

 

$

1.38

 

$

5.19

 

$

3.88

 

Income from discontinued operations

 

0.14

 

 

0.14

 

 

Net income

 

$

2.46

 

$

1.38

 

$

5.33

 

$

3.88

 

 

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:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Shares excluded from calculation of diluted earnings per share

 

750

 

755

 

801

 

446

 

Weighted-average price per share

 

$

57.29

 

$

54.86

 

$

57.22

 

$

59.68

 

 

9



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 June 30, 2013

 

$

68,434

 

$

209,097

 

$

 

$

277,531

 

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.

 

During the third quarter ended June 30, 2013, we sold shares in an available-for-sale security realizing a gain of $153.4 million that is included in gain from sale of investment securities in the Consolidated Condensed Statements of Income.  Net income includes after-tax gains from the sale of available-for-sale securities as follows:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

After-tax gain

 

$

92,449

 

$

 

$

92,449

 

$

 

Earnings per diluted share

 

$

0.86

 

$

 

$

0.86

 

$

 

 

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 $10.1 million at June 30, 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.

 

10



Table of Contents

 

At June 30, 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 June 30, 2013, financial instruments utilizing level 2 inputs include a bank certificate of deposit included in other current assets.

 

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 June 30, 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

 

$

480,480

 

$

480,480

 

$

 

$

 

Equity securities

 

277,531

 

277,531

 

 

 

Other current assets

 

24,414

 

24,164

 

250

 

 

Other assets

 

2,000

 

2,000

 

 

 

Total assets measured at fair value

 

$

784,425

 

$

784,175

 

$

250

 

$

 

 

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

 

 

 

June 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(in thousands)

 

 

 

 

 

 

 

Carrying value of fixed-rate debt

 

$

235.0

 

$

235.0

 

Fair value of fixed-rate debt

 

$

243.2

 

$

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 March 6, 2013, was paid May 31, 2013.  On June 5, 2013, a cash dividend of $0.50 per share was declared for shareholders of record on August 15, 2013, payable August 30, 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 10 years after the grant date.  There were 364,624 non-qualified stock options and 307,100 shares of restricted stock awards granted in the nine months ended June 30, 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.

 

11



Table of Contents

 

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

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

 

 

 

 

 

 

 

Stock options

 

$

2,672

 

$

2,314

 

$

8,804

 

$

7,345

 

Restricted stock

 

3,073

 

2,228

 

8,667

 

5,955

 

 

 

$

5,745

 

$

4,542

 

$

17,471

 

$

13,300

 

 

STOCK OPTIONS

 

The following summarizes the weighted-average assumptions utilized in determining the fair value of options granted during the nine months ended June 30, 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 nine months ended June 30, 2013 is presented in the following tables:

 

 

 

Three Months Ended June 30, 2013

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

Weighted-

 

Average

 

Aggregate

 

 

 

 

 

Average

 

Remaining

 

Intrinsic

 

 

 

Shares

 

Exercise

 

Contractual Term

 

Value

 

Options

 

(in thousands)

 

Price

 

(in years)

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

Outstanding at April 1, 2013

 

4,306

 

$

33.61

 

 

 

 

 

Granted

 

 

 

 

 

 

 

Exercised

 

(50

)

23.84

 

 

 

 

 

Forfeited/Expired

 

(3

)

51.45

 

 

 

 

 

Outstanding at June 30, 2013

 

4,253

 

$

33.72

 

5.0

 

$

122.2

 

Vested and expected to vest at June 30, 2013

 

4,236

 

$

33.66

 

5.0

 

$

121.9

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2013

 

3,325

 

$

28.40

 

4.1

 

$

113.2

 

 

12



Table of Contents

 

 

 

Nine Months Ended
June 30, 2013

 

 

 

 

 

Weighted-

 

 

 

 

 

Average

 

 

 

Shares

 

Exercise

 

Options

 

(in thousands)

 

Price

 

 

 

 

 

 

 

Outstanding at October 1, 2012

 

4,690

 

$

29.56

 

Granted

 

365

 

54.18

 

Exercised

 

(795

)

18.43

 

Forfeited/Expired

 

(7

)

52.32

 

Outstanding at June 30, 2013

 

4,253

 

$

33.72

 

 

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 and third quarters of fiscal 2013.

 

The total intrinsic value of options exercised during the three and nine months ended June 30, 2013 was $2.0 million and $29.6 million, respectively.

 

As of June 30, 2013 the unrecognized compensation cost related to stock options was $12.0 million which is expected to be recognized over a weighted-average period of 2.6 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 June 30, 2013, there was $20.7 million of total unrecognized compensation cost related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 3.0 years.

 

A summary of the status of our restricted stock awards as of June 30, 2013 and changes in restricted stock outstanding during the nine months then ended is presented below:

 

 

 

Nine Months Ended

 

 

 

June 30, 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

)

44.63

 

Forfeited

 

(4

)

54.87

 

Unvested at June 30, 2013

 

578

 

$

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.

 

13



Table of Contents

 

7.              Debt

 

At June 30, 2013 and September 30, 2012, we had the following unsecured long-term debt outstanding:

 

 

 

June 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(in thousands)

 

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 June 30, 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 June 30, 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.  Subsequent to June 30, 2013, we paid the $40 million due July 21, 2013.  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 June 30, 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 June 30, 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 June 30, 2013, we had $269.3 million available to borrow under our $300 million unsecured credit facility.

 

At June 30, 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 nine months of fiscal 2013 and 2012 was 35.4 percent and 36.2 percent, respectively.  Our effective tax rate for the three months ended June 30, 2013 and 2012 was 35.7 percent and 35.1 percent, respectively.  Effective tax rates differ from the U.S. federal statutory rate of 35.0 percent primarily due to state and foreign income taxes and 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 $10.6 million during the next 12 months due to an international matter.

 

14



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 $120.5 million are outstanding at June 30, 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 or 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.

 

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.

 

In the third quarter of fiscal 2013, we settled an arbitration dispute with a third party not affiliated with the Venezuelan government, Petroleo or PDVSA related to the seizure of our property in Venezuela.  Proceeds of $15.0 million were received and recorded in discontinued operations.

 

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 continuing 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

 

15



Table of Contents

 

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 our operating performance in future periods.

 

Summarized financial information of our reportable segments for the nine months ended June 30, 2013 and 2012 is shown in the following tables:

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

June 30, 2013

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

2,077,556

 

$

 

$

2,077,556

 

$

696,774

 

Offshore

 

167,182

 

 

167,182

 

42,778

 

International Land

 

268,337

 

 

268,337

 

30,738

 

 

 

2,513,075

 

 

2,513,075

 

770,290

 

Other

 

10,003

 

643

 

10,646

 

(6,638

)

 

 

2,523,078

 

643

 

2,523,721

 

763,652

 

Eliminations

 

 

(643

)

(643

)

 

Total

 

$

2,523,078

 

$

 

$

2,523,078

 

$

763,652

 

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

June 30, 2012

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

1,983,369

 

$

 

$

1,983,369

 

$

670,349

 

Offshore

 

135,830

 

 

135,830

 

29,742

 

International Land

 

192,305

 

 

192,305

 

13,240

 

 

 

2,311,504

 

 

2,311,504

 

713,331

 

Other

 

10,851

 

629

 

11,480

 

(5,782

)

 

 

2,322,355

 

629

 

2,322,984

 

707,549

 

Eliminations

 

 

(629

)

(629

)

 

Total

 

$

2,322,355

 

$

 

$

2,322,355

 

$

707,549

 

 

Summarized financial information of our reportable segments for the three months ended June 30, 2013 and 2012 is shown in the following tables:

 

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

June 30, 2013

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

695,816

 

$

 

$

695,816

 

$

236,388

 

Offshore

 

53,859

 

 

53,859

 

14,122

 

International Land

 

86,978

 

 

86,978

 

8,458

 

 

 

836,653

 

 

836,653

 

258,968

 

Other

 

3,544

 

214

 

3,758

 

(2,464

)

 

 

840,197

 

214

 

840,411

 

256,504

 

Eliminations

 

 

(214

)

(214

)

 

Total

 

$

840,197

 

$

 

$

840,197

 

$

256,504

 

 

16



Table of Contents

 

 

 

 

 

 

 

 

 

Segment

 

 

 

External

 

Inter-

 

Total

 

Operating

 

(in thousands)

 

Sales

 

Segment

 

Sales

 

Income (Loss)

 

June 30, 2012

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

U.S. Land

 

$

706,786

 

$

 

$

706,786

 

$

235,684

 

Offshore

 

41,617

 

 

41,617

 

7,720

 

International Land

 

67,482

 

 

67,482

 

6,275

 

 

 

815,885

 

 

815,885

 

249,679

 

Other

 

3,900

 

209

 

4,109

 

(2,161

)

 

 

819,785

 

209

 

819,994

 

247,518

 

Eliminations

 

 

(209

)

(209

)

 

Total

 

$

819,785

 

$

 

$

819,785

 

$

247,518

 

 

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

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Segment operating income

 

$

256,504

 

$

247,518

 

$

763,652

 

$

707,549

 

Income from asset sales

 

4,006

 

1,862

 

14,538

 

14,365

 

Corporate general and administrative costs and corporate depreciation

 

(20,550

)

(16,725

)

(64,763

)

(51,695

)

Operating income

 

239,960

 

232,655

 

713,427

 

670,219

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

341

 

329

 

1,082

 

1,021

 

Interest expense

 

(2,091

)

(2,411

)

(4,585

)

(7,293

)

Gain on sale of investment securities

 

153,369

 

 

162,121

 

 

Other

 

(1,214

)

309

 

(3,195

)

288

 

Total other income (expense)

 

150,405

 

(1,773

)

155,423

 

(5,984

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

$

390,365

 

$

230,882

 

$

868,850

 

$

664,235

 

 

The following table presents total assets by reportable segment.

 

 

 

June 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(in thousands)

 

Total assets

 

 

 

 

 

U.S. Land

 

$

4,705,254

 

$

4,422,297

 

Offshore

 

155,197

 

160,135

 

International Land

 

458,702

 

467,538

 

Other

 

32,047

 

33,539

 

 

 

5,351,200

 

5,083,509

 

Investments and corporate operations

 

841,951

 

629,957

 

Total assets from continued operations

 

6,193,151

 

5,713,466

 

Discontinued operations

 

4,460

 

7,619

 

 

 

$

6,197,611

 

$

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

 

Nine Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)

 

(in thousands)

 </