HELMERICH & PAYNE INC
10-Q/A, 2000-12-19
DRILLING OIL & GAS WELLS
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<PAGE>   1
                                   FORM 10-Q/A


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 30549

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

[ ]  For quarterly period ended: DECEMBER 31, 1999

                                       OR

                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
         (State or other jurisdiction of incorporation or organization)


                                   73-0679879
                         (I.R.S. Employer I.D. Number)


   UTICA AT TWENTY-FIRST STREET, TULSA, OKLAHOMA              74114
      (Address of principal executive office)               (Zip Code)


Registrant's telephone number, including area code: (918) 742-5531


Former name, former address and former fiscal year, if changed since last
report:

                                      NONE

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
                                                       ---      ---


<TABLE>
<CAPTION>
             CLASS                             OUTSTANDING AT DECEMBER 31, 1999
<S>                                                        <C>
Common Stock,  .10 par value                               49,655,900
</TABLE>


                                                     TOTAL NUMBER OF PAGES   17
                                                                           ----



<PAGE>   2


                             HELMERICH & PAYNE, INC.


                                      INDEX

     EXPLANATORY NOTE

     Helmerich & Payne, Inc. is filing this Amendment No. 1 on Form 10-Q/A to
     its Quarterly Report of Form 10-Q for the quarter ended December 31, 1999
     to reflect the restatement of its unaudited interim Consolidated Condensed
     Financial Statements for the three months ended December 31, 1999. See the
     Financial Information and Note 12 thereto included elsewhere herein.


<TABLE>
<S>                                                                                      <C>
PART I. FINANCIAL INFORMATION


     Consolidated Condensed Balance Sheets - December 31, 1999 and
     September 30, 1999 ................................................................ 3


     Consolidated Condensed Statements of Income - Three Months Ended
     December 31, 1999 and 1998 ........................................................ 4


     Consolidated Condensed Statements of Cash Flows - Three Months Ended
     December 31, 1999 and 1998 ........................................................ 5


     Consolidated Condensed Statement of Shareholders' Equity Three Months
     Ended December 31, 1999 ........................................................... 6


     Notes to Consolidated Condensed Financial Statements ............................ 7 - 11


     Revenues and Income by Business Segments ......................................... 12


     Management's Discussion and Analysis of Results of Operations and
     Financial Condition ............................................................ 13 - 16


PART II. OTHER INFORMATION ............................................................ 17


     Signature Page ................................................................... 17
</TABLE>



                                       -2-

<PAGE>   3


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (in thousands)


<TABLE>
<CAPTION>
                                                 December 31, 1999
                                                    (Restated-
                                                    See Note 12)       September 30
                                                     Unaudited             1999
                                                ------------------     ------------
<S>                                                 <C>                 <C>
ASSETS
Current Assets
      Cash and cash equivalents                     $    38,544         $    21,758
      Accounts receivable, net                           96,719              99,598
      Inventories                                        24,421              25,187
      Prepaid expenses and other                         18,983              14,081
                                                    -----------         -----------
         Total Current Assets                           178,667             160,624
                                                    -----------         -----------


Investments                                             255,558             238,475
Property, Plant and Equipment, net                      684,832             691,215
Other Assets                                             19,051              19,385
                                                    -----------         -----------

Total Assets                                        $ 1,138,108         $ 1,109,699
                                                    ===========         ===========


LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
      Accounts payable                              $    25,778         $    25,704
      Accrued liabilities                                43,986              41,200
      Notes payable                                          --               5,000
                                                    -----------         -----------
          Total Current Liabilities                      69,764              71,904
                                                    -----------         -----------

Noncurrent Liabilities
      Long-term notes payable                            50,000              50,000
      Deferred income taxes                             125,272             116,588
      Other                                              23,448              23,098
                                                    -----------         -----------
          Total Noncurrent Liabilities                  198,720             189,686
                                                    -----------         -----------

SHAREHOLDERS' EQUITY
      Common stock, par value $.10 per
       share                                              5,353               5,353
      Preferred stock, no shares issued                      --                  --
      Additional paid-in capital                         61,724              61,411
      Retained earnings                                 762,959             745,956
      Unearned compensation                              (4,376)             (4,487)
      Accumulated other comprehensive income             78,996              75,182
                                                    -----------         -----------
                                                        904,656             883,415
      Less treasury stock, at cost                       35,032              35,306
                                                    -----------         -----------
          Total Shareholders' Equity                    869,624             848,109
                                                    -----------         -----------

Total Liabilities and Shareholders' Equity          $ 1,138,108         $ 1,109,699
                                                    ===========         ===========
</TABLE>



The accompanying notes are an integral part of these statements.



                                       -3-
<PAGE>   4


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)
                      (in thousands except per share data)

<TABLE>
<CAPTION>
                                                      Three Months Ended
                                                   (Restated-
                                                  See Note 12)
                                                   12/31/99        12/31/98
                                                   --------        --------
<S>                                                <C>             <C>
REVENUES:
      Sales and other operating revenues           $135,194        $142,518
      Income from investments                        14,387           1,346
                                                   --------        --------
                                                    149,581         143,864
                                                   --------        --------
COST AND EXPENSES:
      Operating costs                                76,697          86,614
      Depreciation, depletion and
        amortization                                 26,138          23,999
      Dry holes and abandonments                      2,382           1,759
      Taxes, other than income taxes                  6,512           6,421
      General and administrative                      2,821           3,590
      Interest                                          821           1,602
                                                   --------        --------
                                                    115,371         123,985
                                                   --------        --------
INCOME BEFORE INCOME TAXES AND
EQUITY IN INCOME OF AFFILIATE                        34,210          19,879


INCOME TAX EXPENSE                                   14,259           7,862


EQUITY IN INCOME OF AFFILIATE,
 net of income taxes                                    510             794
                                                   --------        --------


NET INCOME                                         $ 20,461        $ 12,811
                                                   ========        ========


EARNINGS PER COMMON SHARE:
      Basic                                        $   0.41        $   0.26
      Diluted                                      $   0.41        $   0.26


CASH DIVIDENDS (Note 2)                            $   0.07        $   0.07


AVERAGE COMMON SHARES OUTSTANDING:
      Basic                                          49,427          49,182
      Diluted                                        49,764          49,664
</TABLE>



The accompanying notes are an integral part of these statements.



                                     -4-
<PAGE>   5



                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)


<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                              (Restated-
                                                              See Note 12)
                                                              12/31/99         12/31/98
                                                              --------         --------
<S>                                                           <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income                                                   $ 20,461         $ 12,811
 Adjustments to reconcile net income to net cash
 provided by operating activities:
     Depreciation, depletion and amortization                   26,138           23,999
     Dry holes and abandonments                                  2,382            1,759
     Equity in income of affiliate before income taxes            (823)          (1,281)
     Amortization of deferred compensation                         377              386
     Gain on sale of securities and non-monetary
       investment income                                       (13,089)            (116)
     Gain on sale of property, plant & equipment                   (24)          (4,957)
     Other, net                                                    300              287
     Change in assets and liabilities-
         Accounts receivable                                     2,879            2,502
         Inventories                                               766           (1,581)
         Prepaid expenses and other                             (4,564)         (10,852)
         Accounts payable                                           74           (8,749)
         Accrued liabilities                                     2,786            1,770
         Deferred income taxes                                   6,347              675
         Other noncurrent liabilities                              350             (539)
                                                              --------         --------
         Total adjustments                                      23,899            3,303
                                                              --------         --------


NET CASH PROVIDED BY OPERATING ACTIVITIES                       44,360           16,114
                                                              --------         --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures, including dry hole costs               (22,377)         (44,418)
  Proceeds from sales of property, plant and equipment             304            6,248
  Purchase of investments                                           --               15
  Proceeds from sale of investments                              2,833               53
                                                              --------         --------


NET CASH USED IN INVESTING ACTIVITIES                          (19,240)         (38,102)
                                                              --------         --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable                                       --           58,000
  Payments made on notes payable                                (5,000)         (29,300)
  Dividends paid                                                (3,476)          (3,458)
  Proceeds from exercise of stock options                          142              160
                                                              --------         --------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES             (8,334)          25,402
                                                              --------         --------


NET INCREASE IN CASH AND CASH EQUIVALENTS                       16,786            3,414
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                  21,758           24,476
                                                              --------         --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                      $ 38,544         $ 27,890
                                                              ========         ========
</TABLE>



                                       -5-
<PAGE>   6


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
            CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                             (Restated-See Note 12)
                     (in thousands - except per share data)


<TABLE>
<CAPTION>
                                                                                                            Accumulated
                                       Common Stock   Additional                          Treasury Stock       Other
                                      --------------   Paid-In    Unearned    Retained  -----------------  Comprehensive
                                      Shares  Amount   Capital  Compensation  Earnings  Shares    Amount       Income      Total
                                      ------  ------  --------- ------------  --------  ------   --------  -------------  --------
<S>                                   <C>     <C>      <C>         <C>        <C>        <C>     <C>          <C>         <C>
Balance, September 30, 1999           53,529  $5,353   $61,411     $(4,487)   $745,956   3,903   $(35,306)    $ 75,182    $848,109

Comprehensive Income:
  Net Income                                                                    20,461                                      20,461
  Other comprehensive income,
   net of tax - Unrealized gains
   on available-for-sale securities                                                                              3,814       3,814
                                                                                                                           -------

Comprehensive income                                                                                                        24,275
                                                                                                                           -------

Cash dividends ($0.07 per share)                                                (3,476)                                    ( 3,476)
Exercise of Stock Options                                  156                             (20)       183                      339
Stock issued under Restricted Stock
 Award Plan                                                157        (248)                (10)        91                       --
Amortization of deferred compensation                                  359          18                                         377
                                      ------  ------   -------     -------    --------   -----   --------     --------    --------
Balance, December 31, 1999            53,529  $5,353   $61,724     $(4,376)   $762,959   3,873   $(35,032)    $ 78,996    $869,624
                                      ======  ======   =======     =======    ========   =====   ========     ========    ========
</TABLE>



                                      -6-
<PAGE>   7


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.   In the opinion of the Company, the accompanying unaudited condensed
     financial statements contain all adjustments, which other than the
     restatement adjustments described in Note 12, consist only of those of a
     normal recurring nature, necessary to present fairly the results of the
     periods presented. The results of operations for the three months ended
     December 31, 1999, and December 31, 1998, are not necessarily indicative of
     the results to be expected for the full year. These condensed consolidated
     financial statements should be read in conjunction with the consolidated
     financial statements and notes thereto in the Company's 1999 Annual Report
     on Form 10K.

2.   The $.07 cash dividend declared in September, 1999, was paid December 1,
     1999. On December 1, 1999, a cash dividend of $.07 per share was declared
     for shareholders of record on February 15, 2000, payable March 1, 2000.

3.   Inventories consist of materials and supplies.

4.   Income from investments includes $2,861,000 and $116,000 from gains on
     sales of available-for-sale securities during the first quarter of fiscal
     years 2000 and 1999, respectively. Also included in income from investments
     for the first quarter of fiscal 2000 were gains related to a non-monetary
     dividend ($9,509,000) and a non-monetary gain ($719,000) on the conversion
     of shares of common stock of a Company investee pursuant to that investee
     being acquired. Net income from these two transactions was approximately
     $6.3 million ($0.13 per diluted share).

5.   The following is a summary of available-for-sale securities, which excludes
     those accounted for under the equity method of accounting. The recorded
     investment in securities accounted for under the equity method is
     $41,980,010.

<TABLE>
<CAPTION>
                                                                     (Restated-See Note 12)
                                                              Gross          Gross            Est.
                                                            Unrealized     Unrealized         Fair
                                              Cost            Gains          Losses           Value
                                            --------        ----------     ----------        ------
                                                                 (in thousands)
<S>                                         <C>             <C>             <C>              <C>
          Equity Securities 12/31/99        $ 86,166        $129,993        $  2,581         213,578
          Equity Securities 09/30/99        $ 76,057        $122,369        $  1,108         197,318
</TABLE>


6.   Comprehensive Income -

     The components of comprehensive income, net of related tax, for the three
     month periods ended December 31, 1999, and 1998, are as follows (in
     thousands):

<TABLE>
<CAPTION>
                                                                                 (Restated-
                                                                                See Note 12)
                                                                                   Fiscal         Fiscal
                                                                                    2000           1999
                                                                                -----------      --------
<S>                                                                                <C>           <C>
              Net Income                                                           $20,461       $12,811
              Unrealized gain(loss) on securities                                    3,814        (1,511)
                                                                                  --------      --------
              Comprehensive income                                                 $24,275       $11,300
                                                                                  ========      ========
</TABLE>


     The only component of accumulated other comprehensive income is unrealized
     gains on available-for-sale securities.



                                       -7-
<PAGE>   8


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


7.   At December 31, 1999, the Company had committed bank lines of credit
     totaling $120 million; $70 million expires in May 2000 and $50 million
     expires in October 2003. Additionally, the Company had uncommitted credit
     facilities totaling $35 million. The Company had $50 million in outstanding
     borrowings under its committed bank line of credit that expires in October
     2003. The Company also has outstanding letters of credit totaling $8.5
     million against these lines at December 31, 1999. The average rate on the
     borrowings at December 31, 1999, was 7.0 percent. However, concurrent with
     a $50 million borrowing under one of its committed facilities, the Company
     entered into a 5-year, $50 million interest rate swap, which closely
     correlates with the terms and maturity of the facility. The swap
     effectively fixes the interest rate on this facility at 5.38% for the
     entire 5 year term of the note.

8.   Earnings per Share -

     Basic earnings per share is based on the weighted-average number of common
     shares outstanding during the period. Diluted earnings per share include
     the dilutive effect of stock options and restricted stock.

     A reconciliation of the weighted-average common shares outstanding on a
     basic and diluted basis is as follows:

<TABLE>
<CAPTION>
                                             Three Months Ended
      (in thousands)                       12-31-99     12-31-98
      --------------                       --------     --------
<S>                                         <C>           <C>
      Basic weighted-average shares         49,427        49,182
      Effect of dilutive shares:
          Stock options                        335           472
          Restricted stock                       2            10
                                            ------        ------
                                               337           482
                                            ------        ------
      Diluted weighted-average shares       49,764        49,664
                                            ======        ======
</TABLE>

     Restricted stock of 190,000 shares at a weighted-average price of
     $37.02 and options to purchase 1,686,000 shares of common stock at a
     weighted-average price of $28.92 were outstanding at December 31, 1999, but
     were not included in the computation of diluted earnings per common share.
     Inclusion of these shares would be antidilutive, as the exercise prices of
     the options exceed the average market price of the common shares.

9. New Accounting Pronouncements -

     The Financial Accounting Standards Board has issued SFAS No. 133,
     "Accounting for Derivative Instruments and Hedging Activities", (SFAS 133).
     SFAS 133 is effective for fiscal years beginning after June 15, 2000. This
     standard requires that all derivatives be recognized as assets or
     liabilities in the balance sheet and that those instruments be measured at
     fair value. The Company has not yet determined what the effect of SFAS 133
     will be on the earnings and the financial position of the Company.



                                       -8-
<PAGE>   9
                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


10.      Restricted Stock Awards -

         In the first quarter of fiscal year 2000, the Company issued to certain
         employees 10,000 shares of treasury stock as restricted stock awards
         under the 1996 Stock Incentive Plan. The Company recognized unearned
         compensation of $248,000, which was the fair market value of the stock
         at the time of issuance. Treasury stock was reduced by the book value
         of the shares issued ($90,451) with the difference recognized as an
         increase in paid-in-capital. The unearned compensation is being
         amortized over a five-year period as compensation expense.

11.      Segment Information -

         The Company evaluates performance of its segments based upon operating
         profit or loss from operations before income taxes, which includes
         revenues from external and internal customers; operating costs;
         depreciation, depletion and amortization; dry holes and abandonments
         and taxes other than income taxes. Intersegment sales are accounted for
         in the same manner as sales to unaffiliated customers. Other includes
         investments in available-for-sale securities, equity owned investments,
         as well as corporate operations.

         Summarized financial information of the Company's reportable segments
         for the quarters ended December 31, 1999 and 1998 is shown in the
         following table:

         <TABLE>
         <CAPTION>
         (Restated-See Note 12)    External    Inter-       Total      Operating
         (in thousands)             Sales      Segment      Sales       Profit
         ----------------------   ---------    -------    ---------    ---------
         <S>                      <C>          <C>        <C>          <C>
         December 31, 1999
         CONTRACT DRILLING
            Domestic              $  50,219    $   509    $  50,728    $  6,511
            International            34,201         --       34,201       2,510
                                  ---------    -------    ---------    --------
                                     84,420        509       84,929       9,021
                                  ---------    -------    ---------    --------
         OIL & GAS OPERATIONS
            Exploration & Prod       30,118         --       30,118      12,694
            Natural Gas Mktg         18,315         --       18,315         950
                                  ---------    -------    ---------    --------
                                     48,433         --       48,433      13,644
                                  ---------    -------    ---------    --------
         REAL ESTATE                  2,242        388        2,630       1,385
         OTHER                       14,486         --       14,486          --
         ELIMINATIONS                    --       (897)        (897)         --
                                  ---------    -------    ---------    --------
            TOTAL                 $ 149,581    $    --    $ 149,581    $ 24,050
                                  =========    =======    =========    ========
         </TABLE>




                                      -9-
<PAGE>   10


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)



<TABLE>
<CAPTION>
                                           External         Inter-             Total           Operating
              (in thousands)                Sales           Segment            Sales             Profit
              -----------------------     ---------        ---------         ---------         ---------
<S>                                       <C>              <C>               <C>               <C>
              December 31, 1998
              CONTRACT DRILLING
               Domestic                   $  45,985        $   1,392         $  47,377         $   7,664
               International                 54,685               --            54,685             9,941
                                          ---------        ---------         ---------         ---------
                                            100,670            1,392           102,062            17,605
                                          ---------        ---------         ---------         ---------
              OIL & GAS OPERATIONS
               Exploration & Prod.           26,428               --            26,428             4,505
               Natural Gas Mktg.             13,175               --            13,175               941
                                          ---------        ---------         ---------         ---------
                                             39,603               --            39,603             5,446
                                          ---------        ---------         ---------         ---------
              REAL ESTATE                     2,193              385             2,578             1,391
              OTHER                           1,398               --             1,398                --
              ELIMINATIONS                       --           (1,777)           (1,777)               --
                                          ---------        ---------         ---------         ---------
                 TOTAL                    $ 143,864        $      --         $ 143,864         $  24,442
                                          =========        =========         =========         =========
</TABLE>


              The following table reconciles segment operating profit per the
              table above to income before income taxes and equity in income of
              affiliate as reported on the Consolidated Condensed Statements of
              Income (in thousands).

<TABLE>
<CAPTION>
                                                       (Restated-See Note 12)
              Quarters Ended December 31,                       1999             1998
              ---------------------------              ----------------------  --------
<S>                                                    <C>                     <C>
              Segment operating profit                        $ 24,050         $ 24,442

              Unallocated amounts:
               Income from investments                          14,387            1,346
               General corporate expense                        (2,821)          (3,590)
               Interest expense                                   (821)          (1,602)
               Corporate depreciation                             (405)            (361)
               Other corporate expense                            (180)            (356)
                                                              --------         --------
                  Total unallocated amounts                   $ 10,160         $ (4,563)
                                                              --------         --------
              Income before income taxes and equity in
                Income of affiliate                           $ 34,210         $ 19,879
                                                              ========         ========
</TABLE>

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

<TABLE>
<CAPTION>
                                           (Restated-See Note 12)
              Quarters Ended December 31,           1999              1998
              ---------------------------  ----------------------   --------
<S>                                        <C>                      <C>
              Revenues
              United States                      $115,380           $ 89,179
                Venezuela                           9,047             22,318
                Colombia                           12,244             17,131
                Other Foreign                      12,910             15,236
                                                 --------           --------
                  Total                          $149,581           $143,864
                                                 ========           ========
</TABLE>



                                      -10-
<PAGE>   11


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

12.  Restatement of Amounts Previously Reported -

     Subsequent to the issuance of the Company's financial statements as of and
     for the three and nine month periods ended June 30, 2000, the Company
     determined that the results of operations for the quarterly period ended
     December 31, 1999 and the year-to-date results of operations and financial
     position as of and for December 31, 1999, March 31, 2000, and June 30,
     2000, required restatement. The restatements are the result of treating
     certain non-monetary investment transactions which occurred in the first
     quarter of fiscal 2000 as unrealized gains in other comprehensive income,
     when they should have been treated as realized gains in the Consolidated
     Condensed Statements of Income. The impact of the restatement was to
     increase first quarter and year-to-date income from investments by
     $10,228,000 and net income by $6,341,000 ($0.13 per diluted share) with a
     corresponding reduction to other comprehensive income. All related amounts
     and disclosures herein reflect the results of this restatement. See Note 4
     for additional discussion.
























                                      -11-
<PAGE>   12


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
                    REVENUES AND INCOME BY BUSINESS SEGMENTS
                                   (UNAUDITED)
                                 (in thousands)


<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                (Restated-
                                               See Note 12)
                                                 12/31/99         12/31/98
                                               ------------      ----------
<S>                                             <C>              <C>
SALES AND OTHER REVENUES:

         Contract Drilling-Domestic             $  50,219        $  45,985
         Contract Drilling-International           34,201           54,685
                                                ---------        ---------
            Total Contract Drilling                84,420          100,670
                                                ---------        ---------

         Exploration and Production                30,118           26,428
         Natural Gas Marketing                     18,315           13,175
                                                ---------        ---------
            Total Oil & Gas Operations             48,433           39,603
                                                ---------        ---------

         Real Estate                                2,242            2,193
         Other                                     14,486            1,398
                                                ---------        ---------

TOTAL REVENUES                                  $ 149,581        $ 143,864
                                                =========        =========

OPERATING PROFIT:

         Contract Drilling-Domestic             $   6,511        $   7,664
         Contract Drilling-International            2,510            9,941
                                                ---------        ---------
            Total Contract Drilling                 9,021           17,605
                                                ---------        ---------

         Exploration and Production                12,694            4,505
         Natural Gas Marketing                        950              941
                                                ---------        ---------
            Total Oil & Gas Operations             13,644            5,446
                                                ---------        ---------

         Real Estate                                1,385            1,391
                                                ---------        ---------
            Total Operating Profit                 24,050           24,442
                                                ---------        ---------

OTHER                                              10,160           (4,563)
                                                ---------        ---------

INCOME BEFORE INCOME TAXES AND
EQUITY IN INCOME OF AFFILIATE                   $  34,210        $  19,879
                                                =========        =========
</TABLE>




                                      -12-
<PAGE>   13


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                DECEMBER 31, 1999

RISK FACTORS AND FORWARD-LOOKING STATEMENTS

The following discussion should be read in conjunction with the consolidated
condensed financial statements and related notes included elsewhere herein and
the consolidated financial statements and notes thereto included in the
Company's 1999 Annual Report on Form 10-K. See Note 12 of the Notes to
Consolidated Condensed Financial Statements for a discussion of the effects of
the restatement of the financial statements as of and for the three month period
ended December 31, 1999. The Company's future operating results may be affected
by various trends and factors, which are beyond the Company's control. These
include, among other factors, fluctuations in natural gas and crude oil prices,
expiration or termination of drilling contracts, currency exchange losses,
changes in general economic conditions, rapid or unexpected changes in
technologies and uncertain business conditions that affect the Company's
businesses. Accordingly, past results and trends should not be used by investors
to anticipate future results or trends.

With the exception of historical information, the matters discussed in
Management's Discussion & Analysis of Results of Operations and Financial
Condition includes forward-looking statements. These forward-looking statements
are based on various assumptions. The Company cautions that, while it believes
such assumptions to be reasonable and makes them in good faith, assumed facts
almost always vary from actual results. The differences between assumed facts
and actual results can be material. The Company is including this cautionary
statement to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements made
by, or on behalf of, the Company. The factors identified in this cautionary
statement are important factors (but not necessarily all important factors) that
could cause actual results to differ materially from those expressed in any
forward-looking statement made by, or on behalf of, the Company.

RESULTS OF OPERATIONS

First Quarter 2000 vs. First Quarter 1999

The Company reported net income of $20,461,000 ($0.41 per share) from revenues
of $149,581,000 for the first quarter ended December 31, 1999, compared with net
income of $12,811,000 ($0.26 per share) from revenues of $143,864,000 for the
first quarter of the prior fiscal year. Net income in the first quarter of
fiscal 2000 included $1,754,000 ($0.04 per share) from the sale of investment
securities versus $71,000 in the same period of last year. Also included in
income from investments for the first quarter of fiscal 2000 were gains related
to a non-monetary dividend ($9,509,000) and a non-monetary gain ($719,000) on
the conversion of shares of common stock of a Company investee pursuant to that
investee being acquired. Net income from these two transactions was
approximately $6.3 million ($0.13 per diluted share).

EXPLORATION and PRODUCTION

Exploration and Production reported operating profit of $12,694,000 for the
first quarter compared with $4,505,000 for the same period of fiscal 1999. Oil &
gas revenues increased to $30.1 million from $26.4 million.



                                      -13-
<PAGE>   14


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                DECEMBER 31, 1999
                                   (continued)

Natural gas revenues increased $6.5 million, or 33 percent, due primarily to
higher gas prices (28 percent) and natural gas volumes (4 percent). Oil revenues
increased $1.9 million, or 95 percent, as oil prices more than doubled from the
first quarter of fiscal 1999. Natural gas prices averaged $2.28 per mcf and
$1.78 per mcf for the first quarter of fiscal 2000 and 1999, respectively.
Natural gas volumes averaged 124.5 mmcf/d and 120.0 mmcf/d, respectively. Crude
oil prices averaged $23.26 per bbl and $11.26 per bbl for the first quarter of
fiscal 2000 and 1999, respectively. Crude oil volumes averaged 1,793 bbls/d and
1,821 bbls/d, respectively.

Included in revenues in the first quarter of fiscal 1999 were gains from the
sale of producing properties of approximately $4.6 million. Segment operating
profit was increased by a reduction in geophysical expense of $4.9 million.

As previously announced, the Company has completed, or was in the process of
completing during the first quarter, 28 out of 29 wells in which the Company has
participated. It is estimated that the aggregate net initial production from
those wells would total approximately 25 mmcfd and 500 barrels of oil per day.
However, because of normal production declines of both existing and new
production, and the timing of the new completions, the affect of the new
production will be spread over several months. Additional exploratory and
developmental drilling is planned in these same areas of interest, as well as,
in other prospects currently being developed.


DOMESTIC DRILLING

Domestic Drilling's operating profit decreased $1.2 million, due primarily to
lower margins and rig utilization in land operations, a $1.5 million increase in
depreciation, or 21 percent, offset by increased activity in offshore
operations. Land rig utilization was 75% for the quarter compared with 85% in
the first quarter of fiscal 1999, but was improved over rates of 53% and 65% for
the third and fourth quarters of fiscal 1999. Average dayrates for the current
quarter also improved approximately 4% over the fourth quarter of fiscal 1999.
Domestic offshore platform rig activity was at 100% for the first quarter of
fiscal 2000 and 1999.


INTERNATIONAL DRILLING

International Drilling's operating profit decreased to $2.5 million from $9.9
million. Revenues decreased to $34.2 million from $54.7 million. The decrease in
operating profit is due primarily to lower rig utilization in Venezuela,
Colombia and Australia and lower dayrates in Venezuela and Colombia.
International rig utilization averaged 47% during the first quarter and 65%
during last year's first quarter. Some improvement is anticipated in Ecuador,
Argentina and Bolivia for the remainder of the fiscal year, but low activity may
continue in Venezuela where 19 of the Company's 40 rigs are located and rig
utilization has averaged 28% for the past three quarters.



                                      -14-
<PAGE>   15


                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                DECEMBER 31, 1999
                                   (continued)

OTHER

Revenues increased approximately $13 million over last year, with $2.8 million
due to gains from the sale of available-for-sale securities. The increase also
includes gains related to a non-monetary dividend ($9.5 million) and a
non-monetary gain ($.7 million) on the conversion of shares of common stock of a
Company investee pursuant to that investee being acquired. Net income from these
two transactions was approximately $6.3 million ($0.13 per diluted share). See
Note 12 regarding restated financials related to these transactions. Expenses
were reduced, with interest expense decreasing to $.8 million from $1.6 million
because of a substantial reduction in debt compared to the first quarter of
fiscal 1999 and corporate general and administrative expense decreasing by 21%
to $2.8 million, due primarily to lower airplane expense and advertising costs.

The Company's effective income tax rate increased to 43% for the quarter
compared to 39.5% for the first quarter of last year. The increase is due
primarily to a larger proportionate income in higher-tax-rate jurisdictions in
the Company's international drilling operations. The effective tax rate of 43%
for fiscal 2000 could increase slightly, if projected operating results are not
achieved.



Liquidity and Capital Resources

Net cash provided by operating activities was $44,360,000 for the first quarter
of fiscal 2000, compared with $16,114,000 for the same period in 1999. Capital
expenditures were $22,377,000 and $44,418,000 for the first quarter of fiscal
2000 and 1999, respectively.

The Company anticipates capital expenditures to be approximately $150 million
for fiscal 2000, which is less than projected internally generated cash flows.
During the quarter, the Company reduced borrowings by $5,000,000. The Company's
indebtedness totaled $50,000,000 as of December 31, 1999, as described in note 7
to the Consolidated Condensed Financial Statements.

The Company's Board of Directors, at its December 1, 1999, quarterly Board
meeting, approved an extension of the Company's previously approved stock
repurchase program to allow the repurchase of up to an additional 1,000,000
shares of the Company's common stock. The original program authorized the
repurchase of up to 2,000,000 shares or approximately four percent of its common
stock. The Company repurchased 999,100 shares under the original program. The
Company intends to periodically purchase additional shares in the open market or
in private transactions. The repurchased shares will be held in treasury and
used for general corporate purposes including use in the Company's benefit
plans.

There were no other significant changes in the Company's financial position
since September 30, 1999.



                                      -15-
<PAGE>   16


                         PART I. FINANCIAL INFORMATION
                            HELMERICH & PAYNE, INC.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                     OF OPERATIONS AND FINANCIAL CONDITION
                               DECEMBER 31, 1999

YEAR 2000 COMPLIANCE

During the past year the Company implemented various initiatives in an attempt
to ensure that its hardware, software and equipment function properly with
respect to dates before and after January 1, 2000 (the "Y2K Project"). The
Company implemented the Y2K Project in four phases: identification, assessment,
remediation and testing. The Company completed identification and assessment of
all major systems that it believed could be affected by the Year 2000 issue. In
response to the identification and assessment, the Company completed the
remediation phase for all major Information Technology and Non-Information
Technology systems. The Company completed system testing and implementation of
all Y2K Project initiatives before the end of 1999.

Additionally, the Company canvassed important raw material and service suppliers
for Year 2000 compliance. The search did not reveal any irreplaceable suppliers
that would materially impact our results of operations, liquidity or capital
resources.

The total cost of our Year 2000 project was approximately $800,000, which was
funded through the Company's general funds.

To date, the Company has not experienced any significant Year 2000 related
system failures nor, to our knowledge, have any of our irreplaceable suppliers.
The Company intends to continue to monitor and test its systems for ongoing Year
2000 compliance; however, we cannot guarantee that our computer system or the
systems of other companies upon which our operations rely will not be adversely
affected by problems associated with the Year 2000 issue.







                                      -16-
<PAGE>   17


                           PART II. OTHER INFORMATION
                             HELMERICH & PAYNE, INC.

Item 6(b) Reports on Form 8-K

         There were no reports on Form 8-K for the three months ended December
31, 1999.





                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.






Date: DECEMBER 19, 2000               /s/ DOUGLAS E. FEARS
                                      -----------------------------------------
                                      Douglas E. Fears, Chief Financial Officer



Date: DECEMBER 19, 2000               /s/ HANS C. HELMERICH
                                      -----------------------------------------
                                      Hans C. Helmerich, President





                                      -17-
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                                 EXHIBIT INDEX


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27             Financial Data Schedule
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