The provision for income taxes for the three-month period ended December 31, 2012 was $2.1 million as compared to $3.2 million in the 2011-period. For the year ended December 31, 2012, the provision for income taxes was $6.6 million as compared to $8.4 million in 2011. The expected combined Canadian federal and provincial tax rate for 2012 is 25 percent. The effective tax rates in the three-month period and year ended December 31, 2012 of 32 percent and 27 percent, respectively, are higher than the expected rate due to the profitability of US operations where tax rates are higher, non-recognition deferred tax assets for foreign losses, and non-deductibility of share-based payments.
(Stated in thousands of dollars except per share amounts and percentages)
Three-month periods ended Years ended December 31, December 31, 2012 2011 % Change 2012 2011 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Net earnings 4,537 5,284 (14) 17,707 18,328 (3)Earnings per share - diluted 0.16 0.19 (16) 0.63 0.65 (3)EBITDA 13,575 13,566 - 48,837 45,007 9EBITDA per share - diluted 0.48 0.48 - 1.73 1.59 9EBITDA as a percentage of revenue 17% 18% 16% 17%--------------------------------------------------------------------------------------------------------------------------------------------------------
The Corporation's level of net earnings in the three-month period and year ended December 31, 2012 decreased due to lower margins, higher depreciation expenses and higher finance expenses. EBITDA for the fourth quarter of 2012 is comparable to that achieved in the 2011-quarter. For the year ended December 31, 2012, EBITDA increased by 9 percent due primarily to activity growth in the US and international regions. EBITDA as a percentage of revenue for the three-month period ended December 31, 2012 was 17 percent (2011 - 18 percent) and for the 2012-year was 16 percent (2011 - 17 percent).
Segmented Information:
The Corporation reports three operating segments on a geographical basis throughout the Canadian provinces of Alberta, Saskatchewan, British Columbia, and Manitoba; throughout the Gulf Coast, Northeast and Rocky Mountain regions of the US; and internationally in Albania, Peru, Russia and Colombia.
Canada
(Stated in thousands of dollars)
Three-month periods ended Years ended December 31, December 31, 2012 2011 % Change 2012 2011 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Revenue 32,344 43,842 (26) 126,712 144,416 (12)Reportable segment profit before tax 4,096 9,652 (58) 16,079 26,841 (40)--------------------------------------------------------------------------------------------------------------------------------------------------------
PHX Energy's Canadian revenue decreased by 26 percent to $32.3 million (2011 - $43.8 million) and operating days decreased by 24 percent to 2,829 days (2011 - 3,739 days). In comparison, total industry horizontal and directional drilling activity, as measured by drilling days, was 28 percent lower in the 2012-quarter, 29,264 days, compared to the 2011-quarter's 40,601 days. (Source: Daily Oil Bulletin) Average day rates decreased by 2 percent to $11,433 in the 2012-quarter from $11,725 in the 2011-quarter.
