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Helmerich & Payne, Inc. Announces Fiscal Fourth Quarter & Fiscal Year Results

November 17, 2021

  • H&P's North America Solutions segment exited the fourth quarter of fiscal year 2021 with 127 active rigs, up 5% during the quarter, and expects its first quarter of fiscal year 2022 North America Solutions rig count to exit between 152-157, up over 20%
  • Quarterly North America Solutions operating gross margins(1) decreased $6 million to $69 million sequentially, as revenues increased by $12 million to $293 million and expenses increased by $18 million to $224 million
  • Reported a fiscal fourth quarter net loss of $(0.74) per diluted share; including select items(2) of $(0.12) per diluted share
  • During the quarter, the Company sold eight FlexRig® land rigs to ADNOC Drilling for $86.5 million and subsequently made a $100 million cornerstone investment into ADNOC Drilling's initial public offering
  • H&P announced an upsized debt offering of $550 million of 2.90% senior notes due 2031 issued at our existing investment-grade(3) credit rating with proceeds used to subsequently redeem the previous outstanding 2025 notes
  • On September 1, 2021, the Board of Directors of the Company declared a quarterly cash dividend of $0.25 per share, payable on December 1, 2021 to stockholders of record at the close of business on November 23, 2021

TULSA, Okla.--(BUSINESS WIRE)-- Helmerich & Payne, Inc. (NYSE: HP) reported a net loss of $79 million, or $(0.74) per diluted share, from operating revenues of $344 million for the quarter ended September 30, 2021, compared to a net loss of $56 million, or $(0.52) per diluted share, on revenues of $332 million for the quarter ended June 30, 2021. The net losses per diluted share for the fourth and third quarters of fiscal year 2021 include $(0.12) and $0.05 of after-tax losses and gains, respectively, comprised of select items(2). For the fourth quarter of fiscal year 2021, select items(2) were comprised of:

  • $0.03 of after-tax gains pertaining to the sale of equipment
  • $(0.15) of after-tax losses pertaining to a non-cash impairment for the fair market adjustments to equipment held for sale, closing costs associated with the ADNOC Drilling transactions, restructuring charges, a non-cash fair market adjustment to our equity investment and an inventory write-down

Net cash provided by operating activities was $47 million for the fourth quarter of fiscal year 2021 compared to $31 million for the third quarter of fiscal year 2021.

For fiscal year 2021, the Company reported a net loss of $326 million, or $(3.04) per diluted share, from operating revenues of $1.2 billion. The net loss per diluted share includes $(0.44) of after-tax losses comprised of select items(2). Net cash provided by operating activities was $136 million in fiscal year 2021 compared to $539 million in fiscal year 2020.

President and CEO John Lindsay commented, "As we head towards 2022 we expect that the demand for H&P's drilling solutions will continue to improve, and capital discipline, along with the help of strong commodity prices, will strengthen the industry. I am confident we are well-positioned to deliver value in this environment.

"As contemplated, rig activity increases were more measured during our fiscal fourth quarter as we realized more rig churn among customers. Regardless, we are pleased with the 5% incremental rig count increase we experienced during the quarter and are optimistic as we look ahead to the fourth calendar quarter, where we expect to see our rig count increase sequentially at a higher pace as customers begin to reset their annual capital budgets. We are already experiencing increased rig activity with 141 rigs working in North America today. That said, we believe the market will remain disciplined, but customers' budgets will be set based on the higher commodity price environment. We expect utilization of readily available rigs to remain very high and our projected increase in rig demand will be more than we can accommodate with our current active fleet, meaning we will have to reactivate more long-idled rigs to satisfy demand.

"The tightness in the supply of readily available rigs and the sizeable costs associated with rig reactivations have begun to move contract pricing upward in the market. This will likely become even more pronounced in the coming months and we expect pricing to continue to improve as rig demand picks up heading into 2022. It is my belief H&P's new commercial models and digital technology solutions will also continue to drive economic returns higher, not only for our customers, but also for ourselves.

"International activity tends to lag the U.S.; however, we expect to see activity improve in these markets in the coming quarters as well. For example, we recently signed agreements with YPF to put four rigs to work under term contracts in Argentina commencing at different dates in fiscal 2022. Additionally, our recent transactions to sell eight rigs to the Middle East's largest(4) land driller, ADNOC Drilling, and the subsequent $100 million cornerstone investment in the company's recent initial public offering, provides H&P with a unique opportunity going forward. This is just the beginning of what we look forward to being a fruitful alliance with ADNOC Drilling and represents an initial step in our international expansion plans."

Senior Vice President and CFO Mark Smith also commented, "We expect the Company's strong financial position will be bolstered by improving rig activity levels and pricing, which will give us flexibility to take advantage of additional opportunities. Looking out into fiscal 2022, we have set our initial capex budget to range between $250 and $270 million, representing a substantial sequential increase that tracks with expected activity levels.

"Just prior to our fiscal year end, the Company closed on an upsized $550 million senior notes offering. The notes' coupon of 2.90% represents a record low for a BBB(3) rated 10-year or longer tenor from an oilfield service company. Due to the Company's already strong balance sheet, we were able to take advantage of the historically low interest rate environment, securing low cost, long-term capital and extend our refinancing horizon, which provides us greater financial agility and reduced risk."

John Lindsay concluded, “Those who have worked in this industry know it is resilient, and that it has delivered reliable, affordable energy which has been critical to global progress and prosperity. The industry has made significant progress in reducing the environmental impact of its operational emissions and will continue to do so in the future. At H&P, we are optimistic about the future, and we believe our rigs, digital technology, solid financial position, and the commitment of our people position us to lead the recovery by delivering value-added solutions and services to our customers and partners."

Operating Segment Results for the Fourth Quarter of Fiscal Year 2021

North America Solutions:

This segment had an operating loss of $60.7 million compared to an operating loss of $43.7 million during the previous quarter. The increase in the operating loss was primarily due to impairments related to fair market adjustments for equipment held for sale. Absent the select items(2) for the quarters, this segment's operating loss declined by $4.1 million on a sequential basis.

Operating gross margins(1) decreased by $5.8 million to $69.1 million. Throughout this fiscal year, we prudently managed our expenses and inventory levels, utilizing previously expensed consumable inventory harvested during stacking activities in 2020 rather than fully costed inventory or purchasing new inventory. However, rig activity levels have increased and remain elevated, while previously expensed inventory has been exhausted, causing the need to issue average cost inventory as well as begin purchasing additional inventory to replenish stock levels. This occurrence, along with costs associated with reactivating rigs, adversely impacted operating results during the quarter. Rig reactivation costs were $6.6 million in the fourth fiscal quarter compared to $5.9 million in the third fiscal quarter.

International Solutions:

This segment had an operating loss of $5.7 million compared to an operating loss of $3.5 million during the previous quarter due to higher SG&A expenses associated with the ADNOC Drilling transactions. Operating gross margins(1) improved slightly to a negative $0.4 million from a negative $1.4 million in the previous quarter. Current quarter results included a $0.7 million foreign currency loss primarily related to our South American operations compared to a $0.6 million foreign currency loss in the third quarter of fiscal year 2021.

Offshore Gulf of Mexico:

This segment had operating income of $4.5 million compared to operating income of $5.7 million during the previous quarter. Operating gross margins(1) for the quarter were $7.7 million compared to $9.2 million in the prior quarter.

Operational Outlook for the First Quarter of Fiscal Year 2022

North America Solutions:

  • We expect North America Solutions operating gross margins(1) to be between $75-$85 million, which includes approximately $15 million in estimated reactivation costs
  • We expect to exit the quarter at between 152-157 contracted rigs

International Solutions:

  • We expect International Solutions operating gross margins(1) to be between $(2)-$0 million, exclusive of any foreign exchange gains or losses

Offshore Gulf of Mexico:

  • We expect Offshore Gulf of Mexico operating gross margins(1) to be between $6-$8 million

Other Estimates for Fiscal Year 2022

  • Gross capital expenditures are expected to be approximately $250 to $270 million; approximately 50% expected for maintenance, including tubular purchases, roughly 35% expected for skidding to walking conversions and approximately 15% for corporate and information technology. Ongoing asset sales include reimbursements for lost and damaged tubulars and sales of other used drilling equipment that offset a portion of the gross capital expenditures and are expected to total approximately $40 million in fiscal year 2022.
  • Depreciation for fiscal year 2022 is expected to be approximately $405 million
  • Research and development expenses for fiscal year 2022 are expected to be roughly $25 million
  • General and administrative expenses for fiscal year 2022 are expected to be approximately $170 million of which roughly $45-$48 million is expected for the first fiscal quarter

Select Items Included in Net Income per Diluted Share

Fourth quarter of fiscal year 2021 net loss of $(0.74) per diluted share included $(0.12) in after-tax losses comprised of the following:

  • $0.03 of after-tax gains related to the sale of equipment
  • $(0.01) of non-cash after-tax losses related to fair market value adjustments to equity investments
  • $(0.01) of non-cash after-tax losses related to an inventory write-down
  • $(0.01) of after-tax losses related to restructuring charges
  • $(0.02) of after-tax losses related to closing costs associated with the ADNOC Drilling transactions
  • $(0.10) of after-tax losses related to the non-cash impairment for fair market value adjustments to equipment that is held for sale

Third quarter of fiscal year 2021 net loss of $(0.52) per diluted share included $0.05 in after-tax gains comprised of the following:

  • $0.01 of non-cash after-tax gains from discontinued operations related to adjustments resulting from currency fluctuations
  • $0.02 of non-cash after-tax gains related to fair market value adjustments to equity investments
  • $0.05 of income tax adjustments related to certain discrete tax items
  • $(0.01) of after-tax losses related to the non-cash impairment for fair market value adjustments to decommissioned rigs that are held for sale
  • $(0.01) of after-tax losses related to restructuring charges
  • $(0.01) of after-tax losses related to the change in the fair values of certain contingent liabilities

Fiscal year 2021 net loss of $(3.04) per diluted share included $(0.44) in after-tax losses comprised of the following:

  • $0.05 of income tax adjustments related to certain discrete tax items
  • $0.05 of non-cash after-tax gains related to fair market value adjustments to equity investments
  • $0.10 of non-cash after-tax gains from discontinued operations related to adjustments resulting from currency fluctuations
  • $0.10 of after-tax gains pertaining to the sale of an offshore platform rig and equipment
  • $(0.01) of non-cash after-tax losses related to an inventory write-down
  • $(0.01) of after-tax losses related to the change in the fair values of certain contingent liabilities
  • $(0.02) of after-tax losses related to closing costs associated with the ADNOC Drilling transactions
  • $(0.03) of after-tax losses related to restructuring charges
  • $(0.17) of after-tax losses pertaining to the sale of excess drilling equipment and spares
  • $(0.50) of after-tax losses related to non-cash impairment for fair market value adjustments to decommissioned rigs and equipment that are held for sale

Conference Call

A conference call will be held on Thursday, November 18, 2021 at 11:00 a.m. (ET) with John Lindsay, President and CEO, Mark Smith, Senior Vice President and CFO, and Dave Wilson, Vice President of Investor Relations, to discuss the Company’s fourth quarter fiscal year 2021 results. Dial-in information for the conference call is (800) 895-3361 for domestic callers or (785) 424-1062 for international callers. The call access code is ‘Helmerich’. You may also listen to the conference call that will be broadcast live over the Internet by logging on to the Company’s website at http://www.helmerichpayne.com and accessing the corresponding link through the investor relations section by clicking on “Investors” and then clicking on “News and Events - Events & Presentations” to find the event and the link to the webcast.

About Helmerich & Payne, Inc.

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. H&P also develops and implements advanced automation, directional drilling and survey management technologies. At September 30, 2021, H&P's fleet included 236 land rigs in the United States, 30 international land rigs and seven offshore platform rigs. For more information, see H&P online at www.helmerichpayne.com.

Forward-Looking Statements

This release includes “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of historical facts included in this release, including, without limitation, statements regarding the registrant’s future financial position, operations outlook, business strategy, dividends, budgets, projected costs and plans and objectives of management for future operations are forward-looking statements. For information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s SEC filings, including but not limited to its annual report on Form 10‑K and quarterly reports on Form 10‑Q. As a result of these factors, Helmerich & Payne, Inc.’s actual results may differ materially from those indicated or implied by such forward-looking statements. We undertake no duty to update or revise our forward-looking statements based on changes in internal estimates, expectations or otherwise, except as required by law.

We use our Investor Relations website as a channel of distribution for material company information. Such information is routinely posted and accessible on our Investor Relations website at www.helmerichpayne.com.

 

Note Regarding Trademarks. Helmerich & Payne, Inc. owns or has rights to the use of trademarks, service marks and trade names that it uses in conjunction with the operation of its business. Some of the trademarks that appear in this release or otherwise used by H&P include FlexRig, which may be registered or trademarked in the United States and other jurisdictions.

(1) Operating gross margin is defined as operating revenues less direct operating expenses.
(2) See the corresponding section of this release for details regarding the select items. The Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future periods results. Select items are excluded as they are deemed to be outside of the Company's core business operations.
(3) Investment grade rating of BBB+ from S&P Global and Baa1 from Moody's.
(4) Largest in terms of fleet size.

HELMERICH & PAYNE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three Months Ended

 

Year Ended

(in thousands, except per share

amounts)

September 30,

 

June 30,

 

September 30,

 

September 30,

2021

 

2021

 

2020

 

2021

 

2020

OPERATING REVENUES

 

 

 

 

 

 

 

 

 

Drilling services

$

342,219

 

 

$

329,774

 

 

$

205,621

 

 

$

1,210,800

 

 

$

1,761,714

 

Other

1,588

 

 

2,439

 

 

2,646

 

 

7,768

 

 

12,213

 

 

343,807

 

 

332,213

 

 

208,267

 

 

1,218,568

 

 

1,773,927

 

OPERATING COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

Drilling services operating expenses, excluding depreciation and amortization

268,127

 

 

255,471

 

 

162,518

 

 

952,600

 

 

1,184,788

 

Other operating expenses

1,021

 

 

1,481

 

 

1,491

 

 

5,138

 

 

5,777

 

Depreciation and amortization

101,955

 

 

104,493

 

 

109,587

 

 

419,726

 

 

481,885

 

Research and development

5,197

 

 

5,610

 

 

4,915

 

 

21,724

 

 

21,645

 

Selling, general and administrative

51,824

 

 

41,719

 

 

32,619

 

 

172,195

 

 

167,513

 

Asset impairment charge

14,436

 

 

2,130

 

 

 

 

70,850

 

 

563,234

 

Restructuring charges

2,070

 

 

2,110

 

 

552

 

 

5,926

 

 

16,047

 

Gain on sale of assets

(3,787

)

 

(3,434

)

 

(27,985

)

 

(1,042

)

 

(46,775

)

 

440,843

 

 

409,580

 

 

283,697

 

 

1,647,117

 

 

2,394,114

 

OPERATING LOSS FROM CONTINUING OPERATIONS

(97,036

)

 

(77,367

)

 

(75,430

)

 

(428,549

)

 

(620,187

)

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest and dividend income

2,029

 

 

1,527

 

 

753

 

 

10,254

 

 

7,304

 

Interest expense

(6,094

)

 

(5,963

)

 

(6,154

)

 

(23,955

)

 

(24,474

)

Gain (loss) on investment securities

(1,126

)

 

2,409

 

 

(1,395

)

 

6,727

 

 

(8,720

)

Gain on sale of subsidiary

 

 

 

 

 

 

 

 

14,963

 

Other

(2,630

)

 

(970

)

 

(1,673

)

 

(5,657

)

 

(5,384

)

 

(7,821

)

 

(2,997

)

 

(8,469

)

 

(12,631

)

 

(16,311

)

Loss from continuing operations before income taxes

(104,857

)

 

(80,364

)

 

(83,899

)

 

(441,180

)

 

(636,498

)

Income tax benefit

(25,323

)

 

(23,659

)

 

(23,253

)

 

(103,721

)

 

(140,106

)

Loss from continuing operations

(79,534

)

 

(56,705

)

 

(60,646

)

 

(337,459

)

 

(496,392

)

Income from discontinued operations before income taxes

373

 

 

1,150

 

 

7,905

 

 

11,309

 

 

30,580

 

Income tax provision

 

 

 

 

6,222

 

 

 

 

28,685

 

Income from discontinued operations

373

 

 

1,150

 

 

1,683

 

 

11,309

 

 

1,895

 

NET LOSS

$

(79,161

)

 

$

(55,555

)

 

$

(58,963

)

 

$

(326,150

)

 

$

(494,497

)

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

Loss from continuing operations

$

(0.74

)

 

$

(0.53

)

 

$

(0.57

)

 

$

(3.14

)

 

$

(4.62

)

Income from discontinued operations

 

 

0.01

 

 

0.02

 

 

0.10

 

 

0.02

 

Net loss

$

(0.74

)

 

$

(0.52

)

 

$

(0.55

)

 

$

(3.04

)

 

$

(4.60

)

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

Loss from continuing operations

$

(0.74

)

 

$

(0.53

)

 

$

(0.57

)

 

$

(3.14

)

 

$

(4.62

)

Income from discontinued operations

 

 

0.01

 

 

0.02

 

 

0.10

 

 

0.02

 

Net loss

$

(0.74

)

 

$

(0.52

)

 

$

(0.55

)

 

$

(3.04

)

 

$

(4.60

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

Basic

107,899

 

 

107,896

 

 

107,484

 

 

107,818

 

 

108,009

 

Diluted

107,899

 

 

107,896

 

 

107,484

 

 

107,818

 

 

108,009

 

HELMERICH & PAYNE, INC.

CONSOLIDATED BALANCE SHEETS

 

September 30,

 

September 30,

(in thousands except share data and share amounts)

2021

 

2020

ASSETS

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

917,534

 

 

$

487,884

 

Short-term investments

198,700

 

 

89,335

 

Accounts receivable, net of allowance of $2,068 and $1,820, respectively

228,894

 

 

192,623

 

Inventories of materials and supplies, net

84,057

 

 

104,180

 

Prepaid expenses and other, net

85,928

 

 

89,305

 

Assets held-for-sale

71,453

 

 

 

Total current assets

1,586,566

 

 

963,327

 

 

 

 

 

Investments

135,444

 

 

31,585

 

Property, plant and equipment, net

3,127,287

 

 

3,646,341

 

Other Noncurrent Assets:

 

 

 

Goodwill

45,653

 

 

45,653

 

Intangible assets, net

73,838

 

 

81,027

 

Operating lease right-of-use asset

49,187

 

 

44,583

 

Other assets, net

16,153

 

 

17,105

 

Total other noncurrent assets

$

184,831

 

 

$

188,368

 

 

 

 

 

Total assets

$

5,034,128

 

 

$

4,829,621

 

 

 

 

 

LIABILITIES & SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

71,996

 

 

36,468

 

Dividends payable

27,332

 

 

27,226

 

Current portion of long-term debt

483,486

 

 

 

Accrued liabilities

283,492

 

 

155,442

 

Total current liabilities

866,306

 

 

219,136

 

 

 

 

 

Noncurrent Liabilities:

 

 

 

Long-term debt, net

541,997

 

 

480,727

 

Deferred income taxes

563,437

 

 

650,675

 

Other

147,757

 

 

147,180

 

Noncurrent liabilities - discontinued operations

2,013

 

 

13,389

 

Total noncurrent liabilities

1,255,204

 

 

1,291,971

 

 

 

 

 

Shareholders' Equity:

 

 

 

Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 and 112,151,563 shares issued as of September 30, 2021 and 2020, respectively, and 107,898,859 and 107,488,242 shares outstanding as of September 30, 2021 and 2020, respectively

11,222

 

 

11,215

 

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

 

 

 

Additional paid-in capital

529,903

 

 

521,628

 

Retained earnings

2,573,375

 

 

3,010,012

 

Accumulated other comprehensive loss

(20,244

)

 

(26,188

)

Treasury stock, at cost, 4,324,006 shares and 4,663,321 shares as of September 30, 2021 and 2020, respectively

(181,638

)

 

(198,153

)

Total shareholders’ equity

$

2,912,618

 

 

$

3,318,514

 

Total liabilities and shareholders' equity

$

5,034,128

 

 

$

4,829,621

 

HELMERICH & PAYNE, INC.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Year Ended September 30,

(in thousands)

2021

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net loss

$

(326,150

)

 

$

(494,497

)

 

$

(33,656

)

Adjustment for (income) loss from discontinued operations

(11,309

)

 

(1,895

)

 

1,146

 

Loss from continuing operations

(337,459

)

 

(496,392

)

 

(32,510

)

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

 

 

 

 

 

Depreciation and amortization

419,726

 

 

481,885

 

 

562,803

 

Asset impairment charge

70,850

 

 

563,234

 

 

224,327

 

Amortization of debt discount and debt issuance costs

1,423

 

 

1,817

 

 

1,732

 

Provision for credit loss

203

 

 

2,203

 

 

2,321

 

Stock-based compensation

27,858

 

 

36,329

 

 

34,292

 

Loss (gain) on investment securities

(6,727

)

 

8,720

 

 

54,488

 

Gain on sale of assets

(1,042

)

 

(46,775

)

 

(39,691

)

Gain on sale of subsidiary

 

 

(14,963

)

 

 

Deferred income tax benefit

(89,752

)

 

(157,555

)

 

(44,554

)

Other

13,793

 

 

(2,423

)

 

4,431

 

Changes in assets and liabilities

37,614

 

 

162,848

 

 

88,174

 

Net cash provided by operating activities from continuing operations

136,488

 

 

538,928

 

 

855,813

 

Net cash used in operating activities from discontinued operations

(48

)

 

(47

)

 

(62

)

Net cash provided by operating activities

136,440

 

 

538,881

 

 

855,751

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Capital expenditures

(82,148

)

 

(140,795

)

 

(458,402

)

Purchase of investments

(417,601

)

 

(134,641

)

 

(97,652

)

Payment for acquisition of business, net of cash acquired

 

 

 

 

(16,163

)

Proceeds from sale of investments

207,716

 

 

94,646

 

 

98,764

 

Proceeds from sale of subsidiary

 

 

15,056

 

 

 

Proceeds from asset sales

43,515

 

 

78,399

 

 

50,817

 

Cash received in advance of property, plant and equipment sale

86,524

 

 

 

 

 

Other

 

 

(550

)

 

 

Net cash used in investing activities

(161,994

)

 

(87,885

)

 

(422,636

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Dividends paid

(109,130

)

 

(260,335

)

 

(313,421

)

Proceeds from debt issuance

548,719

 

 

 

 

 

Debt issuance costs

(3,935

)

 

 

 

(3,912

)

Proceeds from stock option exercises

 

 

4,100

 

 

3,053

 

Payments for employee taxes on net settlement of equity awards

(2,162

)

 

(3,784

)

 

(6,418

)

Payment of contingent consideration from acquisition of business

(7,250

)

 

(8,250

)

 

 

Payments for early extinguishment of long-term debt

 

 

 

 

(12,852

)

Share repurchase

 

 

(28,505

)

 

(42,779

)

Other

(719

)

 

(446

)

 

 

Net cash provided by (used in) financing activities

425,523

 

 

(297,220

)

 

(376,329

)

Net increase in cash and cash equivalents and restricted cash

399,969

 

 

153,776

 

 

56,786

 

Cash and cash equivalents and restricted cash, beginning of period

536,747

 

 

382,971

 

 

326,185

 

Cash and cash equivalents and restricted cash, end of period

$

936,716

 

 

$

536,747

 

 

$

382,971

 

HELMERICH & PAYNE, INC.

         

SEGMENT REPORTING

         

 

Three Months Ended

 

Year Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

(in thousands, except operating statistics)

2021

 

2021

 

2020

 

2021

 

2020

NORTH AMERICA SOLUTIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

293,303

 

 

$

281,132

 

 

$

149,304

 

 

$

1,026,364

 

 

$

1,474,380

 

Direct operating expenses

224,185

 

 

206,172

 

 

110,048

 

 

773,507

 

 

942,277

 

Segment gross margin (2)

69,118

 

 

74,960

 

 

39,256

 

 

252,857

 

 

532,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

95,177

 

 

96,997

 

 

101,941

 

 

392,415

 

 

438,039

 

Research and development

5,411

 

 

5,605

 

 

4,828

 

 

21,811

 

 

20,699

 

Selling, general and administrative expense

13,866

 

 

12,583

 

 

10,916

 

 

51,089

 

 

53,714

 

Asset impairment charge

14,436

 

 

2,130

 

 

 

 

70,850

 

 

406,548

 

Restructuring charges

899

 

 

1,388

 

 

(232

)

 

3,868

 

 

7,005

 

Segment operating loss

$

(60,671

)

 

$

(43,743

)

 

$

(78,197

)

 

$

(287,176

)

 

$

(393,902

)

Operating Statistics (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average active rigs

124

 

 

119

 

 

65

 

 

107

 

 

134

 

Number of active rigs at the end of period

127

 

 

121

 

 

69

 

 

127

 

 

69

 

Number of available rigs at the end of period

236

 

 

242

 

 

262

 

 

236

 

 

262

 

Reimbursements of "out-of-pocket" expenses

$

34,536

 

 

$

33,282

 

 

$

6,915

 

 

$

113,897

 

 

$

171,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTERNATIONAL SOLUTIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

17,308

 

 

$

15,278

 

 

$

23,996

 

 

$

57,917

 

 

$

144,185

 

Direct operating expenses

17,741

 

 

16,690

 

 

25,157

 

 

68,672

 

 

124,791

 

Segment gross margin (2)

(433

)

 

(1,412

)

 

(1,161

)

 

(10,755

)

 

19,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

652

 

 

573

 

 

897

 

 

2,013

 

 

17,531

 

Selling, general and administrative expense

4,565

 

 

1,346

 

 

733

 

 

8,028

 

 

4,565

 

Asset impairment charge

 

 

 

 

 

 

 

 

156,686

 

Restructuring charges

 

 

207

 

 

683

 

 

207

 

 

2,980

 

Segment operating loss

$

(5,650

)

 

$

(3,538

)

 

$

(3,474

)

 

$

(21,003

)

 

$

(162,368

)

Operating Statistics (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average active rigs

6

 

 

5

 

 

5

 

 

5

 

 

13

 

Number of active rigs at the end of period

6

 

 

6

 

 

5

 

 

6

 

 

5

 

Number of available rigs at the end of period

30

 

 

32

 

 

32

 

 

30

 

 

32

 

Reimbursements of "out-of-pocket" expenses

$

1,369

 

 

$

1,152

 

 

$

3,224

 

 

$

6,693

 

 

$

10,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OFFSHORE GULF OF MEXICO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

31,488

 

 

$

33,364

 

 

$

32,321

 

 

$

126,399

 

 

$

143,149

 

Direct operating expenses

23,797

 

 

24,127

 

 

27,711

 

 

97,249

 

 

119,371

 

Segment gross margin (2)

7,691

 

 

9,237

 

 

4,610

 

 

29,150

 

 

23,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

2,420

 

 

2,938

 

 

3,090

 

 

10,557

 

 

11,681

 

Selling, general and administrative expense

729

 

 

592

 

 

72

 

 

2,624

 

 

3,365

 

Restructuring charges

 

 

 

 

(8

)

 

 

 

1,254

 

Segment operating income

$

4,542

 

 

$

5,707

 

 

$

1,456

 

 

$

15,969

 

 

$

7,478

 

Operating Statistics (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average active rigs

4

 

 

4

 

 

5

 

 

4

 

 

5

 

Number of active rigs at the end of period

4

 

 

4

 

 

5

 

 

4

 

 

5

 

Number of available rigs at the end of period

7

 

 

7

 

 

8

 

 

7

 

 

8

 

Reimbursement of "out-of-pocket" expenses

$

5,985

 

 

$

8,342

 

 

$

5,548

 

 

$

27,388

 

 

$

30,436

 

(1)

 

These operating metrics allow investors to analyze the various components of segment financial results in terms of activity, utilization and other key results. Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results. Beginning in the first quarter of fiscal year 2021, these operating metrics replaced previously used per day metrics. As a result, prior year comparative information is also provided above.

     

(2)

 

Segment gross margin and operating income/loss have limitations and should not be used as alternatives to revenues, expenses, or operating income/loss, which are performance measures determined in accordance with GAAP.

Segment reconciliation amounts were as follows:

 

Three Months Ended September 30, 2021

(in thousands)

North America
Solutions

 

Offshore Gulf
of Mexico

 

International
Solutions

 

Other

 

Eliminations

 

Total

Operating revenue

$

293,303

 

 

 

31,488

 

 

$

17,308

 

 

$

1,708

 

 

$

 

 

$

343,807

 

Intersegment

 

 

 

 

 

 

10,235

 

 

(10,235

)

 

 

Total operating revenue

$

293,303

 

 

 

31,488

 

 

$

17,308

 

 

$

11,943

 

 

$

(10,235

)

 

$

343,807

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct operating expenses

214,696

 

 

18,019

 

 

17,320

 

 

19,113

 

 

 

 

269,148

 

Intersegment

9,489

 

 

5,778

 

 

421

 

 

114

 

 

(15,802

)

 

 

Total drilling services & other operating expenses

$

224,185

 

 

 

23,797

 

 

$

17,741

 

 

$

19,227

 

 

$

(15,802

)

 

$

269,148

 

 

Year Ended September 30, 2021

(in thousands)

North America
Solutions

 

Offshore Gulf
of Mexico

 

International
Solutions

 

Other

 

Eliminations

 

Total

Operating revenue

$

1,026,364

 

 

$

126,399

 

 

$

57,917

 

 

$

7,888

 

 

$

 

 

$

1,218,568

 

Intersegment

 

 

 

 

 

 

35,416

 

 

(35,416

)

 

 

Total operating revenue

$

1,026,364

 

 

$

126,399

 

 

$

57,917

 

 

$

43,304

 

 

$

(35,416

)

 

$

1,218,568

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct operating expenses

755,193

 

 

85,062

 

 

67,803

 

 

49,680

 

 

 

 

957,738

 

Intersegment

18,314

 

 

12,187

 

 

869

 

 

384

 

 

(31,754

)

 

 

Total drilling services & other operating expenses

$

773,507

 

 

$

97,249

 

 

$

68,672

 

 

$

50,064

 

 

$

(31,754

)

 

$

957,738