false000004676500000467652023-04-262023-04-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 26, 2023

HELMERICH & PAYNE, INC.
(Exact name of registrant as specified in its charter)

DE1-422173-0679879
(State or other jurisdiction of
Incorporation)		(Commission File
Number)		(I.R.S. Employer
Identification No.)

1437 South Boulder Avenue, Suite 1400
Tulsa, OK 74119
(Address of principal executive offices and zip code)
(918) 742-5531
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock ($0.10 par value)HPNYSE

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐






ITEM 2.02    RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On April 26, 2023, Helmerich & Payne, Inc. issued a press release announcing its financial results for its second fiscal quarter ended March 31, 2023. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. This information is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS

(d)    Exhibits

Exhibit NumberDESCRIPTION
99.1
104Cover page Interactive Data File - the cover page XBRL tags are embedded within the inline XBRL document.

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 HELMERICH & PAYNE, INC.
  
By:/s/ William H. Gault
 Name:William H. Gault
 Title:
Corporate Secretary

Date: April 26, 2023

        hpunifiedlogocolorlarge202.jpg


Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE: April 26, 2023

 
HELMERICH & PAYNE, INC. ANNOUNCES FISCAL SECOND QUARTER RESULTS


•The Company reported fiscal second quarter net income of $1.55 per diluted share; including select items(1) of $0.29 per diluted share

•Quarterly North America Solutions operating income increased $37 million sequentially, while direct margins(2) increased $36 million to approximately $296 million, as revenues increased by $49 million to $676 million and expenses increased by $13 million to $380 million

•The North America Solutions segment exited the second quarter of fiscal year 2023 with 179 active rigs reflecting an increase in revenue per day of approximately $3,200/day or 10% to $36,300/day on a sequential basis, while direct margins(2) per day increased by roughly $2,300/day or 14% to $18,000/day

•H&P's North America Solutions segment anticipates averaging 163-167 rigs during the third quarter of fiscal year 2023 and exiting the quarter between 155-160 active rigs due to increased contractual churn, a softer natural gas market, and our prioritizing of disciplined pricing in the face of wavering industry utilization

•Despite more contractual churn in higher direct margin(2) spot rigs relative to lower direct margin(2) rigs under term contracts and higher cost absorption given fewer active rigs, the Company expects its North America Solutions direct margins(2) per day to remain relatively flat or increase slightly in the fiscal third quarter

•Fiscal year to date the Company has allocated approximately $250 million of capital as follows: $53 million in base dividends, $50 million in supplemental dividends and $146 million in share repurchases(3)

•On March 1, 2023, the Board of Directors of the Company declared a quarterly base cash dividend of $0.25 per share and a supplemental cash dividend of $0.235 per share; both dividends are payable on June 1, 2023 to stockholders of record at the close of business on May 18, 2023


Helmerich & Payne, Inc. (NYSE: HP) reported net income of $164 million, or $1.55 per diluted share, from operating revenues of $769 million for the quarter ended March 31, 2023, compared to net income of $97 million, or $0.91 per diluted share, from operating revenues of $720 million for the quarter ended December 31, 2022. The net income per diluted share for the second and first quarters of fiscal 2023 include $0.29 and $(0.20) of after-tax gain and losses, respectively, comprised of select items(1). For the second quarter of fiscal year 2023, select items were comprised of:

•$0.29 of after-tax gains pertaining to non-cash fair market adjustments to our equity investments

Helmerich & Payne | 1437 South Boulder Ave. | Suite 1400
Tulsa, OK 74119 | 918.588.5190 | helmerichpayne.com
Page 2
News Release
April 26, 2023

Net cash provided by operating activities was $141 million for the second quarter of fiscal year 2023, which included $114 million in tax payments compared to net cash provided by operating activities of $185 million for the first quarter of fiscal year 2023, which included $22 million in net tax refunds.

President and CEO John Lindsay commented, "H&P delivered another outstanding quarter and executed on a goal we set a year ago to generate 50%(4) direct margins in our NAS segment. The reason for setting that goal was to generate double digit returns that exceed our double digit cost of capital. With this milestone accomplished, our focus now turns to maintaining those levels of returns going forward.
"The past two decades demonstrate that even during upcycles, a certain amount of rig count variability exists, and we are witnessing that today. The macro-outlook has been challenged by political and economic insecurities in the global crude oil market and in the U.S. natural gas market. Volatility in both of these commodity markets has caused some uncertainty which has negatively impacted near-term rig demand. We see these events as shorter-term transitory issues and remain optimistic in the outlook which favors growing global demand for crude oil and natural gas over the long-term.
"H&P intends to remain firm on pricing; favoring returns over market share. That said, the juxtaposition of reduced rig activity and increased contractual churn caused by a weak natural gas market, along with our determined approach regarding fiscal discipline, necessitates a reduction in our forward rig count projections. Nevertheless, our super-spec FlexRig® fleet utilization remains high, and we are committed to sustaining this level of margin performance going forward, believing this path is in the best interest of all our stakeholders. Moreover, from our vantage point, activity in the crude oil market may create the opportunity for the Company to put rigs back into service this summer due to expected industry rig churn and perhaps again later in the calendar year as part of the recent trend of customers contracting additional rigs late in the calendar year as their new fiscal budgets are established.
"Maintaining fiscal discipline goes hand-in-hand with our customer-centric approach. By utilizing our FlexRig® fleet, technology, people and processes, we are able to consistently deliver the outcomes our customers desire, enhance their economic returns, and be compensated appropriately for the value we provide. We continue to develop new commercial models that not only demonstrate the value we create, but also expand collaborative efforts between H&P and its customers.
"On the international front, H&P's potential for longer-term growth prospects remains in focus. During the quarter, we moved our first super-spec rig into our Middle East hub and sent another to Australia. While initially small in terms of rig count, we believe this early progress portends more to come. Along those lines, we still plan to export more super-spec rigs to the Middle East during the back half of the year after undergoing region specific modifications, including conversions to walking systems. Operations in Argentina and Colombia remain relatively steady and are now providing solid financial contributions."
Senior Vice President and CFO Mark Smith also commented, "Several adverse macro issues, such as recessionary concerns, volatile commodity prices, and even anxiety over the financial health of the U.S. regional banking industry have commanded the market's attention this past quarter. We believe this coupled with a lower outlook for rig activity in fiscal 2023 has distracted from the more tangible value the Company has created this past year through higher margins and increased financial and shareholder returns. Accordingly, we have followed through on our capital allocation strategy regarding opportunistic share repurchases and repurchased shares during the second fiscal quarter, buying approximately 2.5 million shares for approximately $107 million. While the amount of share repurchases year-to-date surpasses the $100 million mark, we still have ample cash available to conduct additional repurchases or take advantage of other investment opportunities.
"As mentioned in the previous quarter, expectations can often change quickly, and as such our rig count expectations for the remainder of fiscal 2023 have been revised lower. Our current view is that those activity revisions are far less impactful to our projected cash flow generation than a degradation in our direct margins would be if we attempt to maintain activity levels by lowering pricing. Consequently, we remain confident in our financial plans going forward, keeping our capital allocation strategy unchanged and executing on the fiscal 2023 supplemental shareholder plan."
John Lindsay concluded, “From the perspective of my 36-year career at H&P, we are working more closely with our customers than at any other time, and our collaborations are primarily focused on value added performance rather than the daily cost of the drilling rig. That is due in large part to those customers realizing the near- and long-term benefits of having H&P as their drilling solution provider coupled with our relentless focus on delivering value. All of this is driven by H&P employees utilizing our rig assets and technologies to consistently strive to deliver the desired outcomes for our customers."

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News Release
April 26, 2023



Operating Segment Results for the Second Quarter of Fiscal Year 2023

North America Solutions:
This segment had operating income of $182.1 million compared to operating income of $145.3 million during the previous quarter. The increase in operating income reflects more of our older term contracts continuing to reprice at higher contract economics which has improved the overall level of pricing across the fleet.

Direct margins(2) increased by $35.9 million to $296.2 million as both revenues and expenses increased sequentially. Quarterly operating results were impacted by the costs associated with reactivating rigs; $5.2 million in the second fiscal quarter compared to $8.6 million in the previous quarter.

International Solutions:
This segment had operating income of $4.0 million compared to operating income of $1.6 million during the previous quarter. Absent an impairment charge of $8.1 million during the first quarter of fiscal 2023, the decline in operating income was mainly driven by higher expenses associated with rig mobilizations.

Direct margins(2) during the second fiscal quarter were $8.6 million compared to $13.8 million during the previous quarter.

Offshore Gulf of Mexico:
This segment had operating income of $6.7 million compared to operating income of $6.7 million during the previous quarter. Direct margins(2) for the quarter were $9.3 million compared to $9.5 million in the prior quarter.
 

Operational Outlook for the Third Quarter of Fiscal Year 2023
 
North America Solutions:
•We expect North America Solutions direct margins(2) to be between $265-$285 million with an average active rig count of 163-167 rigs during the quarter
•We expect to exit the quarter between approximately 155-160 contracted rigs
International Solutions:
•We expect International Solutions direct margins(2) to be between $4-$7 million, exclusive of any foreign exchange gains or losses

Offshore Gulf of Mexico:
•We expect Offshore Gulf of Mexico direct margins(2) to be between $5.5-$7.5 million

Other Estimates for Fiscal Year 2023
•Gross capital expenditures are now expected to be approximately $400 to $450 million, exclusive of ongoing asset sales that 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 $65 million in fiscal year 2023
•Depreciation for fiscal year 2023 is still expected to be approximately $400 million
•Research and development expenses for fiscal year 2023 are now expected to be roughly $30 million
•General and administrative expenses for fiscal year 2023 are now expected to be approximately $205 million
•Cash taxes for fiscal year 2023 are now expected to be approximately $175-$225 million, of which a net $92 million has been paid through March 31, 2023

Page 4
News Release
April 26, 2023


Select Items(1) Included in Net Income per Diluted Share
 
Second quarter of fiscal year 2023 net income of $1.55 per diluted share included $0.29 in after-tax gains comprised of the following:

•$0.29 of non-cash after-tax gains related to fair market value adjustments to equity investments

First quarter of fiscal year 2023 net income of $0.91 per diluted share included $(0.20) in after-tax losses comprised of the following:

•$(0.09) of non-cash after-tax losses pertaining to an impairment for fair market adjustments to decommissioned rigs and equipment that are held for sale
•$(0.11) of non-cash after-tax losses related to fair market value adjustments to equity investments


Conference Call
 
A conference call will be held on Thursday, April 27, 2023 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 second quarter fiscal year 2023 results. Dial-in information for the conference call is (877) 830-2598 for domestic callers or (785) 424-1745 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 March 31, 2023, H&P's fleet included 233 land rigs in the United States, 22 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 business strategy, future financial position, operations outlook, future cash flow, future use of generated cash flow, dividend amounts and timing, supplemental shareholder return plans and amounts of any future dividends, share repurchases, investments, active rig count projections, budgets, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, capex spending, outlook for international markets, and actions by customers 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. Investors are cautioned not to put undue reliance on such statements. We undertake no duty to publicly update or revise any forward-looking statements, whether as a result of new information changes in internal estimates, expectations or otherwise, except as required under applicable securities laws.


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April 26, 2023

Helmerich & Payne uses its Investor Relations website as a channel of distribution for material company information. Such information is routinely posted and accessible on its Investor Relations website at www.helmerichpayne.com. Information on our website is not part of this release.

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) Select items are considered non-GAAP metrics and are included as a supplemental disclosure as 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 the Company's core business operations. See Non-GAAP Measurements.
(2) Direct margin, which is considered a non-GAAP metric, is defined as operating revenues (less reimbursements) less direct operating expenses (less reimbursements) and is included as a supplemental disclosure. We believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See Non-GAAP Measurements for a reconciliation of segment operating income(loss) to direct margin. Expected direct margin for the third quarter of fiscal 2023 is provided on a non-GAAP basis only because certain information necessary to calculate the cost comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future items and adjustments, which could be significant, we are unable to provide a reconciliation of expected direct margin to the most comparable GAAP measure without unreasonable effort.
(3) During the second fiscal quarter H&P repurchased approximately 2.5 million shares for approximately $107 million; fiscal year to date the Company has repurchased approximately 3.4 million shares for approximately $146 million
(4) The NAS segment direct margin percentage for the fiscal second quarter, a non-GAAP metric, is calculated by dividing the direct margin for the segment ($296.2 million) by segment revenues ($675.8 million) less reimbursements ($77.4 million).


Contact: Dave Wilson, Vice President of Investor Relations
investor.relations@hpinc.com
(918) 588‑5190

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April 26, 2023


HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months EndedSix Months Ended
(in thousands, except per share amounts)March 31,December 31,March 31,March 31,March 31,
20232022202220232022
OPERATING REVENUES
Drilling services$766,682 $717,170 $465,370 $1,483,852 $872,904 
Other2,540 2,467 2,227 5,007 4,475 
769,222 719,637 467,597 1,488,859 877,379 
OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization449,110 428,251 339,759 877,361 639,411 
Other operating expenses1,188 1,126 1,181 2,314 2,363 
Depreciation and amortization96,255 96,655 102,937 192,910 203,374 
Research and development8,702 6,933 6,387 15,635 12,914 
Selling, general and administrative52,855 48,455 47,051 101,310 90,766 
Asset impairment charges— 12,097 — 12,097 4,363 
Restructuring charges— — 63 — 805 
Gain on reimbursement of drilling equipment(11,574)(15,724)(6,448)(27,298)(11,702)
Other (gain) loss on sale of assets(2,519)(2,379)(716)(4,898)313 
594,017 575,414 490,214 1,169,431 942,607 
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS175,205 144,223 (22,617)319,428 (65,228)
Other income (expense)
Interest and dividend income5,055 4,705 3,399 9,760 5,988 
Interest expense(4,239)(4,355)(4,390)(8,594)(10,504)
Gain (loss) on investment securities39,752 (15,091)22,132 24,661 69,994 
Loss on extinguishment of debt— — — — (60,083)
Other(743)(660)(476)(1,403)(1,018)
39,825 (15,401)20,665 24,424 4,377 
Income (loss) from continuing operations before income taxes 215,030 128,822 (1,952)343,852 (60,851)
Income tax expense (benefit)51,129 32,395 2,672 83,524 (4,896)
Income (loss) from continuing operations163,901 96,427 (4,624)260,328 (55,955)
Income (loss) from discontinued operations before income taxes139 718 (352)857 (383)
Income tax expense— — — — — 
Income (loss) from discontinued operations139 718 (352)857 (383)
NET INCOME (LOSS)$164,040 $97,145 $(4,976)$261,185 $(56,338)
Basic earnings (loss) per common share:
Income (loss) from continuing operations$1.55 $0.91 $(0.05)$2.45 $(0.53)
Income from discontinued operations— 0.01 — 0.01 — 
Net income (loss)$1.55 $0.92 $(0.05)$2.46 $(0.53)
Diluted earnings (loss) per common share:
Income (loss) from continuing operations$1.55 $0.90 $(0.05)$2.45 $(0.53)
Income from discontinued operations— 0.01 — 0.01 — 
Net income (loss)$1.55 $0.91 $(0.05)$2.46 $(0.53)
Weighted average shares outstanding:
Basic103,968 105,248 105,393 104,615 106,494 
Diluted104,363 106,104 105,393 105,003 106,494 




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News Release
April 26, 2023



HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,September 30,
(in thousands except share data and share amounts)20232022
ASSETS
Current Assets:
Cash and cash equivalents$159,672 $232,131 
Restricted cash53,231 36,246 
Short-term investments85,090 117,101 
Accounts receivable, net of allowance of $6,096 and $2,975, respectively
525,611 458,713 
Inventories of materials and supplies, net99,408 87,957 
Prepaid expenses and other, net80,090 66,463 
Assets held-for-sale1,349 4,333 
Total current assets1,004,451 1,002,944 
Investments261,960 218,981 
Property, plant and equipment, net2,931,301 2,960,809 
Other Noncurrent Assets:
Goodwill45,653 45,653 
Intangible assets, net63,790 67,154 
Operating lease right-of-use asset37,150 39,064 
Other assets, net21,428 20,926 
Total other noncurrent assets168,021 172,797 
Total assets$4,365,733 $4,355,531 
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$160,101 $126,966 
Dividends payable50,409 26,693 
Accrued liabilities 203,211 241,151 
Total current liabilities413,721 394,810 
Noncurrent Liabilities:
Long-term debt, net542,734 542,610 
Deferred income taxes540,316 537,712 
Other113,156 114,927 
Total noncurrent liabilities1,196,206 1,195,249 
Shareholders' Equity:
Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of March 31, 2023 and September 30, 2022, and 102,584,517 and 105,293,662 shares outstanding as of March 31, 2023 and September 30, 2022, respectively
11,222 11,222 
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued
— — 
Additional paid-in capital509,205 528,278 
Retained earnings2,608,100 2,473,572 
Accumulated other comprehensive loss(11,560)(12,072)
Treasury stock, at cost, 9,638,348 shares and 6,929,203 shares as of March 31, 2023 and September 30, 2022, respectively
(361,161)(235,528)
Total shareholders’ equity2,755,806 2,765,472 
Total liabilities and shareholders' equity$4,365,733 $4,355,531 



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April 26, 2023

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31,
(in thousands)20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$261,185 $(56,338)
Adjustment for (income) loss from discontinued operations(857)383 
Income (loss) from continuing operations260,328 (55,955)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization192,910 203,374 
Asset impairment charges12,097 4,363 
Amortization of debt discount and debt issuance costs664 559 
Loss on extinguishment of debt— 60,083 
Provision for credit loss3,222 669 
Stock-based compensation15,704 14,163 
Gain on investment securities(24,661)(69,994)
Gain on reimbursement of drilling equipment(27,298)(11,702)
Other (gain) loss on sale of assets(4,898)313 
Deferred income tax expense (benefit)3,165 (11,597)
Other2,024 (4,287)
Changes in assets and liabilities(106,952)(111,051)
Net cash provided by operating activities from continuing operations326,305 18,938 
Net cash used in operating activities from discontinued operations(51)(42)
Net cash provided by operating activities326,254 18,896 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(181,479)(104,482)
Other capital expenditures related to assets held-for-sale— (10,550)
Purchase of short-term investments(64,418)(68,565)
Purchase of long-term investments(18,771)(14,124)
Proceeds from sale of short-term investments97,744 117,456 
Proceeds from asset sales47,718 34,944 
Net cash used in investing activities(119,206)(45,321)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid(102,941)(54,007)
Payments for employee taxes on net settlement of equity awards(14,410)(5,503)
Payment of contingent consideration from acquisition of business(250)(250)
Payments for early extinguishment of long-term debt— (487,148)
Make-whole premium payment— (56,421)
Share repurchases(145,013)(76,999)
Other(540)(587)
Net cash used in financing activities(263,154)(680,915)
Net decrease in cash and cash equivalents and restricted cash(56,106)(707,340)
Cash and cash equivalents and restricted cash, beginning of period269,009 936,716 
Cash and cash equivalents and restricted cash, end of period$212,903 $229,376 
         




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April 26, 2023

HELMERICH & PAYNE, INC.
SEGMENT REPORTING
Three Months EndedSix Months Ended
March 31,December 31,March 31,March 31,March 31,
(in thousands, except operating statistics)20232022202220232022
NORTH AMERICA SOLUTIONS
Operating revenues$675,780 $627,163 $408,814 $1,302,943 $749,848 
Direct operating expenses379,611 366,855 294,397 746,466 550,965 
Depreciation and amortization89,070 89,814 95,817 178,884 189,438 
Research and development8,738 7,059 6,420 15,797 12,988 
Selling, general and administrative expense16,212 14,190 10,883 30,402 21,712 
Asset impairment charges— 3,948 — 3,948 1,868 
Restructuring charges— — — — 473 
Segment operating income (loss)$182,149 $145,297 $1,297 $327,446 $(27,596)
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$296,169 $260,308 $114,417 $556,477 $198,883 
Revenue days3
16,48816,57814,75233,06727,698
Average active rigs4
183180164182152
Number of active rigs at the end of period5
179184171179171
Number of available rigs at the end of period233235236233236
Reimbursements of "out-of-pocket" expenses$77,442 $79,159 $46,664 $156,601 $89,793 
INTERNATIONAL SOLUTIONS
Operating revenues$55,890 $54,801 $27,422 $110,691 $64,581 
Direct operating expenses47,275 40,977 25,171 88,252 49,302 
Depreciation1,652 1,392 1,049 3,044 1,804 
Selling, general and administrative expense3,008 2,709 2,050 5,717 3,779 
Asset impairment charge— 8,149 — 8,149 2,495 
Segment operating income (loss)$3,955 $1,574 $(848)$5,529 $7,201 
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$8,615 $13,824 $2,251 $22,439 $15,279 
Revenue days3
1,2631,1406362,4031,283
Average active rigs4
14127137
Number of active rigs at the end of period5
15136156
Number of available rigs at the end of period2220282228
Reimbursements of "out-of-pocket" expenses$2,789 $2,856 $1,226 $5,645 $2,669 
OFFSHORE GULF OF MEXICO
Operating revenues$34,979 $35,164 $29,147 $70,143 $58,461 
Direct operating expenses25,688 25,691 20,884 51,379 41,595 
Depreciation1,904 1,894 2,401 3,798 4,781 
Selling, general and administrative expense700 833 584 1,533 1,341 
Segment operating income$6,687 $6,746 $5,278 $13,433 $10,744 
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$9,291 $9,473 $8,263 $18,764 $16,866 
Revenue days3
360368360728728
Average active rigs4
44444
Number of active rigs at the end of period5
44444
Number of available rigs at the end of period77777
Reimbursements of "out-of-pocket" expenses $7,994 $7,189 $5,809 $15,183 $11,884 

(1)These operating metrics and financial data, including average active rigs, are provided to 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.
(2)Direct margin, which is considered a non-GAAP metric, is defined as operating revenues less direct operating expenses and is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.
(3)Defined as the number of contractual days we recognized revenue for during the period.
(4)Active rigs generate revenue for the Company; accordingly, 'average active rigs' represents the average number of rigs generating revenue during the applicable time period. This metric is calculated by dividing revenue days by total days in the applicable period (i.e. 90, 92 or 182 days).
(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.


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April 26, 2023


Segment reconciliation amounts were as follows:
Three Months Ended March 31, 2023
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of MexicoOtherEliminationsTotal
Operating revenue$675,780 $55,890 $34,979 $2,573 $— $769,222 
Intersegment— — — 17,662 (17,662)— 
Total operating revenue$675,780 $55,890 $34,979 $20,235 $(17,662)$769,222 
Direct operating expenses$366,714 $47,036 $23,716 $12,551 $— $450,017 
Intersegment12,897 239 1,972 105 (15,213)— 
Total drilling services & other operating expenses$379,611 $47,275 $25,688 $12,656 $(15,213)$450,017 
    
    
Six Months Ended March 31, 2023
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of MexicoOtherEliminationsTotal
Operating revenue$1,302,943 $110,691 $70,143 $5,082 $— $1,488,859 
Intersegment— — — 34,064 (34,064)— 
Total operating revenue$1,302,943 $110,691 $70,143 $39,146 $(34,064)$1,488,859 
Direct operating expenses$718,029 $87,737 $47,517 $26,111 $— $879,394 
Intersegment28,437 515 3,862 134 (32,948)— 
Total drilling services & other operating expenses$746,466 $88,252 $51,379 $26,245 $(32,948)$879,394 

Segment operating income (loss) for all segments is a non-GAAP financial measure of the Company’s performance, as it excludes gain on sale of assets, corporate selling, general and administrative expenses, corporate restructuring charges, and corporate depreciation. The Company considers segment operating income (loss) to be an important supplemental measure of operating performance for presenting trends in the Company’s core businesses. This measure is used by the Company to facilitate period-to-period comparisons in operating performance of the Company’s reportable segments in the aggregate by eliminating items that affect comparability between periods. The Company believes that segment operating income (loss) is useful to investors because it provides a means to evaluate the operating performance of the segments and the Company on an ongoing basis using criteria that are used by our internal decision makers. Additionally, it highlights operating trends and aids analytical comparisons. However, segment operating income has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect the Company’s operating performance in future periods.


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April 26, 2023


The following table reconciles operating income (loss) per the information above to income (loss) from continuing operations before income taxes as reported on the Unaudited Condensed Consolidated Statements of Operations:
        
Three Months EndedSix Months Ended
March 31,December 31,March 31,March 31,March 31,
(in thousands)20232022202220232022
Operating income (loss)
North America Solutions$182,149 $145,297 $1,297 $327,446 $(27,596)
International Solutions3,955 1,574 (848)5,529 7,201 
Offshore Gulf of Mexico6,687 6,746 5,278 13,433 10,744 
Other6,823 4,677 3,167 11,500 7,096 
Eliminations(2,267)2,310 (2,031)43 (3,313)
Segment operating income (loss)$197,347 $160,604 $6,863 $357,951 $(5,868)
Gain on reimbursement of drilling equipment11,574 15,724 6,448 27,298 11,702 
Other gain (loss) on sale of assets2,519 2,379 716 4,898 (313)
Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges(36,235)(34,484)(36,644)(70,719)(70,749)
Operating income (loss)$175,205 $144,223 $(22,617)$319,428 $(65,228)
Other income (expense):
Interest and dividend income5,055 4,705 3,399 9,760 5,988 
Interest expense(4,239)(4,355)(4,390)(8,594)(10,504)
Gain (loss) on investment securities39,752 (15,091)22,132 24,661 69,994 
Loss on extinguishment of debt— — — — (60,083)
Other(743)(660)(476)(1,403)(1,018)
Total unallocated amounts39,825 (15,401)20,665 24,424 4,377 
Income (loss) from continuing operations before income taxes$215,030 $128,822 $(1,952)$343,852 $(60,851)


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April 26, 2023


SUPPLEMENTARY STATISTICAL INFORMATION 
Unaudited
 


U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS
April 26,March 31,December 31,Q2FY23
202320232022Average
U.S. Land Operations
Term Contract Rigs101 101 105 103 
Spot Contract Rigs68 78 79 80 
Total Contracted Rigs169 179 184 183 
Idle or Other Rigs64 54 51 51 
Total Marketable Fleet233 233 235 234 
 


H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS
Number of Rigs Already Under Long-Term Contracts(*)
(Estimated Quarterly Average — as of 3/31/23)
Q3Q4Q1Q2Q3Q4Q1
SegmentFY23FY23FY24FY24FY24FY24FY25
U.S. Land Operations97.2 84.5 59.7 39.6 34.7 27.0 12.7 
International Land Operations9.5 8.7 8.0 6.0 5.7 4.1 4.0 
Offshore Operations— — — — — — — 
Total106.7 93.2 67.7 45.6 40.4 31.1 16.7 
(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.
 


















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April 26, 2023


NON-GAAP MEASUREMENTS

NON-GAAP RECONCILIATION OF SELECT ITEMS AND ADJUSTED NET INCOME(**)


Three Months Ended March 31, 2023
(in thousands, except per share data)PretaxTaxNetEPS
Net income (GAAP basis)$164,040 $1.55 
(-) Fair market adjustment to equity investments$39,583 $9,755 $29,828 $0.29 
Adjusted net income$134,212 $1.26 


Three Months Ended December 31, 2022
(in thousands, except per share data)PretaxTaxNetEPS
Net income (GAAP basis)$97,145 $0.91 
(-) Impairments for fair market value adjustments$(12,097)$(3,049)$(9,048)$(0.09)
(-) Fair market adjustment to equity investments$(15,152)$(3,818)$(11,334)$(0.11)
Adjusted net income$117,527 $1.11 


(**)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 period results. Select items are excluded as they are deemed to be outside of the Company's core business operations.



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April 26, 2023


NON-GAAP RECONCILIATION OF DIRECT MARGIN
Direct margin is considered a non-GAAP metric. We define "direct margin" as operating revenues less direct operating expenses. Direct margin is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. Direct margin is not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures.
The following table reconciles direct margin to segment operating income (loss), which we believe is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to direct margin.
.
Three Months Ended March 31, 2023
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income$182,149 $3,955 $6,687 
Add back:
Depreciation and amortization89,070 1,652 1,904 
Research and development8,738 — — 
Selling, general and administrative expense16,212 3,008 700 
Direct margin (Non-GAAP)$296,169 $8,615 $9,291 
Three Months Ended December 31, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income$145,297 $1,574 $6,746 
Add back:
Depreciation and amortization89,814 1,392 1,894 
Research and development7,059 — — 
Selling, general and administrative expense14,190 2,709 833 
Asset impairment charge3,948 8,149 — 
Direct margin (Non-GAAP)$260,308 $13,824 $9,473 
Three Months Ended March 31, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$1,297 $(848)$5,278 
Add back:
Depreciation and amortization95,817 1,049 2,401 
Research and development6,420 — — 
Selling, general and administrative expense10,883 2,050 584 
Direct margin (Non-GAAP)$114,417 $2,251 $8,263 

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April 26, 2023


Six Months Ended March 31, 2023
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income$327,446 $5,529 $13,433 
Add back:
Depreciation and amortization178,884 3,044 3,798 
Research and development15,797 — — 
Selling, general and administrative expense30,402 5,717 1,533 
Asset impairment charges3,948 8,149 — 
Direct margin (Non-GAAP)$556,477 $22,439 $18,764 
Six Months Ended March 31, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$(27,596)$7,201 $10,744 
Add back:
Depreciation and amortization189,438 1,804 4,781 
Research and development12,988 — — 
Selling, general and administrative expense21,712 3,779 1,341 
Asset impairment charges1,868 2,495 — 
Restructuring charges473 — — 
Direct margin (Non-GAAP)$198,883 $15,279 $16,866