false000004676500000467652024-07-242024-07-24

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): July 24, 2024

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.)

222 North Detroit Avenue
Tulsa, OK 74120
(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 July 24, 2024, Helmerich & Payne, Inc. issued a press release announcing its financial results for its third fiscal quarter ended June 30, 2024. 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:

Date:
Corporate Secretary

July 24, 2024



        hpunifiedlogocolorlarge202.jpg

Exhibit 99.1
NEWS RELEASE
July 24, 2024

 
HELMERICH & PAYNE, INC. ANNOUNCES FISCAL THIRD QUARTER RESULTS

The Company reported fiscal third quarter net income of $89 million, or $0.88 per diluted share; including select items(1)of $(0.04) per diluted share

The North America Solutions ("NAS") segment exited the third quarter of fiscal year 2024 with 146 active rigs and recognized revenue per day of $39,800/day with associated direct margins(2) per day of $20,300/day during the quarter

Quarterly NAS operating income increased $16 million sequentially; while direct margins(2) increased by $6 million to $277 million, as revenues increased by $6 million to $620 million and expenses remained relatively flat at $343 million

H&P's NAS segment anticipates exiting the fourth quarter of fiscal year 2024 between 147-153 active rigs

On June 5, 2024, the Board of Directors of the Company declared a quarterly base cash dividend of $0.25 per share and a supplemental cash dividend of $0.17 per share; both dividends are payable on August 30, 2024 to stockholders of record at the close of business on August 16, 2024


Helmerich & Payne, Inc. (NYSE: HP) reported net income of $89 million, or $0.88 per diluted share, from operating revenues of $698 million for the quarter ended June 30, 2024, compared to net income of $85 million, or $0.84 per diluted share, from operating revenues of $688 million for the quarter ended March 31, 2024. The net income per diluted share for the third and second quarters of fiscal year 2024 include net $(0.04) and net $0.00 of after-tax gains and losses, respectively, comprised of select items(1). For the third quarter of fiscal year 2024, select items were comprised of:

$0.06 of after-tax gains related to the non-cash fair market value adjustments to our equity investments
$(0.10) of after-tax losses related to a Blue Chip Swap transaction and non-recurring professional service fees

Net cash provided by operating activities was $197 million for the third quarter of fiscal year 2024 compared to net cash provided by operating activities of $144 million for the second quarter of fiscal year 2024.

Helmerich & Payne | 1437 South Boulder Ave. | Suite 1400
Tulsa, OK 74119 | 918.588.5190 | helmerichpayne.com

Page 2
News Release
July 24, 2024


President and CEO John Lindsay commented, "Our financial results for the third fiscal quarter continue to demonstrate the resilience of our strategy in the North America Solutions segment. Once again, it was particularly notable, that despite a more sizeable decline in the overall industry rig count, our NAS active rig count remained relatively stable during the third fiscal quarter which is a reflection of H&P’s unyielding focus on providing value to our customers. On the international front, the Company's first super-spec FlexRig® arrived in Saudi Arabia, which is another step in our strategy to increase our operational presence in the region.

"Macro headwinds, both directly and indirectly related to the oil and gas industry, persist and are still causing a more cautionary outlook for the industry. With the cyclical nature of our industry, we are hopeful that these will subside and bring about a more positive outlook for the industry in the coming quarters. Contractual churn remains prevalent in the U.S. market, but our people are doing a good job managing through this. We expect the churn to continue and as we have seen in recent summers, we also anticipate our active rig count to be flat with perhaps a modest incline heading into our fiscal year-end.

"Activity levels in the International Solutions segment in the fourth fiscal quarter are expected to remain consistent with the third fiscal quarter with the exception that the first of the eight Saudi Arabia rigs is expected to commence work in the fiscal fourth quarter once contractual acceptance procedures are completed. The preparation work for the remaining seven super-spec rigs is progressing as planned with export dates expected through the balance of the calendar year. We are looking forward to working with Saudi Aramco and building a long-term, valuable relationship with our new customer.
Senior Vice President and CFO Mark Smith also commented, "Currently, we expect our active NAS rig count in the fourth fiscal quarter to remain consistent with our third fiscal quarter average. Accordingly, our NAS direct margin guidance also remains relatively consistent with the level recognized during the third fiscal quarter. Contract economics remain the cornerstone of our NAS strategy and we do not anticipate the same level of volatility or correlation to overall rig counts that we have experienced in the past. Recent quarterly results continue to provide evidence of that.

“The Company returned another $42 million to shareholders in the form of base and supplemental dividends during the quarter and the Board of Directors declared the fourth and final installment of the supplemental dividend under the 2024 Supplemental Shareholder Return Plan. Looking ahead, we have just begun the process of establishing our fiscal 2025 capital budget and preliminarily we believe the projected maintenance and walking rig conversions capex will be similar to fiscal 2024 levels with the biggest swing factor related to any international tender awards that would result in additional capex. As part of its budgeting process for the fiscal year ahead, the Company continuously evaluates the uses of cash and capital allocation priorities.”

John Lindsay concluded, “The Company will continue to execute as it always has with a customer-centric approach and safety focus, which is ingrained in our Company culture. We look forward to commencing work in Saudi Arabia and taking advantage of additional opportunities as those arise in the coming quarters."






Page 3
News Release
July 24, 2024

Operating Segment Results for the Third Quarter of Fiscal Year 2024

North America Solutions:
This segment had operating income of $163.4 million compared to operating income of $147.1 million during the previous quarter. The increase in operating income was primarily attributable to a higher direct margin and the prior quarter experiencing higher depreciation and research and development expenses. Direct margin(2) increased by $6.0 million to $277.4 million sequentially.

International Solutions:
This segment had an operating loss of $4.8 million compared to operating income of $3.6 million during the previous quarter. The decrease in operating income was mainly due to recommissioning expenses for rigs that will be exported to Saudi Arabia and related start-up costs. Direct margin(2) during the third fiscal quarter was $0.4 million compared to $8.4 million during the previous quarter. Current quarter results included a $2.1 million foreign currency loss compared to a $0.5 million foreign currency loss in the previous quarter.

Offshore Gulf of Mexico:
This segment had operating income of $5.0 million compared to operating income of $0.1 million during the previous quarter. Direct margin(2) for the quarter was $7.6 million compared to $2.9 million in the previous quarter. The increase in operating income was primarily attributable to rigs moving to full operating rates earlier than planned.

Operational Outlook for the Fourth Quarter of Fiscal Year 2024
 
North America Solutions:
We expect North America Solutions direct margins(2) to be between $260-$280 million
We expect to exit the quarter between approximately 147-153 contracted rigs

International Solutions:
We expect International Solutions direct margins(2) to be between $(2)-$2 million, exclusive of any foreign exchange gains or losses
Projected International Solutions direct margins(2) for the fourth fiscal quarter are inclusive of approximately $6-$8 million of rig preparation and start-up expense related to our Saudi Arabia operations, higher than previous guidance as some costs shifted from the third fiscal quarter into the fourth fiscal quarter

Offshore Gulf of Mexico:
We expect Offshore Gulf of Mexico direct margins(2) to be between $6-$8 million

Other Estimates for Fiscal Year 2024
Gross capital expenditures are still expected to be approximately $500 million;
Ongoing asset sales that include reimbursements for lost and damaged tubulars and sales of other used drilling equipment offset a portion of the gross capital expenditures, and are now expected to total approximately $45 million in fiscal year 2024
Depreciation for fiscal year 2024 is now expected to be approximately $400 million
Research and development expenses for fiscal year 2024 are now expected to be roughly $40 million
General and administrative expenses for fiscal year 2024 are now expected to be approximately $250 million
Cash taxes to be paid in fiscal year 2024 are still expected to be approximately $150-$200 million



Page 4
News Release
July 24, 2024

Select Items(1) Included in Net Income per Diluted Share
 
Third quarter of fiscal year 2024 net income of $0.88 per diluted share included a net impact $(0.04) per share in after-tax gains and losses comprised of the following:

$0.06 of non-cash after-tax gains related to fair market value adjustments to equity investments
$(0.05) of after-tax losses on a Blue Chip Swap transaction to repatriate cash to the U.S. from Argentina
$(0.05) of after-tax losses related to non-recurring professional service fees

Second quarter of fiscal year 2024 net income of $0.84 per diluted share included $0.00 in after-tax losses comprised of the following:

$0.03 of non-cash after-tax gains related to fair market value adjustments to equity investments
$(0.03) of after-tax losses related to research and development expenses associated with an asset acquisition

Conference Call

A conference call will be held on Thursday, July 25, 2024 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 third quarter fiscal year 2024 results. Dial-in information for the conference call is (800) 225-9448 for domestic callers or (203) 518-9814 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 June 30, 2024, H&P's fleet included 232 land rigs in the United States, 23 international land rigs and seven offshore platform rigs. For more information, see H&P online at www.helmerichpayne.com.




Page 5
News Release
July 24, 2024

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, future share repurchases, investments, active rig count projections, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, capex spending and budgets, outlook for domestic and international markets, future commodity prices, and future customer activity and relationships 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 and other disclosures in 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.

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 2024 is provided on a non-GAAP basis only because certain information necessary to calculate the most 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.



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


Page 6
News Release
July 24, 2024


HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months EndedNine Months Ended
(in thousands, except per share amounts)June 30,March 31,June 30,June 30,June 30,
20242024202320242023
OPERATING REVENUES
Drilling services$695,139 $685,131 $721,567 $2,054,835 $2,205,419 
Other2,585 2,812 2,389 7,979 7,396 
697,724 687,943 723,956 2,062,814 2,212,815 
OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization417,028 401,851 429,182 1,222,182 1,306,543 
Other operating expenses1,144 1,026 1,003 3,307 3,317 
Depreciation and amortization97,816 104,545 94,811 296,352 287,721 
Research and development10,555 12,942 7,085 32,105 22,720 
Selling, general and administrative66,870 62,037 49,271 185,484 150,581 
Asset impairment charges— — — — 12,097 
Gain on reimbursement of drilling equipment(9,732)(7,461)(10,642)(24,687)(37,940)
Other (gain) loss on sale of assets2,730 2,431 4,504 2,718 (394)
586,411 577,371 575,214 1,717,461 1,744,645 
OPERATING INCOME111,313 110,572 148,742 345,353 468,170 
Other income (expense)
Interest and dividend income11,888 6,567 10,748 29,189 20,508 
Interest expense(4,336)(4,261)(4,324)(12,969)(12,918)
Gain (loss) on investment securities389 3,747 (18,538)102 6,123 
Other3,134 400 (672)2,991 (1,218)
11,075 6,453 (12,786)19,313 12,495 
Income before income taxes 122,388 117,025 135,956 364,666 480,665 
Income tax expense33,703 32,194 40,663 95,977 124,187 
NET INCOME$88,685 $84,831 $95,293 $268,689 $356,478 
Basic earnings per common share$0.89 $0.85 $0.93 $2.68 $3.40 
Diluted earnings per common share$0.88 $0.84 $0.93 $2.67 $3.39 
Weighted average shares outstanding:
Basic98,752 98,774 101,163 98,891 103,464 
Diluted99,007 99,046 101,550 99,116 103,852 





Page 7
News Release
July 24, 2024

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,September 30,
(in thousands except share data and share amounts)20242023
ASSETS
Current Assets:
Cash and cash equivalents$203,633 $257,174 
Restricted cash78,369 59,064 
Short-term investments86,088 93,600 
Accounts receivable, net of allowance of $2,377 and $2,688, respectively
415,395 404,188 
Inventories of materials and supplies, net115,312 94,227 
Prepaid expenses and other, net71,522 97,727 
Assets held-for-sale— 645 
Total current assets970,319 1,006,625 
Investments292,229 264,947 
Property, plant and equipment, net3,014,345 2,921,695 
Other Noncurrent Assets:
Goodwill45,653 45,653 
Intangible assets, net55,752 60,575 
Operating lease right-of-use asset57,315 50,400 
Other assets, net49,369 32,061 
Total other noncurrent assets208,089 188,689 
Total assets$4,484,982 $4,381,956 
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$158,896 $130,852 
Dividends payable42,045 25,194 
Accrued liabilities 255,851 262,885 
Total current liabilities456,792 418,931 
Noncurrent Liabilities:
Long-term debt, net545,589 545,144 
Deferred income taxes494,412 517,809 
Other131,344 128,129 
Total noncurrent liabilities1,171,345 1,191,082 
Shareholders' Equity:
Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of June 30, 2024 and September 30, 2023, and 98,755,412 and 99,426,526 shares outstanding as of June 30, 2024 and September 30, 2023, respectively
11,222 11,222 
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued
— — 
Additional paid-in capital510,379 525,369 
Retained earnings2,833,136 2,707,715 
Accumulated other comprehensive loss(8,499)(7,981)
Treasury stock, at cost, 13,467,453 shares and 12,796,339 shares as of June 30, 2024 and September 30, 2023, respectively
(489,393)(464,382)
Total shareholders’ equity2,856,845 2,771,943 
Total liabilities and shareholders' equity$4,484,982 $4,381,956 






Page 8
News Release
July 24, 2024

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30,
(in thousands)20242023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$268,689 $356,478 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization296,352 287,721 
Asset impairment charges— 12,097 
Provision for credit loss(213)2,165 
Stock-based compensation23,777 23,884 
Gain on investment securities(102)(6,123)
Gain on reimbursement of drilling equipment(24,687)(37,940)
Other (gain) loss on sale of assets2,718 (394)
Deferred income tax expense (benefit)(23,634)4,197 
Other3,011 3,960 
Changes in assets and liabilities(30,004)(27,045)
Net cash provided by operating activities515,907 619,000 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(389,095)(281,790)
Purchase of short-term investments(148,451)(102,140)
Purchase of long-term investments(9,167)(18,813)
Proceeds from sale of short-term investments152,034 148,651 
Insurance proceeds from involuntary conversion
5,533 — 
Proceeds from asset sales35,148 63,048 
Net cash used in investing activities(353,998)(191,044)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid(126,417)(152,579)
Payments for employee taxes on net settlement of equity awards(12,176)(14,410)
Payment of contingent consideration from acquisition of business(6,250)(250)
Share repurchases(51,302)(247,213)
Other— (540)
Net cash used in financing activities(196,145)(414,992)
Net increase (decrease) in cash and cash equivalents and restricted cash(34,236)12,964 
Cash and cash equivalents and restricted cash, beginning of period316,238 269,009 
Cash and cash equivalents and restricted cash, end of period$282,002 $281,973 
         





Page 9
News Release
July 24, 2024

HELMERICH & PAYNE, INC.
SEGMENT REPORTING
Three Months EndedNine Months Ended
June 30,March 31,June 30,June 30,June 30,
(in thousands, except operating statistics)20242024202320242023
NORTH AMERICA SOLUTIONS
Operating revenues$620,040 $613,339 $641,612 $1,827,661 $1,944,555 
Direct operating expenses342,617 341,938 364,688 1,022,763 1,111,154 
Depreciation and amortization89,207 97,573 87,209 273,799 266,093 
Research and development10,623 13,006 7,254 32,318 23,051 
Selling, general and administrative expense14,234 13,692 12,962 43,802 43,364 
Asset impairment charges— — — — 3,948 
Segment operating income $163,359 $147,130 $169,499 $454,979 $496,945 
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$277,423 $271,401 $276,924 $804,898 $833,401 
Revenue days3
13,68314,12315,07541,51648,142
Average active rigs4
150155166152176
Number of active rigs at the end of period5
146152153146153
Number of available rigs at the end of period232233233232233
Reimbursements of "out-of-pocket" expenses$74,915 $73,584 $82,688 $218,227 $239,288 
INTERNATIONAL SOLUTIONS
Operating revenues$47,882 $45,878 $48,692 $148,512 $159,383 
Direct operating expenses47,446 37,514 45,390 129,479 133,642 
Depreciation2,797 2,418 2,171 7,549 5,215 
Selling, general and administrative expense2,483 2,377 2,528 7,336 8,245 
Asset impairment charges— — — — 8,149 
Segment operating income (loss)$(4,844)$3,569 $(1,397)$4,148 $4,132 
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$436 $8,364 $3,302 $19,033 $25,741 
Revenue days3
1,0671,0381,2153,2783,618
Average active rigs4
1211131213
Number of active rigs at the end of period5
1211131213
Number of available rigs at the end of period2322222322
Reimbursements of "out-of-pocket" expenses$2,069 $1,964 $2,098 $7,417 $7,743 
OFFSHORE GULF OF MEXICO
Operating revenues$27,218 $25,913 $31,221 $78,662 $101,364 
Direct operating expenses19,611 23,010 23,913 62,200 75,292 
Depreciation1,798 1,941 1,873 5,807 5,671 
Selling, general and administrative expense799 884 730 2,515 2,263 
Segment operating income$5,010 $78 $4,705 $8,140 $18,138 
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$7,607 $2,903 $7,308 $16,462 $26,072 
Revenue days3
2732733648351,092
Average active rigs4
33434
Number of active rigs at the end of period5
33434
Number of available rigs at the end of period77777
Reimbursements of "out-of-pocket" expenses $7,746 $8,857 $7,823 $24,430 $23,006 

(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 reimbursements) less direct operating expenses (less reimbursements) 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. 91 days for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023, 274 days for the nine months ended June 30, 2024 and 273 days for the nine months ended June 30, 2023).
(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.






Page 10
News Release
July 24, 2024



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 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 (loss) 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.

Income from discontinued operations was presented as a separate line item on our Unaudited Condensed Consolidated Statements of Operations during the three and nine months ended June 30, 2023. To conform with the current fiscal year presentation, we reclassified amounts previously presented in Income from discontinued operations, which were not material, to Other within Other income (expense) on our Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2023.

The following table reconciles operating income 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 EndedNine Months Ended
June 30,March 31,June 30,June 30,June 30,
(in thousands)20242024202320242023
Operating income (loss)
North America Solutions$163,359 $147,130 $169,499 $454,979 $496,945 
International Solutions(4,844)3,569 (1,397)4,148 4,132 
Offshore Gulf of Mexico5,010 78 4,705 8,140 18,138 
Other(4,791)2,785 2,104 (2,073)13,604 
Eliminations(616)(772)4,470 (1,054)4,513 
Segment operating income$158,118 $152,790 $179,381 $464,140 $537,332 
Gain on reimbursement of drilling equipment9,732 7,461 10,642 24,687 37,940 
Other gain (loss) on sale of assets(2,730)(2,431)(4,504)(2,718)394 
Corporate selling, general and administrative costs and corporate depreciation(53,807)(47,248)(36,777)(140,756)(107,496)
Operating income$111,313 $110,572 $148,742 $345,353 $468,170 
Other income (expense):
Interest and dividend income11,888 6,567 10,748 29,189 20,508 
Interest expense(4,336)(4,261)(4,324)(12,969)(12,918)
Gain (loss) on investment securities389 3,747 (18,538)102 6,123 
Other3,134 400 (672)2,991 (1,218)
Total unallocated amounts11,075 6,453 (12,786)19,313 12,495 
Income before income taxes$122,388 $117,025 $135,956 $364,666 $480,665 



Page 11
News Release
July 24, 2024


SUPPLEMENTARY STATISTICAL INFORMATION 
Unaudited
 


U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS
July 24,June 30,March 31,Q3FY24
202420242024Average
U.S. Land Operations
Term Contract Rigs88 83 96 86 
Spot Contract Rigs60 63 56 64 
Total Contracted Rigs148 146 152 150 
Idle or Other Rigs84 86 81 82 
Total Marketable Fleet232 232 233 232 
 


H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS
Number of Rigs Already Under Long-Term Contracts(*)
(Estimated Quarterly Average — as of 6/30/24)
Q4Q1Q2Q3Q4Q1Q2
SegmentFY24FY25FY25FY25FY25FY26FY26
U.S. Land Operations86.9 72.5 40.8 30.4 27.1 19.3 4.0 
International Land Operations9.0 10.9 13.1 11.7 11.0 10.9 10.0 
Offshore Operations— — — — — — — 
Total95.9 83.4 53.9 42.1 38.1 30.2 14.0 
(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.
 



















Page 12
News Release
July 24, 2024


NON-GAAP MEASUREMENTS

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


Three Months Ended June 30, 2024
(in thousands, except per share data)PretaxTax ImpactNetEPS
Net income (GAAP basis)$88,685 $0.88 
(-) Fair market adjustment to equity investments$7,508 $1,944 $5,564 $0.06 
   (-) Non-recurring professional service fees$(6,680)$(1,730)$(4,950)$(0.05)
(-) Losses on a Blue Chip Swap transaction$(7,112)$(1,842)$(5,270)$(0.05)
Adjusted net income$93,341 $0.92 



Three Months Ended March 31, 2024
(in thousands, except per share data)PretaxTax ImpactNetEPS
Net income (GAAP basis)$84,831 $0.84 
(-) Fair market adjustment to equity investments$3,777 $920 $2,857 $0.03 
(-) Research and development expenses associated with an asset acquisition$(3,840)$(995)$(2,845)$(0.03)
Adjusted net income$84,819 $0.84 



(**)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.




Page 13
News Release
July 24, 2024


NON-GAAP RECONCILIATION OF DIRECT MARGIN
Direct margin is considered a non-GAAP metric. We define "direct margin" as operating revenues (less reimbursements) less direct operating expenses (less reimbursements). 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 June 30, 2024
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$163,359 $(4,844)$5,010 
Add back:
Depreciation and amortization89,207 2,797 1,798 
Research and development10,623 — — 
Selling, general and administrative expense14,234 2,483 799 
Direct margin (Non-GAAP)$277,423 $436 $7,607 
Three Months Ended March 31, 2024
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income$147,130 $3,569 $78 
Add back:
Depreciation and amortization97,573 2,418 1,941 
Research and development13,006 — — 
Selling, general and administrative expense13,692 2,377 884 
Direct margin (Non-GAAP)$271,401 $8,364 $2,903 
Three Months Ended June 30, 2023
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$169,499 $(1,397)$4,705 
Add back:
Depreciation and amortization87,209 2,171 1,873 
Research and development7,254 — — 
Selling, general and administrative expense12,962 2,528 730 
Direct margin (Non-GAAP)$276,924 $3,302 $7,308 
Nine Months Ended June 30, 2024
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income $454,979 $4,148 $8,140 
Add back:
Depreciation and amortization273,799 7,549 5,807 
Research and development32,318 — — 
Selling, general and administrative expense43,802 7,336 2,515 
Direct margin (Non-GAAP)$804,898 $19,033 $16,462 


Page 14
News Release
July 24, 2024

Nine Months Ended June 30, 2023
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income$496,945 $4,132 $18,138 
Add back:
Depreciation and amortization266,093 5,215 5,671 
Research and development23,051 — — 
Selling, general and administrative expense43,364 8,245 2,263 
Asset impairment charges3,948 8,149 — 
Direct margin (Non-GAAP)$833,401 $25,741 $26,072