false000004676500000467652021-07-282021-07-28

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 28, 2021

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

DE 1-4221 73-0679879
(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 class Trading symbol(s) Name of each exchange on which registered
Common Stock ($0.10 par value) HP NYSE

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 28, 2021, Helmerich & Payne, Inc. issued a press release announcing its financial results for its third fiscal quarter ended June 30, 2021. 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 on 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 (the "Exchange Act"), 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, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit Number    Description
99.1    Helmerich & Payne, Inc. earnings press release dated July 28, 2021.
104    Cover 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: July 28, 2021





HP_UNIFIEDLOGOXCOLORXLARGE.JPG
Exhibit 99.1
NEWS RELEASE
July 28, 2021
 
HELMERICH & PAYNE, INC. ANNOUNCES THIRD QUARTER RESULTS
H&P's North America Solutions segment exited the third quarter of fiscal year 2021 with 121 active rigs, up over 10% during the quarter

The Company ended the quarter with $558 million in cash and short-term investments and no amounts drawn on its $750 million revolving credit facility culminating in approximately $1.3 billion in available liquidity

Quarterly North America Solutions operating gross margins(1) increased $11 million to $75 million sequentially, as revenues increased by $31 million to $281 million and expenses increased by $20 million to $206 million

The Company reported a fiscal third quarter net loss of $(0.52) per diluted share; including select items(2) of $0.05 per diluted share

Deployment of our drilling automation technologies and utilization of new commercial models kept pace with the increase in rig activity with roughly 25% of our active FlexRig® fleet utilizing AutoSlide®, and over 30% of the fleet contracted with some form of performance-based contract

H&P continues to invest in new and diversified technologies for long-term sustainability through geothermal opportunities as well as power management applications on the rig site

On June 2, 2021, the Board of Directors of the Company declared a quarterly cash dividend of $0.25 per share, payable on August 31, 2021, to stockholders of record at the close of business on August 17, 2021


Helmerich & Payne, Inc. (NYSE: HP) reported a net loss of $56 million, or $(0.52) per diluted share, from operating revenues of $332 million for the quarter ended June 30, 2021, compared to a net loss of $121 million, or $(1.13) per diluted share, on revenues of $296 million for the quarter ended March 31, 2021. The net losses per diluted share for the third and second quarters of fiscal year 2021 include $0.05 and $(0.53), respectively, of after-tax gains and losses comprised of select items(2). For the third quarter of fiscal year 2021, select items(2) were comprised of:

$0.08 of after-tax gains pertaining to a non-cash fair market adjustment to our equity investment, income tax adjustments related to certain discrete tax items, and discontinued operations related to adjustments resulting from currency fluctuations
$(0.03) of after-tax losses pertaining to a non-cash impairment for fair market adjustments to decommissioned rigs that are held for sale, restructuring charges, and changes in the fair values of certain contingent liabilities

FOOTER-EARNINGSRELEASE.JPG


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News Release
July 28, 2021
Net cash provided by operating activities was $31 million for the third quarter of fiscal year 2021 compared to net cash provided by operating activities of $78 million in the prior quarter, which benefited from a large income tax refund.

    President and CEO John Lindsay commented, "The rig count and market share gains we have secured since the industry lows almost a year ago is a testament to H&P's position as the leading drilling solutions provider. While we have experienced moderation in this upward trajectory, we still expect activity and pricing to continue to increase over the next quarter as the availability of super-spec rigs tightens. We remain optimistic that current crude oil prices will translate into even higher activity and pricing levels in the fourth calendar quarter leading into 2022.
"We continue to affect change in the industry through the use of new commercial models and digital technology solutions. There is a growing appreciation for the value proposition H&P provides, and more customers are partnering with us to achieve better drilling outcomes. When utilized on a FlexRig® platform, H&P's digital technology and automation solutions are able to enhance drilling outcomes both in terms of efficiency gains and wellbore quality, resulting in improved long-term well economics and returns. This outcome-based approach delivers more predictive, consistent and superior well results over an entire drilling program, lowering overall well costs and downhole risks, and greatly reducing the potential for costly outliers. Minimizing downhole variation with the appropriate planning, technology and execution can produce positive economic results in a drilling program.
"The methods, the equipment, the technology and the risk profile in the drilling of unconventional oil and gas wells has evolved significantly over the past few decades; however, the legacy dayrate model has not. This has resulted in an unsustainable allocation of the economic benefits that have been accruing over the past several years through the drilling of more efficient and better-quality wells. Consequently, the pricing model for providing better drilling outcomes needs to evolve. H&P's new commercial models aim to better align us with our customer's goals and allow us to share in the value-added outcomes we help create."
    Senior Vice President and CFO Mark Smith also commented, "The Company's solid financial position and strong financial stewardship remain resolute, giving us plenty of flexibility in our capital allocation strategy to take advantage of additional investment opportunities in the future should they arise and to maintain our steadfast commitment of returning cash to shareholders.
"We have continued to make investments, and explore future investments, in geothermal companies targeting the ambitious goal of affordable, reliable, and clean energy on a global scale. At present, we have a robust set of geothermal investment opportunities across a diverse technological and drilling spectrum. These opportunities not only include providing our drilling and technology solutions, but also direct investments into companies working toward accessing geothermal heat to create low-carbon and scalable base load power generation in an economically viable manner. Additionally, we continue to invest resources and work with our customers to provide customized power management solutions at the rig site that result in improved environmental and economic outcomes.
"Within the constructs of a smaller industry going forward, reducing our operating cost structure remains a high priority for the Company and steps have been underway to make this happen. Recent actions will result in an estimated annualized savings of $7 million with that full benefit captured in calendar 2022. Further, we have many other ongoing initiatives that will result in additional cost savings, that will be recognized incrementally over the next several quarters. Over time we expect these cost saving measures to culminate into meaningful, long-term improvements in our cost structure."
    John Lindsay concluded, “The strength of our people, financial position, and drilling solutions will continue to provide us an edge in this improving market. Our track record of forming new and cementing existing partnerships with customers that manifest from our commitment to mutual long-term success."
Operating Segment Results for the Third Quarter of Fiscal Year 2021
North America Solutions:
This segment had an operating loss of $43.7 million compared to an operating loss of $109.8 million during the previous quarter. The decrease in the operating loss was primarily due to the prior quarter being adversely impacted by impairments related to fair market adjustments to decommissioned rigs that are held for sale and restructuring charges. Absent the select items(2) for the quarters, this segment's operating loss declined by $13.9 million on a sequential basis, due mainly to a higher level of rig activity.




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News Release
July 28, 2021

Operating gross margins(1) increased by $10.9 million to $75.0 million as both revenues and expenses increased sequentially. Operating results were still negatively impacted by the costs associated with reactivating rigs; $5.9 million in the third fiscal quarter compared to $9.7 million in the second fiscal quarter.

International Solutions:
This segment had an operating loss of $3.5 million compared to an operating loss of $3.5 million during the previous quarter. Operating gross margins(1) improved slightly to a negative $1.4 million from a negative $1.9 million in the previous quarter. Current quarter results included a $0.6 million foreign currency loss primarily related to our South American operations compared to a $2.4 million foreign currency loss in the second quarter of fiscal year 2021.

Offshore Gulf of Mexico:
This segment had operating income of $5.7 million compared to operating income of $3.0 million during the previous quarter. Operating gross margins(1) for the quarter were $9.2 million compared to $6.2 million in the prior quarter.

Operational Outlook for the Fourth Quarter of Fiscal Year 2021
 
North America Solutions:
We expect North America Solutions operating gross margins(1) to be between $72-$82 million
We expect to exit the quarter at between 127-132 contracted rigs    
 
International Solutions:
We expect International Solutions operating gross margins(1) to be relatively flat 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 $7-$9 million

Other Estimates for Fiscal Year 2021
Gross capital expenditures are now expected to at the lower end of our previous guidance range of $85 to $105 million range. 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 still expected to total approximately $25 million in fiscal year 2021. Note the sale of the offshore platform rig during the first quarter of fiscal year 2021 is excluded from this number.
Depreciation and amortization expenses are still expected to be approximately $425 million
Research and development expenses for fiscal year 2021 are now expected to be roughly $20 to 25 million
Selling, general and administrative expenses for fiscal year 2021 are still expected to be approximately $160 million





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News Release
July 28, 2021

Select Items Included in Net Income per Diluted Share
 
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 non-cash after-tax losses for impairments related to 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

Second quarter of fiscal year 2021 net loss of $(1.13) per diluted share included $(0.53) in after-tax losses comprised of the following:
$0.02 of non-cash after-tax gains related to fair market value adjustments to equity investments
$0.02 of non-cash after-tax gains from discontinued operations related to adjustments resulting from currency fluctuations
$(0.01) of after-tax losses related to restructuring charges
$(0.17) of after-tax losses pertaining to the sale of excess drilling equipment and spares
$(0.39) of non-cash after-tax losses for impairments related to fair market value adjustments to decommissioned rigs that are held for sale

 Conference Call
 
A conference call will be held on Thursday, July 29, 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 third quarter fiscal year 2021 results. Dial-in information for the conference call is (877) 876-9176 for domestic callers or (785) 424-1670 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, 2021, H&P's fleet included 242 land rigs in the U.S., 32 international land rigs and seven offshore platform rigs. For more information, see H&P online at www.helmerichpayne.com.






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News Release
July 28, 2021

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 and AutoSlide, which may be registered or trademarked in the U.S. 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.


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




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News Release
July 28, 2021
HELMERICH & PAYNE, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
(in thousands, except per share amounts) June 30, March 31, June 30, June 30, June 30,
2021 2021 2020 2021 2020
Operating revenues
Drilling services $ 329,774  $ 294,026  $ 314,405  $ 868,581  $ 1,556,093 
Other 2,439  2,145  2,959  6,180  9,567 
332,213  296,171  317,364  874,761  1,565,660 
Operating costs and expenses
Drilling services operating expenses, excluding depreciation and amortization 255,471  230,313  205,198  684,473  1,022,270 
Other operating expenses 1,481  1,274  1,549  4,117  4,286 
Depreciation and amortization 104,493  106,417  110,161  317,771  372,298 
Research and development 5,610  5,334  3,638  16,527  16,730 
Selling, general and administrative 41,719  39,349  43,108  120,371  134,894 
Asset impairment charge 2,130  54,284  —  56,414  563,234 
Restructuring charges 2,110  1,608  15,495  3,856  15,495 
(Gain) loss on sale of assets (3,434) 18,515  (4,201) 2,745  (18,790)
409,580  457,094  374,948  1,206,274  2,110,417 
Operating loss from continuing operations (77,367) (160,923) (57,584) (331,513) (544,757)
Other income (expense)
Interest and dividend income 1,527  4,819  771  8,225  6,551 
Interest expense (5,963) (5,759) (6,125) (17,861) (18,320)
Gain (loss) on investment securities 2,409  2,520  2,267  7,853  (7,325)
Gain on sale of subsidiary —  —  —  —  14,963 
Other (970) (577) (2,914) (3,027) (3,711)
(2,997) 1,003  (6,001) (4,810) (7,842)
Loss from continuing operations before income taxes (80,364) (159,920) (63,585) (336,323) (552,599)
Income tax benefit (23,659) (36,624) (17,578) (78,398) (116,853)
Loss from continuing operations (56,705) (123,296) (46,007) (257,925) (435,746)
Income from discontinued operations before income taxes 1,150  2,293  9,151  10,936  22,675 
Income tax provision —  —  8,743  —  22,463 
Income from discontinued operations 1,150  2,293  408  10,936  212 
Net loss $ (55,555) $ (121,003) $ (45,599) $ (246,989) $ (435,534)
Basic earnings (loss) per common share:
Loss from continuing operations $ (0.53) $ (1.15) $ (0.43) $ (2.40) $ (4.05)
Income from discontinued operations $ 0.01  $ 0.02  $ —  $ 0.10  $ — 
Net loss $ (0.52) $ (1.13) $ (0.43) $ (2.30) $ (4.05)
Diluted earnings (loss) per common share:
Loss from continuing operations $ (0.53) $ (1.15) $ (0.43) $ (2.40) $ (4.05)
Income from discontinued operations $ 0.01  $ 0.02  $ —  $ 0.10  $ — 
Net loss $ (0.52) $ (1.13) $ (0.43) $ (2.30) $ (4.05)
Weighted average shares outstanding (in thousands):
Basic 107,896  107,861  107,439  107,790  108,185 
Diluted 107,896  107,861  107,439  107,790  108,185 



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July 28, 2021
HELMERICH & PAYNE, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, September 30,
(in thousands except share data and share amounts) 2021 2020
Assets
Current Assets:
Cash and cash equivalents $ 370,553  $ 487,884 
Short-term investments 187,256  89,335 
Accounts receivable, net of allowance of $1,885 and $1,820, respectively
233,632  192,623 
Inventories of materials and supplies, net 90,537  104,180 
Prepaid expenses and other, net 91,477  89,305 
Assets held-for-sale 10,088  — 
Total current assets 983,543  963,327 
Investments 36,886  31,585 
Property, plant and equipment, net 3,281,082  3,646,341 
Other Noncurrent Assets:
Goodwill 45,653  45,653 
Intangible assets, net 75,634  81,027 
Operating lease right-of-use asset 53,116  44,583 
Other assets, net 19,371  17,105 
Total other noncurrent assets 193,774  188,368 
Total assets $ 4,495,285  $ 4,829,621 
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable $ 64,193  $ 36,468 
Dividends payable 27,324  27,226 
Accrued liabilities 173,784  155,442 
Total current liabilities 265,301  219,136 
Noncurrent Liabilities:
Long-term debt, net 481,002  480,727 
Deferred income taxes 584,633  650,675 
Other 154,049  147,180 
Noncurrent liabilities - discontinued operations 2,393  13,389 
Total noncurrent liabilities 1,222,077  1,291,971 
Shareholders' Equity:
Common stock, $.10 par value, 160,000,000 shares authorized, 112,222,865 and 112,151,563 shares issued as of June 30, 2021 and September 30, 2020, respectively, and 107,898,782 and 107,488,242 shares outstanding as of June 30, 2021 and September 30, 2020, respectively
11,222  11,215 
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued —  — 
Additional paid-in capital 523,281  521,628 
Retained earnings 2,679,859  3,010,012 
Accumulated other comprehensive loss (24,814) (26,188)
Treasury stock, at cost, 4,324,083 shares and 4,663,321 shares as of June 30, 2021 and September 30, 2020, respectively
(181,641) (198,153)
Total shareholders’ equity 3,007,907  3,318,514 
Total liabilities and shareholders' equity $ 4,495,285  $ 4,829,621 
 



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July 28, 2021
HELMERICH & PAYNE, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended June 30,
(in thousands) 2021 2020
OPERATING ACTIVITIES:
Net loss $ (246,989) $ (435,534)
Adjustment for income from discontinued operations (10,936) (212)
Loss from continuing operations (257,925) (435,746)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 317,771  372,298 
Asset impairment charge 56,414  563,234 
Amortization of debt discount and debt issuance costs 994  1,358 
Provision for credit loss 4,151 
Stock-based compensation 21,240  32,059 
(Gain) loss on investment securities (7,853) 7,325 
(Gain) loss on sale of assets 2,745  (18,790)
Gain on sale of subsidiary —  (14,963)
Deferred income tax benefit (66,102) (122,366)
Other 8,849  (1,580)
Changes in assets and liabilities 13,721  59,311 
Net cash provided by operating activities from continuing operations 89,862  446,291 
Net cash used in operating activities from discontinued operations (41) (38)
Net cash provided by operating activities 89,821  446,253 
INVESTING ACTIVITIES:
Capital expenditures (49,173) (120,960)
Purchase of investments (236,784) (78,303)
Proceeds from sale of investments 139,430  66,033 
Proceeds from sale of subsidiary —  15,056 
Proceeds from asset sales 26,775  31,200 
Other —  (50)
Net cash used in investing activities (119,752) (87,024)
FINANCING ACTIVITIES:
Dividends paid (81,815) (233,124)
Proceeds from stock option exercises —  4,100 
Payments for employee taxes on net settlement of equity awards (2,160) (3,752)
Payment of contingent consideration from acquisition of business (250) (4,250)
Share repurchase —  (28,504)
Other (719) (446)
Net cash used in financing activities (84,944) (265,976)
Net increase (decrease) in cash and cash equivalents and restricted cash (114,875) 93,253 
Cash and cash equivalents and restricted cash, beginning of period 536,747  382,971 
Cash and cash equivalents and restricted cash, end of period $ 421,872  $ 476,224 



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July 28, 2021
         
Three Months Ended Nine Months Ended
SEGMENT REPORTING June 30, March 31, June 30, June 30,
(in thousands, except operating statistics)
2021 2021 2020 2021 2020
NORTH AMERICA SOLUTIONS OPERATIONS
Operating revenues $ 281,132  $ 249,939  $ 254,434  $ 733,061  $ 1,325,076 
Direct operating expenses 206,172  185,841  152,663  549,322  832,229 
Segment gross margin (2)
74,960  64,098  101,771  183,739  492,847 
Depreciation and amortization 96,997  99,917  102,699  297,238  336,098 
Research and development 5,605  5,329  3,459  16,400  15,871 
Selling, general and administrative expense 12,583  12,960  13,533  37,223  42,798 
Asset impairment charge 2,130  54,284  —  56,414  406,548 
Restructuring charges 1,388  1,442  7,237  2,969  7,237 
Segment operating loss $ (43,743) $ (109,834) $ (25,157) $ (226,505) $ (315,705)
Operating Statistics (1):
Average active rigs 119  105  89  102  157 
Number of active rigs at the end of period 121  109  68  121  68 
Number of available rigs at the end of period 242  242  262  242  262 
Reimbursements of "out-of-pocket" expenses $ 33,282  $ 27,290  $ 27,806  $ 79,361  $ 164,540 
INTERNATIONAL SOLUTIONS OPERATIONS
Operating revenues $ 15,278  $ 14,813  $ 22,477  $ 40,609  $ 120,189 
Direct operating expenses 16,690  16,718  27,595  50,931  99,634 
Segment gross margin (2)
(1,412) (1,905) (5,118) (10,322) 20,555 
Depreciation 573  415  996  1,361  16,634 
Selling, general and administrative expense 1,346  1,138  1,129  3,463  3,832 
Asset impairment charge —  —  —  —  156,686 
Restructuring charges 207  —  2,297  207  2,297 
Segment operating loss $ (3,538) $ (3,458) $ (9,540) $ (15,353) $ (158,894)
Operating Statistics (1):
Average active rigs 11  15 
Number of active rigs at the end of period
Number of available rigs at the end of period 32  32  32  32  32 
Reimbursements of "out-of-pocket" expenses $ 1,152  $ 1,613  $ 3,079  $ 5,324  $ 6,875 
OFFSHORE GULF OF MEXICO OPERATIONS
Operating revenues $ 33,364  $ 29,274  $ 37,494  $ 94,911  $ 110,828 
Direct operating expenses 24,127  23,069  28,967  73,452  91,660 
Segment gross margin (2)
9,237  6,205  8,527  21,459  19,168 
Depreciation 2,938  2,593  3,004  8,137  8,591 
Selling, general and administrative expense 592  634  1,248  1,895  3,293 
Restructuring charges —  —  1,262  —  1,262 
Segment operating income $ 5,707  $ 2,978  $ 3,013  $ 11,427  $ 6,022 
Operating Statistics (1):
Average active rigs
Number of active rigs at the end of period
Number of available rigs at the end of period
Reimbursements of "out-of-pocket" expenses $ 8,342  $ 5,193  $ 8,224  $ 21,403  $ 24,888 
(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.



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July 28, 2021


    Segment reconciliation amounts were as follows:
Three Months Ended June 30, 2021
(in thousands) North America Solutions Offshore Gulf of Mexico International Solutions Other Eliminations Total
Operating revenue $ 281,132  $ 33,364  $ 15,278  $ 2,439  $ —  $ 332,213 
Intersegment —  —  —  9,379  (9,379) — 
Total operating revenue $ 281,132  $ 33,364  $ 15,278  $ 11,818  $ (9,379) $ 332,213 
Direct operating expenses 202,630  21,923  16,547  15,852  —  256,952 
Intersegment 3,542  2,204  143  13  (5,902) — 
Total drilling services & other operating expenses $ 206,172  $ 24,127  $ 16,690  $ 15,865  $ (5,902) $ 256,952 

Nine Months Ended June 30, 2021
(in thousands) North America Solutions Offshore Gulf of Mexico International Solutions Other Eliminations Total
Operating revenue $ 733,061  $ 94,911  $ 40,609  $ 6,180  $ —  $ 874,761 
Intersegment —  —  —  25,181  (25,181) — 
Total operating revenue $ 733,061  $ 94,911  $ 40,609  $ 31,361  $ (25,181) $ 874,761 
Direct operating expenses 540,497  67,043  50,483  30,567  —  688,590 
Intersegment 8,825  6,409  448  270  (15,952) — 
Total drilling services & other operating expenses $ 549,322  $ 73,452  $ 50,931  $ 30,837  $ (15,952) $ 688,590 

    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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News Release
July 28, 2021
    The following table reconciles segment operating income (loss) per the information above to loss from continuing operations before income taxes as reported on the Unaudited Condensed Consolidated Statements of Operations:
        
Three Months Ended Nine Months Ended
June 30, March 31, June 30, June 30, June 30,
(in thousands) 2021 2021 2020 2021 2020
Operating income (loss)
North America Solutions $ (43,743) $ (109,834) $ (25,157) $ (226,505) $ (315,705)
International Solutions (3,538) (3,458) (9,540) (15,353) (158,894)
Offshore Gulf of Mexico 5,707  2,978  3,013  11,427  6,022 
Other (4,670) (1,072) 4,389  (1,631) 3,704 
Eliminations (3,298) (3,433) —  (8,857) — 
Segment operating loss $ (49,542) $ (114,819) $ (27,295) $ (240,919) $ (464,873)
Gain (loss) on sale of assets 3,434  (18,515) 4,201  (2,745) 18,790 
Corporate selling, general and administrative costs and corporate depreciation (31,259) (27,589) (34,490) (87,849) (98,674)
Operating loss $ (77,367) $ (160,923) $ (57,584) $ (331,513) $ (544,757)
Other income (expense):
Interest and dividend income 1,527  4,819  771  8,225  6,551 
Interest expense (5,963) (5,759) (6,125) (17,861) (18,320)
Gain (loss) on investment securities 2,409  2,520  2,267  7,853  (7,325)
Gain on sale of subsidiary —  —  —  —  14,963 
Other (970) (577) (2,914) (3,027) (3,711)
Total unallocated amounts (2,997) 1,003  (6,001) (4,810) (7,842)
Loss from continuing operations before income taxes $ (80,364) $ (159,920) $ (63,585) $ (336,323) $ (552,599)



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News Release
July 28, 2021

SUPPLEMENTARY STATISTICAL INFORMATION 
Unaudited
 
U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS
July 28, June 30, March 31, Q3FY21
2021 2021 2021 Average
U.S. Land Operations
Term Contract Rigs 65  64  64  64 
Spot Contract Rigs 58  57  45  55 
Total Contracted Rigs 123  121  109  119 
Idle or Other Rigs 119  121  133  123 
Total Marketable Fleet 242  242  242  242 
 
H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS
Number of Rigs Already Under Long-Term Contracts(*)
(Estimated Quarterly Average — as of 06/30/21)
Q4 Q1 Q2 Q3 Q4 Q1 Q2
Segment FY21 FY22 FY22 FY22 FY22 FY23 FY23
U.S. Land Operations 65.3  62.3  37.8  27.2  24.0  21.2  3.9 
International Land Operations 1.0  1.0  1.0  1.0  1.0  1.0  1.0 
Offshore Operations —  —  —  —  —  —  — 
Total 66.3  63.3  38.8  28.2  25.0  22.2  4.9 
(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.
 
SELECT ITEMS(**)
Three Months Ended June 30, 2021
(in thousands, except per share data) Pretax Tax Net EPS
Net loss (GAAP basis) $ (55,555) $ (0.52)
     (-) Adjustment for tax position $ 5,777  $ 5,777  $ 0.05 
     (-) Fair market adjustment to equity investments $ 2,253  $ 593  $ 1,660  $ 0.02 
     (-) Gain from discontinued ops. - currency fluctuation adjustments
$ 1,150  $ —  $ 1,150  $ 0.01 
     (-) Restructuring charges $ (2,110) $ (512) $ (1,598) $ (0.01)
     (-) Adjustment to future value earnout for acquisitions $ (823) $ (191) $ (632) $ (0.01)
     (-) Impairments for fair market value adjustments to decomm. rigs $ (2,131) $ (1,200) $ (931) $ (0.01)
Adjusted net loss $ (60,981) $ (0.57)

Three Months Ended March 31, 2021
(in thousands, except per share data) Pretax Tax Net EPS
Net loss (GAAP basis) $ (121,003) $ (1.13)
     (-) Fair market adjustment to equity investments $ 2,520  $ 545  $ 1,975  $ 0.02 
     (-) Gain from discontinued ops. - currency fluctuation adjustments $ 2,293  $ —  $ 2,293  $ 0.02 
     (-) Restructuring charges $ (1,608) $ (352) $ (1,256) $ (0.01)
     (-) Loss on the sale of excess drilling equipment and spares $ (23,019) $ (5,061) $ (17,958) $ (0.17)
     (-) Impairments for fair market value adjustments to decomm. rigs $ (54,284) $ (11,888) $ (42,396) $ (0.39)
Adjusted net loss $ (63,661) $ (0.60)


(**)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.