false000004676500000467652022-07-272022-07-27

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 27, 2022

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 July 27, 2022, Helmerich & Payne, Inc. issued a press release announcing its financial results for its third fiscal quarter ended June 30, 2022. 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 (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 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: July 27, 2022





hp_unifiedlogoxcolorxlarge.jpg
Exhibit 99.1
NEWS RELEASE
July 27, 2022
 
HELMERICH & PAYNE, INC. ANNOUNCES THIRD QUARTER RESULTS
The Company reported fiscal third quarter net income of $0.16 per diluted share; including select items(1) of $(0.11) per diluted share

H&P's North America Solutions segment exited the third quarter of fiscal year 2022 with 175 active rigs

Quarterly North America Solutions operating income increased $56 million sequentially, while direct margins(2) increased $53 million to $168 million sequentially, as revenues increased by $77 million to $486 million and expenses increased by $24 million to $318 million

North America Solutions revenue per day increased approximately $1,950/day or 8% to $26,500/day on a sequential basis, while direct margins(2) per day increased approximately $2,850/day or 37% to $10,600/day

Expect North America Solutions direct margins(2) to increase by approximately 15% on sequential basis with only a modest increase in revenue days in the fourth quarter of fiscal year 2022

On May 31, 2022, the Board of Directors of the Company declared a quarterly cash dividend of $0.25 per share, payable on September 1, 2022 to stockholders of record at the close of business on August 17, 2022


Helmerich & Payne, Inc. (NYSE: HP) reported net income of $18 million, or $0.16 per diluted share, from operating revenues of $550 million for the quarter ended June 30, 2022, compared to a net loss of $5 million, or $(0.05) per diluted share, on operating revenues of $468 million for the quarter ended March 31, 2022. The net income per diluted share for the third quarter of fiscal year 2022 and the net loss per diluted share for the second quarter of fiscal year 2022 include $(0.11) and $0.12, respectively, of after-tax losses and gains comprised of select items(1). For the third quarter of fiscal year 2022, select items(1) were comprised of:

$(0.11) of after-tax losses pertaining to non-cash fair market value adjustments to equity investments

Net cash provided by operating activities was $98 million for the third quarter of fiscal year 2022 compared to $23 million in the prior quarter.

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


Page 2
News Release
July 27, 2022

    President and CEO John Lindsay commented, "I am pleased with our performance during the quarter. Our financial results are beginning to reflect the benefits of a number of strategic initiatives, particularly those impacting pricing in our North America Solutions segment. The efforts made earlier this calendar year to achieve more sustainable contract economics continue and will accumulate further as pricing improves across our super-spec FlexRig® fleet. We recognize that we still have further to go before achieving returns that fully reflect the value we deliver to customers and will continue to push on this front. Our scale and technology enhance profitability in the US and these advantages are also providing a pathway to grow internationally, both of which will ultimately lead to improved economic returns for all our stakeholders over time.

"As expected, we ended the quarter at 175 rigs representing only a modest rig count growth during the quarter. Fiscal discipline together with additional contractual churn allowed us to re-contract rigs without incurring additional reactivation costs and redeploy them at significantly higher rates. Our rapidly improving contract economics are primarily driven by H&P's value proposition to customers in a tight market for readily available super-spec rigs. We believe the drilling solutions and outcomes we provide are increasingly being recognized and coveted by customers. Capital discipline by many among the land drillers combined with supply chain and labor constraints are governing the drilling industry's cadence of reactivating idle super-spec rigs at scale. This will likely perpetuate the supply-demand tightness for super-spec rigs leading to further improvements in our contract economics. H&P is preparing to respond to the future demand for super-spec rigs from our idled FlexRig® fleet in fiscal year 2023, and we will do so by applying the same disciplined approach, focusing on financial returns, and seeking to receive commensurate compensation for the value we are providing.
"Our Offshore Gulf of Mexico segment has provided steady contribution to the Company over several decades, particularly during the recent pandemic. We have increased pricing offshore as well and expect the margin contribution to improve going forward at a moderately higher level. On the international front, activity continues to tick higher with the potential for further improvements in our South American operations in the coming quarters. In the Middle East, preparations are underway to export some of our idle super-spec capacity as part of our hub strategy. Current plans have one rig moving in the coming months with others possible shortly thereafter depending on the timing of opportunities in the region compared to other competing international locations. We view this as an important step in establishing our Middle East hub and expanding our presence within the region as part of a longer-term growth strategy."
    Senior Vice President and CFO Mark Smith also commented, "Our financial results reflect the margin expansion we are experiencing which is frankly needed to sustain our capital intensive and technologically demanding business in the long term. We anticipate further improvements in the coming quarters as our contracts in our North America Solutions segment continue to reprice at higher levels.
"Coinciding with the improvements in margins is the amount of cash we expect to generate from our operations. Cash returns to shareholders remain a top priority with our existing dividend and we have a desire to augment these returns in the future. However, our strong capital discipline dictates that we take a measured approach, especially as we head into our fourth fiscal quarter and look ahead into fiscal 2023 considering upcoming maintenance and reactivation capex and potential investments toward further international expansion."
    John Lindsay concluded, “On a daily basis, I get to see the achievements attained by the strong dedication of our employees and the passion they bring to the Company; striving to do better than the day before and enhancing the value we provide to our customers and shareholders. As we move forward, I am confident our shared values and commitments will endure and enable the Company to maintain its leadership position within the oil service industry."



Page 3
News Release
July 27, 2022

Operating Segment Results for the Third Quarter of Fiscal Year 2022
North America Solutions:
This segment had operating income of $57.4 million compared to operating income of $1.3 million during the previous quarter. The increase in operating income was primarily due to improving contract economics and modestly higher activity levels during the quarter.

Direct margins(2) increased by $53.2 million to $167.6 million as both revenues and expenses increased sequentially. Operating results continue to be negatively impacted by the costs associated with reactivating rigs; $6.5 million in the third fiscal quarter compared to $14.2 million in the previous quarter.

International Solutions:
This segment had an operating loss of $6.6 million compared to an operating loss of $0.8 million during the previous quarter. The decrease in operating income is primarily attributable to costs incurred with establishing our Middle East hub, which includes preparing a rig to be exported from the U.S.

Direct margins(2) during the third fiscal quarter were a negative $3.2 million compared to a positive $2.3 million during the previous quarter. Current quarter results included a $1.1 million foreign currency loss compared to a $2.4 million foreign currency loss the previous quarter.

Offshore Gulf of Mexico:
This segment had operating income of $5.9 million compared to operating income of $5.3 million during the previous quarter. Direct margins(2) for the quarter were $8.8 million compared to $8.3 million in the prior quarter.

Operational Outlook for the Fourth Quarter of Fiscal Year 2022
North America Solutions:
We expect North America Solutions direct margins(2) to be between $185-$205 million, which includes approximately $6.0 million in estimated reactivation costs
We expect to exit the quarter at approximately 176 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
International Solutions direct margins(2) are still expected to be negatively impacted by costs associated with establishing a Middle East hub
Offshore Gulf of Mexico:
We expect Offshore Gulf of Mexico direct margins(2) to be between $9-$11 million




Page 4
News Release
July 27, 2022
Other Estimates for Fiscal Year 2022
Gross capital expenditures are still expected to be approximately $250 to $270 million; 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 $45 million in fiscal year 2022
Depreciation and amortization expenses are still expected to be approximately $405 million
Research and development expenses for fiscal year 2022 are still expected to be roughly $27 million
Selling, general and administrative expenses for fiscal year 2022 are still expected to be just over $180 million
Select Items Included in Net Income per Diluted Share
 
Third quarter of fiscal year 2022 net income of $0.16 per diluted share included $(0.11) in after-tax losses comprised of the following:
$(0.11) of non-cash after-tax losses related to fair market value adjustments to equity investments
$(0.00) of after-tax losses related to restructuring charges

Second quarter of fiscal year 2022 net loss of $(0.05) per diluted share included $0.12 in after-tax gains comprised of the following:
$0.13 of non-cash after-tax gains related to fair market value adjustments to equity investments
$(0.00) of after-tax losses related to restructuring charges
$(0.01) of after-tax losses related to the sale of assets

Conference Call
A conference call will be held on Thursday, July 28, 2022, 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 2022 results. Dial-in information for the conference call is (877) 830-2596 for domestic callers or (785) 424-1881 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 strives to operate 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. As of June 30, 2022, H&P's fleet included 236 land rigs in the U.S., 28 international land rigs and seven offshore platform rigs. For more information, see H&P online at www.helmerichpayne.com.





Page 5
News Release
July 27, 2022
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 our future financial position, operations outlook, business strategy, dividends, share repurchases, budgets, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, spot contract economics, future supply-demand tightness, capex spending and outlook for international markets 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 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.

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



Note Regarding Trademarks. Helmerich & Payne, Inc. owns or has rights to the use of trademarks, service marks and trade names that it uses in conjunction with the operation of its business. Some of the trademarks that appear in this release or otherwise used by H&P include FlexRig, which may be registered or trademarked in the U.S. 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 of 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 direct operating expenses 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 fourth quarter of fiscal 2022 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 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 27, 2022
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months EndedSix Months Ended
(in thousands, except per share 
amounts)
June 30,March 31,June 30,June 30,June 30,
20222022202120222021
OPERATING REVENUES
Drilling services$547,906 $465,370 $329,774 $1,420,810 $868,581 
Other2,327 2,227 2,439 6,802 6,180 
550,233 467,597 332,213 1,427,612 874,761 
OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization376,210 339,759 255,471 1,015,621 684,473 
Other operating expenses1,053 1,181 1,481 3,416 4,117 
Depreciation and amortization100,741 102,937 104,493 304,115 317,771 
Research and development6,511 6,387 5,610 19,425 16,527 
Selling, general and administrative44,933 47,051 41,719 135,699 120,371 
Asset impairment charge— — 2,130 4,363 56,414 
Restructuring charges33 63 2,110 838 3,856 
Gain on reimbursement of drilling equipment(9,895)(6,448)(4,268)(21,597)(10,207)
Other (gain) loss on sale of assets(3,075)(716)834 (2,762)12,952 
516,511 490,214 409,580 1,459,118 1,206,274 
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS33,722 (22,617)(77,367)(31,506)(331,513)
Other income (expense)
Interest and dividend income5,313 3,399 1,527 11,301 8,225 
Interest expense(4,372)(4,390)(5,963)(14,876)(17,861)
Gain (loss) on investment securities(14,310)22,132 2,409 55,684 7,853 
Loss on extinguishment of debt— — — (60,083)— 
Other(1,148)(476)(970)(2,166)(3,027)
(14,517)20,665 (2,997)(10,140)(4,810)
Income (loss) from continuing operations before income taxes 19,205 (1,952)(80,364)(41,646)(336,323)
Income tax expense (benefit)1,730 2,672 (23,659)(3,166)(78,398)
Gain (loss) from continuing operations17,475 (4,624)(56,705)(38,480)(257,925)
Income (loss) from discontinued operations before income taxes277 (352)1,150 (106)10,936 
Income tax provision— — — — — 
Income (loss) from discontinued operations277 (352)1,150 (106)10,936 
NET INCOME (LOSS)$17,752 $(4,976)$(55,555)$(38,586)$(246,989)
Basic earnings (loss) per common share:
Income (loss) from continuing operations$0.16 $(0.05)$(0.53)$(0.37)$(2.40)
Income from discontinued operations$— $— $0.01 $— $0.10 
Net income (loss)$0.16 $(0.05)$(0.52)$(0.37)$(2.30)
Diluted earnings (loss) per common share:
Income (loss) from continuing operations$0.16 $(0.05)$(0.53)$(0.37)$(2.40)
Income from discontinued operations$— $— $0.01 $— $0.10 
Net income (loss)$0.16 $(0.05)$(0.52)$(0.37)$(2.30)
Weighted average shares outstanding (in thousands):
Basic105,289 105,393 107,896 106,092 107,790 
Diluted106,021 105,393 107,896 106,092 107,790 



Page 7
News Release
July 27, 2022
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,September 30,
(in thousands except share data and share amounts)20222021
ASSETS
Current Assets:
Cash and cash equivalents$188,663 $917,534 
Short-term investments144,331 198,700 
Accounts receivable, net of allowance of $3,032 and $2,068, respectively
397,880 228,894 
Inventories of materials and supplies, net86,091 84,057 
Prepaid expenses and other, net103,589 85,928 
Assets held-for-sale25,604 71,453 
Total current assets946,158 1,586,566 
Investments213,956 135,444 
Property, plant and equipment, net2,987,107 3,127,287 
Other Noncurrent Assets:
Goodwill45,653 45,653 
Intangible assets, net68,950 73,838 
Operating lease right-of-use assets40,539 49,187 
Other assets, net20,247 16,153 
Total other noncurrent assets175,389 184,831 
Total assets$4,322,610 $5,034,128 
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable$119,972 $71,996 
Dividends payable26,693 27,332 
Current portion of long-term debt, net— 483,486 
Accrued liabilities254,611 283,492 
Total current liabilities401,276 866,306 
Noncurrent Liabilities:
Long-term debt, net542,290 541,997 
Deferred income taxes527,545 563,437 
Other116,770 147,757 
Noncurrent liabilities - discontinued operations2,061 2,013 
Total noncurrent liabilities1,188,666 1,255,204 
Shareholders' Equity:
Common stock, $.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of both June 30, 2022 and September 30, 2021, and 105,290,017 and 107,898,859 shares outstanding as of June 30, 2022 and September 30, 2021, respectively
11,222 11,222 
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued— — 
Additional paid-in capital521,439 529,903 
Retained earnings2,454,726 2,573,375 
Accumulated other comprehensive loss(19,067)(20,244)
Treasury stock, at cost, 6,932,848 shares and 4,324,006 shares as of June 30, 2022 and September 30, 2021, respectively
(235,652)(181,638)
Total shareholders’ equity2,732,668 2,912,618 
Total liabilities and shareholders' equity$4,322,610 $5,034,128 



Page 8
News Release
July 27, 2022
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30,
(in thousands)20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(38,586)$(246,989)
Adjustment for (income) loss from discontinued operations106 (10,936)
Loss from continuing operations(38,480)(257,925)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization304,115 317,771 
Asset impairment charge4,363 56,414 
Amortization of debt discount and debt issuance costs880 994 
Loss on extinguishment of debt60,083 — 
Provision for credit loss1,022 
Stock-based compensation21,214 21,240 
Gain on investment securities(55,684)(7,853)
Gain on reimbursement of drilling equipment(21,597)(10,207)
Other (gain) loss on sale of assets(2,762)12,952 
Deferred income tax benefit(36,614)(66,102)
Other(2,765)8,849 
Changes in assets and liabilities(117,074)13,721 
Net cash provided by operating activities from continuing operations116,701 89,862 
Net cash used in operating activities from discontinued operations(60)(41)
Net cash provided by operating activities116,641 89,821 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(174,958)(49,173)
Other capital expenditures related to assets held-for-sale(18,228)— 
Purchase of short-term investments(109,318)(234,465)
Purchase of long-term investments(47,210)(2,319)
Proceeds from sale of short-term investments161,766 139,430 
Proceeds from sale of long-term investments22,042 — 
Proceeds from asset sales50,260 26,775 
Other (7,500)— 
Net cash used in investing activities(123,146)(119,752)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid(80,702)(81,815)
Payments for employee taxes on net settlement of equity awards(5,515)(2,160)
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(76,999)— 
Other(587)(719)
Net cash used in financing activities(707,622)(84,944)
Net decrease in cash and cash equivalents and restricted cash(714,127)(114,875)
Cash and cash equivalents and restricted cash, beginning of period936,716 536,747 
Cash and cash equivalents and restricted cash, end of period$222,589 $421,872 
 



Page 9
News Release
July 27, 2022
HELMERICH & PAYNE, INC.
SEGMENT REPORTING
Three Months EndedNine Months Ended
June 30,March 31,June 30,June 30,
(in thousands, except operating statistics)
20222022202120222021
NORTH AMERICA SOLUTIONS
Operating revenues$486,004 $408,814 $281,132 $1,235,852 $733,061 
Direct operating expenses318,400 294,397 206,172 869,365 549,322 
Depreciation and amortization93,612 95,817 96,997 283,050 297,238 
Research and development6,545 6,420 5,605 19,533 16,400 
Selling, general and administrative expense10,069 10,883 12,583 31,781 37,223 
Asset impairment charge— — 2,130 1,868 56,414 
Restructuring charges25 — 1,388 498 2,969 
Segment operating income (loss)$57,353 $1,297 $(43,743)$29,757 $(226,505)
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
167,604 114,417 74,960 366,487 183,739 
Revenue days3
15,796 14,752 10,854 43,494 27,770 
Average active rigs4
174 164 119 159 102 
Number of active rigs at the end of period5
175 171 121 175 121 
Number of available rigs at the end of period236 236 242 236 242 
Reimbursements of "out-of-pocket" expenses$67,218 $46,664 $33,282 $157,010 $79,361 
INTERNATIONAL SOLUTIONS
Operating revenues29,118 27,422 15,278 93,699 40,609 
Direct operating expenses32,364 25,171 16,690 81,666 50,931 
Depreciation1,175 1,049 573 2,979 1,361 
Selling, general and administrative expense2,129 2,050 1,346 5,908 3,463 
Asset impairment charge— — — 2,495 — 
Restructuring charges— — 207 — 207 
Segment operating income (loss)$(6,550)$(848)$(3,538)$651 $(15,353)
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
(3,246)2,251 (1,412)12,033 (10,322)
Revenue days3
718 636 488 2,010 1,229 
Average active rigs4
Number of active rigs at the end of period5
Number of available rigs at the end of period28 28 32 28 32 
Reimbursements of "out-of-pocket" expenses$699 $1,226 $1,152 $3,368 $5,324 
OFFSHORE GULF OF MEXICO
Operating revenues$32,701 $29,147 $33,364 91,162 94,911 
Direct operating expenses23,922 20,884 24,127 65,517 73,452 
Depreciation2,328 2,401 2,938 7,109 8,137 
Selling, general and administrative expense579 584 592 1,920 1,895 
Segment operating income$5,872 $5,278 $5,707 $16,616 $11,427 
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
8,779 8,263 9,237 25,645 21,459 
Revenue days3
364 360 364 1,092 1,184 
Average active rigs4
Number of active rigs at the end of period5
Number of available rigs at the end of period
Reimbursements of "out-of-pocket" expenses$7,219 $5,809 $8,342 $19,103 $21,403 

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 (e.g. 91 days for the three months ended June 30, 2022 and 2021, 90 days for the three months ended March 31, 2022 and 273 days for the nine months ended June 30, 2022 and 2021).
5)Defined as the number of rigs generating revenue at the applicable end date of the time period.



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Segment reconciliation amounts were as follows:
Three Months Ended June 30, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of MexicoOtherEliminationsTotal
Operating revenue$486,004 $29,118 $32,701 $2,410 $— $550,233 
Intersegment— — — 14,725 (14,725)— 
Total operating revenue$486,004 $29,118 $32,701 $17,135 $(14,725)$550,233 
Direct operating expenses$308,238 $32,208 $22,123 $14,694 $— $377,263 
Intersegment10,162 156 1,799 (4)(12,113)— 
Total drilling services & other operating expenses$318,400 $32,364 $23,922 $14,690 $(12,113)$377,263 

Nine Months Ended June 30, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of MexicoOtherEliminationsTotal
Operating revenue$1,235,852 $93,699 $91,162 $6,899 $— $1,427,612 
Intersegment— — — 41,577 (41,577)— 
Total operating revenue$1,235,852 $93,699 $91,162 $48,476 $(41,577)$1,427,612 
Direct operating expenses$840,501 $81,252 $60,059 $37,225 $— $1,019,037 
Intersegment28,864 414 5,458 63 (34,799)— 
Total drilling services & other operating expenses$869,365 $81,666 $65,517 $37,288 $(34,799)$1,019,037 

    
The following table reconciles segment 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 EndedNine Months Ended
June 30,March 31,June 30,June 30,
(in thousands)20222022202120222021
Operating income (loss)
North America Solutions$57,353 $1,297 $(43,743)$29,757 $(226,505)
International Solutions(6,550)(848)(3,538)651 (15,353)
Offshore Gulf of Mexico5,872 5,278 5,707 16,616 11,427 
Other1,965 3,167 (4,670)9,061 (1,631)
Eliminations(2,140)(2,031)(3,298)(5,453)(8,857)
Segment operating income (loss)$56,500 $6,863 $(49,542)$50,632 $(240,919)
Gain on reimbursement of drilling equipment9,895 6,448 4,268 21,597 10,207 
Other gain (loss) on sale of assets3,075 716 (834)2,762 (12,952)
Corporate selling, general and administrative costs, corporate depreciation, and corporate restructuring charges(35,748)(36,644)(31,259)(106,497)(87,849)
Operating income (loss) from continuing operations$33,722 $(22,617)$(77,367)$(31,506)$(331,513)
Other income (expense):
Interest and dividend income5,313 3,399 1,527 11,301 8,225 
Interest expense(4,372)(4,390)(5,963)(14,876)(17,861)
Gain (loss) on investment securities(14,310)22,132 2,409 55,684 7,853 
Loss on extinguishment of debt— — — (60,083)— 
Other(1,148)(476)(970)(2,166)(3,027)
Total unallocated amounts(14,517)20,665 (2,997)(10,140)(4,810)
Income (loss) from continuing operations before income taxes$19,205 $(1,952)$(80,364)$(41,646)$(336,323)



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July 27, 2022

SUPPLEMENTARY STATISTICAL INFORMATION 
Unaudited

 
U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS
July 27,June 30,March 31,Q3FY22
202220222022Average
U.S. Land Operations
Term Contract Rigs116 115 103 113 
Spot Contract Rigs60 60 68 61 
Total Contracted Rigs176 175 171 174 
Idle or Other Rigs60 61 65 62 
Total Marketable Fleet236 236 236 236 

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS
Number of Rigs Already Under Long-Term Contracts(*)
(Estimated Quarterly Average — as of 6/30/22)
Q4Q1Q2Q3Q4Q1Q2
SegmentFY22FY23FY23FY23FY23FY24FY24
U.S. Land Operations116.577.234.924.917.413.410.9
International Land Operations8.48.88.06.85.55.04.0
Offshore Operations— — — — — — — 
Total124.986.042.931.722.918.414.9
(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.
 
Non-GAAP Measurements

NON-GAAP RECONCILIATION OF SELECT ITEMS AND ADJUSTED NET LOSS(**)
Three Months Ended June 30, 2022
(in thousands, except per share data)PretaxTaxNetEPS
Net loss (GAAP basis)$17,752 $0.16 
(-) Fair market adjustments to equity investments$(14,268)$(3,028)(11,240)(0.11)
(-) Restructuring charges(33)(68)35 — 
Adjusted net loss (Non-GAAP)$28,957 $0.27 

Three Months Ended March 31, 2022
(in thousands, except per share data)PretaxTaxNetEPS
Net loss (GAAP basis)$(4,976)$(0.05)
(-) Fair market adjustments to equity investments$22,308 $8,483 13,825 0.13 
(-) Restructuring charges(63)(10)(53)— 
(-) Loss related to the sale of equipment(1,353)(205)(1,148)(0.01)
Adjusted net loss (Non-GAAP)$(17,600)$(0.17)

(**)Select items and adjusted net loss are considered non-GAAP metrics. 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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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 June 30, 2022
(in thousands)North America SolutionsOffshore Gulf of MexicoInternational Solutions
Segment operating income (loss)$57,353 $5,872 $(6,550)
Add back:
Depreciation and amortization93,612 2,328 1,175 
Research and development6,545 — — 
Selling, general and administrative expense10,069 579 2,129 
Restructuring charges25 — — 
Direct margin (Non-GAAP)$167,604 $8,779 $(3,246)
Three Months Ended March 31, 2022
(in thousands)North America SolutionsOffshore Gulf of MexicoInternational Solutions
Segment operating income (loss)$1,297 $5,278 $(848)
Add back:
Depreciation and amortization95,817 2,401 1,049 
Research and development6,420 — — 
Selling, general and administrative expense10,883 584 2,050 
Direct margin (Non-GAAP)$114,417 $8,263 $2,251 
Three Months Ended June 30, 2021
(in thousands)North America SolutionsOffshore Gulf of MexicoInternational Solutions
Segment operating income (loss)$(43,743)$5,707 $(3,538)
Add back:
Depreciation and amortization96,997 2,938 573 
Research and development5,605 — — 
Selling, general and administrative expense12,583 592 1,346 
Asset impairment charge2,130 — — 
Restructuring charges1,388 — 207 
Direct margin (Non-GAAP)$74,960 $9,237 $(1,412)



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Nine Months Ended June 30, 2022
(in thousands)North America SolutionsOffshore Gulf of MexicoInternational Solutions
Segment operating income$29,757 $16,616 $651 
Add back:
Depreciation and amortization283,050 7,109 2,979 
Research and development19,533 — — 
Selling, general and administrative expense31,781 1,920 5,908 
Asset impairment charge1,868 — 2,495 
Restructuring charges498 — — 
Direct margin (Non-GAAP)$366,487 $25,645 $12,033 
Nine Months Ended June 30, 2021
(in thousands)North America SolutionsOffshore Gulf of MexicoInternational Solutions
Segment operating income (loss)$(226,505)$11,427 $(15,353)
Add back:
Depreciation and amortization297,238 8,137 1,361 
Research and development16,400 — — 
Selling, general and administrative expense37,223 1,895 3,463 
Asset impairment charge56,414 — — 
Restructuring charges2,969 — 207 
Direct margin (Non-GAAP)$183,739 $21,459 $(10,322)