false000004676500000467652022-11-162022-11-16

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): November 16, 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 November 16, 2022, Helmerich & Payne, Inc. issued a press release announcing its financial results for its fourth fiscal quarter and fiscal year ended September 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, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS

(d)    Exhibits

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

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

Date: November 16, 2022




        hpunifiedlogocolorlarge202.jpg


Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE: November 16, 2022

 
HELMERICH & PAYNE, INC. ANNOUNCES FISCAL FOURTH QUARTER & FISCAL YEAR RESULTS


H&P announced its fiscal 2023 Supplemental Shareholder Return Plan(1), which is currently projected to provide nearly $210 million combined in established base and supplemental dividends in fiscal year 2023

The Company reported fiscal fourth quarter and fiscal year net income of $0.42 and $0.05 per diluted share respectively, including select items(2) of $(0.03) and $(0.05) per diluted share respectively

Quarterly North America Solutions operating income increased $35 million sequentially, while direct margins(3) increased $36 million to approximately $203 million, as revenues increased by $66 million to $552 million and expenses increased by $30 million to $349 million

The North America Solutions segment exited the fourth quarter of fiscal year 2022 with 176 active rigs reflecting an increase in revenue per day of approximately $3,000/day or 11% to $29,500/day on a sequential basis, while direct margins(3) per day increased by roughly $2,000/day or almost 20% to $12,600/day

H&P's North America Solutions segment anticipates exiting the first quarter of fiscal year 2023 between 181-186 active rigs with expected direct margins(3) per day increasing by another 20% on a sequential basis and expects to reach a maximum active rig count for fiscal year 2023 of 192 rigs by March 31, 2023

H&P set its fiscal year 2023 capex budget to range between $425 and $475 million

On September 7, 2022, the Board of Directors of the Company declared a quarterly base cash dividend of $0.25 per share, and on October 17, 2022 declared a supplemental cash dividend of $0.235 per share; both dividends are payable on December 1, 2022 to stockholders of record at the close of business on November 15, 2022


Helmerich & Payne, Inc. (NYSE: HP) reported net income of $46 million, or $0.42 per diluted share, from operating revenues of $631 million for the quarter ended September 30, 2022, compared to net income of $18 million, or $0.16 per diluted share, from operating revenues of $550 million for the quarter ended June 30, 2022. The net income per diluted share for the fourth and third quarters of fiscal year 2022 include $(0.03) and $(0.11) of after-tax losses, respectively, comprised of select items(2). For the fourth quarter of fiscal year 2022, select items(2) were comprised of:

$0.03 of after-tax gains pertaining to the sale of equipment and non-cash fair market adjustments to equity investments
$(0.06) of after-tax losses pertaining to a lump sum settlement for a distribution from the pension plan

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

Page 2
News Release
November 16, 2022

Net cash provided by operating activities was $117 million for the fourth quarter of fiscal year 2022 compared to $98 million for the third quarter of fiscal year 2022.

For fiscal year 2022, the Company reported net income of $7 million, or $0.05 per diluted share, from operating revenues of $2.1 billion. The net income per diluted share includes $(0.05) of after-tax losses comprised of select items(2). Net cash provided by operating activities was $234 million in fiscal year 2022 compared to $136 million in fiscal year 2021.

President and CEO John Lindsay commented, "Supportive market conditions and our adherence to our business and capital allocation strategy have led to sequentially improving quarterly results in fiscal 2022. We are beginning to recognize economic returns at levels that we have not experienced since 2014. As such, we believe there is significant momentum heading into fiscal 2023, and we plan to continue a posture of fiscal discipline, move forward with our supplemental shareholder return plan, and further implement our strategic initiative to expand internationally. These actions align with the Company's history of financial stewardship by increasing the Company's financial returns through long-term investment in the business and increasing cash returns to shareholders through the augmentation of our long-standing dividend commitment.
"Customer demand during the fourth fiscal quarter was satisfied by contractual churn and by reactivating one rig out of stack early in the quarter as expected. Our financial results improved substantially quarter over quarter as pricing increases and better contract economics took hold across more of our FlexRig® fleet. We anticipate a modest 16 rig uplift in our NAS rig count in fiscal 2023 of which roughly two-thirds are already committed and to attain a maximum of 192 active rigs for fiscal 2023 sometime during the second fiscal quarter of 2023. As in prior years, we expect our 2023 rig adds to be weighted toward the front half of the fiscal year, and do anticipate experiencing additional contractual churn throughout the year. We expect our financial results for the first fiscal quarter of 2023 to follow the improving trend of the past two fiscal quarters, where strong demand from customers coupled with rollovers of term contracts, should continue to drive higher average levels of pricing across the active fleet.
"For our International Solutions segment, the Company plans to deploy capital in preparation for more substantive growth in the future. We are seeing opportunities to bid in areas of existing operations as well as in countries that would be new to H&P. Most of these tenders are taking place where unconventional drilling is in its nascent stages, such as in the Middle East, and where we believe our proven drilling solutions can provide a lot of value to customers. We believe our international business is an important avenue of growth for the future and serves as a potential outlet for some of our currently idle super-spec rigs in the U.S. This initiative also adds more diversification to the Company's revenue streams over the long-term and this current allocation of investment capital plays an important part in executing on this strategy."
Senior Vice President and CFO Mark Smith also commented, "Maintaining economic discipline in our capital-intensive business remains paramount, and has resulted in increased capital efficiency and a positive impact on our financial returns. The Company will continue to allocate capital with this mindset. Our North America Solutions direct margins continue to improve, led by our fiscal discipline and robust pricing despite the current inflationary and supply chain challenges, which have been more apparent as of late with a labor-related cost increase just at the end of the fiscal fourth quarter and in our recently announced fiscal 2023 capex budget reflecting higher levels of maintenance expenditures.
"Looking out to fiscal 2023, we expect to see increased profitability for the Company propelling us forward to execute on other strategic capital allocation priorities, such as the recently announced 2023 supplemental shareholder return plan and diversification through further investment in our international operations. We believe both provide incremental returns; one that is more near-term and one that will develop over time. Even beyond these planned capital commitments, the Company should have flexibility to be positioned to take advantage of additional investment opportunities and/or further augment shareholder returns through additional supplemental dividends and/or share repurchases. Essentially in fiscal 2023, we plan to allocate roughly two-thirds of our cash flow generation after capex commitments to shareholders in the form of base and supplemental dividends, which would currently represent an approximate dividend yield of 4%, very competitive for our industry. The remaining one-third we believe, should give us an adequate amount of flexibility. This is further testament to the Company's strong cash flow generation and financial position."



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News Release
November 16, 2022

John Lindsay concluded, “We enter fiscal 2023 with momentum and increased confidence that our initiatives in our North America Solutions segment have gained traction and are delivering positive financial results. We are also excited by the prospects and opportunities before us, particularly in our International Solutions segment. The successes the Company has achieved and plans to achieve would not be possible without our devoted and hard-working employee base, which I am proud to say continues to set the standard for our industry."

Operating Segment Results for the Fourth Quarter of Fiscal Year 2022
North America Solutions:
This segment had operating income of $92.1 million compared to operating income of $57.4 million during the previous quarter. The increase in operating income was primarily due to improving contract economics as market pricing continued to increase coupled with term contracts rolling onto market rates.

Direct margins(3) increased by $35.9 million to $203.5 million as both revenues and expenses increased sequentially. Quarterly operating results were impacted by the costs associated with reactivating rigs; $7.5 million in the fourth fiscal quarter compared to $6.5 million in the previous quarter.

International Solutions:
This segment had an operating loss of $0.8 million compared to an operating loss of $6.6 million during the previous quarter. The decrease in operating loss is primarily attributable to increased activity in Latin America, particularly with operations in Argentina.

Direct margins(3) during the fourth fiscal quarter were $3.3 million compared to a negative $3.2 million during the previous quarter. Current quarter results included a $1.2 million foreign currency loss compared to a $1.1 million foreign currency loss in the previous quarter.

Offshore Gulf of Mexico:
This segment had operating income of $6.6 million compared to operating income of $5.9 million during the previous quarter. Direct margins(3) for the quarter were $9.4 million compared to $8.8 million in the prior quarter.
 
Operational Outlook for the First Quarter of Fiscal Year 2023
 
North America Solutions:
We expect North America Solutions direct margins(3) to be between $250-$270 million, which includes approximately $8.5 million in estimated reactivation costs
We expect to exit the quarter between approximately 181-186 contracted rigs

International Solutions:
We expect International Solutions direct margins(3) to be between $7-$10 million, exclusive of any foreign exchange gains or losses
International Solutions direct margins(2) are expected to be reduced by operating costs related to establishing our Middle East hub

Offshore Gulf of Mexico:
We expect Offshore Gulf of Mexico direct margins(3) to be between $8-$10 million


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News Release
November 16, 2022

Other Estimates for Fiscal Year 2023
Gross capital expenditures are expected to be approximately $425 to $475 million;
approximately two-thirds expected for North America Solutions, including maintenance per active rig of $1.1 to $1.3 million and reactivating up to 16 super-spec rigs of which six are planned walking conversions
approximately one-quarter for International Solutions, including five super-spec upgrades and six reactivations that will be also converted to walking capabilities for export from the U.S. fleet
remainder for corporate and information technology expenditures
ongoing asset sales include reimbursements for lost and damaged tubulars and sales of other used drilling equipment that offset a portion of the gross capital expenditures and are expected to total approximately $50 million in fiscal year 2023
Depreciation for fiscal year 2023 is expected to be approximately $400 million
Research and development expenses for fiscal year 2023 are expected to be roughly $28 million
General and administrative expenses for fiscal year 2023 are expected to be approximately $195 million
Cash taxes for fiscal year 2023 are expected to be approximately $190-$240 million
inclusive of approximately $45 million relating to fiscal year 2022 amounts to be paid in fiscal 2023
exclusive of roughly $28 million in income tax receivables of which $25 million was already received during the fiscal first quarter of 2023

Select Items(2) Included in Net Income per Diluted Share
 
Fourth quarter of fiscal year 2022 net income of $0.42 per diluted share included $(0.03) 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
$0.01 of after-tax gains related to the sale of equipment
$(0.06) of after-tax losses related to a lump sum settlement for a distribution from the pension plan

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 gains related to fair market value adjustments to equity investments
$(0.00) of after-tax losses related to restructuring charges

Fiscal year 2022 net income of $0.05 per diluted share included $(0.05) in after-tax losses comprised of the following:

$0.42 of non-cash after-tax gains related to fair market value adjustments to equity investments
$0.13 of after-tax gains related to a settlement of a previous contractual dispute with an international customer
$(0.01) of after-tax losses related to restructuring charges
$(0.03) of after-tax losses related to the sale of equipment
$(0.03) of non-cash after-tax losses for impairments related to fair market value adjustments to decommissioned rigs and equipment that are held for sale
$(0.06) of after-tax losses related to a lump sum settlement for a distribution from the pension plan
$(0.47) of after-tax losses related to a debt make-whole premium and write-off of debt discount and issuance costs




Page 5
News Release
November 16, 2022


Conference Call
 
A conference call will be held on Thursday, November 17, 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 fourth quarter fiscal year 2022 results. Dial-in information for the conference call is (877) 830-2596 for domestic callers or (785) 424-1877 for international callers. The call access code is ‘Helmerich’. You may also listen to the conference call that will be broadcast live over the Internet by logging on to the Company’s website at http://www.helmerichpayne.com and accessing the corresponding link through the investor relations section by clicking on “Investors” and then clicking on “News and Events - Events & Presentations” to find the event and the link to the webcast.


About Helmerich & Payne, Inc.
 
Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world.  H&P also develops and implements advanced automation, directional drilling and survey management technologies. At September 30, 2022, H&P's fleet included 236 land rigs in the United States, 28 international land rigs and seven offshore platform rigs. For more information, see H&P online at www.helmerichpayne.com.

Forward-Looking Statements

This release includes “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of historical facts included in this release, including, without limitation, statements regarding the registrant’s business strategy, future financial position, operations outlook, future cash flow, future use of generated cash flow, dividend amounts and timing, supplemental shareholder return plans, share repurchases, investments, active rig count projections, budgets, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, capex spending, outlook for international markets, and actions by customers are forward-looking statements. For information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s SEC filings, including but not limited to its annual report on Form 10‑K and quarterly reports on Form 10‑Q. As a result of these factors, Helmerich & Payne, Inc.’s actual results may differ materially from those indicated or implied by such forward-looking statements. Investors are cautioned not to put undue reliance on such statements. We undertake no duty to publicly update or revise any forward-looking statements, whether as a result of new information changes in internal estimates, expectations or otherwise, except as required under applicable securities laws.

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.



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November 16, 2022


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) The Company's planned base and supplemental dividends represent our current intention of returning capital to shareholders during fiscal year 2023 based upon our outlook of market and industry conditions at present, including our current expectations surrounding rig pricing, activity levels, margins, cash generation, capital expenditures and other investment opportunities. In determining whether to proceed with the fiscal year 2023 base dividends and the supplemental dividends, management and the Board of Directors will continue to review the Company's financial position and performance together with relative market conditions at that time in order for the Board of Directors to determine the amount, timing and approval of any dividend payments.
(2) 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.
(3) 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 first quarter of fiscal 2023 is provided on a non-GAAP basis only because certain information necessary to calculate the cost comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future items and adjustments, which could be significant, we are unable to provide a reconciliation of expected direct margin to the most comparable GAAP measure without unreasonable effort.


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


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News Release
November 16, 2022


HELMERICH & PAYNE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months EndedYear Ended
(in thousands, except per share 
amounts)
September 30,June 30,September 30,September 30,
20222022202120222021
OPERATING REVENUES
Drilling services$629,031 $547,906 $342,219 $2,049,841 $1,210,800 
Other2,301 2,327 1,588 9,103 7,768 
631,332 550,233 343,807 2,058,944 1,218,568 
OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization410,968 376,210 268,127 1,426,589 952,600 
Other operating expenses1,222 1,053 1,021 4,638 5,138 
Depreciation and amortization99,055 100,741 101,955 403,170 419,726 
Research and development7,138 6,511 5,197 26,563 21,724 
Selling, general and administrative46,667 44,933 51,824 182,366 172,195 
Asset impairment charges— — 14,436 4,363 70,850 
Restructuring charges— 33 2,070 838 5,926 
Gain on reimbursement of drilling equipment(7,846)(9,895)(2,115)(29,443)(12,322)
Other (gain) loss on sale of assets(2,670)(3,075)(1,672)(5,432)11,280 
554,534 516,511 440,843 2,013,652 1,647,117 
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS76,798 33,722 (97,036)45,292 (428,549)
Other income (expense)
Interest and dividend income6,789 5,313 2,029 18,090 10,254 
Interest expense(4,327)(4,372)(6,094)(19,203)(23,955)
Gain (loss) on investment securities2,253 (14,310)(1,126)57,937 6,727 
Loss on extinguishment of debt— — — (60,083)— 
Other(8,949)(1,148)(2,630)(11,115)(5,657)
(4,234)(14,517)(7,821)(14,374)(12,631)
Income (loss) from continuing operations before income taxes 72,564 19,205 (104,857)30,918 (441,180)
Income tax expense (benefit)27,532 1,730 (25,323)24,366 (103,721)
Income (loss) from continuing operations45,032 17,475 (79,534)6,552 (337,459)
Income from discontinued operations before income taxes507 277 373 401 11,309 
Income tax provision— — — — — 
Income from discontinued operations507 277 373 401 11,309 
NET INCOME (LOSS)$45,539 $17,752 $(79,161)$6,953 $(326,150)
Basic earnings (loss) per common share:
Income (loss) from continuing operations$0.42 $0.16 $(0.74)$0.05 $(3.14)
Income from discontinued operations— — — — 0.10 
Net income (loss)$0.42 $0.16 $(0.74)$0.05 $(3.04)
Diluted earnings (loss) per common share:
Income (loss) from continuing operations$0.42 $0.16 $(0.74)$0.05 $(3.14)
Income from discontinued operations— — — — 0.10 
Net income (loss)$0.42 $0.16 $(0.74)$0.05 $(3.04)
Weighted average shares outstanding:
Basic105,292 105,289 107,899 105,891 107,818 
Diluted106,078 106,021 107,899 106,555 107,818 





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News Release
November 16, 2022


HELMERICH & PAYNE, INC.
CONSOLIDATED BALANCE SHEETS
September 30,September 30,
(in thousands except share data and share amounts)20222021
ASSETS
Current Assets:
Cash and cash equivalents$232,131 $917,534 
Restricted cash36,246 18,350 
Short-term investments117,101 198,700 
Accounts receivable, net of allowance of $2,975 and $2,068, respectively
458,713 228,894 
Inventories of materials and supplies, net87,957 84,057 
Prepaid expenses and other, net66,463 67,578 
Assets held-for-sale4,333 71,453 
Total current assets1,002,944 1,586,566 
Investments218,981 135,444 
Property, plant and equipment, net2,960,809 3,127,287 
Other Noncurrent Assets:
Goodwill45,653 45,653 
Intangible assets, net67,154 73,838 
Operating lease right-of-use asset39,064 49,187 
Other assets, net20,926 16,153 
Total other noncurrent assets172,797 184,831 
Total assets$4,355,531 $5,034,128 
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$126,966 $71,996 
Dividends payable26,693 27,332 
Current portion of long-term debt, net— 483,486 
Accrued liabilities 241,151 283,492 
Total current liabilities394,810 866,306 
Noncurrent Liabilities:
Long-term debt, net542,610 541,997 
Deferred income taxes537,712 563,437 
Other113,387 147,757 
Noncurrent liabilities - discontinued operations1,540 2,013 
Total noncurrent liabilities1,195,249 1,255,204 
Shareholders' Equity:
Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of September 30, 2022 and 2021, and 105,293,662 and 107,898,859 shares outstanding as of September 30, 2022 and 2021, respectively
11,222 11,222 
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued
— — 
Additional paid-in capital528,278 529,903 
Retained earnings2,473,572 2,573,375 
Accumulated other comprehensive loss(12,072)(20,244)
Treasury stock, at cost, 6,929,203 shares and 4,324,006 shares as of September 30, 2022 and 2021, respectively
(235,528)(181,638)
Total shareholders’ equity2,765,472 2,912,618 
Total liabilities and shareholders' equity$4,355,531 $5,034,128 


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News Release
November 16, 2022

HELMERICH & PAYNE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended September 30,
(in thousands)202220212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$6,953 $(326,150)$(494,497)
Adjustment for income from discontinued operations(401)(11,309)(1,895)
Income (loss) from continuing operations6,552 (337,459)(496,392)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization403,170 419,726 481,885 
Asset impairment charges4,363 70,850 563,234 
Amortization of debt discount and debt issuance costs1,200 1,423 1,817 
Loss on extinguishment of debt60,083 — — 
Provision for credit loss1,081 203 2,203 
Stock-based compensation28,032 27,858 36,329 
Loss (gain) on investment securities(57,937)(6,727)8,720 
Gain on reimbursement of drilling equipment(29,443)(12,322)(26,959)
Other (gain) loss on sale of assets(5,432)11,280 (19,816)
Gain on sale of subsidiary— — (14,963)
Deferred income tax benefit(28,488)(89,752)(157,555)
Other6,533 13,794 (2,423)
Changes in assets and liabilities(155,728)37,614 162,848 
Net cash provided by operating activities from continuing operations233,986 136,488 538,928 
Net cash used in operating activities from discontinued operations(73)(48)(47)
Net cash provided by operating activities233,913 136,440 538,881 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(250,894)(82,148)(140,795)
Other capital expenditures related to assets held-for-sale(21,645)— — 
Purchase of short-term investments(165,109)(315,078)(134,641)
Purchase of long-term investments(51,241)(102,523)(550)
Proceeds from sale of short-term investments244,728 207,716 94,646 
Proceeds from sale of long-term investments22,042 — — 
Proceeds from sale of subsidiary— — 15,056 
Proceeds from asset sales62,304 43,515 78,399 
Advance payment for sale of property, plant and equipment — 86,524 — 
Other (7,500)— — 
Net cash used in investing activities(167,315)(161,994)(87,885)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid(107,395)(109,130)(260,335)
Proceeds from debt issuance— 548,719 — 
Debt issuance costs— (3,935)— 
Proceeds from stock option exercises— — 4,100 
Payments for employee taxes on net settlement of equity awards(5,505)(2,162)(3,784)
Payment of contingent consideration from acquisition of business(250)(7,250)(8,250)
Payments for early extinguishment of long-term debt(487,148)— — 
Make-whole premium payment(56,421)— — 
Share repurchases(76,999)— (28,505)
Other(587)(719)(446)
Net cash provided by (used in) financing activities(734,305)425,523 (297,220)
Net increase (decrease) in cash and cash equivalents and restricted cash(667,707)399,969 153,776 
Cash and cash equivalents and restricted cash, beginning of period936,716 536,747 382,971 
Cash and cash equivalents and restricted cash, end of period$269,009 $936,716 $536,747 
         


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November 16, 2022

HELMERICH & PAYNE, INC.
SEGMENT REPORTING
Three Months EndedYear Ended
September 30,June 30,September 30,September 30,
(in thousands, except operating statistics)20222022202120222021
NORTH AMERICA SOLUTIONS
Operating revenues$552,315 $486,004 $293,303 $1,788,167 $1,026,364 
Direct operating expenses348,769 318,400 224,185 1,218,134 773,507 
Depreciation and amortization92,200 93,612 95,177 375,250 392,415 
Research and development7,195 6,545 5,411 26,728 21,811 
Selling, general and administrative expense12,015 10,069 13,866 43,796 51,089 
Asset impairment charges— — 14,436 1,868 70,850 
Restructuring charges— 25 899 498 3,868 
Segment operating income (loss)$92,136 $57,353 $(60,671)$121,893 $(287,176)
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$203,546 $167,604 $69,118 $570,033 $252,857 
Revenue days3
16,17815,79611,42959,67239,199
Average active rigs4
176174124163107
Number of active rigs at the end of period5
176175127176127
Number of available rigs at the end of period236236236236236
Reimbursements of "out-of-pocket" expenses$75,082 $67,218 $34,536 $232,092 $113,897 
INTERNATIONAL SOLUTIONS
Operating revenues$42,373 $29,118 $17,308 $136,072 $57,917 
Direct operating expenses39,114 32,364 17,741 120,780 68,672 
Depreciation1,177 1,175 652 4,156 2,013 
Selling, general and administrative expense2,871 2,129 4,565 8,779 8,028 
Asset impairment charge— — — 2,495 — 
Restructuring charges— — — — 207 
Segment operating loss$(789)$(6,550)$(5,650)$(138)$(21,003)
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$3,259 $(3,246)$(433)$15,292 $(10,755)
Revenue days3
1,0357185863,0361,815
Average active rigs4
118685
Number of active rigs at the end of period5
1296126
Number of available rigs at the end of period2828302830
Reimbursements of "out-of-pocket" expenses$1,542 $699 $1,369 $4,910 $6,693 
OFFSHORE GULF OF MEXICO
Operating revenues$34,303 $32,701 $31,488 $125,465 $126,399 
Direct operating expenses24,898 23,922 23,797 90,415 97,249 
Depreciation2,066 2,328 2,420 9,175 10,557 
Selling, general and administrative expense741 579 729 2,661 2,624 
Segment operating income$6,598 $5,872 $4,542 $23,214 $15,969 
Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2
$9,405 $8,779 $7,691 $35,050 $29,150 
Revenue days3
3683643681,4601,552
Average active rigs4
44444
Number of active rigs at the end of period5
44444
Number of available rigs at the end of period77777
Reimbursements of "out-of-pocket" expenses $6,974 $7,219 $5,985 $26,077 $27,388 

(1)These operating metrics and financial data, including average active rigs, are provided to allow investors to analyze the various components of segment financial results in terms of activity, utilization and other key results. Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results.
(2)Direct margin, which is considered a non-GAAP metric, is defined as operating revenues less direct operating expenses and is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.
(3)Defined as the number of contractual days we recognized revenue for during the period.
(4)Active rigs generate revenue for the Company; accordingly, 'average active rigs' represents the average number of rigs generating revenue during the applicable time period. This metric is calculated by dividing revenue days by total days in the applicable period (i.e. 90 days).
(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 September 30, 2022
(in thousands)North America SolutionsOffshore Gulf of MexicoInternational SolutionsOtherEliminationsTotal
Operating revenue$552,315 $34,303 $42,373 $2,341 $— $631,332 
Intersegment— — — 15,470 (15,470)— 
Total operating revenue$552,315 $34,303 $42,373 $17,811 $(15,470)$631,332 
Direct operating expenses336,880 23,020 38,915 13,375 — 412,190 
Intersegment11,889 1,878 199 20 (13,986)— 
Total drilling services & other operating expenses$348,769 $24,898 $39,114 $13,395 $(13,986)$412,190 

Year Ended September 30, 2022
(in thousands)North America SolutionsOffshore Gulf of MexicoInternational SolutionsOtherEliminationsTotal
Operating revenue$1,788,167 $125,465 $136,072 $9,240 $— $2,058,944 
Intersegment— — — 57,047 (57,047)— 
Total operating revenue$1,788,167 $125,465 $136,072 $66,287 $(57,047)$2,058,944 
Direct operating expenses1,177,381 83,079 120,167 50,600 — 1,431,227 
Intersegment40,753 7,336 613 83 (48,785)— 
Total drilling services & other operating expenses$1,218,134 $90,415 $120,780 $50,683 $(48,785)$1,431,227 
    
    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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The following table reconciles operating income (loss) per the information above to income (loss) from continuing operations before income taxes as reported on the Consolidated Statements of Operations:
        
Three Months EndedYear Ended
September 30,June 30,September 30,September 30,
(in thousands)20222022202120222021
Operating income (loss)
North America Solutions$92,136 $57,353 $(60,671)$121,893 $(287,176)
International Solutions(789)(6,550)(5,650)(138)(21,003)
Offshore Gulf of Mexico6,598 5,872 4,542 23,214 15,969 
Other3,659 1,965 (8,073)12,720 (9,704)
Eliminations(969)(2,140)7,277 (6,422)(1,580)
Segment operating income (loss)$100,635 $56,500 $(62,575)$151,267 $(303,494)
Gain on reimbursement of drilling equipment7,846 9,895 2,115 29,443 12,322 
Other gain (loss) on sale of assets2,670 3,075 1,672 5,432 (11,280)
Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges(34,353)(35,748)(38,248)(140,850)(126,097)
Operating income (loss)$76,798 $33,722 $(97,036)$45,292 $(428,549)
Other income (expense):
Interest and dividend income6,789 5,313 2,029 18,090 10,254 
Interest expense(4,327)(4,372)(6,094)(19,203)(23,955)
Gain (loss) on investment securities2,253 (14,310)(1,126)57,937 6,727 
Loss on extinguishment of debt— — — (60,083)— 
Other(8,949)(1,148)(2,630)(11,115)(5,657)
Total unallocated amounts(4,234)(14,517)(7,821)(14,374)(12,631)
Income (loss) from continuing operations before income taxes$72,564 $19,205 $(104,857)$30,918 $(441,180)



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SUPPLEMENTARY STATISTICAL INFORMATION 
Unaudited
 


U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS
November 16,September 30,June 30,Q4FY22
202220222022Average
U.S. Land Operations
Term Contract Rigs119 119 115 122 
Spot Contract Rigs61 57 60 54 
Total Contracted Rigs180 176 175 176 
Idle or Other Rigs56 60 61 60 
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 9/30/22)
Q1Q2Q3Q4Q1Q2Q3
SegmentFY23FY23FY23FY23FY24FY24FY24
U.S. Land Operations113.0 94.8 54.6 43.8 35.4 32.9 30.7 
International Land Operations9.1 9.0 7.8 7.7 7.0 6.0 5.7 
Offshore Operations— — — — — — — 
Total122.1 103.8 62.4 51.5 42.4 38.9 36.4 
(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.
 



















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NON-GAAP MEASUREMENTS

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


Three Months Ended September 30, 2022
(in thousands, except per share data)PretaxTaxNetEPS
Net income (GAAP basis)$45,539 $0.42 
(-) Fair market value adjustments to equity investments$2,287 $518 $1,769 $0.02 
(-) Gain related to the sale of equipment$2,019 $458 $1,561 $0.01 
(-) Lump sum settlement for distribution from pension$(8,270)$(1,873)$(6,397)$(0.06)
Adjusted net income$48,606 $0.45 



Three Months Ended June 30, 2022
(in thousands, except per share data)PretaxTaxNetEPS
Net income (GAAP basis)$17,752 $0.16 
(-) Fair market adjustment to equity investments$(14,268)$(3,028)$(11,240)$(0.11)
(-) Restructuring charges$(33)$(68)$35 $— 
Adjusted net income$28,957 $0.27 


Twelve Months Ended September 30, 2022
(in thousands, except per share data)PretaxTaxNetEPS
Net income (GAAP basis)$6,953 $0.05 
(-) Fair market adjustment to equity investments$58,258 $13,196 $45,062 $0.42 
(-) Settlement of a previous contractual dispute with an international customer$16,381 $2,469 $13,912 $0.13 
(-) Gain related to the sale of equipment$2,019 $458 $1,561 $0.01 
(-) Restructuring charges$(838)$(190)$(648)$(0.01)
(-) Impairments for fair market value adjustments to equipment held for sale$(4,363)$(658)$(3,705)$(0.03)
(-) Loss related to the sale of equipment$(4,744)$(716)$(4,028)$(0.04)
(-) Lump sum settlement for distribution from pension$(8,270)$(1,873)$(6,397)$(0.06)
(-) Debt make whole premium and write-off of debt discount and issuance$(60,083)$(9,054)$(51,029)$(0.47)
Adjusted net income$12,225 $0.10 

(**)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 September 30, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$92,136 $(789)$6,598 
Add back:
Depreciation and amortization92,200 1,177 2,066 
Research and development7,195 — — 
Selling, general and administrative expense12,015 2,871 741 
Direct margin (Non-GAAP)$203,546 $3,259 $9,405 
Three Months Ended June 30, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$57,353 $(6,550)$5,872 
Add back:
Depreciation and amortization93,612 1,175 2,328 
Research and development6,545 — — 
Selling, general and administrative expense10,069 2,129 579 
Restructuring charges25 — — 
Direct margin (Non-GAAP)$167,604 $(3,246)$8,779 
Three Months Ended September 30, 2021
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$(60,671)$(5,650)$4,542 
Add back:
Depreciation and amortization95,177 652 2,420 
Research and development5,411 — — 
Selling, general and administrative expense13,866 4,565 729 
Asset impairment charges14,436 — — 
Restructuring charges899 — — 
Direct margin (Non-GAAP)$69,118 $(433)$7,691 


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Year Ended September 30, 2022
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$121,893 $(138)$23,214 
Add back:
Depreciation and amortization375,250 4,156 9,175 
Research and development26,728 — — 
Selling, general and administrative expense43,796 8,779 2,661 
Asset impairment charges1,868 2,495 — 
Restructuring charges498 — — 
Direct margin (Non-GAAP)$570,033 $15,292 $35,050 
Year Ended September 30, 2021
(in thousands)North America SolutionsInternational SolutionsOffshore Gulf of Mexico
Segment operating income (loss)$(287,176)$(21,003)$15,969 
Add back:
Depreciation and amortization392,415 2,013 10,557 
Research and development21,811 — — 
Selling, general and administrative expense51,089 8,028 2,624 
Asset impairment charges70,850 — — 
Restructuring charges3,868 207 — 
Direct margin (Non-GAAP)$252,857 $(10,755)$29,150