HP Helmerich and Payne Inc

• The Company reported fiscal fourth quarter and fiscal year 2024 net income of $0.76 and $3.43 per diluted share, respectively, including select items(1) that had a neutral impact on fiscal fourth quarter diluted earnings per share and a $(0.07) per share impact on fiscal year diluted share

• The North America Solutions ("NAS") segment exited the fourth quarter of fiscal year 2024 with 151 active rigs and recognized revenue per day of approximately $39,100/day with associated direct margins(2) per day of $19,800/day during the quarter

• Quarterly NAS operating income decreased $8 million sequentially to $156 million; while direct margins(2) decreased $3 million to approximately $275 million, as revenues decreased by $2 million to $618 million and expenses increased by $1 million to $344 million

• H&P's North America Solutions segment anticipates exiting the first quarter of fiscal year 2025 between 147-153 active rigs

• H&P expects capital expenditures for fiscal year 2025 to range between $290 and $325 million; note these current capital expenditures expectations do not include any amounts related to the pending KCA Deutag acquisition

• On September 11, 2024, the Board of Directors of the Company declared a quarterly cash dividend of $0.25 per share, payable on December 2, 2024, to stockholders of record at the close of business on November 18, 2024

Helmerich & Payne, Inc. (NYSE: HP) reported net income of $75 million, or $0.76 per diluted share, from operating revenues of $694 million for the quarter ended September 30, 2024, compared to net income of $89 million, or $0.88 per diluted share, from operating revenues of $698 million for the quarter ended June 30, 2024. The net income per diluted share for the fourth and third quarters of fiscal year 2024 include $0.00 and net $(0.04) of after-tax gains and losses, respectively, comprised of select items(2). For the fourth quarter of fiscal year 2024, select items(2) were comprised of:

• $0.10 of after-tax gains related to the non-cash fair market value adjustments to our equity investments
• $(0.10) of after-tax losses related to acquisition transaction and integration costs and fees associated with acquisition financing

Net cash provided by operating activities was $169 million for the fourth quarter of fiscal year 2024 compared to $197 million for the third quarter of fiscal year 2024.

For fiscal year 2024, the Company reported net income of $344 million, or $3.43 per diluted share, from operating revenues of $2.8 billion. The net income per diluted share includes $(0.07) of after-tax losses comprised of select items(2). Net cash provided by operating activities was $685 million in fiscal year 2024 compared to $834 million in fiscal year 2023.

President and CEO John Lindsay commented, "The Company delivered on another strong year in fiscal 2024. Our North America Solutions segment was able to maintain its rig count within a relatively narrow-band, accrete market share, and achieve another year of solid economic performance, all despite a roughly 5% decline in the overall U.S. rig count. These results continue to exemplify our relentless focus on creating value for our customers. In our International Solutions segment, fiscal 2024 was historic for a couple of reasons. First, after years of effort and preparation, we won a sizeable tender award with Saudi Aramco and delivered our first rig to Saudi Arabia. Second, we announced our intentions to acquire KCA Deutag, which we believe firmly positions H&P as a global leader in onshore drilling.

"During the fourth fiscal quarter, our NAS rig activity trended as we expected; up by a handful of rigs from the previous quarter and exiting at 151 rigs. Along with the increasing rig count, the NAS segment was also able to sustain its direct margin at a healthy level, which again, is a testament to our ability to deliver value through our drilling solutions approach. Heading into the first fiscal quarter of 2025, we expect our rig count to remain relatively flat as incremental demand for rigs is fairly matched with rigs rolling from existing commitments. Similarly, we expect NAS direct margins to remain relatively flat as well.

"In our International Solutions segment, our first rig in Saudi Arabia has commenced operations and we have exported four more rigs to the country with a goal of exporting the remaining three rigs prior to calendar year-end. Once all of the rigs are accepted and begin operations, we will have eight rigs working for Saudi Aramco in unconventional natural gas plays. The rig count in our other international operations is holding relatively stable and while we are optimistic around current and future tendering opportunities, we do not expect a sizeable shift in that rig count during fiscal 2025.

"In late July of this year, the Company announced its intentions to acquire KCA Deutag for approximately $2.0 billion. This acquisition is transformative in that it accelerates H&P's international growth strategy by significantly enhancing our presence in key Middle East energy markets. We believe this acquisition will greatly increase H&P's global scale and diversification, not only in the Middle East, but also by adding a sizeable complementary, and asset-lite offshore management contract business. We have every confidence that the KCA Deutag acquisition will strengthen the Company's overall cash flow profile with a more diversified and durable revenue stream in the long-term."

Senior Vice President and CFO Kevin Vann also commented, "During the last few months, the Company has shored up the financing of the KCA Deutag acquisition. We established a $400 million, two-year term loan, raised $1.25 billion in bonds with various maturities of three, five, and ten years with a combined average interest rate of approximately 5%, and more recently sold the Company's stake in ADNOC Drilling through a private placement that yielded proceeds of approximately $197 million, substantially more than originally anticipated. We continue to work through the customary closing conditions and regulatory approvals for the KCA Deutag acquisition, making good progress, and still expect the transaction to close prior to calendar 2024 year end.

"Moving into fiscal 2025, our planned capital expenditures are expected to range between $290 and $325 million, representing a sizeable sequential decrease from H&P's fiscal 2024 spend. This planned sequential decrease is driven by a lower maintenance capex per rig in our NAS segment as the Company has substantially completed capital spending related to the deferments that were made during the years impacted by the pandemic. As a consequence, maintenance capex per rig appears to be moving back towards historical levels of approximately $1.0 million per active rig. Another main contributor to the projected decrease in capex is a lower level of international growth capex as fiscal 2024 capex was heavily impacted by spending related to a 7-rig tender award with Saudi Aramco. The anticipated reduction in the planned fiscal 2025 capex relative to fiscal 2024, which we currently believe will be approximately $190 million, is projected to create a significant increase in the Company's projected free cash flow(3). Additionally, as a reminder, in fiscal 2024 we allocated approximately $200 million of free cash flow to a base dividend, a supplemental dividend, and share repurchases. We expect to continue to allocate approximately $100 million to our annual base dividend of $1/share; however, a priority will be placed on using the remaining free cash flow to reduce the debt incurred related to the pending KCA Deutag acquisition."

John Lindsay concluded, “I am proud of what H&P has achieved this fiscal year and am excited about what we are building for the future. This next year will be one of integrating and becoming a larger and globally diversified company. We look forward to welcoming KCA Deutag's talented employees to the H&P team, and together we will maintain our shared attentiveness towards safety and to creating value for our customers."

Operating Segment Results for the Fourth Quarter of Fiscal Year 2024

North America Solutions:

This segment had operating income of $155.7 million compared to operating income of $163.4 million during the previous quarter, a decrease of $7.7 million. The decrease in operating income was primarily attributable to sequentially lower operating revenues and higher depreciation expense associated with walking rig conversions. Direct margin(2) decreased by $2.8 million to $274.6 million sequentially.

International Solutions:

This segment had an operating loss of $5.1 million compared to an operating loss of $4.8 million during the previous quarter. Direct margin(2) during the fourth fiscal quarter was $0.3 million compared to $0.4 million during the previous quarter. Current quarter results included a $1.1 million foreign currency loss compared to a $2.1 million foreign currency loss in the previous quarter.

Offshore Gulf of Mexico:

This segment had operating income of $4.3 million compared to operating income of $5.0 million during the previous quarter. Direct margin(2) for the quarter was $7.1 million compared to $7.6 million in the previous quarter.

Operational Outlook for the First Quarter of Fiscal Year 2025

North America Solutions:

• We expect North America Solutions direct margins(3) to be between $260-$280 million
• We expect to exit the quarter between approximately 147-153 contracted rigs

International Solutions (does not include any amounts related to the pending KCA Deutag acquisition):

• We expect International Solutions direct margins(3) to be between $(2)-$2 million, exclusive of any foreign exchange gains or losses

Offshore Gulf of Mexico (does not include any amounts related to the pending KCA Deutag acquisition):

• We expect Offshore Gulf of Mexico direct margins(3) to be between $7-$9 million

Other Estimates for Fiscal Year 2025 (does not include any amounts related to the pending KCA Deutag acquisition)

• Gross capital expenditures are expected to be approximately $290 to $325 million;
  • approximately 85% expected for North America Solutions, including maintenance per active rig of approximately $1.0 million, planned rig-related equipment upgrades, and six planned walking conversions
  • approximately 15% expected for International Solutions and Offshore Gulf of Mexico, primarily for rig maintenance and the remaining spend related to the 7-rig tender award with Saudi Aramco
  • 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 $45 million in fiscal year 2025
• Depreciation for fiscal year 2025 is expected to be approximately $400 million
• Research and development expenses for fiscal year 2025 are expected to be roughly $32 million
• General and administrative expenses for fiscal year 2025 are expected to be approximately $235 million
• Cash taxes for fiscal year 2025 are expected to be approximately $140 to $190 million

Select Items(2) Included in Net Income per Diluted Share

Fourth quarter of fiscal year 2024 net income of $0.76 per diluted share included a net impact of $0.00 per share in after-tax gains and losses comprised of the following:

• $0.10 of non-cash after-tax gains related to fair market value adjustments to our equity investments
• $(0.05) of after-tax losses related to fees associated with acquisition financing
• $(0.05) of after-tax losses related to transaction and integration costs

Third quarter of fiscal year 2024 net income of $0.88 per diluted share included $(0.04) in after-tax gains and losses comprised of the following:

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

Fiscal year 2024 net income of $3.43 per diluted share included $(0.07) in after-tax gains and losses comprised of the following:

• $0.16 of non-cash after-tax gains related to fair market value adjustments to our equity investments
• $(0.03) of after-tax losses related to research and development expenses associated with an asset acquisition
• $(0.05) of after-tax losses related to fees associated with acquisition financing
• $(0.05) of after-tax losses on a Blue Chip Swap transaction to repatriate cash to the U.S. from Argentina
• $(0.10) of after-tax losses related to transaction and integration costs

Conference Call

A conference call will be held on Thursday, November 14, 2024 at 11:00 a.m. (ET) with John Lindsay, President and CEO, Kevin Vann, Senior Vice President and CFO, and Dave Wilson, Vice President of Investor Relations, to discuss the Company’s fourth quarter fiscal year 2024 results. Dial-in information for the conference call is (800) 225-9448 for domestic callers or (203) 518-9708 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, 2024, H&P's fleet included 228 land rigs in the United States, 27 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, future 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 domestic and international markets, and actions by customers, and statements regarding the consummation and expected impact of the KCA Deutag acquisition are forward-looking statements. For information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and other disclosures in the Company’s SEC filings, including but not limited to its annual report on Form 10‑K and quarterly reports on Form 10‑Q. As a result of these factors, Helmerich & Payne, Inc.’s actual results may differ materially from those indicated or implied by such forward-looking statements. Investors are cautioned not to put undue reliance on such statements. We undertake no duty to publicly update or revise any forward-looking statements, whether as a result of new information, changes in internal estimates, expectations or otherwise, except as required under applicable securities laws.

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

 

Note Regarding Trademarks. Helmerich & Payne, Inc. owns or has rights to the use of trademarks, service marks and trade names that it uses in conjunction with the operation of its business. Some of the trademarks that appear in this release or otherwise used by H&P include FlexRig, which may be registered or trademarked in the United States and other jurisdictions.

(1) Select items are considered non-GAAP metrics and are included as a supplemental disclosure as the Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future periods results. Select items are excluded as they are deemed to be outside the Company's core business operations. See Non-GAAP Measurements.

(2) Direct margin, which is considered a non-GAAP metric, is defined as operating revenues (less reimbursements) less direct operating expenses (less reimbursements) and is included as a supplemental disclosure. We believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See Non-GAAP Measurements for a reconciliation of segment operating income(loss) to direct margin. Expected direct margin for the first quarter of fiscal 2025 is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future items and adjustments, which could be significant, we are unable to provide a reconciliation of expected direct margin to the most comparable GAAP measure without unreasonable effort.

(3) Free cash flow, which is considered a non-GAAP metric, is defined as net cash provided by/used in operating activities less capital expenditures. We believe that free cash flow is useful measure to assess and understand the financial performance of the Company. This financial measure 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.

HELMERICH & PAYNE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three Months Ended

 

Year Ended

(in thousands, except per share amounts)

September 30,

 

June 30,

 

September 30,

 

September 30,

2024

 

2024

 

2023

 

2024

 

2023

OPERATING REVENUES

 

 

 

 

 

 

 

 

 

Drilling services

$

691,293

 

 

$

695,139

 

 

$

657,258

 

 

$

2,746,128

 

 

$

2,862,677

 

Other

 

2,500

 

 

 

2,585

 

 

 

2,348

 

 

 

10,479

 

 

 

9,744

 

 

 

693,793

 

 

 

697,724

 

 

 

659,606

 

 

 

2,756,607

 

 

 

2,872,421

 

OPERATING COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

Drilling services operating expenses, excluding depreciation and amortization

 

408,043

 

 

 

417,028

 

 

 

408,555

 

 

 

1,630,225

 

 

 

1,715,098

 

Other operating expenses

 

1,176

 

 

 

1,144

 

 

 

1,160

 

 

 

4,483

 

 

 

4,477

 

Depreciation and amortization

 

100,992

 

 

 

97,816

 

 

 

94,593

 

 

 

397,344

 

 

 

382,314

 

Research and development

 

8,862

 

 

 

10,555

 

 

 

7,326

 

 

 

40,967

 

 

 

30,046

 

Selling, general and administrative

 

66,923

 

 

 

60,190

 

 

 

56,076

 

 

 

244,877

 

 

 

206,657

 

Asset impairment charges

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,097

 

Acquisition transaction costs

 

7,452

 

 

 

6,680

 

 

 

—

 

 

 

14,982

 

 

 

—

 

Gain on reimbursement of drilling equipment

 

(8,622

)

 

 

(9,732

)

 

 

(10,233

)

 

 

(33,309

)

 

 

(48,173

)

Other loss on sale of assets

 

2,421

 

 

 

2,730

 

 

 

8,410

 

 

 

5,139

 

 

 

8,016

 

 

 

587,247

 

 

 

586,411

 

 

 

565,887

 

 

 

2,304,708

 

 

 

2,310,532

 

OPERATING INCOME

 

106,546

 

 

 

111,313

 

 

 

93,719

 

 

 

451,899

 

 

 

561,889

 

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

11,979

 

 

 

11,888

 

 

 

7,885

 

 

 

41,168

 

 

 

28,393

 

Interest expense

 

(16,124

)

 

 

(4,336

)

 

 

(4,365

)

 

 

(29,093

)

 

 

(17,283

)

Gain on investment securities

 

13,851

 

 

 

389

 

 

 

5,176

 

 

 

13,953

 

 

 

11,299

 

Other

 

102

 

 

 

3,134

 

 

 

10,299

 

 

 

3,093

 

 

 

9,081

 

 

 

9,808

 

 

 

11,075

 

 

 

18,995

 

 

 

29,121

 

 

 

31,490

 

Income before income taxes

 

116,354

 

 

 

122,388

 

 

 

112,714

 

 

 

481,020

 

 

 

593,379

 

Income tax expense

 

40,878

 

 

 

33,703

 

 

 

35,092

 

 

 

136,855

 

 

 

159,279

 

NET INCOME

$

75,476

 

 

$

88,685

 

 

$

77,622

 

 

$

344,165

 

 

$

434,100

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.75

 

 

$

0.89

 

 

$

0.78

 

 

$

3.43

 

 

$

4.18

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.76

 

 

$

0.88

 

 

$

0.77

 

 

$

3.43

 

 

$

4.16

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

98,755

 

 

 

98,752

 

 

 

99,427

 

 

 

98,857

 

 

 

102,447

 

Diluted

 

98,995

 

 

 

99,007

 

 

 

99,884

 

 

 

99,067

 

 

 

102,852

 

HELMERICH & PAYNE, INC.

CONSOLIDATED BALANCE SHEETS

 

September 30,

 

September 30,

(in thousands except share data and share amounts)

2024

 

2023

ASSETS

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

217,341

 

 

$

257,174

 

Restricted cash

 

68,902

 

 

 

59,064

 

Short-term investments

 

292,919

 

 

 

93,600

 

Accounts receivable, net of allowance of $2,977 and $2,688, respectively

 

418,604

 

 

 

404,188

 

Inventories of materials and supplies, net

 

117,884

 

 

 

94,227

 

Prepaid expenses and other, net

 

76,419

 

 

 

97,727

 

Assets held-for-sale

 

—

 

 

 

645

 

Total current assets

 

1,192,069

 

 

 

1,006,625

 

 

 

 

 

Investments, net

 

100,567

 

 

 

264,947

 

Property, plant and equipment, net

 

3,016,277

 

 

 

2,921,695

 

Other Noncurrent Assets:

 

 

 

Goodwill

 

45,653

 

 

 

45,653

 

Intangible assets, net

 

54,147

 

 

 

60,575

 

Operating lease right-of-use asset

 

67,076

 

 

 

50,400

 

Restricted cash

 

1,242,417

 

 

 

—

 

Other assets, net

 

63,692

 

 

 

32,061

 

Total other noncurrent assets

 

1,472,985

 

 

 

188,689

 

 

 

 

 

Total assets

$

5,781,898

 

 

$

4,381,956

 

 

 

 

 

LIABILITIES & SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

135,084

 

 

$

130,852

 

Dividends payable

 

25,024

 

 

 

25,194

 

Accrued liabilities

 

286,841

 

 

 

262,885

 

Total current liabilities

 

446,949

 

 

 

418,931

 

 

 

 

 

Noncurrent Liabilities:

 

 

 

Long-term debt, net

 

1,782,182

 

 

 

545,144

 

Deferred income taxes

 

495,481

 

 

 

517,809

 

Other

 

140,134

 

 

 

128,129

 

Total noncurrent liabilities

 

2,417,797

 

 

 

1,191,082

 

 

 

 

 

Shareholders' Equity:

 

 

 

Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of September 30, 2024 and 2023, and 98,755,412 and 99,426,526 shares outstanding as of September 30, 2024 and 2023, respectively

 

11,222

 

 

 

11,222

 

Preferred stock, no par value, 1,000,000 shares authorized, no shares issued

 

—

 

 

 

—

 

Additional paid-in capital

 

518,083

 

 

 

525,369

 

Retained earnings

 

2,883,590

 

 

 

2,707,715

 

Accumulated other comprehensive loss

 

(6,350

)

 

 

(7,981

)

Treasury stock, at cost, 13,467,453 shares and 12,796,339 shares as of September 30, 2024 and 2023, respectively

 

(489,393

)

 

 

(464,382

)

Total shareholders’ equity

 

2,917,152

 

 

 

2,771,943

 

Total liabilities and shareholders' equity

$

5,781,898

 

 

$

4,381,956

 

HELMERICH & PAYNE, INC.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Year Ended September 30,

(in thousands)

2024

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income

$

344,165

 

 

$

434,100

 

 

$

6,953

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

397,344

 

 

 

382,314

 

 

 

403,170

 

Asset impairment charges

 

—

 

 

 

12,097

 

 

 

4,363

 

Amortization of debt discount and debt issuance costs

 

10,560

 

 

 

1,079

 

 

 

1,200

 

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

60,083

 

Stock-based compensation

 

31,198

 

 

 

32,456

 

 

 

28,032

 

Gain on investment securities

 

(13,953

)

 

 

(11,299

)

 

 

(57,937

)

Gain on reimbursement of drilling equipment

 

(33,309

)

 

 

(48,173

)

 

 

(29,443

)

Other (gain) loss on sale of assets

 

5,139

 

 

 

8,016

 

 

 

(5,432

)

Deferred income tax benefit

 

(23,191

)

 

 

(20,400

)

 

 

(28,488

)

Other

 

5,132

 

 

 

8,979

 

 

 

7,140

 

Changes in assets and liabilities

 

(38,422

)

 

 

34,513

 

 

 

(155,728

)

Net cash provided by operating activities

 

684,663

 

 

 

833,682

 

 

 

233,913

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Capital expenditures

 

(495,072

)

 

 

(395,460

)

 

 

(250,894

)

Other capital expenditures related to assets held-for-sale

 

—

 

 

 

—

 

 

 

(21,645

)

Purchase of short-term investments

 

(200,653

)

 

 

(180,993

)

 

 

(165,109

)

Purchase of long-term investments

 

(9,120

)

 

 

(20,748

)

 

 

(51,241

)

Proceeds from sale of short-term investments

 

204,152

 

 

 

195,311

 

 

 

244,728

 

Proceeds from sale of long-term investments

 

—

 

 

 

—

 

 

 

22,042

 

Proceeds from asset sales

 

46,412

 

 

 

70,085

 

 

 

62,304

 

Insurance proceeds from involuntary conversion

 

5,533

 

 

 

9,221

 

 

 

—

 

Other

 

(10,000

)

 

 

—

 

 

 

(7,500

)

Net cash used in investing activities

 

(458,748

)

 

 

(322,584

)

 

 

(167,315

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Dividends paid

 

(168,459

)

 

 

(201,456

)

 

 

(107,395

)

Proceeds from debt issuance

 

1,247,629

 

 

 

—

 

 

 

—

 

Debt issuance costs

 

(22,934

)

 

 

—

 

 

 

—

 

Payments for employee taxes on net settlement of equity awards

 

(12,177

)

 

 

(14,410

)

 

 

(5,505

)

Payment of contingent consideration from acquisition of business

 

(6,250

)

 

 

(250

)

 

 

(250

)

Payments for early extinguishment of long-term debt

 

—

 

 

 

—

 

 

 

(487,148

)

Make-whole premium payment

 

—

 

 

 

—

 

 

 

(56,421

)

Share repurchases

 

(51,302

)

 

 

(247,213

)

 

 

(76,999

)

Other

 

—

 

 

 

(540

)

 

 

(587

)

Net cash provided by (used in) financing activities

 

986,507

 

 

 

(463,869

)

 

 

(734,305

)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

1,212,422

 

 

 

47,229

 

 

 

(667,707

)

Cash and cash equivalents and restricted cash, beginning of period

 

316,238

 

 

 

269,009

 

 

 

936,716

 

Cash and cash equivalents and restricted cash, end of period

$

1,528,660

 

 

$

316,238

 

 

$

269,009

 

HELMERICH & PAYNE, INC.

SEGMENT REPORTING

 

Three Months Ended

 

Year Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

(in thousands, except operating statistics)

2024

 

2024

 

2023

 

2024

 

2023

NORTH AMERICA SOLUTIONS

 

 

 

 

 

 

 

 

 

Operating revenues

$

618,285

 

 

$

620,040

 

 

$

575,188

 

 

$

2,445,946

 

 

$

2,519,743

 

Direct operating expenses

 

343,651

 

 

 

342,617

 

 

 

336,374

 

 

 

1,366,414

 

 

 

1,447,528

 

Depreciation and amortization

 

92,647

 

 

 

89,207

 

 

 

87,883

 

 

 

366,446

 

 

 

353,976

 

Research and development

 

8,987

 

 

 

10,623

 

 

 

7,406

 

 

 

41,305

 

 

 

30,457

 

Selling, general and administrative expense

 

17,305

 

 

 

14,234

 

 

 

15,003

 

 

 

61,107

 

 

 

58,367

 

Asset impairment charges

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,948

 

Segment operating income

$

155,695

 

 

$

163,359

 

 

$

128,522

 

 

$

610,674

 

 

$

625,467

 

Financial Data and Other Operating Statistics1:

 

 

 

 

 

 

 

 

 

Direct margin (Non-GAAP)2

$

274,634

 

 

$

277,423

 

 

$

238,814

 

 

$

1,079,532

 

 

$

1,072,215

 

Revenue days3

 

13,871

 

 

 

13,683

 

 

 

13,672

 

 

 

55,387

 

 

 

61,814

 

Average active rigs4

 

151

 

 

 

150

 

 

 

149

 

 

 

151

 

 

 

169

 

Number of active rigs at the end of period5

 

151

 

 

 

146

 

 

 

147

 

 

 

151

 

 

 

147

 

Number of available rigs at the end of period

 

228

 

 

 

232

 

 

 

233

 

 

 

228

 

 

 

233

 

Reimbursements of "out-of-pocket" expenses

$

76,148

 

 

$

74,915

 

 

$

65,582

 

 

$

294,375

 

 

$

304,870

 

 

 

 

 

 

 

 

 

 

 

INTERNATIONAL SOLUTIONS

 

 

 

 

 

 

 

 

 

Operating revenues

$

45,463

 

 

$

47,882

 

 

$

53,183

 

 

$

193,975

 

 

$

212,566

 

Direct operating expenses

 

45,155

 

 

 

47,446

 

 

 

53,650

 

 

 

174,634

 

 

 

187,292

 

Depreciation

 

3,314

 

 

 

2,797

 

 

 

2,400

 

 

 

10,863

 

 

 

7,615

 

Selling, general and administrative expense

 

2,091

 

 

 

2,483

 

 

 

2,156

 

 

 

9,427

 

 

 

10,401

 

Asset impairment charge

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8,149

 

Segment operating loss

$

(5,097

)

 

$

(4,844

)

 

$

(5,023

)

 

$

(949

)

 

$

(891

)

Financial Data and Other Operating Statistics1:

 

 

 

 

 

 

 

 

 

Direct margin (Non-GAAP)2

$

308

 

 

$

436

 

 

$

(467

)

 

$

19,341

 

 

$

25,274

 

Revenue days3

 

1,336

 

 

 

1,067

 

 

 

1,170

 

 

 

4,614

 

 

 

4,788

 

Average active rigs4

 

15

 

 

 

12

 

 

 

13

 

 

 

13

 

 

 

13

 

Number of active rigs at the end of period5

 

16

 

 

 

12

 

 

 

13

 

 

 

16

 

 

 

13

 

Number of available rigs at the end of period

 

27

 

 

 

23

 

 

 

22

 

 

 

27

 

 

 

22

 

Reimbursements of "out-of-pocket" expenses

$

1,065

 

 

$

2,069

 

 

$

2,484

 

 

$

8,482

 

 

$

10,227

 

 

 

 

 

 

 

 

 

 

 

OFFSHORE GULF OF MEXICO

 

 

 

 

 

 

 

 

 

Operating revenues

$

27,545

 

 

$

27,218

 

 

$

28,880

 

 

$

106,207

 

 

$

130,244

 

Direct operating expenses

 

20,468

 

 

 

19,611

 

 

 

21,489

 

 

 

82,668

 

 

 

96,781

 

Depreciation

 

1,723

 

 

 

1,798

 

 

 

1,951

 

 

 

7,530

 

 

 

7,622

 

Selling, general and administrative expense

 

1,079

 

 

 

799

 

 

 

722

 

 

 

3,594

 

 

 

3,035

 

Segment operating income

$

4,275

 

 

$

5,010

 

 

$

4,718

 

 

$

12,415

 

 

$

22,806

 

Financial Data and Other Operating Statistics1:

 

 

 

 

 

 

 

 

 

Direct margin (Non-GAAP)2

$

7,077

 

 

$

7,607

 

 

$

7,391

 

 

$

23,539

 

 

$

33,463

 

Revenue days3

 

276

 

 

 

273

 

 

 

368

 

 

 

1,111

 

 

 

1,460

 

Average active rigs4

 

3

 

 

 

3

 

 

 

4

 

 

 

3

 

 

 

4

 

Number of active rigs at the end of period5

 

3

 

 

 

3

 

 

 

4

 

 

 

3

 

 

 

4

 

Number of available rigs at the end of period

 

7

 

 

 

7

 

 

 

7

 

 

 

7

 

 

 

7

 

Reimbursements of "out-of-pocket" expenses

$

7,287

 

 

$

7,746

 

 

$

7,439

 

 

$

31,717

 

 

$

30,445

 

(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. 92 days for the three months ended September 30, 2024 and 2023, 91 days for the three months ended June 30, 2024, 366 days for the year ended September 30, 2024 and 365 days for the year ended September 30, 2023).

(5)

Defined as the number of rigs generating revenue at the applicable end date of the time period.

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

The following table reconciles operating income (loss) per the information above to income before income taxes as reported on the Consolidated Statements of Operations:

 

Three Months Ended

 

Year Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

(in thousands)

2024

 

2024

 

2023

 

2024

 

2023

Operating income (loss)

 

 

 

 

 

 

 

 

 

North America Solutions

$

155,695

 

 

$

163,359

 

 

$

128,522

 

 

$

610,674

 

 

$

625,467

 

International Solutions

 

(5,097

)

 

 

(4,844

)

 

 

(5,023

)

 

 

(949

)

 

 

(891

)

Offshore Gulf of Mexico

 

4,275

 

 

 

5,010

 

 

 

4,668

 

 

 

12,415

 

 

 

22,806

 

Other

 

714

 

 

 

(4,791

)

 

 

2,272

 

 

 

(1,359

)

 

 

15,876

 

Eliminations

 

2,315

 

 

 

(616

)

 

 

158

 

 

 

1,261

 

 

 

4,671

 

Segment operating income

$

157,902

 

 

$

158,118

 

 

$

130,597

 

 

$

622,042

 

 

$

667,929

 

Acquisition transaction costs

 

(7,452

)

 

 

(6,680

)

 

 

—

 

 

 

(14,982

)

 

 

—

 

Gain on reimbursement of drilling equipment

 

8,622

 

 

 

9,732

 

 

 

10,233

 

 

 

33,309

 

 

 

48,173

 

Other loss on sale of assets

 

(2,421

)

 

 

(2,730

)

 

 

(8,410

)

 

 

(5,139

)

 

 

(8,016

)

Corporate selling, general and administrative costs and corporate depreciation

 

(50,105

)

 

 

(47,127

)

 

 

(38,701

)

 

 

(183,331

)

 

 

(146,197

)

Operating income

$

106,546

 

 

$

111,313

 

 

$

93,719

 

 

$

451,899

 

 

$

561,889

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

11,979

 

 

 

11,888

 

 

 

7,885

 

 

 

41,168

 

 

 

28,393

 

Interest expense

 

(16,124

)

 

 

(4,336

)

 

 

(4,365

)

 

 

(29,093

)

 

 

(17,283

)

Gain on investment securities

 

13,851

 

 

 

389

 

 

 

5,176

 

 

 

13,953

 

 

 

11,299

 

Other

 

102

 

 

 

3,134

 

 

 

10,299

 

 

 

3,093

 

 

 

9,081

 

Total unallocated amounts

 

9,808

 

 

 

11,075

 

 

 

18,995

 

 

 

29,121

 

 

 

31,490

 

Income before income taxes

$

116,354

 

 

$

122,388

 

 

$

112,714

 

 

$

481,020

 

 

$

593,379

 

SUPPLEMENTARY STATISTICAL INFORMATION

Unaudited

 

U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS

 

 

November 13,

 

September 30,

 

June 30,

 

Q4FY24

 

2024

 

2024

 

2024

 

Average

U.S. Land Operations

 

 

 

 

 

 

 

Term Contract Rigs

85

 

88

 

83

 

87

Spot Contract Rigs

64

 

63

 

63

 

64

Total Contracted Rigs

149

 

151

 

146

 

151

Idle or Other Rigs

79

 

77

 

86

 

79

Total Marketable Fleet

228

 

228

 

232

 

230

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS

Number of Rigs Already Under Long-Term Contracts(*)

(Estimated Quarterly Average — as of 9/30/24)

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

Q4

Segment

FY25

 

FY25

 

FY25

 

FY25

 

FY26

 

FY26

 

FY26

 

FY26

U.S. Land Operations

85.8

 

76.5

 

52.6

 

46.0

 

35.4

 

17.0

 

15.8

 

15.0

International Land Operations

10.5

 

13.1

 

12.0

 

12.0

 

11.8

 

11.0

 

11.0

 

10.2

Offshore Operations

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

Total

96.3

 

89.6

 

64.6

 

58.0

 

47.2

 

28.0

 

26.8

 

25.2

(*) 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 INCOME(**)

 

 

Three Months Ended September 30, 2024

(in thousands, except per share data)

Pretax

 

Tax

 

Net

 

EPS

Net income (GAAP basis)

 

 

 

 

$

75,476

 

 

$

0.76

 

(-) Fair market adjustment to equity investments

$

13,764

 

 

$

4,073

 

 

$

9,691

 

 

$

0.10

 

(-) Fees associated with the acquisition financing

$

(7,167

)

 

$

(2,043

)

 

$

(5,124

)

 

$

(0.05

)

(-) Expenses related to transaction and integration costs

$

(7,452

)

 

$

(2,287

)

 

$

(5,165

)

 

$

(0.05

)

Adjusted net income

 

 

 

 

$

76,074

 

 

$

0.76

 

 

 

Three Months Ended June 30, 2024

(in thousands, except per share data)

Pretax

 

Tax

 

Net

 

EPS

Net income (GAAP basis)

 

 

 

 

$

88,685

 

 

$

0.88

 

(-) Fair market adjustment to equity investments

$

7,508

 

 

$

1,944

 

 

$

5,564

 

 

$

0.06

 

(-) Expenses related to transaction and integration costs

$

(6,680

)

 

$

(1,730

)

 

$

(4,950

)

 

$

(0.05

)

(-) Losses on a Blue Chip Swap transaction

$

(7,112

)

 

$

(1,842

)

 

$

(5,270

)

 

$

(0.05

)

Adjusted net income

 

 

 

 

$

93,341

 

 

$

0.92

 

 

 

Twelve Months Ended September 30, 2024

(in thousands, except per share data)

Pretax

 

Tax

 

Net

 

EPS

Net income (GAAP basis)

 

 

 

 

$

344,165

 

 

$

3.43

 

(-) Fair market adjustment to equity investments

$

20,948

 

 

$

5,970

 

 

$

14,978

 

 

$

0.16

 

(-) Research and development expenses associated with an asset acquisition

$

(3,840

)

 

$

(995

)

 

$

(2,845

)

 

$

(0.03

)

(-) Fees associated with the acquisition financing

$

(7,167

)

 

$

(2,043

)

 

$

(5,124

)

 

$

(0.05

)

(-) Losses on a Blue Chip Swap transaction

$

(7,112

)

 

$

(1,878

)

 

$

(5,234

)

 

$

(0.05

)

(-) Expenses related to transaction and integration costs

$

(14,982

)

 

$

(4,270

)

 

$

(10,712

)

 

$

(0.10

)

Adjusted net income

 

 

 

 

$

353,102

 

 

$

3.50

 

(**)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.

 

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, 2024

(in thousands)

North America Solutions

 

International Solutions

 

Offshore Gulf of Mexico

Segment operating income (loss)

$

155,695

 

$

(5,097

)

 

$

4,275

Add back:

 

 

 

 

 

Depreciation and amortization

 

92,647

 

 

3,314

 

 

 

1,723

Research and development

 

8,987

 

 

—

 

 

 

—

Selling, general and administrative expense

 

17,305

 

 

2,091

 

 

 

1,079

Direct margin (Non-GAAP)

$

274,634

 

$

308

 

 

$

7,077

 

 

Three Months Ended June 30, 2024

(in thousands)

North America Solutions

 

International Solutions

 

Offshore Gulf of Mexico

Segment operating income (loss)

$

163,359

 

$

(4,844

)

 

$

5,010

Add back:

 

 

 

 

 

Depreciation and amortization

 

89,207

 

 

2,797

 

 

 

1,798

Research and development

 

10,623

 

 

—

 

 

 

—

Selling, general and administrative expense

 

14,234

 

 

2,483

 

 

 

799

Direct margin (Non-GAAP)

$

277,423

 

$

436

 

 

$

7,607

 

 

Three Months Ended September 30, 2023

(in thousands)

North America Solutions

 

International Solutions

 

Offshore Gulf of Mexico

Segment operating income (loss)

$

128,522

 

$

(5,023

)

 

$

4,668

Add back:

 

 

 

 

 

Depreciation and amortization

 

87,883

 

 

2,400

 

 

 

1,951

Research and development

 

7,406

 

 

—

 

 

 

—

Selling, general and administrative expense

 

15,003

 

 

2,156

 

 

 

772

Direct margin (Non-GAAP)

$

238,814

 

$

(467

)

 

$

7,391

 

 

Year Ended September 30, 2024

(in thousands)

North America Solutions

 

International Solutions

 

Offshore Gulf of Mexico

Segment operating income (loss)

$

610,674

 

$

(949

)

 

$

12,415

Add back:

 

 

 

 

 

Depreciation and amortization

 

366,446

 

 

10,863

 

 

 

7,530

Research and development

 

41,305

 

 

—

 

 

 

—

Selling, general and administrative expense

 

61,107

 

 

9,427

 

 

 

3,594

Direct margin (Non-GAAP)

$

1,079,532

 

$

19,341

 

 

$

23,539

 

 

Year Ended September 30, 2023

(in thousands)

North America Solutions

 

International Solutions

 

Offshore Gulf of Mexico

Segment operating income (loss)

$

625,467

 

$

(891

)

 

$

22,806

Add back:

 

 

 

 

 

Depreciation and amortization

 

353,976

 

 

7,615

 

 

 

7,622

Research and development

 

30,457

 

 

—

 

 

 

—

Selling, general and administrative expense

 

58,367

 

 

10,401

 

 

 

3,035

Asset impairment charges

 

3,948

 

 

8,149

 

 

 

—

Direct margin (Non-GAAP)

$

1,072,215

 

$

25,274

 

 

$

33,463

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241113434250/en/

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