- The Company reported fiscal third quarter net income of $89
million, or $0.88 per diluted share; including select items(1) of
$(0.04) per diluted share
- The North America Solutions ("NAS") segment exited the third
quarter of fiscal year 2024 with 146 active rigs and recognized
revenue per day of $39,800/day with associated direct margins(2)
per day of $20,300/day during the quarter
- Quarterly NAS operating income increased $16 million
sequentially; while direct margins(2) increased by $6 million to
$277 million, as revenues increased by $6 million to $620 million
and expenses remained relatively flat at $343 million
- H&P's NAS segment anticipates exiting the fourth quarter
of fiscal year 2024 between 147-153 active rigs
- On June 5, 2024, the Board of Directors of the Company
declared a quarterly base cash dividend of $0.25 per share and a
supplemental cash dividend of $0.17 per share; both dividends are
payable on August 30, 2024 to stockholders of record at the close
of business on August 16, 2024
Helmerich & Payne, Inc. (NYSE: HP) reported net income of
$89 million, or $0.88 per diluted share, from operating revenues of
$698 million for the quarter ended June 30, 2024, compared to net
income of $85 million, or $0.84 per diluted share, from operating
revenues of $688 million for the quarter ended March 31, 2024. The
net income per diluted share for the third and second quarters of
fiscal year 2024 include net $(0.04) and net $0.00 of after-tax
gains and losses, respectively, comprised of select items(1). For
the third quarter of fiscal year 2024, select items were comprised
of:
- $0.06 of after-tax gains related to the non-cash fair market
value adjustments to our equity investments
- $(0.10) of after-tax losses related to a Blue Chip Swap
transaction and non-recurring professional service fees
Net cash provided by operating activities was $197 million for
the third quarter of fiscal year 2024 compared to net cash provided
by operating activities of $144 million for the second quarter of
fiscal year 2024.
President and CEO John Lindsay commented, “Our financial results
for the third fiscal quarter continue to demonstrate the resilience
of our strategy in the North America Solutions segment. Once again,
it was particularly notable, that despite a more sizeable decline
in the overall industry rig count, our NAS active rig count
remained relatively stable during the third fiscal quarter which is
a reflection of H&P’s unyielding focus on providing value to
our customers. On the international front, the Company's first
super-spec FlexRig® arrived in Saudi Arabia, which is another step
in our strategy to increase our operational presence in the
region.
“Macro headwinds, both directly and indirectly related to the
oil and gas industry, persist and are still causing a more
cautionary outlook for the industry. With the cyclical nature of
our industry, we are hopeful that these will subside and bring
about a more positive outlook for the industry in the coming
quarters. Contractual churn remains prevalent in the U.S. market,
but our people are doing a good job managing through this. We
expect the churn to continue and as we have seen in recent summers,
we also anticipate our active rig count to be flat with perhaps a
modest incline heading into our fiscal year-end.
“Activity levels in the International Solutions segment in the
fourth fiscal quarter are expected to remain consistent with the
third fiscal quarter with the exception that the first of the eight
Saudi Arabia rigs is expected to commence work in the fiscal fourth
quarter once contractual acceptance procedures are completed. The
preparation work for the remaining seven super-spec rigs is
progressing as planned with export dates expected through the
balance of the calendar year. We are looking forward to working
with Saudi Aramco and building a long-term, valuable relationship
with our new customer.”
Senior Vice President and CFO Mark Smith also commented,
“Currently, we expect our active NAS rig count in the fourth fiscal
quarter to remain consistent with our third fiscal quarter average.
Accordingly, our NAS direct margin guidance also remains relatively
consistent with the level recognized during the third fiscal
quarter. Contract economics remain the cornerstone of our NAS
strategy and we do not anticipate the same level of volatility or
correlation to overall rig counts that we have experienced in the
past. Recent quarterly results continue to provide evidence of
that.
“The Company returned another $42 million to shareholders in the
form of base and supplemental dividends during the quarter and the
Board of Directors declared the fourth and final installment of the
supplemental dividend under the 2024 Supplemental Shareholder
Return Plan. Looking ahead, we have just begun the process of
establishing our fiscal 2025 capital budget and preliminarily we
believe the projected maintenance and walking rig conversions capex
will be similar to fiscal 2024 levels with the biggest swing factor
related to any international tender awards that would result in
additional capex. As part of its budgeting process for the fiscal
year ahead, the Company continuously evaluates the uses of cash and
capital allocation priorities.”
John Lindsay concluded, “The Company will continue to execute as
it always has with a customer-centric approach and safety focus,
which is ingrained in our Company culture. We look forward to
commencing work in Saudi Arabia and taking advantage of additional
opportunities as those arise in the coming quarters."
Operating Segment Results for the Third
Quarter of Fiscal Year 2024
North America Solutions:
This segment had operating income of $163.4 million compared to
operating income of $147.1 million during the previous quarter. The
increase in operating income was primarily attributable to a higher
direct margin and the prior quarter experiencing higher
depreciation and research and development expenses. Direct
margin(2) increased by $6.0 million to $277.4 million
sequentially.
International Solutions:
This segment had an operating loss of $4.8 million compared to
operating income of $3.6 million during the previous quarter. The
decrease in operating income was mainly due to recommissioning
expenses for rigs that will be exported to Saudi Arabia and related
start-up costs. Direct margin(2) during the third fiscal quarter
was $0.4 million compared to $8.4 million during the previous
quarter. Current quarter results included a $2.1 million foreign
currency loss compared to a $0.5 million foreign currency loss in
the previous quarter.
Offshore Gulf of Mexico:
This segment had operating income of $5.0 million compared to
operating income of $0.1 million during the previous quarter.
Direct margin(2) for the quarter was $7.6 million compared to $2.9
million in the previous quarter. The increase in operating income
was primarily attributable to rigs moving to full operating rates
earlier than planned.
Operational Outlook for the Fourth
Quarter of Fiscal Year 2024
North America Solutions:
- We expect North America Solutions direct margins(2) to be
between $260-$280 million
- We expect to exit the quarter between approximately 147-153
contracted rigs
International Solutions:
- We expect International Solutions direct margins(2) to be
between $(2)-$2 million, exclusive of any foreign exchange gains or
losses
- Projected International Solutions direct margins(2) for the
fourth fiscal quarter are inclusive of approximately $6-$8 million
of rig preparation and start-up expense related to our Saudi Arabia
operations, higher than previous guidance as some costs shifted
from the third fiscal quarter into the fourth fiscal quarter
Offshore Gulf of Mexico:
- We expect Offshore Gulf of Mexico direct margins(2) to be
between $6-$8 million
Other Estimates for Fiscal Year
2024
- Gross capital expenditures are still expected to be
approximately $500 million;
- Ongoing asset sales that include reimbursements for lost and
damaged tubulars and sales of other used drilling equipment offset
a portion of the gross capital expenditures, and are now expected
to total approximately $45 million in fiscal year 2024
- Depreciation for fiscal year 2024 is now expected to be
approximately $400 million
- Research and development expenses for fiscal year 2024 are now
expected to be roughly $40 million
- General and administrative expenses for fiscal year 2024 are
now expected to be approximately $250 million
- Cash taxes to be paid in fiscal year 2024 are still expected to
be approximately $150-$200 million
Select Items(1) Included in Net Income
per Diluted Share
Third quarter of fiscal year 2024 net income of $0.88 per
diluted share included a net impact $(0.04) per share in after-tax
gains and losses comprised of the following:
- $0.06 of non-cash after-tax gains related to fair market value
adjustments to equity investments
- $(0.05) of after-tax losses on a Blue Chip Swap transaction to
repatriate cash to the U.S. from Argentina
- $(0.05) of after-tax losses related to non-recurring
professional service fees
Second quarter of fiscal year 2024 net income of $0.84 per
diluted share included $0.00 in after-tax losses comprised of the
following:
- $0.03 of non-cash after-tax gains related to fair market value
adjustments to equity investments
- $(0.03) of after-tax losses related to research and development
expenses associated with an asset acquisition
Conference Call
A conference call will be held on Thursday, July 25, 2024 at
11:00 a.m. (ET) with John Lindsay, President and CEO, Mark Smith,
Senior Vice President and CFO, and Dave Wilson, Vice President of
Investor Relations, to discuss the Company’s third quarter fiscal
year 2024 results. Dial-in information for the conference call is
(800) 225-9448 for domestic callers or (203) 518-9814 for
international callers. The call access code is ‘Helmerich’. You may
also listen to the conference call that will be broadcast live over
the Internet by logging on to the Company’s website at
http://www.helmerichpayne.com and accessing the corresponding link
through the investor relations section by clicking on “Investors”
and then clicking on “News and Events - Events & Presentations”
to find the event and the link to the webcast.
About Helmerich & Payne,
Inc.
Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE:
HP) is committed to delivering industry leading levels of drilling
productivity and reliability. H&P operates with the highest
level of integrity, safety and innovation to deliver superior
results for its customers and returns for shareholders. Through its
subsidiaries, the Company designs, fabricates and operates
high-performance drilling rigs in conventional and unconventional
plays around the world. H&P also develops and implements
advanced automation, directional drilling and survey management
technologies. At June 30, 2024, H&P's fleet included 232 land
rigs in the United States, 23 international land rigs and seven
offshore platform rigs. For more information, see H&P online at
www.helmerichpayne.com.
Forward-Looking
Statements
This release includes “forward-looking statements” within the
meaning of the Securities Act of 1933 and the Securities Exchange
Act of 1934, and such statements are based on current expectations
and assumptions that are subject to risks and uncertainties. All
statements other than statements of historical facts included in
this release, including, without limitation, statements regarding
the registrant’s business strategy, future financial position,
operations outlook, future cash flow, future use of generated cash
flow, dividend amounts and timing, supplemental shareholder return
plans and amounts of any future dividends, future share
repurchases, investments, active rig count projections, projected
costs and plans, objectives of management for future operations,
contract terms, financing and funding, capex spending and budgets,
outlook for domestic and international markets, future commodity
prices, and future customer activity and relationships are
forward-looking statements. For information regarding risks and
uncertainties associated with the Company’s business, please refer
to the “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections and other
disclosures in the Company’s SEC filings, including but not limited
to its annual report on Form 10‑K and quarterly reports on Form
10‑Q. As a result of these factors, Helmerich & Payne, Inc.’s
actual results may differ materially from those indicated or
implied by such forward-looking statements. Investors are cautioned
not to put undue reliance on such statements. We undertake no duty
to publicly update or revise any forward-looking statements,
whether as a result of new information, changes in internal
estimates, expectations or otherwise, except as required under
applicable securities laws.
Helmerich & Payne uses its Investor Relations website as a
channel of distribution for material company information. Such
information is routinely posted and accessible on its Investor
Relations website at www.helmerichpayne.com. Information on our
website is not part of this release.
Note Regarding Trademarks. Helmerich & Payne, Inc. owns
or has rights to the use of trademarks, service marks and trade
names that it uses in conjunction with the operation of its
business. Some of the trademarks that appear in this release or
otherwise used by H&P include FlexRig, which may be registered
or trademarked in the United States and other
jurisdictions.
(1) Select items are considered non-GAAP metrics and are
included as a supplemental disclosure as the Company believes
identifying and excluding select items is useful in assessing and
understanding current operational performance, especially in making
comparisons over time involving previous and subsequent periods
and/or forecasting future periods results. Select items are
excluded as they are deemed to be outside the Company's core
business operations. See Non-GAAP Measurements.
(2) Direct margin, which is considered a non-GAAP metric, is
defined as operating revenues (less reimbursements) less direct
operating expenses (less reimbursements) and is included as a
supplemental disclosure. We believe it is useful in assessing and
understanding our current operational performance, especially in
making comparisons over time. See Non-GAAP Measurements for a
reconciliation of segment operating income(loss) to direct margin.
Expected direct margin for the third quarter of fiscal 2024 is
provided on a non-GAAP basis only because certain information
necessary to calculate the most comparable GAAP measure is
unavailable due to the uncertainty and inherent difficulty of
predicting the occurrence and the future financial statement impact
of certain items. Therefore, as a result of the uncertainty and
variability of the nature and amount of future items and
adjustments, which could be significant, we are unable to provide a
reconciliation of expected direct margin to the most comparable
GAAP measure without unreasonable effort.
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Three Months Ended
Nine Months Ended
(in thousands, except per share
amounts)
June 30,
March 31,
June 30,
June 30,
June 30,
2024
2024
2023
2024
2023
OPERATING REVENUES
Drilling services
$
695,139
$
685,131
$
721,567
$
2,054,835
$
2,205,419
Other
2,585
2,812
2,389
7,979
7,396
697,724
687,943
723,956
2,062,814
2,212,815
OPERATING COSTS AND EXPENSES
Drilling services operating expenses,
excluding depreciation and amortization
417,028
401,851
429,182
1,222,182
1,306,543
Other operating expenses
1,144
1,026
1,003
3,307
3,317
Depreciation and amortization
97,816
104,545
94,811
296,352
287,721
Research and development
10,555
12,942
7,085
32,105
22,720
Selling, general and administrative
66,870
62,037
49,271
185,484
150,581
Asset impairment charges
—
—
—
—
12,097
Gain on reimbursement of drilling
equipment
(9,732
)
(7,461
)
(10,642
)
(24,687
)
(37,940
)
Other (gain) loss on sale of assets
2,730
2,431
4,504
2,718
(394
)
586,411
577,371
575,214
1,717,461
1,744,645
OPERATING INCOME
111,313
110,572
148,742
345,353
468,170
Other income (expense)
Interest and dividend income
11,888
6,567
10,748
29,189
20,508
Interest expense
(4,336
)
(4,261
)
(4,324
)
(12,969
)
(12,918
)
Gain (loss) on investment securities
389
3,747
(18,538
)
102
6,123
Other
3,134
400
(672
)
2,991
(1,218
)
11,075
6,453
(12,786
)
19,313
12,495
Income before income taxes
122,388
117,025
135,956
364,666
480,665
Income tax expense
33,703
32,194
40,663
95,977
124,187
NET INCOME
$
88,685
$
84,831
$
95,293
$
268,689
$
356,478
Basic earnings per common share
$
0.89
$
0.85
$
0.93
$
2.68
$
3.40
Diluted earnings per common share
$
0.88
$
0.84
$
0.93
$
2.67
$
3.39
Weighted average shares outstanding:
Basic
98,752
98,774
101,163
98,891
103,464
Diluted
99,007
99,046
101,550
99,116
103,852
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
June 30,
September 30,
(in thousands except share data and share
amounts)
2024
2023
ASSETS
Current Assets:
Cash and cash equivalents
$
203,633
$
257,174
Restricted cash
78,369
59,064
Short-term investments
86,088
93,600
Accounts receivable, net of allowance of
$2,377 and $2,688, respectively
415,395
404,188
Inventories of materials and supplies,
net
115,312
94,227
Prepaid expenses and other, net
71,522
97,727
Assets held-for-sale
—
645
Total current assets
970,319
1,006,625
Investments
292,229
264,947
Property, plant and equipment, net
3,014,345
2,921,695
Other Noncurrent Assets:
Goodwill
45,653
45,653
Intangible assets, net
55,752
60,575
Operating lease right-of-use asset
57,315
50,400
Other assets, net
49,369
32,061
Total other noncurrent assets
208,089
188,689
Total assets
$
4,484,982
$
4,381,956
LIABILITIES & SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
158,896
$
130,852
Dividends payable
42,045
25,194
Accrued liabilities
255,851
262,885
Total current liabilities
456,792
418,931
Noncurrent Liabilities:
Long-term debt, net
545,589
545,144
Deferred income taxes
494,412
517,809
Other
131,344
128,129
Total noncurrent liabilities
1,171,345
1,191,082
Shareholders' Equity:
Common stock, $0.10 par value, 160,000,000
shares authorized, 112,222,865 shares issued as of June 30, 2024
and September 30, 2023, and 98,755,412 and 99,426,526 shares
outstanding as of June 30, 2024 and September 30, 2023,
respectively
11,222
11,222
Preferred stock, no par value, 1,000,000
shares authorized, no shares issued
—
—
Additional paid-in capital
510,379
525,369
Retained earnings
2,833,136
2,707,715
Accumulated other comprehensive loss
(8,499
)
(7,981
)
Treasury stock, at cost, 13,467,453 shares
and 12,796,339 shares as of June 30, 2024 and September 30, 2023,
respectively
(489,393
)
(464,382
)
Total shareholders’ equity
2,856,845
2,771,943
Total liabilities and shareholders'
equity
$
4,484,982
$
4,381,956
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Nine Months Ended June
30,
(in thousands)
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
268,689
$
356,478
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
296,352
287,721
Asset impairment charges
—
12,097
Provision for credit loss
(213
)
2,165
Stock-based compensation
23,777
23,884
Gain on investment securities
(102
)
(6,123
)
Gain on reimbursement of drilling
equipment
(24,687
)
(37,940
)
Other (gain) loss on sale of assets
2,718
(394
)
Deferred income tax expense (benefit)
(23,634
)
4,197
Other
3,011
3,960
Changes in assets and liabilities
(30,004
)
(27,045
)
Net cash provided by operating
activities
515,907
619,000
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures
(389,095
)
(281,790
)
Purchase of short-term investments
(148,451
)
(102,140
)
Purchase of long-term investments
(9,167
)
(18,813
)
Proceeds from sale of short-term
investments
152,034
148,651
Insurance proceeds from involuntary
conversion
5,533
—
Proceeds from asset sales
35,148
63,048
Net cash used in investing activities
(353,998
)
(191,044
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Dividends paid
(126,417
)
(152,579
)
Payments for employee taxes on net
settlement of equity awards
(12,176
)
(14,410
)
Payment of contingent consideration from
acquisition of business
(6,250
)
(250
)
Share repurchases
(51,302
)
(247,213
)
Other
—
(540
)
Net cash used in financing activities
(196,145
)
(414,992
)
Net increase (decrease) in cash and cash
equivalents and restricted cash
(34,236
)
12,964
Cash and cash equivalents and restricted
cash, beginning of period
316,238
269,009
Cash and cash equivalents and restricted
cash, end of period
$
282,002
$
281,973
HELMERICH & PAYNE, INC.
SEGMENT REPORTING
Three Months Ended
Nine Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(in thousands, except operating
statistics)
2024
2024
2023
2024
2023
NORTH AMERICA SOLUTIONS
Operating revenues
$
620,040
$
613,339
$
641,612
$
1,827,661
$
1,944,555
Direct operating expenses
342,617
341,938
364,688
1,022,763
1,111,154
Depreciation and amortization
89,207
97,573
87,209
273,799
266,093
Research and development
10,623
13,006
7,254
32,318
23,051
Selling, general and administrative
expense
14,234
13,692
12,962
43,802
43,364
Asset impairment charges
—
—
—
—
3,948
Segment operating income
$
163,359
$
147,130
$
169,499
$
454,979
$
496,945
Financial Data and Other Operating
Statistics1:
Direct margin (Non-GAAP)2
$
277,423
$
271,401
$
276,924
$
804,898
$
833,401
Revenue days3
13,683
14,123
15,075
41,516
48,142
Average active rigs4
150
155
166
152
176
Number of active rigs at the end of
period5
146
152
153
146
153
Number of available rigs at the end of
period
232
233
233
232
233
Reimbursements of "out-of-pocket"
expenses
$
74,915
$
73,584
$
82,688
$
218,227
$
239,288
INTERNATIONAL SOLUTIONS
Operating revenues
$
47,882
$
45,878
$
48,692
$
148,512
$
159,383
Direct operating expenses
47,446
37,514
45,390
129,479
133,642
Depreciation
2,797
2,418
2,171
7,549
5,215
Selling, general and administrative
expense
2,483
2,377
2,528
7,336
8,245
Asset impairment charges
—
—
—
—
8,149
Segment operating income (loss)
$
(4,844
)
$
3,569
$
(1,397
)
$
4,148
$
4,132
Financial Data and Other Operating
Statistics1:
Direct margin (Non-GAAP)2
$
436
$
8,364
$
3,302
$
19,033
$
25,741
Revenue days3
1,067
1,038
1,215
3,278
3,618
Average active rigs4
12
11
13
12
13
Number of active rigs at the end of
period5
12
11
13
12
13
Number of available rigs at the end of
period
23
22
22
23
22
Reimbursements of "out-of-pocket"
expenses
$
2,069
$
1,964
$
2,098
$
7,417
$
7,743
OFFSHORE GULF OF MEXICO
Operating revenues
$
27,218
$
25,913
$
31,221
$
78,662
$
101,364
Direct operating expenses
19,611
23,010
23,913
62,200
75,292
Depreciation
1,798
1,941
1,873
5,807
5,671
Selling, general and administrative
expense
799
884
730
2,515
2,263
Segment operating income
$
5,010
$
78
$
4,705
$
8,140
$
18,138
Financial Data and Other Operating
Statistics1:
Direct margin (Non-GAAP)2
$
7,607
$
2,903
$
7,308
$
16,462
$
26,072
Revenue days3
273
273
364
835
1,092
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
$
7,746
$
8,857
$
7,823
$
24,430
$
23,006
(1)
These operating metrics and financial
data, including average active rigs, are provided to allow
investors to analyze the various components of segment financial
results in terms of activity, utilization and other key results.
Management uses these metrics to analyze historical segment
financial results and as the key inputs for forecasting and
budgeting segment financial results.
(2)
Direct margin, which is considered a
non-GAAP metric, is defined as operating revenues (less
reimbursements) less direct operating expenses (less
reimbursements) and is included as a supplemental disclosure
because we believe it is useful in assessing and understanding our
current operational performance, especially in making comparisons
over time. See — Non-GAAP Measurements below for a reconciliation
of segment operating income (loss) to direct margin.
(3)
Defined as the number of contractual days
we recognized revenue for during the period.
(4)
Active rigs generate revenue for the
Company; accordingly, 'average active rigs' represents the average
number of rigs generating revenue during the applicable time
period. This metric is calculated by dividing revenue days by total
days in the applicable period (i.e. 91 days for the three months
ended June 30, 2024, March 31, 2024, and June 30, 2023, 274 days
for the nine months ended June 30, 2024 and 273 days for the nine
months ended June 30, 2023).
(5)
Defined as the number of rigs generating
revenue at the applicable end date of the time period.
Segment operating income (loss) for all segments is a non-GAAP
financial measure of the Company’s performance, as it excludes gain
on sale of assets, corporate selling, general and administrative
expenses and corporate depreciation. The Company considers segment
operating income (loss) to be an important supplemental measure of
operating performance for presenting trends in the Company’s core
businesses. This measure is used by the Company to facilitate
period-to-period comparisons in operating performance of the
Company’s reportable segments in the aggregate by eliminating items
that affect comparability between periods. The Company believes
that segment operating income (loss) is useful to investors because
it provides a means to evaluate the operating performance of the
segments and the Company on an ongoing basis using criteria that
are used by our internal decision makers. Additionally, it
highlights operating trends and aids analytical comparisons.
However, segment operating income (loss) has limitations and should
not be used as an alternative to operating income or loss, a
performance measure determined in accordance with GAAP, as it
excludes certain costs that may affect the Company’s operating
performance in future periods.
Income from discontinued operations was presented as a separate
line item on our Unaudited Condensed Consolidated Statements of
Operations during the three and nine months ended June 30, 2023. To
conform with the current fiscal year presentation, we reclassified
amounts previously presented in Income from discontinued
operations, which were not material, to Other within Other income
(expense) on our Unaudited Condensed Consolidated Statements of
Operations for the three and nine months ended June 30, 2023.
The following table reconciles operating income per the
information above to income (loss) from continuing operations
before income taxes as reported on the Unaudited Condensed
Consolidated Statements of Operations:
Three Months Ended
Nine Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(in thousands)
2024
2024
2023
2024
2023
Operating income (loss)
North America Solutions
$
163,359
$
147,130
$
169,499
$
454,979
$
496,945
International Solutions
(4,844
)
3,569
(1,397
)
4,148
4,132
Offshore Gulf of Mexico
5,010
78
4,705
8,140
18,138
Other
(4,791
)
2,785
2,104
(2,073
)
13,604
Eliminations
(616
)
(772
)
4,470
(1,054
)
4,513
Segment operating income
$
158,118
$
152,790
$
179,381
$
464,140
$
537,332
Gain on reimbursement of drilling
equipment
9,732
7,461
10,642
24,687
37,940
Other gain (loss) on sale of assets
(2,730
)
(2,431
)
(4,504
)
(2,718
)
394
Corporate selling, general and
administrative costs and corporate depreciation
(53,807
)
(47,248
)
(36,777
)
(140,756
)
(107,496
)
Operating income
$
111,313
$
110,572
$
148,742
$
345,353
$
468,170
Other income (expense):
Interest and dividend income
11,888
6,567
10,748
29,189
20,508
Interest expense
(4,336
)
(4,261
)
(4,324
)
(12,969
)
(12,918
)
Gain (loss) on investment securities
389
3,747
(18,538
)
102
6,123
Other
3,134
400
(672
)
2,991
(1,218
)
Total unallocated amounts
11,075
6,453
(12,786
)
19,313
12,495
Income before income taxes
$
122,388
$
117,025
$
135,956
$
364,666
$
480,665
SUPPLEMENTARY STATISTICAL
INFORMATION
Unaudited
U.S. LAND RIG COUNTS &
MARKETABLE FLEET STATISTICS
July 24,
June 30,
March 31,
Q3FY24
2024
2024
2024
Average
U.S. Land Operations
Term Contract Rigs
88
83
96
86
Spot Contract Rigs
60
63
56
64
Total Contracted Rigs
148
146
152
150
Idle or Other Rigs
84
86
81
82
Total Marketable Fleet
232
232
233
232
H&P GLOBAL FLEET UNDER
TERM CONTRACT STATISTICS
Number of Rigs Already Under
Long-Term Contracts(*)
(Estimated Quarterly Average —
as of 6/30/24)
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Segment
FY24
FY25
FY25
FY25
FY25
FY26
FY26
U.S. Land Operations
86.9
72.5
40.8
30.4
27.1
19.3
4.0
International Land Operations
9.0
10.9
13.1
11.7
11.0
10.9
10.0
Offshore Operations
—
—
—
—
—
—
—
Total
95.9
83.4
53.9
42.1
38.1
30.2
14.0
(*) All of the above rig contracts have
original terms equal to or in excess of six months and include
provisions for early termination fees.
NON-GAAP MEASUREMENTS
NON-GAAP RECONCILIATION OF
SELECT ITEMS AND ADJUSTED NET INCOME(**)
Three Months Ended June 30,
2024
(in thousands, except per share data)
Pretax
Tax Impact
Net
EPS
Net income (GAAP basis)
$
88,685
$
0.88
(-) Fair market adjustment to equity
investments
$
7,508
$
1,944
$
5,564
$
0.06
(-) Non-recurring professional service
fees
$
(6,680
)
$
(1,730
)
$
(4,950
)
$
(0.05
)
(-) Losses on a Blue Chip Swap
transaction
$
(7,112
)
$
(1,842
)
$
(5,270
)
$
(0.05
)
Adjusted net income
$
93,341
$
0.92
Three Months Ended March 31,
2024
(in thousands, except per share data)
Pretax
Tax Impact
Net
EPS
Net income (GAAP basis)
$
84,831
$
0.84
(-) Fair market adjustment to equity
investments
$
3,777
$
920
$
2,857
$
0.03
(-) Research and development expenses
associated with an asset acquisition
$
(3,840
)
$
(995
)
$
(2,845
)
$
(0.03
)
Adjusted net income
$
84,819
$
0.84
(**)The Company believes identifying and excluding select items
is useful in assessing and understanding current operational
performance, especially in making comparisons over time involving
previous and subsequent periods and/or forecasting future period
results. Select items are excluded as they are deemed to be outside
of the Company's core business operations.
NON-GAAP
RECONCILIATION OF DIRECT MARGIN
Direct margin is considered a non-GAAP metric. We define "direct
margin" as operating revenues (less reimbursements) less direct
operating expenses (less reimbursements). Direct margin is included
as a supplemental disclosure because we believe it is useful in
assessing and understanding our current operational performance,
especially in making comparisons over time. Direct margin is not a
substitute for financial measures prepared in accordance with GAAP
and should therefore be considered only as supplemental to such
GAAP financial measures.
The following table reconciles direct margin to segment
operating income (loss), which we believe is the financial measure
calculated and presented in accordance with GAAP that is most
directly comparable to direct margin.
Three Months Ended June 30,
2024
(in thousands)
North America
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 March 31,
2024
(in thousands)
North America
Solutions
International
Solutions
Offshore Gulf of
Mexico
Segment operating income
$
147,130
$
3,569
$
78
Add back:
Depreciation and amortization
97,573
2,418
1,941
Research and development
13,006
—
—
Selling, general and administrative
expense
13,692
2,377
884
Direct margin (Non-GAAP)
$
271,401
$
8,364
$
2,903
Three Months Ended June 30,
2023
(in thousands)
North America
Solutions
International
Solutions
Offshore Gulf of
Mexico
Segment operating income (loss)
$
169,499
$
(1,397
)
$
4,705
Add back:
Depreciation and amortization
87,209
2,171
1,873
Research and development
7,254
—
—
Selling, general and administrative
expense
12,962
2,528
730
Direct margin (Non-GAAP)
$
276,924
$
3,302
$
7,308
Nine Months Ended June 30,
2024
(in thousands)
North America
Solutions
International
Solutions
Offshore Gulf of
Mexico
Segment operating income
$
454,979
$
4,148
$
8,140
Add back:
Depreciation and amortization
273,799
7,549
5,807
Research and development
32,318
—
—
Selling, general and administrative
expense
43,802
7,336
2,515
Direct margin (Non-GAAP)
$
804,898
$
19,033
$
16,462
Nine Months Ended June 30,
2023
(in thousands)
North America
Solutions
International
Solutions
Offshore Gulf of
Mexico
Segment operating income
$
496,945
$
4,132
$
18,138
Add back:
Depreciation and amortization
266,093
5,215
5,671
Research and development
23,051
—
—
Selling, general and administrative
expense
43,364
8,245
2,263
Asset impairment charges
3,948
8,149
—
Direct margin (Non-GAAP)
$
833,401
$
25,741
$
26,072
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240724653817/en/
Dave Wilson, Vice President of Investor Relations
investor.relations@hpinc.com (918) 588‑5190
Helmerich and Payne (NYSE:HP)
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