- The North America Solutions ("NAS") segment exited the first
quarter of fiscal year 2024 with 151 active rigs and experienced an
increase in revenue per day of approximately $1,000/day to
$38,300/day on a sequential basis, while direct margins(1) per day
increased by approximately $1,200/day to $18,700/day
- The Company reported fiscal first quarter net income of $95
million, or $0.94 per diluted share; including select items(2) of
$(0.03) per diluted share
- Quarterly NAS operating income increased $16 million
sequentially, while direct margins(1) increased $17 million to
approximately $256 million, as revenues increased by $19 million to
$594 million and expenses increased by $2 million to $338
million
- H&P's NAS segment anticipates exiting the second quarter
of fiscal year 2024 between 154-159 active rigs
- The Company recently received preliminary notification of an
award for seven super-spec rigs in the Middle East
- During the first fiscal quarter, the Company returned
approximately $90 million of capital to shareholders as follows:
$25 million in base dividends, $17 million in supplemental
dividends and $47 million in share repurchases(3)
- On December 6, 2023, 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 February 27, 2024 to stockholders of record at the close
of business on February 13, 2024
Helmerich & Payne, Inc. (NYSE: HP) reported net income of
$95 million, or $0.94 per diluted share, from operating revenues of
$677 million for the quarter ended December 31, 2023, compared to
net income of $78 million, or $0.77 per diluted share, from
operating revenues of $660 million for the quarter ended September
30, 2023. The net income per diluted share for the first quarter of
fiscal 2024 and fourth quarter of fiscal 2023 include $(0.03) and
$0.08 of after-tax losses and gains, respectively, comprised of
select items(2). For the first quarter of fiscal year 2024, select
items were comprised of:
- $(0.03) of after-tax losses related to the non-cash fair market
value adjustments to our equity investments
Net cash provided by operating activities was $175 million for
the first quarter of fiscal year 2024 compared to net cash provided
by operating activities of $215 million for the fourth quarter of
fiscal year 2023.
President and CEO John Lindsay commented, "The Company performed
well both operationally and financially during the first fiscal
quarter of 2024 despite the persistent volatility in crude oil and
natural gas prices. During the quarter, the Company's stock price
continued to trade as it has historically, with a strong
correlation to crude oil prices and industry rig count. Decoupling
from these traditional macro measures will require proving our
ability to maintain returns above our cost of capital through the
cycles, and I believe our fiscal first quarter results are another
step in that direction.
"Expectations for modest incremental rig adds during the quarter
were further tempered to some extent by the ongoing churn we are
experiencing in the market and, as a result, we exited the December
quarter at 151 active rigs, towards the lower end of our guidance
range. We expect this churn to continue in the March quarter as
E&P budgets are being reset in a relatively weaker commodity
price environment, particularly on the natural gas side. From a
North America Solutions margin perspective, the Company delivered
direct margins that were higher on a sequential basis, indicating
that our direct margins, like our rig count, may have experienced a
trough during our fourth fiscal quarter of 2023. Looking out, we
project our North America Solutions direct margins to remain
relatively flat to up slightly during the March quarter.
"In our International Solutions segment we are very excited
regarding recent developments that are tangible proof of our
execution on our international expansion strategy. The Company
recently received preliminary notification, subject to finalization
of contractual agreements, that it has been awarded seven
super-spec FlexRigs for work in a drilling campaign in the Middle
East. These rigs are expected to commence operations shortly after
delivery, which is currently scheduled for the first half of fiscal
2025. Additionally, these rigs will be sourced from our idle
super-spec rigs in the U.S., converted to walking configurations,
and further equipped to suit contractual specifications.
Furthermore, in the Middle East we have been successful in
contracting an additional rig in Bahrain. The super-spec rig to be
utilized for this work is already located in the region as part of
our Middle East hub and it is expected to commence operations
during the summer of 2024. These are positive outcomes in our
Middle East expansion strategy, and we look forward to further
growth in the future."
Senior Vice President and CFO Mark Smith also commented, "During
the quarter, we executed on our fiscal 2024 supplemental
shareholder return plan, returning approximately $42 million to
shareholders in the form of base and supplemental dividends.
Additionally, we exhausted our calendar 2023 share repurchase
authorization of 7 million shares by repurchasing roughly 1.3
million shares for approximately $47 million. At the start of the
new calendar year, our share repurchase authorization was reset to
4 million shares. These actions demonstrate our prioritization of
returning cash to shareholders and highlight our shareholder
capital allocation strategy.
"Given the outlook for a lower level of crude oil production
growth in the U.S. in 2024, combined with the recent volatility in
commodity prices, we expect our rig count will only grow modestly
in fiscal 2024. That is something we had already contemplated as
part of our fiscal 2024 capex budget, so we do not currently
believe we need to modify our capex plans. We believe current
conditions highlight the continued need to remain focused on our
NAS margins and reinforce support for the international expansion
strategy we are undertaking. Along those lines, the planned capex
for the recent seven-rig award was included in our fiscal 2024
capex budget that we announced last October. Furthermore, this
award supports our goals of not only expanding internationally, but
also reducing the available supply of our idle super-spec rigs in
the U.S. market."
John Lindsay concluded, “Every year in this industry new
challenges arise, many resulting from supply and demand dynamics
that ultimately result in crude oil and natural gas price
volatility. As difficult as it is to manage in these times, we also
see these headwinds as opportunities to show-case the exceptional
capabilities of our fleet and to demonstrate the value our
technology, processes and people bring to providing drilling
solutions for our customers. For our part, we will remain focused
on our goals and execute toward their achievement in the long-term.
Our recent successes on the international front are evidence of
this with our announcement of securing work for eight rigs in the
Middle East, subject to finalization of contractual agreements.
Including the one rig contracted in August 2023, we now have plans
to put nine additional rigs to work in the Middle East, which when
they begin operations will nearly double our existing international
active rig count."
Operating Segment Results for the First
Quarter of Fiscal Year 2024
North America Solutions:
This segment had operating income of $144.5 million compared to
operating income of $128.5 million during the previous quarter. The
increase in operating income was primarily attributable to
sequentially higher operating revenues offset by only a modest
increase in direct operating expenses. Direct margin(1) increased
by $17.3 million to $256.1 million sequentially.
International Solutions:
This segment had operating income of $5.4 million compared to an
operating loss of $5.0 million during the previous quarter. The
increase in operating income was mainly due to prior quarter
results being adversely impacted by costs associated with preparing
U.S. rigs for international deployment, additional expat expenses
and a relatively large foreign currency loss. Direct margin(1)
during the first fiscal quarter was $10.2 million compared to a
$0.5 million loss during the previous quarter. Current quarter
results included a $1.8 million foreign currency loss compared to a
$4.6 million foreign currency loss in the previous quarter.
Offshore Gulf of Mexico:
This segment had operating income of $3.1 million compared to
operating income of $4.7 million during the previous quarter.
Direct margin(1) for the quarter was $6.0 million compared to $7.4
million in the previous quarter primarily driven by the anticipated
activity decline.
Operational Outlook for the Second
Quarter of Fiscal Year 2024
North America Solutions:
- We expect North America Solutions direct margins(1) to be
between $255-$275 million
- We expect to exit the quarter between approximately 154-159
contracted rigs
International Solutions:
- We expect International Solutions direct margins(1) to be
between $1-$3 million, exclusive of any foreign exchange gains or
losses; the projected sequential decline is due to one less rig
operating in both Argentina and Colombia and expenses related to
preparing rigs for export
Offshore Gulf of Mexico:
- We expect Offshore Gulf of Mexico direct margins(1) to be
between $4-$7 million
Other Estimates for Fiscal Year
2024
- Gross capital expenditures are still expected to be
approximately $450 to $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 still expected
to total approximately $50 million in fiscal year 2024
- Depreciation for fiscal year 2024 is still expected to be
approximately $390 million
- Research and development expenses for fiscal year 2024 are
still expected to be roughly $30 million
- General and administrative expenses for fiscal year 2024 are
still expected to be approximately $230 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
First quarter of fiscal year 2024 net income of $0.94 per
diluted share included $(0.03) in after-tax losses comprised of the
following:
- $(0.03) of non-cash after-tax losses related to fair market
value adjustments to equity investments
Fourth quarter of fiscal year 2023 net income of $0.77 per
diluted share included $0.08 in after-tax gains comprised of the
following:
- $0.13 of non-cash after-tax gains related to fair market value
adjustments to equity investments
- $0.05 of after-tax gains related to net settlements and
accruals of certain outstanding claims
- $(0.01) of non-cash after-tax losses related to the change in
the fair value of certain contingent liabilities
- $(0.09) of after-tax losses on a Blue Chip Swap transaction to
repatriate cash to the U.S. from Argentina
Conference Call
A conference call will be held on Tuesday, January 30, 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 first quarter fiscal
year 2024 results. Dial-in information for the conference call is
(800) 895-3367 for domestic callers or (785) 424-1061 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 December 31, 2023, H&P's fleet included 233
land rigs in the United States, 22 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, conversion of rig
awards to definitive agreements on the terms and timing currently
expected, 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 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) 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 second 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.
(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) During the first fiscal quarter of fiscal 2024, H&P
repurchased approximately 1.3 million shares for approximately $47
million.
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Three Months Ended
(in thousands, except per share
amounts)
December 31,
September 30,
December 31,
2023
2023
2022
OPERATING REVENUES
Drilling services
$
674,565
$
657,258
$
717,170
Other
2,582
2,348
2,467
677,147
659,606
719,637
OPERATING COSTS AND EXPENSES
Drilling services operating expenses,
excluding depreciation and amortization
403,303
408,555
428,251
Other operating expenses
1,137
1,160
1,126
Depreciation and amortization
93,991
94,593
96,655
Research and development
8,608
7,326
6,933
Selling, general and administrative
56,577
56,076
48,455
Asset impairment charges
—
—
12,097
Gain on reimbursement of drilling
equipment
(7,494
)
(10,233
)
(15,724
)
Other (gain) loss on sale of assets
(2,443
)
8,410
(2,379
)
553,679
565,887
575,414
OPERATING INCOME
123,468
93,719
144,223
Other income (expense)
Interest and dividend income
10,734
7,885
4,705
Interest expense
(4,372
)
(4,365
)
(4,355
)
Gain (loss) on investment securities
(4,034
)
5,176
(15,091
)
Other
(543
)
10,299
58
1,785
18,995
(14,683
)
Income before income taxes
125,253
112,714
129,540
Income tax expense
30,080
35,092
32,395
NET INCOME
$
95,173
$
77,622
$
97,145
Basic earnings per common share
$
0.95
$
0.78
$
0.92
Diluted earnings per common share
$
0.94
$
0.77
$
0.91
Weighted average shares outstanding:
Basic
99,143
99,427
105,248
Diluted
99,628
99,884
106,104
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
December 31,
September 30,
(in thousands except share data and share
amounts)
2023
2023
ASSETS
Current Assets:
Cash and cash equivalents
$
214,104
$
257,174
Restricted cash
65,137
59,064
Short-term investments
84,121
93,600
Accounts receivable, net of allowance of
$3,948 and $2,688, respectively
435,819
404,188
Inventories of materials and supplies,
net
101,419
94,227
Prepaid expenses and other, net
88,080
97,727
Assets held-for-sale
—
645
Total current assets
988,680
1,006,625
Investments
263,443
264,947
Property, plant and equipment, net
2,970,371
2,921,695
Other Noncurrent Assets:
Goodwill
45,653
45,653
Intangible assets, net
58,968
60,575
Operating lease right-of-use asset
62,254
50,400
Other assets, net
31,959
32,061
Total other noncurrent assets
198,834
188,689
Total assets
$
4,421,328
$
4,381,956
LIABILITIES & SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
157,302
$
130,852
Dividends payable
41,993
25,194
Accrued liabilities
269,691
262,885
Total current liabilities
468,986
418,931
Noncurrent Liabilities:
Long-term debt, net
545,292
545,144
Deferred income taxes
510,015
517,809
Other
137,389
128,129
Total noncurrent liabilities
1,192,696
1,191,082
Shareholders' Equity:
Common stock, $0.10 par value, 160,000,000
shares authorized, 112,222,865 shares issued as of December 31,
2023 and September 30, 2023, and 98,623,747 and 99,426,526 shares
outstanding as of December 31, 2023 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
506,672
525,369
Retained earnings
2,743,794
2,707,715
Accumulated other comprehensive loss
(7,847
)
(7,981
)
Treasury stock, at cost, 13,599,118 shares
and 12,796,339 shares as of December 31, 2023 and September 30,
2023, respectively
(494,195
)
(464,382
)
Total shareholders’ equity
2,759,646
2,771,943
Total liabilities and shareholders'
equity
$
4,421,328
$
4,381,956
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months Ended December
31,
(in thousands)
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
95,173
$
97,145
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
93,991
96,655
Asset impairment charges
—
12,097
Provision for credit loss
1,309
3,358
Stock-based compensation
7,672
8,273
Loss on investment securities
4,034
15,091
Gain on reimbursement of drilling
equipment
(7,494
)
(15,724
)
Other gain on sale of assets
(2,443
)
(2,379
)
Deferred income tax expense (benefit)
(7,829
)
188
Other
(856
)
7,274
Changes in assets and liabilities
(8,759
)
(36,603
)
Net cash provided by operating
activities
174,798
185,375
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures
(136,411
)
(96,027
)
Purchase of short-term investments
(46,250
)
(41,641
)
Purchase of long-term investments
(291
)
(16,237
)
Proceeds from sale of short-term
investments
57,956
40,758
Proceeds from asset sales
11,929
30,978
Net cash used in investing activities
(113,067
)
(82,169
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Dividends paid
(42,294
)
(51,764
)
Payments for employee taxes on net
settlement of equity awards
(8,820
)
(9,483
)
Payment of contingent consideration from
acquisition of business
(250
)
(250
)
Share repurchases
(47,364
)
(39,060
)
Net cash used in financing activities
(98,728
)
(100,557
)
Net increase (decrease) in cash and cash
equivalents and restricted cash
(36,997
)
2,649
Cash and cash equivalents and restricted
cash, beginning of period
316,238
269,009
Cash and cash equivalents and restricted
cash, end of period
$
279,241
$
271,658
HELMERICH & PAYNE, INC.
SEGMENT REPORTING
Three Months Ended
December 31,
September 30,
December 31,
(in thousands, except operating
statistics)
2023
2023
2022
NORTH AMERICA SOLUTIONS
Operating revenues
$
594,282
$
575,188
$
627,163
Direct operating expenses
338,208
336,374
366,855
Depreciation and amortization
87,019
87,883
89,814
Research and development
8,689
7,406
7,059
Selling, general and administrative
expense
15,876
15,003
14,190
Asset impairment charges
—
—
3,948
Segment operating income
$
144,490
$
128,522
$
145,297
Financial Data and Other Operating
Statistics1:
Direct margin (Non-GAAP)2
$
256,074
$
238,814
$
260,308
Revenue days3
13,711
13,672
16,578
Average active rigs4
149
149
180
Number of active rigs at the end of
period5
151
147
184
Number of available rigs at the end of
period
233
233
235
Reimbursements of "out-of-pocket"
expenses
$
69,728
$
65,582
$
79,159
INTERNATIONAL SOLUTIONS
Operating revenues
$
54,752
$
53,183
$
54,801
Direct operating expenses
44,519
53,650
40,977
Depreciation
2,334
2,400
1,392
Selling, general and administrative
expense
2,476
2,156
2,709
Asset impairment charges
—
—
8,149
Segment operating income (loss)
$
5,423
$
(5,023
)
$
1,574
Financial Data and Other Operating
Statistics1:
Direct margin (Non-GAAP)2
$
10,233
$
(467
)
$
13,824
Revenue days3
1,173
1,170
1,140
Average active rigs4
13
13
12
Number of active rigs at the end of
period5
12
13
13
Number of available rigs at the end of
period
22
22
20
Reimbursements of "out-of-pocket"
expenses
$
3,384
$
2,484
$
2,856
OFFSHORE GULF OF MEXICO
Operating revenues
$
25,531
$
28,880
$
35,164
Direct operating expenses
19,579
21,489
25,691
Depreciation
2,068
1,951
1,894
Selling, general and administrative
expense
832
772
833
Segment operating income
$
3,052
$
4,668
$
6,746
Financial Data and Other Operating
Statistics1:
Direct margin (Non-GAAP)2
$
5,952
$
7,391
$
9,473
Revenue days3
289
368
368
Average active rigs4
3
4
4
Number of active rigs at the end of
period5
3
4
4
Number of available rigs at the end of
period
7
7
7
Reimbursements of "out-of-pocket"
expenses
$
7,827
$
7,439
$
7,189
(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 December 31, 2023 and 2022 and the three months 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 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 months ended December 31, 2022. 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 months ended December 31, 2022.
The following table reconciles operating income (loss) per the
information above to income (loss) from continuing operations
before income taxes as reported on the Unaudited Condensed
Consolidated Statements of Operations:
Three Months Ended
December 31,
September 30,
December 31,
(in thousands)
2023
2023
2022
Operating income (loss)
North America Solutions
$
144,490
$
128,522
$
145,297
International Solutions
5,423
(5,023
)
1,574
Offshore Gulf of Mexico
3,052
4,668
6,746
Other
(67
)
2,272
4,677
Eliminations
334
158
2,310
Segment operating income
$
153,232
$
130,597
$
160,604
Gain on reimbursement of drilling
equipment
7,494
10,233
15,724
Other gain (loss) on sale of assets
2,443
(8,410
)
2,379
Corporate selling, general and
administrative costs and corporate depreciation
(39,701
)
(38,701
)
(34,484
)
Operating income
$
123,468
$
93,719
$
144,223
Other income (expense):
Interest and dividend income
10,734
7,885
4,705
Interest expense
(4,372
)
(4,365
)
(4,355
)
Gain (loss) on investment securities
(4,034
)
5,176
(15,091
)
Other
(543
)
10,299
58
Total unallocated amounts
1,785
18,995
(14,683
)
Income before income taxes
$
125,253
$
112,714
$
129,540
SUPPLEMENTARY STATISTICAL
INFORMATION
Unaudited
U.S. LAND RIG COUNTS &
MARKETABLE FLEET STATISTICS
January 29,
December 31,
September 30,
Q1FY24
2024
2023
2023
Average
U.S. Land Operations
Term Contract Rigs
93
89
85
87
Spot Contract Rigs
61
62
62
62
Total Contracted Rigs
154
151
147
149
Idle or Other Rigs
79
82
86
84
Total Marketable Fleet
233
233
233
233
H&P GLOBAL FLEET UNDER
TERM CONTRACT STATISTICS
Number of Rigs Already Under
Long-Term Contracts(*)
(Estimated Quarterly Average —
as of 12/31/23)
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Segment
FY24
FY24
FY24
FY25
FY25
FY25
FY25
U.S. Land Operations
91.3
85.0
74.0
43.0
30.5
22.3
20.9
International Land Operations
7.0
6.7
5.9
5.0
4.4
3.7
3.0
Offshore Operations
—
—
—
—
—
—
Total
98.3
91.7
79.9
48.0
34.9
26.0
23.9
(*) All of the above rig contracts have
original terms equal to or in excess of six months and include
provisions for early termination fees.
NON-GAAP MEASUREMENTS
NON-GAAP RECONCILIATION OF
SELECT ITEMS AND ADJUSTED NET INCOME(**)
Three Months Ended December
31, 2023
(in thousands, except per share data)
Pretax
Tax
Net
EPS
Net income (GAAP basis)
$
95,173
$
0.94
(-) Fair market adjustment to equity
investments
$
(4,102
)
$
(1,005
)
$
(3,097
)
$
(0.03
)
Adjusted net income
$
98,270
$
0.97
Three Months Ended September
30, 2023
(in thousands, except per share data)
Pretax
Tax
Net
EPS
Net income (GAAP basis)
$
77,622
$
0.77
(-) Fair market adjustment to equity
investments
$
17,286
$
4,715
$
12,571
$
0.13
(-) Net settlements and accruals related
to certain outstanding claims
$
7,112
$
1,913
$
5,199
$
0.05
(-) Contingent liabilities
$
(2,000
)
$
(583
)
$
(1,417
)
$
(0.01
)
(-) Losses on a Blue Chip Swap
transaction
$
(12,158
)
$
(3,270
)
$
(8,888
)
$
(0.09
)
Adjusted net income
$
70,157
$
0.69
(**)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 December
31, 2023
(in thousands)
North America
Solutions
International
Solutions
Offshore Gulf of
Mexico
Segment operating income
$
144,490
$
5,423
$
3,052
Add back:
Depreciation and amortization
87,019
2,334
2,068
Research and development
8,689
—
—
Selling, general and administrative
expense
15,876
2,476
832
Direct margin (Non-GAAP)
$
256,074
$
10,233
$
5,952
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
Three Months Ended December
31, 2022
(in thousands)
North America
Solutions
International
Solutions
Offshore Gulf of
Mexico
Segment operating income
$
145,297
$
1,574
$
6,746
Add back:
Depreciation and amortization
89,814
1,392
1,894
Research and development
7,059
—
—
Selling, general and administrative
expense
14,190
2,709
833
Asset impairment charges
3,948
8,149
—
Direct margin (Non-GAAP)
$
260,308
$
13,824
$
9,473
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240129647706/en/
Dave Wilson, Vice President of Investor Relations
investor.relations@hpinc.com (918) 588‑5190
Helmerich and Payne (NYSE:HP)
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