Business Wire | Jan 31, 2022 04:15PM EST

Helmerich & Payne, Inc. Announces First Quarter Results

Jan. 31, 2022

TULSA, Okla.--(BUSINESS WIRE)--Jan. 31, 2022--Helmerich & Payne, Inc. (NYSE: HP) reported a net loss of $51 million, or $(0.48) per diluted share, from operating revenues of $410 million for the quarter ended December 31, 2021, compared to a net loss of $79 million, or $(0.74) per diluted share, on revenues of $344 million for the quarter ended September 30, 2021. The net losses per diluted share for first quarter of fiscal year 2022 and the fourth quarter of fiscal year 2021 include $(0.03) and $(0.12), respectively, of after-tax gains and losses comprised of select items(2). For the first quarter of fiscal year 2022, select items(2) were comprised of:

* $0.51 of after-tax gains pertaining to a non-cash fair market adjustment to our equity investments and a settlement of a previous contractual dispute with an international customer

* $(0.54) of after-tax losses pertaining to a debt make-whole premium and write-off of debt discount and issuance costs, a non-cash impairment for fair market adjustments to decommissioned rigs and equipment that are held for sale, losses on sale of assets, and restructuring charges

Net cash used by operating activities was $4 million for the first quarter of fiscal year 2022 compared to net cash provided by operating activities of $47 million in the prior quarter.

President and CEO John Lindsay commented, "I am encouraged by the progress the industry has made on its path to recovery from the market collapse in 2020. Increasing demand for super-spec rigs has predictably led to a very tight market in 2022. As expected this demand increase resulted in a significant uptick in our rig count during the first fiscal quarter, which we anticipate will likely be followed by a more moderate, yet still healthy increase in the second fiscal quarter. H&P's ability to provide superior rigs, people, and digital technologies culminates in a compelling value proposition for customers in this environment. Our position as a leading drilling solutions provider is strengthening as evidenced by our market share growth.

"The rig demand experienced thus far, combined with costs associated with reactivating idle super-spec rigs and other general operating cost inflation, has led to an increase in leading-edge pricing. However, higher pricing is required, not only due to the near-term scarcity of readily available super-spec rigs and the long-term supply constraints of the industry, but also for the value creation of a well-placed, high-quality wellbore. Additional pricing momentum is warranted to recoup reactivation costs and inflationary adjustments we have experienced over the past decade and as a return for the value proposition H&P offers the customer. Notwithstanding the activity improvements and higher commodity prices that have benefited the industry, from an oilfield service provider perspective, substantially higher pricing is still required in order to generate the returns necessary to attract and retain investors and for this business to be vibrant and sustainable.

"The activity outlook for international markets is positive, however in the near term our rig count in the Middle East is expected to decline due to two unexpected rig releases. We are excited about our strategic alliance and the investment we have made with ADNOC Drilling and we look forward to further expanding that relationship as well as developing additional opportunities in the Middle East region. Our activity in South America is improving slowly and we remain encouraged by the prospects for additional growth in the coming quarters and beyond."

Senior Vice President and CFO Mark Smith also commented, "The strength of our balance sheet underpins our ability to focus on the long-term and execute across different capital allocation opportunities. Our attractive debt refinance, at a low 2.90% coupon rate and extended 10-year maturity, and our $100 million investment in ADNOC Drilling's IPO, now with a market value in excess of $140 million, are recent examples. This strength also enables H&P to respond to specific customer needs as well as to generate additional returns and garner market share by converting some of our skidding rigs to walking rigs. Similar to our E&P customers we will maintain our strong capex budget discipline when it comes to allocating capital.

"These various return-enhancing allocations of capital are being accomplished simultaneously as we provide a return of cash to our shareholders, something we have done uninterrupted for more than 60 years with our dividend. More recently, we augmented our dividend returns with share repurchases that encompassed buying back approximately 3.1(3) million shares for roughly $76(3) million."

John Lindsay concluded, "Despite the industry challenges faced during the past couple of years we remain focused on our long-term opportunities with a strong disciplined approach of allocating capital to return-accretive endeavors for the long-term benefit of our shareholders. This would not be possible without the hard work and dedication of H&P employees, both past and present, who continually set the standard in the industry. Over one hundred years of drilling experience combined with our uniform FlexRig(r) fleet and industry leading automation solutions puts us in a great position as we move forward. Our rigs, automation solutions, and digital portfolio have compelling value propositions for both North America and international markets. The momentum we built during fiscal 2021 carries into fiscal 2022 with a fresh sense of optimism. We look forward to strengthening our partnerships with new and existing customers, and developing drilling solutions that contribute to our mutual successes."

Operating Segment Results for the First Quarter of Fiscal Year 2022

North America Solutions:

This segment had an operating loss of $28.9 million compared to an operating loss of $60.7 million during the previous quarter. The decrease in the operating loss was primarily due to higher activity levels and the prior quarter being adversely impacted by an impairment for fair market adjustments for equipment held for sale. Absent the select item(2) negative impacts of the fair market impairments and restructuring charges for the quarters, this segment's operating loss improved by $16.9 million on a sequential basis.

Operating gross margins(1) increased by $15.3 million to $84.5 million as both revenues and expenses increased sequentially. Operating results were still negatively impacted by the costs associated with reactivating rigs; $20.5 million in the first fiscal quarter compared to $6.6 million in the previous quarter.

International Solutions:

This segment had operating income of $8.0 million compared to an operating loss of $5.7 million during the previous quarter. The increase in operating income was twofold - there was a settlement related to a previous contractual dispute with a customer resulting in $16.4 million in revenue during the first fiscal quarter and the previous quarter was adversely impacted by $2.6 million of expenses associated with the closing of the ADNOC Drilling transactions. Absent the select items(2) for the quarters, this segment's operating loss increased $3.0 million on a sequential basis primarily due to rig start-up costs and other transitory expenses.

Operating gross margins(1) during the first fiscal quarter were a positive $13.0 million, benefiting from the aforementioned $16.4 million settlement related to a previous contractual dispute with a customer. Excluding the settlement, operating gross margins(1) were a negative $3.4 million compared to a negative $0.4 million in the previous quarter. Current quarter results included a $1.0 million foreign currency loss primarily related to our South American operations compared to a $0.7 million foreign currency loss in the fourth quarter of fiscal year 2021.

Offshore Gulf of Mexico:

This segment had operating income of $5.5 million compared to operating income of $4.5 million during the previous quarter. Operating gross margins(1) for the quarter were $8.6 million compared to $7.7 million in the prior quarter.

Operational Outlook for the Second Quarter of Fiscal Year 2022

North America Solutions:

* We expect North America Solutions operating gross margins(1) to be between $100-$115 million, which includes approximately $11 million in estimated reactivation costs

* We expect to exit the quarter at between 165-175 contracted rigs

International Solutions:

* We expect International Solutions operating gross margins(1) to be between $(2)-$0 million, exclusive of any foreign exchange gains or losses

Offshore Gulf of Mexico:

* We expect Offshore Gulf of Mexico operating gross margins(1) to be between $6-$8 million

Other Estimates for Fiscal Year 2021

* Gross capital expenditures are still expected to be approximately $250 to $270 million; approximately 50% expected for maintenance, including tubular purchases, roughly 35% expected for skidding to walking conversions and approximately 15% for corporate and information technology. 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 now expected to total approximately $45 million in fiscal year 2022.

* Depreciation and amortization expenses are still expected to be approximately $405 million

* Research and development expenses for fiscal year 2022 are now expected to be roughly $27 million

* Selling, general and administrative expenses for fiscal year 2022 are still expected to be approximately $170 million

Select Items Included in Net Income per Diluted Share

First quarter of fiscal year 2022 net loss of $(0.48) per diluted share included $(0.03) in after-tax losses comprised of the following:

* $0.13 of after-tax gains related to a settlement of a previous contractual dispute with an international customer

* $0.38 of non-cash after-tax gains related to fair market value adjustments to equity investments

* $(0.01) of after-tax losses related to restructuring charges

* $(0.03) of after-tax losses related to the sale of assets

* $(0.03) of non-cash after-tax losses for impairments related to fair market value adjustments to decommissioned rigs and equipment that are held for sale

* $(0.47) of after-tax losses related to a debt make-whole premium and write-off of debt discount and issuance costs

Fourth quarter of fiscal year 2021 net loss of $(0.74) per diluted share included $(0.12) in after-tax losses comprised of the following:

* $0.03 of after-tax gains related to the sale of equipment

* $(0.01) of non-cash after-tax losses related to fair market value adjustments to equity investments

* $(0.01) of non-cash after-tax losses related to an inventory write-down

* $(0.01) of after-tax losses related to restructuring charges

* $(0.02) of after-tax losses related to closing costs associated with the ADNOC Drilling transactions

* $(0.10) of after-tax losses related to the non-cash impairment for fair market value adjustments to equipment that is held for sale

Conference Call

A conference call will be held on Tuesday, February 1, 2022, at 11:00 a.m. (ET) with John Lindsay, President and CEO, Mark Smith, Senior Vice President and CFO, and Dave Wilson, Vice President of Investor Relations, to discuss the Company's first quarter fiscal year 2022 results. Dial-in information for the conference call is (800) 895-3361 for domestic callers or (785) 424-1062 for international callers. The call access code is 'Helmerich'. You may also listen to the conference call that will be broadcast live over the internet by logging on to the Company's website at http://www.helmerichpayne.com and accessing the corresponding link through the investor relations section by clicking on "Investors" and then clicking on "News and Events - Events & Presentations" to find the event and the link to the webcast.

About Helmerich & Payne, Inc.

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P strives to operate with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. H&P also develops and implements advanced automation, directional drilling and survey management technologies. As of December 31, 2021, H&P's fleet included 236 land rigs in the U.S., 28 international land rigs and seven offshore platform rigs. For more information, see H&P online at www.helmerichpayne.com.

Forward-Looking Statements

This release includes "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of historical facts included in this release, including, without limitation, statements regarding our future financial position, operations outlook, business strategy, dividends, share repurchases, budgets, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, and the ongoing effect of the COVID-19 pandemic and actions we or others may take in response to the COVID-19 pandemic are forward-looking statements. For information regarding risks and uncertainties associated with the Company's business, please refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's SEC filings, including but not limited to its annual report on Form 10?K and quarterly reports on Form 10?Q. As a result of these factors, Helmerich & Payne, Inc.'s actual results may differ materially from those indicated or implied by such forward-looking statements. We undertake no duty to publicly update or revise any forward-looking statements, whether as a result of new information changes in internal estimates, expectations or otherwise, except as required under applicable securities laws.

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

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

(1) Operating gross margin is defined as operating revenues less direct operating expenses.

(2) See the corresponding section of this release for details regarding the select items. The Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future periods results. Select items are excluded as they are deemed to be outside of the Company's core business operations.

(3) During our first fiscal quarter of 2022 we repurchased 2,547,750 shares for $60,358,000. During our second fiscal quarter through January 28, 2022 we repurchased an additional 598,677 shares for $16,391,000.

HELMERICH & PAYNE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

December September December(in thousands, except per share 31, 30, 31,amounts) 2021 2021 2020

OPERATING REVENUES

Drilling services $ 407,534 $ 342,219 $ 244,781

Other 2,248 1,588 1,596

409,782 343,807 246,377

OPERATING COSTS AND EXPENSES

Drilling services operating expenses,excluding depreciation and 299,652 268,127 198,689 amortization

Other operating expenses 1,182 1,021 1,362

Depreciation and amortization 100,437 101,955 106,861

Research and development 6,527 5,197 5,583

Selling, general and administrative 43,715 51,824 39,303

Asset impairment charge 4,363 14,436 -

Restructuring charges 742 2,070 138

Gain on reimbursement of drilling (5,254 ) (2,115 ) (2,191 )equipment

Other gain (loss) on sale of assets 1,029 (1,672 ) (10,145 )

452,393 440,843 339,600

OPERATING LOSS FROM CONTINUING (42,611 ) (97,036 ) (93,223 )OPERATIONS

Other income (expense)

Interest and dividend income 2,589 2,029 1,879

Interest expense (6,114 ) (6,094 ) (6,139 )

Gain (loss) on investment securities 47,862 (1,126 ) 2,924

Loss on extinguishment of debt (60,083 ) - -

Other (542 ) (2,630 ) (1,480 )

(16,288 ) (7,821 ) (2,816 )

Loss from continuing operations before (58,899 ) (104,857 ) (96,039 )income taxes

Income tax benefit (7,568 ) (25,323 ) (18,115 )

Loss from continuing operations (51,331 ) (79,534 ) (77,924 )

Income (loss) from discontinued (31 ) 373 7,493 operations before income taxes

Income tax provision - - -

Income (loss) from discontinued (31 ) 373 7,493 operations

NET LOSS $ (51,362 ) $ (79,161 ) $ (70,431 )



Basic earnings (loss) per common share:

Loss from continuing operations $ (0.48 ) $ (0.74 ) $ (0.73 )

Income from discontinued operations $ - $ - $ 0.07

Net loss $ (0.48 ) $ (0.74 ) $ (0.66 )



Diluted earnings (loss) per common share:

Loss from continuing operations $ (0.48 ) $ (0.74 ) $ (0.73 )

Income from discontinued operations $ - $ - $ 0.07

Net loss $ (0.48 ) $ (0.74 ) $ (0.66 )



Weighted average shares outstanding (in thousands):

Basic 107,571 107,899 107,617

Diluted 107,571 107,899 107,617

HELMERICH & PAYNE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,

September 30,

(in thousands except share data and share amounts)

2021

2021

ASSETS

Current Assets:

Cash and cash equivalents

$

234,196

$

917,534

Short-term investments

207,068

198,700

Accounts receivable, net of allowance of $1,730 and $2,068, respectively

282,381

228,894

Inventories of materials and supplies, net

87,272

84,057

Prepaid expenses and other, net

80,956

85,928

Assets held-for-sale

62,821

71,453

Total current assets

954,694

1,586,566

Investments

193,624

135,444

Property, plant and equipment, net

3,066,326

3,127,287

Other Noncurrent Assets:

Goodwill

45,653

45,653

Intangible assets, net

72,042

73,838

Operating lease right-of-use assets

47,356

49,187

Other assets, net

12,559

16,153

Total other noncurrent assets

177,610

184,831

Total assets

$

4,392,254

$

5,034,128

LIABILITIES & SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$

109,032

$

71,996

Dividends payable

26,819

27,332

Current portion of long-term debt, net

-

483,486

Accrued liabilities

263,125

283,492

Total current liabilities

398,976

866,306

Noncurrent Liabilities:

Long-term debt, net

542,236

541,997

Deferred income taxes

545,869

563,437

Other

126,551

147,757

Noncurrent liabilities - discontinued operations

2,031

2,013

Total noncurrent liabilities

1,216,687

1,255,204

Shareholders' Equity:

Common stock, $.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of both December 31, 2021 and September 30, 2021, and 105,731,795 and 107,898,859 shares outstanding as of December 31, 2021 and September 30, 2021, respectively

11,222

11,222

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

-

-

Additional paid-in capital

514,969

529,903

Retained earnings

2,495,206

2,573,375

Accumulated other comprehensive loss

(19,850

)

(20,244

)

Treasury stock, at cost, 6,491,070 shares and 4,324,006 shares as of December 31, 2021 and September 30, 2021, respectively

(224,956

)

(181,638

)

Total shareholders' equity

2,776,591

2,912,618

Total liabilities and shareholders' equity

$

4,392,254

$

5,034,128

HELMERICH & PAYNE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, September 30,

(in thousands except share data and share 2021 2021amounts)

ASSETS

Current Assets:

Cash and cash equivalents $ 234,196 $ 917,534

Short-term investments 207,068 198,700

Accounts receivable, net of allowance of $1,730 282,381 228,894 and $2,068, respectively

Inventories of materials and supplies, net 87,272 84,057

Prepaid expenses and other, net 80,956 85,928

Assets held-for-sale 62,821 71,453

Total current assets 954,694 1,586,566



Investments 193,624 135,444

Property, plant and equipment, net 3,066,326 3,127,287

Other Noncurrent Assets:

Goodwill 45,653 45,653

Intangible assets, net 72,042 73,838

Operating lease right-of-use assets 47,356 49,187

Other assets, net 12,559 16,153

Total other noncurrent assets 177,610 184,831



Total assets $ 4,392,254 $ 5,034,128



LIABILITIES & SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable $ 109,032 $ 71,996

Dividends payable 26,819 27,332

Current portion of long-term debt, net - 483,486

Accrued liabilities 263,125 283,492

Total current liabilities 398,976 866,306



Noncurrent Liabilities:

Long-term debt, net 542,236 541,997

Deferred income taxes 545,869 563,437

Other 126,551 147,757

Noncurrent liabilities - discontinued operations 2,031 2,013

Total noncurrent liabilities 1,216,687 1,255,204



Shareholders' Equity:

Common stock, $.10 par value, 160,000,000 sharesauthorized, 112,222,865 shares issued as of bothDecember 31, 2021 and September 30, 2021, and 11,222 11,222 105,731,795 and 107,898,859 shares outstanding asof December 31, 2021 and September 30, 2021,respectively

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

Additional paid-in capital 514,969 529,903

Retained earnings 2,495,206 2,573,375

Accumulated other comprehensive loss (19,850 ) (20,244 )

Treasury stock, at cost, 6,491,070 shares and4,324,006 shares as of December 31, 2021 and (224,956 ) (181,638 )September 30, 2021, respectively

Total shareholders' equity 2,776,591 2,912,618

Total liabilities and shareholders' equity $ 4,392,254 $ 5,034,128

HELMERICH & PAYNE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

(in thousands)

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(51,362

)

$

(70,431

)

Adjustment for (income) loss from discontinued operations

31

(7,493

)

Loss from continuing operations

(51,331

)

(77,924

)

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

Depreciation and amortization

100,437

106,861

Asset impairment charge

4,363

-

Amortization of debt discount and debt issuance costs

239

460

Loss on extinguishment of debt

60,083

-

Provision for credit loss

(112

)

(465

)

Provision for obsolete inventory

(708

)

216

Stock-based compensation

6,218

7,451

Gain on investment securities

(47,862

)

(2,924

)

Gain on reimbursement of drilling equipment

(5,254

)

(2,191

)

Other (gain) loss on sale of assets

1,029

(10,145

)

Deferred income tax benefit

(17,750

)

(15,016

)

Other

(3,781

)

1,458

Changes in assets and liabilities

(49,276

)

(27,382

)

Net cash used in operating activities from continuing operations

(3,705

)

(19,601

)

Net cash used in operating activities from discontinued operations

(13

)

(3

)

Net cash used in operating activities

(3,718

)

(19,604

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(44,014

)

(13,985

)

Other capital expenditures related to assets held-for-sale

(3,877

)

-

Purchase of short-term investments

(47,083

)

(94,151

)

Purchase of long-term investments

(9,015

)

(1,000

)

Proceeds from sale of short-term investments

37,777

37,097

Proceeds from asset sales

21,483

6,836

Net cash used in investing activities

(44,729

)

(65,203

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Dividends paid

(27,320

)

(26,918

)

Payments for employee taxes on net settlement of equity awards

(4,113

)

(2,119

)

Payment of contingent consideration from acquisition of business

(250

)

(250

)

Payments for early extinguishment of long-term debt

(487,148

)

-

Make-whole premium payment

(56,421

)

-

Share repurchases

(60,358

)

-

Net cash used in financing activities

(635,610

)

(29,287

)

Net decrease in cash and cash equivalents and restricted cash

(684,057

)

(114,094

)

Cash and cash equivalents and restricted cash, beginning of period

936,716

536,747

Cash and cash equivalents and restricted cash, end of period

$

252,659

$

422,653

HELMERICH & PAYNE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

(in thousands) 2021 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ (51,362 ) $ (70,431 )

Adjustment for (income) loss from discontinued 31 (7,493 )operations

Loss from continuing operations (51,331 ) (77,924 )

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

Depreciation and amortization 100,437 106,861

Asset impairment charge 4,363 -

Amortization of debt discount and debt issuance 239 460 costs

Loss on extinguishment of debt 60,083 -

Provision for credit loss (112 ) (465 )

Provision for obsolete inventory (708 ) 216

Stock-based compensation 6,218 7,451

Gain on investment securities (47,862 ) (2,924 )

Gain on reimbursement of drilling equipment (5,254 ) (2,191 )

Other (gain) loss on sale of assets 1,029 (10,145 )

Deferred income tax benefit (17,750 ) (15,016 )

Other (3,781 ) 1,458

Changes in assets and liabilities (49,276 ) (27,382 )

Net cash used in operating activities from (3,705 ) (19,601 )continuing operations

Net cash used in operating activities from (13 ) (3 )discontinued operations

Net cash used in operating activities (3,718 ) (19,604 )



CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (44,014 ) (13,985 )

Other capital expenditures related to assets (3,877 ) - held-for-sale

Purchase of short-term investments (47,083 ) (94,151 )

Purchase of long-term investments (9,015 ) (1,000 )

Proceeds from sale of short-term investments 37,777 37,097

Proceeds from asset sales 21,483 6,836

Net cash used in investing activities (44,729 ) (65,203 )



CASH FLOWS FROM FINANCING ACTIVITIES:

Dividends paid (27,320 ) (26,918 )

Payments for employee taxes on net settlement of (4,113 ) (2,119 )equity awards

Payment of contingent consideration from (250 ) (250 )acquisition of business

Payments for early extinguishment of long-term debt (487,148 ) -

Make-whole premium payment (56,421 ) -

Share repurchases (60,358 ) -

Net cash used in financing activities (635,610 ) (29,287 )

Net decrease in cash and cash equivalents and (684,057 ) (114,094 )restricted cash

Cash and cash equivalents and restricted cash, 936,716 536,747 beginning of period

Cash and cash equivalents and restricted cash, end $ 252,659 $ 422,653 of period

HELMERICH & PAYNE, INC.

SEGMENT REPORTING

Three Months Ended

December 31,

September 30,

December 31,

(in thousands, except operating statistics)

2021

2021

2020

NORTH AMERICA SOLUTIONS

Operating revenues

$

341,034

$

293,303

$

201,990

Direct operating expenses

256,568

224,185

157,309

Segment gross margin (2)

84,466

69,118

44,681

Depreciation and amortization

93,621

95,177

100,324

Research and development

6,568

5,411

5,466

Selling, general and administrative expense

10,829

13,866

11,680

Asset impairment charge

1,868

14,436

-

Restructuring charges

473

899

139

Segment operating loss

$

(28,893

)

$

(60,671

)

$

(72,928

)

Operating Statistics (1):

Average active rigs

141

124

81

Number of active rigs at the end of period

154

127

94

Number of available rigs at the end of period

236

236

262

Reimbursements of "out-of-pocket" expenses

$

43,129

$

34,536

$

18,789

INTERNATIONAL SOLUTIONS

Operating revenues

$

37,159

$

17,308

$

10,518

Direct operating expenses

24,131

17,741

17,523

Segment gross margin (2)

13,028

(433

)

(7,005

)

Depreciation

755

652

373

Selling, general and administrative expense

1,729

4,565

979

Asset impairment charge

2,495

-

-

Segment operating income (loss)

$

8,049

$

(5,650

)

$

(8,357

)

Operating Statistics (1):

Average active rigs

7

6

4

Number of active rigs at the end of period

8

6

4

Number of available rigs at the end of period

28

30

32

Reimbursements of "out-of-pocket" expenses

$

1,443

$

1,369

$

2,559

OFFSHORE GULF OF MEXICO

Operating revenues

$

29,314

$

31,488

$

32,273

Direct operating expenses

20,711

23,797

26,256

Segment gross margin (2)

8,603

7,691

6,017

Depreciation

2,380

2,420

2,606

Selling, general and administrative expense

757

729

669

Segment operating income

$

5,466

$

4,542

$

2,742

Operating Statistics (1):

Average active rigs

4

4

5

Number of active rigs at the end of period

4

4

4

Number of available rigs at the end of period

7

7

7

Reimbursements of "out-of-pocket" expenses

$

6,075

$

5,985

$

7,868

HELMERICH & PAYNE, INC.

SEGMENT REPORTING

Three Months Ended

December September December 31, 30, 31,

(in thousands, except operating 2021 2021 2020statistics)

NORTH AMERICA SOLUTIONS

Operating revenues $ 341,034 $ 293,303 $ 201,990

Direct operating expenses 256,568 224,185 157,309

Segment gross margin (2) 84,466 69,118 44,681



Depreciation and amortization 93,621 95,177 100,324

Research and development 6,568 5,411 5,466

Selling, general and administrative 10,829 13,866 11,680 expense

Asset impairment charge 1,868 14,436 -

Restructuring charges 473 899 139

Segment operating loss $ (28,893 ) $ (60,671 ) $ (72,928 )

Operating Statistics (1):

Average active rigs 141 124 81

Number of active rigs at the end of 154 127 94 period

Number of available rigs at the end of 236 236 262 period

Reimbursements of "out-of-pocket" $ 43,129 $ 34,536 $ 18,789 expenses



INTERNATIONAL SOLUTIONS

Operating revenues $ 37,159 $ 17,308 $ 10,518

Direct operating expenses 24,131 17,741 17,523

Segment gross margin (2) 13,028 (433 ) (7,005 )



Depreciation 755 652 373

Selling, general and administrative 1,729 4,565 979 expense

Asset impairment charge 2,495 - -

Segment operating income (loss) $ 8,049 $ (5,650 ) $ (8,357 )

Operating Statistics (1):

Average active rigs 7 6 4

Number of active rigs at the end of 8 6 4 period

Number of available rigs at the end of 28 30 32 period

Reimbursements of "out-of-pocket" $ 1,443 $ 1,369 $ 2,559 expenses



OFFSHORE GULF OF MEXICO

Operating revenues $ 29,314 $ 31,488 $ 32,273

Direct operating expenses 20,711 23,797 26,256

Segment gross margin (2) 8,603 7,691 6,017



Depreciation 2,380 2,420 2,606

Selling, general and administrative 757 729 669 expense

Segment operating income $ 5,466 $ 4,542 $ 2,742

Operating Statistics (1):

Average active rigs 4 4 5

Number of active rigs at the end of 4 4 4 period

Number of available rigs at the end of 7 7 7 period

Reimbursements of "out-of-pocket" $ 6,075 $ 5,985 $ 7,868 expenses

(1)

These operating metrics 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)

Segment gross margin and operating income/loss have limitations and should not be used as alternatives to revenues, expenses, or operating income/loss, which are performance measures determined in accordance with GAAP.

Segment reconciliation amounts were as follows:

These operating metrics allow investors to analyze the various components of segment financial results in terms of activity, utilization and other(1) key results. Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results.

Segment gross margin and operating income/loss have limitations and should(2) not be used as alternatives to revenues, expenses, or operating income/ loss, which are performance measures determined in accordance with GAAP.

Segment reconciliation amounts were as follows:

Three Months Ended December 31, 2021

North Offshore(in America International Gulfthousands) Other Eliminations Total Solutions Solutions of Mexico

Operating $ 341,034 $ 37,159 $ 29,314 $ 2,275 $ - $ 409,782revenue

Intersegment - - - 13,648 (13,648 ) -

Totaloperating $ 341,034 $ 37,159 $ 29,314 $ 15,923 $ (13,648 ) $ 409,782revenue



Directoperating 246,726 24,015 18,797 11,296 - 300,834expenses

Intersegment 9,842 116 1,914 24 (11,896 ) -

Totaldrillingservices & $ 256,568 $ 24,131 $ 20,711 $ 11,320 $ (11,896 ) $ 300,834otheroperatingexpenses

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

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

Three Months Ended

December September December 31, 30, 31,

(in thousands) 2021 2021 2020

Operating income (loss)

North America Solutions $ (28,893 ) $ (60,671 ) $ (72,928 )

International Solutions 8,049 (5,650 ) (8,357 )

Offshore Gulf of Mexico 5,466 4,542 2,742

Other 3,929 (8,073 ) 4,111

Eliminations (1,282 ) 7,277 (2,126 )

Segment operating loss $ (12,731 ) $ (62,575 ) $ (76,558 )

Gain on reimbursement of drilling 5,254 2,115 2,191 equipment

Other gain (loss) on sale of assets (1,029 ) 1,672 10,145

Corporate selling, general andadministrative costs, corporate (34,105 ) (38,248 ) (29,001 )depreciation, and corporaterestructuring charges

Operating loss from continuing $ (42,611 ) $ (97,036 ) $ (93,223 )operations

Other income (expense):

Interest and dividend income 2,589 2,029 1,879

Interest expense (6,114 ) (6,094 ) (6,139 )

Gain (loss) on investment securities 47,862 (1,126 ) 2,924

Loss on extinguishment of debt (60,083 ) - -

Other (542 ) (2,630 ) (1,480 )

Total unallocated amounts (16,288 ) (7,821 ) (2,816 )

Loss from continuing operations before $ (58,899 ) $ (104,857 ) $ (96,039 )income taxes

SUPPLEMENTARY STATISTICAL INFORMATION Unaudited

U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS

January 31,

December 31,

September 30,

Q1FY22

2022

2021

2021

Average

U.S. Land Operations

Term Contract Rigs

92

85

73

81

Spot Contract Rigs

72

69

54

60

Total Contracted Rigs

164

154

127

141

Idle or Other Rigs

72

82

109

95

Total Marketable Fleet

236

236

236

236

SUPPLEMENTARY STATISTICAL INFORMATIONUnaudited

U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS

January 31, December 31, September 30, Q1FY22

2022 2021 2021 Average

U.S. Land Operations

Term Contract Rigs 92 85 73 81

Spot Contract Rigs 72 69 54 60

Total Contracted Rigs 164 154 127 141

Idle or Other Rigs 72 82 109 95

Total Marketable Fleet 236 236 236 236

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS Number of Rigs Already Under Long-Term Contracts(*) (Estimated Quarterly Average - as of 12/31/21)

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Segment

FY22

FY22

FY22

FY23

FY23

FY23

FY23

U.S. Land Operations

91.5

75.5

49.2

31.4

10.1

7.5

5.4

International Land Operations

3.0

4.0

5.0

5.0

5.0

4.3

4.0

Offshore Operations

-

-

-

-

-

-

-

Total

94.5

79.5

54.2

36.4

15.1

11.8

9.4

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICSNumber of Rigs Already Under Long-Term Contracts^(*)(Estimated Quarterly Average - as of 12/31/21)

Q2 Q3 Q4 Q1 Q2 Q3 Q4

Segment FY22 FY22 FY22 FY23 FY23 FY23 FY23

U.S. Land Operations 91.5 75.5 49.2 31.4 10.1 7.5 5.4

International Land Operations 3.0 4.0 5.0 5.0 5.0 4.3 4.0

Offshore Operations - - - - - - -

Total 94.5 79.5 54.2 36.4 15.1 11.8 9.4

(*)

All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.

(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.

SELECT ITEMS(**)

Three Months Ended December 31, 2021

(in thousands, except per share data)

Pretax

Tax

Net

EPS

Net loss (GAAP basis)

$

(50,905

)

$

(0.48

)

(-) Fair market adjustment to equity investments

$

47,931

$

7,223

$

40,708

$

0.38

(-) Settlement of a previous contractual dispute with an international customer

$

16,381

$

2,469

$

13,912

$

0.13

(-) Restructuring charges

$

(742

)

$

(112

)

$

(630

)

$

(0.01

)

(-) Loss related to the sale of equipment

$

(3,391

)

$

(511

)

$

(2,880

)

$

(0.03

)

(-) Impairment for fair market value adjustments to equipment held for sale

$

(4,363

)

$

(658

)

$

(3,705

)

$

(0.03

)

(-) Debt make whole premium and write-off of debt discount and issuance costs

$

(60,083

)

$

(9,054

)

$

(51,029

)

$

(0.47

)

Adjusted net loss

$

(47,281

)

$

(0.45

)

SELECT ITEMS^(**)



Three Months Ended December 31, 2021

(in thousands, except per Pretax Tax Net EPSshare data)

Net loss (GAAP basis) $ (50,905 ) $ (0.48 )

(-) Fair market adjustment $ 47,931 $ 7,223 $ 40,708 $ 0.38 to equity investments

(-) Settlement of a previouscontractual dispute with an $ 16,381 $ 2,469 $ 13,912 $ 0.13 international customer

(-) Restructuring charges $ (742 ) $ (112 ) $ (630 ) $ (0.01 )

(-) Loss related to the sale $ (3,391 ) $ (511 ) $ (2,880 ) $ (0.03 )of equipment

(-) Impairment for fairmarket value adjustments to $ (4,363 ) $ (658 ) $ (3,705 ) $ (0.03 )equipment held for sale

(-) Debt make whole premiumand write-off of debt $ (60,083 ) $ (9,054 ) $ (51,029 ) $ (0.47 )discount and issuance costs

Adjusted net loss $ (47,281 ) $ (0.45 )

Three Months Ended September 30, 2021

(in thousands, except per share data)

Pretax

Tax

Net

EPS

Net loss (GAAP basis)

$

(79,161

)

$

(0.74

)

(-) Gains related to the sale of equipment

$

4,348

$

810

$

3,538

$

0.03

(-) Adjustment to future value earn out for acquisitions

$

(200

)

$

(49

)

$

(151

)

$

-

(-) Fair market value adjustments to equity investments

$

(1,130

)

$

(246

)

$

(884

)

$

(0.01

)

(-) Inventory write-down

$

(1,714

)

$

(403

)

$

(1,311

)

$

(0.01

)

(-) Restructuring charges

$

(2,074

)

$

(499

)

$

(1,575

)

$

(0.01

)

(-) Closing costs of the ADNOC Drilling transactions

$

(2,634

)

$

(617

)

$

(2,017

)

$

(0.02

)

(-) Impairment for fair market value adjustments to equipment held for sale

$

(14,436

)

$

(3,562

)

$

(10,874

)

$

(0.10

)

Adjusted net loss

$

(65,887

)

$

(0.62

)

Three Months Ended September 30, 2021

(in thousands, except per Pretax Tax Net EPSshare data)

Net loss (GAAP basis) $ (79,161 ) $ (0.74 )

(-) Gains related to the $ 4,348 $ 810 $ 3,538 $ 0.03 sale of equipment

(-) Adjustment to futurevalue earn out for $ (200 ) $ (49 ) $ (151 ) $ - acquisitions

(-) Fair market valueadjustments to equity $ (1,130 ) $ (246 ) $ (884 ) $ (0.01 )investments

(-) Inventory write-down $ (1,714 ) $ (403 ) $ (1,311 ) $ (0.01 )

(-) Restructuring charges $ (2,074 ) $ (499 ) $ (1,575 ) $ (0.01 )

(-) Closing costs of the $ (2,634 ) $ (617 ) $ (2,017 ) $ (0.02 )ADNOC Drilling transactions

(-) Impairment for fairmarket value adjustments to $ (14,436 ) $ (3,562 ) $ (10,874 ) $ (0.10 )equipment held for sale

Adjusted net loss $ (65,887 ) $ (0.62 )

(**)

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220128005475/en/

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