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Helmerich & Payne, Inc. Announces Third Quarter Results

Helmerich & Payne, Inc. (NYSE: HP) reported a net loss of $56 million, or $(0.52) per diluted share, from operating revenues of $332 million for the quarter ended June 30, 2021, compared to a net loss of $121 million, or $(1.13) per diluted share, on revenues of $296 million for the quarter ended March 31, 2021. The net losses per diluted share for the third and second quarters of fiscal year 2021 include $0.05 and $(0.53), respectively, of after-tax gains and losses comprised of select items(2). For the third quarter of fiscal year 2021, select items(2) were comprised of:

  • $0.08 of after-tax gains pertaining to a non-cash fair market adjustment to our equity investment, income tax adjustments related to certain discrete tax items, and discontinued operations related to adjustments resulting from currency fluctuations
  • $(0.03) of after-tax losses pertaining to a non-cash impairment for fair market adjustments to decommissioned rigs that are held for sale, restructuring charges, and changes in the fair values of certain contingent liabilities

Net cash provided by operating activities was $31 million for the third quarter of fiscal year 2021 compared to net cash provided by operating activities of $78 million in the prior quarter, which benefited from a large income tax refund.

President and CEO John Lindsay commented, "The rig count and market share gains we have secured since the industry lows almost a year ago is a testament to H&P's position as the leading drilling solutions provider. While we have experienced moderation in this upward trajectory, we still expect activity and pricing to continue to increase over the next quarter as the availability of super-spec rigs tightens. We remain optimistic that current crude oil prices will translate into even higher activity and pricing levels in the fourth calendar quarter leading into 2022.

"We continue to affect change in the industry through the use of new commercial models and digital technology solutions. There is a growing appreciation for the value proposition H&P provides, and more customers are partnering with us to achieve better drilling outcomes. When utilized on a FlexRig® platform, H&P's digital technology and automation solutions are able to enhance drilling outcomes both in terms of efficiency gains and wellbore quality, resulting in improved long-term well economics and returns. This outcome-based approach delivers more predictive, consistent and superior well results over an entire drilling program, lowering overall well costs and downhole risks, and greatly reducing the potential for costly outliers. Minimizing downhole variation with the appropriate planning, technology and execution can produce positive economic results in a drilling program.

"The methods, the equipment, the technology and the risk profile in the drilling of unconventional oil and gas wells has evolved significantly over the past few decades; however, the legacy dayrate model has not. This has resulted in an unsustainable allocation of the economic benefits that have been accruing over the past several years through the drilling of more efficient and better-quality wells. Consequently, the pricing model for providing better drilling outcomes needs to evolve. H&P's new commercial models aim to better align us with our customer's goals and allow us to share in the value-added outcomes we help create."

Senior Vice President and CFO Mark Smith also commented, "The Company's solid financial position and strong financial stewardship remain resolute, giving us plenty of flexibility in our capital allocation strategy to take advantage of additional investment opportunities in the future should they arise and to maintain our steadfast commitment of returning cash to shareholders.

"We have continued to make investments, and explore future investments, in geothermal companies targeting the ambitious goal of affordable, reliable, and clean energy on a global scale. At present, we have a robust set of geothermal investment opportunities across a diverse technological and drilling spectrum. These opportunities not only include providing our drilling and technology solutions, but also direct investments into companies working toward accessing geothermal heat to create low-carbon and scalable base load power generation in an economically viable manner. Additionally, we continue to invest resources and work with our customers to provide customized power management solutions at the rig site that result in improved environmental and economic outcomes.

"Within the constructs of a smaller industry going forward, reducing our operating cost structure remains a high priority for the Company and steps have been underway to make this happen. Recent actions will result in an estimated annualized savings of $7 million with that full benefit captured in calendar 2022. Further, we have many other ongoing initiatives that will result in additional cost savings, that will be recognized incrementally over the next several quarters. Over time we expect these cost saving measures to culminate into meaningful, long-term improvements in our cost structure."

John Lindsay concluded, “The strength of our people, financial position, and drilling solutions will continue to provide us an edge in this improving market. Our track record of forming new and cementing existing partnerships with customers that manifest from our commitment to mutual long-term success."

Operating Segment Results for the Third Quarter of Fiscal Year 2021

North America Solutions:

This segment had an operating loss of $43.7 million compared to an operating loss of $109.8 million during the previous quarter. The decrease in the operating loss was primarily due to the prior quarter being adversely impacted by impairments related to fair market adjustments to decommissioned rigs that are held for sale and restructuring charges. Absent the select items(2) for the quarters, this segment's operating loss declined by $13.9 million on a sequential basis, due mainly to a higher level of rig activity.

Operating gross margins(1) increased by $10.9 million to $75.0 million as both revenues and expenses increased sequentially. Operating results were still negatively impacted by the costs associated with reactivating rigs; $5.9 million in the third fiscal quarter compared to $9.7 million in the second fiscal quarter.

International Solutions:

This segment had an operating loss of $3.5 million compared to an operating loss of $3.5 million during the previous quarter. Operating gross margins(1) improved slightly to a negative $1.4 million from a negative $1.9 million in the previous quarter. Current quarter results included a $0.6 million foreign currency loss primarily related to our South American operations compared to a $2.4 million foreign currency loss in the second quarter of fiscal year 2021.

Offshore Gulf of Mexico:

This segment had operating income of $5.7 million compared to operating income of $3.0 million during the previous quarter. Operating gross margins(1) for the quarter were $9.2 million compared to $6.2 million in the prior quarter.

Operational Outlook for the Fourth Quarter of Fiscal Year 2021

North America Solutions:

  • We expect North America Solutions operating gross margins(1) to be between $72-$82 million
  • We expect to exit the quarter at between 127-132 contracted rigs

International Solutions:

  • We expect International Solutions operating gross margins(1) to be relatively flat 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 $7-$9 million

Other Estimates for Fiscal Year 2021

  • Gross capital expenditures are now expected to at the lower end of our previous guidance range of $85 to $105 million range. 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 still expected to total approximately $25 million in fiscal year 2021. Note the sale of the offshore platform rig during the first quarter of fiscal year 2021 is excluded from this number.
  • Depreciation and amortization expenses are still expected to be approximately $425 million
  • Research and development expenses for fiscal year 2021 are now expected to be roughly $20 to 25 million
  • Selling, general and administrative expenses for fiscal year 2021 are still expected to be approximately $160 million

Select Items Included in Net Income per Diluted Share

Third quarter of fiscal year 2021 net loss of $(0.52) per diluted share included $0.05 in after-tax gains comprised of the following:

  • $0.01 of non-cash after-tax gains from discontinued operations related to adjustments resulting from currency fluctuations
  • $0.02 of non-cash after-tax gains related to fair market value adjustments to equity investments
  • $0.05 of income tax adjustments related to certain discrete tax items
  • $(0.01) of non-cash after-tax losses for impairments related to fair market value adjustments to decommissioned rigs that are held for sale
  • $(0.01) of after-tax losses related to restructuring charges
  • $(0.01) of after-tax losses related to the change in the fair values of certain contingent liabilities

Second quarter of fiscal year 2021 net loss of $(1.13) per diluted share included $(0.53) in after-tax losses comprised of the following:

  • $0.02 of non-cash after-tax gains related to fair market value adjustments to equity investments
  • $0.02 of non-cash after-tax gains from discontinued operations related to adjustments resulting from currency fluctuations
  • $(0.01) of after-tax losses related to restructuring charges
  • $(0.17) of after-tax losses pertaining to the sale of excess drilling equipment and spares
  • $(0.39) of non-cash after-tax losses for impairments related to fair market value adjustments to decommissioned rigs that are held for sale

Conference Call

A conference call will be held on Thursday, July 29, 2021, 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 2021 results. Dial-in information for the conference call is (877) 876-9176 for domestic callers or (785) 424-1670 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, 2021, H&P's fleet included 242 land rigs in the U.S., 32 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 future financial position, operations outlook, business strategy, dividends, budgets, projected costs and plans and objectives of management for future operations 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 update or revise our forward-looking statements based on changes in internal estimates, expectations or otherwise, except as required by law.

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 and AutoSlide, 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.

HELMERICH & PAYNE, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Nine Months Ended

(in thousands, except per share amounts)

June 30,

March 31,

June 30,

June 30,

June 30,

2021

2021

2020

2021

2020

Operating revenues

Drilling services

$

329,774

$

294,026

$

314,405

$

868,581

$

1,556,093

Other

2,439

2,145

2,959

6,180

9,567

332,213

296,171

317,364

874,761

1,565,660

Operating costs and expenses

Drilling services operating expenses, excluding depreciation and amortization

255,471

230,313

205,198

684,473

1,022,270

Other operating expenses

1,481

1,274

1,549

4,117

4,286

Depreciation and amortization

104,493

106,417

110,161

317,771

372,298

Research and development

5,610

5,334

3,638

16,527

16,730

Selling, general and administrative

41,719

39,349

43,108

120,371

134,894

Asset impairment charge

2,130

54,284

56,414

563,234

Restructuring charges

2,110

1,608

15,495

3,856

15,495

(Gain) loss on sale of assets

(3,434)

18,515

(4,201)

2,745

(18,790)

409,580

457,094

374,948

1,206,274

2,110,417

Operating loss from continuing operations

(77,367)

(160,923)

(57,584)

(331,513)

(544,757)

Other income (expense)

Interest and dividend income

1,527

4,819

771

8,225

6,551

Interest expense

(5,963)

(5,759)

(6,125)

(17,861)

(18,320)

Gain (loss) on investment securities

2,409

2,520

2,267

7,853

(7,325)

Gain on sale of subsidiary

14,963

Other

(970)

(577)

(2,914)

(3,027)

(3,711)

(2,997)

1,003

(6,001)

(4,810)

(7,842)

Loss from continuing operations before income taxes

(80,364)

(159,920)

(63,585)

(336,323)

(552,599)

Income tax benefit

(23,659)

(36,624)

(17,578)

(78,398)

(116,853)

Loss from continuing operations

(56,705)

(123,296)

(46,007)

(257,925)

(435,746)

Income from discontinued operations before income taxes

1,150

2,293

9,151

10,936

22,675

Income tax provision

8,743

22,463

Income from discontinued operations

1,150

2,293

408

10,936

212

Net loss

$

(55,555)

$

(121,003)

$

(45,599)

$

(246,989)

$

(435,534)

Basic earnings (loss) per common share:

Loss from continuing operations

$

(0.53)

$

(1.15)

$

(0.43)

$

(2.40)

$

(4.05)

Income from discontinued operations

$

0.01

$

0.02

$

$

0.10

$

Net loss

$

(0.52)

$

(1.13)

$

(0.43)

$

(2.30)

$

(4.05)

Diluted earnings (loss) per common share:

Loss from continuing operations

$

(0.53)

$

(1.15)

$

(0.43)

$

(2.40)

$

(4.05)

Income from discontinued operations

$

0.01

$

0.02

$

$

0.10

$

Net loss

$

(0.52)

$

(1.13)

$

(0.43)

$

(2.30)

$

(4.05)

Weighted average shares outstanding (in thousands):

Basic

107,896

107,861

107,439

107,790

108,185

Diluted

107,896

107,861

107,439

107,790

108,185

HELMERICH & PAYNE, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

June 30,

September 30,

(in thousands except share data and share amounts)

2021

2020

Assets

Current Assets:

Cash and cash equivalents

$

370,553

$

487,884

Short-term investments

187,256

89,335

Accounts receivable, net of allowance of $1,885 and $1,820, respectively

233,632

192,623

Inventories of materials and supplies, net

90,537

104,180

Prepaid expenses and other, net

91,477

89,305

Assets held-for-sale

10,088

Total current assets

983,543

963,327

Investments

36,886

31,585

Property, plant and equipment, net

3,281,082

3,646,341

Other Noncurrent Assets:

Goodwill

45,653

45,653

Intangible assets, net

75,634

81,027

Operating lease right-of-use asset

53,116

44,583

Other assets, net

19,371

17,105

Total other noncurrent assets

193,774

188,368

Total assets

$

4,495,285

$

4,829,621

Liabilities and Shareholders’ Equity

Current Liabilities:

Accounts payable

$

64,193

$

36,468

Dividends payable

27,324

27,226

Accrued liabilities

173,784

155,442

Total current liabilities

265,301

219,136

Noncurrent Liabilities:

Long-term debt, net

481,002

480,727

Deferred income taxes

584,633

650,675

Other

154,049

147,180

Noncurrent liabilities - discontinued operations

2,393

13,389

Total noncurrent liabilities

1,222,077

1,291,971

Shareholders' Equity:

Common stock, $.10 par value, 160,000,000 shares authorized, 112,222,865 and 112,151,563 shares issued as of June 30, 2021 and September 30, 2020, respectively, and 107,898,782 and 107,488,242 shares outstanding as of June 30, 2021 and September 30, 2020, respectively

11,222

11,215

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

Additional paid-in capital

523,281

521,628

Retained earnings

2,679,859

3,010,012

Accumulated other comprehensive loss

(24,814)

(26,188)

Treasury stock, at cost, 4,324,083 shares and 4,663,321 shares as of June 30, 2021 and September 30, 2020, respectively

(181,641)

(198,153)

Total shareholders’ equity

3,007,907

3,318,514

Total liabilities and shareholders' equity

$

4,495,285

$

4,829,621

HELMERICH & PAYNE, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended June 30,

(in thousands)

2021

2020

OPERATING ACTIVITIES:

Net loss

$

(246,989)

$

(435,534)

Adjustment for income from discontinued operations

(10,936)

(212)

Loss from continuing operations

(257,925)

(435,746)

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

Depreciation and amortization

317,771

372,298

Asset impairment charge

56,414

563,234

Amortization of debt discount and debt issuance costs

994

1,358

Provision for credit loss

8

4,151

Stock-based compensation

21,240

32,059

(Gain) loss on investment securities

(7,853)

7,325

(Gain) loss on sale of assets

2,745

(18,790)

Gain on sale of subsidiary

(14,963)

Deferred income tax benefit

(66,102)

(122,366)

Other

8,849

(1,580)

Changes in assets and liabilities

13,721

59,311

Net cash provided by operating activities from continuing operations

89,862

446,291

Net cash used in operating activities from discontinued operations

(41)

(38)

Net cash provided by operating activities

89,821

446,253

INVESTING ACTIVITIES:

Capital expenditures

(49,173)

(120,960)

Purchase of investments

(236,784)

(78,303)

Proceeds from sale of investments

139,430

66,033

Proceeds from sale of subsidiary

15,056

Proceeds from asset sales

26,775

31,200

Other

(50)

Net cash used in investing activities

(119,752)

(87,024)

FINANCING ACTIVITIES:

Dividends paid

(81,815)

(233,124)

Proceeds from stock option exercises

4,100

Payments for employee taxes on net settlement of equity awards

(2,160)

(3,752)

Payment of contingent consideration from acquisition of business

(250)

(4,250)

Share repurchase

(28,504)

Other

(719)

(446)

Net cash used in financing activities

(84,944)

(265,976)

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

(114,875)

93,253

Cash and cash equivalents and restricted cash, beginning of period

536,747

382,971

Cash and cash equivalents and restricted cash, end of period

$

421,872

$

476,224

Three Months Ended

Nine Months Ended

SEGMENT REPORTING

June 30,

March 31,

June 30,

June 30,

(in thousands, except operating statistics)

2021

2021

2020

2021

2020

NORTH AMERICA SOLUTIONS OPERATIONS

Operating revenues

$

281,132

$

249,939

$

254,434

$

733,061

$

1,325,076

Direct operating expenses

206,172

185,841

152,663

549,322

832,229

Segment gross margin (2)

74,960

64,098

101,771

183,739

492,847

Depreciation and amortization

96,997

99,917

102,699

297,238

336,098

Research and development

5,605

5,329

3,459

16,400

15,871

Selling, general and administrative expense

12,583

12,960

13,533

37,223

42,798

Asset impairment charge

2,130

54,284

56,414

406,548

Restructuring charges

1,388

1,442

7,237

2,969

7,237

Segment operating loss

$

(43,743)

$

(109,834)

$

(25,157)

$

(226,505)

$

(315,705)

Operating Statistics (1):

Average active rigs

119

105

89

102

157

Number of active rigs at the end of period

121

109

68

121

68

Number of available rigs at the end of period

242

242

262

242

262

Reimbursements of "out-of-pocket" expenses

$

33,282

$

27,290

$

27,806

$

79,361

$

164,540

INTERNATIONAL SOLUTIONS OPERATIONS

Operating revenues

$

15,278

$

14,813

$

22,477

$

40,609

$

120,189

Direct operating expenses

16,690

16,718

27,595

50,931

99,634

Segment gross margin (2)

(1,412)

(1,905)

(5,118)

(10,322)

20,555

Depreciation

573

415

996

1,361

16,634

Selling, general and administrative expense

1,346

1,138

1,129

3,463

3,832

Asset impairment charge

156,686

Restructuring charges

207

2,297

207

2,297

Segment operating loss

$

(3,538)

$

(3,458)

$

(9,540)

$

(15,353)

$

(158,894)

Operating Statistics (1):

Average active rigs

5

4

11

5

15

Number of active rigs at the end of period

6

5

8

6

8

Number of available rigs at the end of period

32

32

32

32

32

Reimbursements of "out-of-pocket" expenses

$

1,152

$

1,613

$

3,079

$

5,324

$

6,875

OFFSHORE GULF OF MEXICO OPERATIONS

Operating revenues

$

33,364

$

29,274

$

37,494

$

94,911

$

110,828

Direct operating expenses

24,127

23,069

28,967

73,452

91,660

Segment gross margin (2)

9,237

6,205

8,527

21,459

19,168

Depreciation

2,938

2,593

3,004

8,137

8,591

Selling, general and administrative expense

592

634

1,248

1,895

3,293

Restructuring charges

1,262

1,262

Segment operating income

$

5,707

$

2,978

$

3,013

$

11,427

$

6,022

Operating Statistics (1):

Average active rigs

4

4

5

4

5

Number of active rigs at the end of period

4

4

5

4

5

Number of available rigs at the end of period

7

7

8

7

8

Reimbursements of "out-of-pocket" expenses

$

8,342

$

5,193

$

8,224

$

21,403

$

24,888

(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. Beginning in the first quarter of fiscal year 2021, these operating metrics replaced previously used per day metrics. As a result, prior year comparative information is also provided above.

(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:

Three Months Ended June 30, 2021

(in thousands)

North America
Solutions

Offshore Gulf
of Mexico

International
Solutions

Other

Eliminations

Total

Operating revenue

$

281,132

$

33,364

$

15,278

$

2,439

$

$

332,213

Intersegment

9,379

(9,379)

Total operating revenue

$

281,132

$

33,364

$

15,278

$

11,818

$

(9,379)

$

332,213

Direct operating expenses

202,630

21,923

16,547

15,852

256,952

Intersegment

3,542

2,204

143

13

(5,902)

Total drilling services & other operating expenses

$

206,172

$

24,127

$

16,690

$

15,865

$

(5,902)

$

256,952

Nine Months Ended June 30, 2021

(in thousands)

North America
Solutions

Offshore Gulf
of Mexico

International
Solutions

Other

Eliminations

Total

Operating revenue

$

733,061

$

94,911

$

40,609

$

6,180

$

$

874,761

Intersegment

25,181

(25,181)

Total operating revenue

$

733,061

$

94,911

$

40,609

$

31,361

$

(25,181)

$

874,761

Direct operating expenses

540,497

67,043

50,483

30,567

688,590

Intersegment

8,825

6,409

448

270

(15,952)

Total drilling services & other operating expenses

$

549,322

$

73,452

$

50,931

$

30,837

$

(15,952)

$

688,590

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

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

Nine Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

(in thousands)

2021

2021

2020

2021

2020

Operating income (loss)

North America Solutions

$

(43,743)

$

(109,834)

$

(25,157)

$

(226,505)

$

(315,705)

International Solutions

(3,538)

(3,458)

(9,540)

(15,353)

(158,894)

Offshore Gulf of Mexico

5,707

2,978

3,013

11,427

6,022

Other

(4,670)

(1,072)

4,389

(1,631)

3,704

Eliminations

(3,298)

(3,433)

(8,857)

Segment operating loss

$

(49,542)

$

(114,819)

$

(27,295)

$

(240,919)

$

(464,873)

Gain (loss) on sale of assets

3,434

(18,515)

4,201

(2,745)

18,790

Corporate selling, general and administrative costs and corporate depreciation

(31,259)

(27,589)

(34,490)

(87,849)

(98,674)

Operating loss

$

(77,367)

$

(160,923)

$

(57,584)

$

(331,513)

$

(544,757)

Other income (expense):

Interest and dividend income

1,527

4,819

771

8,225

6,551

Interest expense

(5,963)

(5,759)

(6,125)

(17,861)

(18,320)

Gain (loss) on investment securities

2,409

2,520

2,267

7,853

(7,325)

Gain on sale of subsidiary

14,963

Other

(970)

(577)

(2,914)

(3,027)

(3,711)

Total unallocated amounts

(2,997)

1,003

(6,001)

(4,810)

(7,842)

Loss from continuing operations before income taxes

$

(80,364)

$

(159,920)

$

(63,585)

$

(336,323)

$

(552,599)

SUPPLEMENTARY STATISTICAL INFORMATION

Unaudited

U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS

July 28,

June 30,

March 31,

Q3FY21

2021

2021

2021

Average

U.S. Land Operations

Term Contract Rigs

65

64

64

64

Spot Contract Rigs

58

57

45

55

Total Contracted Rigs

123

121

109

119

Idle or Other Rigs

119

121

133

123

Total Marketable Fleet

242

242

242

242

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS

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

(Estimated Quarterly Average — as of 06/30/21)

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Segment

FY21

FY22

FY22

FY22

FY22

FY23

FY23

U.S. Land Operations

65.3

62.3

37.8

27.2

24.0

21.2

3.9

International Land Operations

1.0

1.0

1.0

1.0

1.0

1.0

1.0

Offshore Operations

Total

66.3

63.3

38.8

28.2

25.0

22.2

4.9

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

SELECT ITEMS(**)

Three Months Ended June 30, 2021

(in thousands, except per share data)

Pretax

Tax

Net

EPS

Net loss (GAAP basis)

$

(55,555)

$

(0.52)

(-) Adjustment for tax position

$

5,777

$

5,777

$

0.05

(-) Fair market adjustment to equity investments

$

2,253

$

593

$

1,660

$

0.02

(-) Gain from discontinued ops. - currency fluctuation adjustments

$

1,150

$

$

1,150

$

0.01

(-) Restructuring charges

$

(2,110)

$

(512)

$

(1,598)

$

(0.01)

(-) Adjustment to future value earnout for acquisitions

$

(823)

$

(191)

$

(632)

$

(0.01)

(-) Impairments for fair market value adjustments to decomm. rigs

$

(2,131)

$

(1,200)

$

(931)

$

(0.01)

Adjusted net loss

$

(60,981)

$

(0.57)

Three Months Ended March 31, 2021

(in thousands, except per share data)

Pretax

Tax

Net

EPS

Net loss (GAAP basis)

$

(121,003)

$

(1.13)

(-) Fair market adjustment to equity investments

$

2,520

$

545

$

1,975

$

0.02

(-) Gain from discontinued ops. - currency fluctuation adjustments

$

2,293

$

$

2,293

$

0.02

(-) Restructuring charges

$

(1,608)

$

(352)

$

(1,256)

$

(0.01)

(-) Loss on the sale of excess drilling equipment and spares

$

(23,019)

$

(5,061)

$

(17,958)

$

(0.17)

(-) Impairments for fair market value adjustments to decomm. rigs

$

(54,284)

$

(11,888)

$

(42,396)

$

(0.39)

Adjusted net loss

$

(63,661)

$

(0.60)

(**)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.

Contacts:

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

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