TULSA, Okla.--(BUSINESS WIRE)--Helmerich & Payne, Inc. (NYSE: HP) reported net income of $46 million, or $0.42 per diluted share, from operating revenues of $631 million for the quarter ended September 30, 2022, compared to net income of $18 million, or $0.16 per diluted share, from operating revenues of $550 million for the quarter ended June 30, 2022. The net income per diluted share for the fourth and third quarters of fiscal year 2022 include $(0.03) and $(0.11) of after-tax losses, respectively, comprised of select items(2). For the fourth quarter of fiscal year 2022, select items(2) were comprised of:
- $0.03 of after-tax gains pertaining to the sale of equipment and non-cash fair market adjustments to equity investments
- $(0.06) of after-tax losses pertaining to a lump sum settlement for a distribution from the pension plan
Net cash provided by operating activities was $117 million for the fourth quarter of fiscal year 2022 compared to $98 million for the third quarter of fiscal year 2022.
For fiscal year 2022, the Company reported net income of $7 million, or $0.05 per diluted share, from operating revenues of $2.1 billion. The net income per diluted share includes $(0.05) of after-tax losses comprised of select items(2). Net cash provided by operating activities was $234 million in fiscal year 2022 compared to $136 million in fiscal year 2021.
President and CEO John Lindsay commented, "Supportive market conditions and our adherence to our business and capital allocation strategy have led to sequentially improving quarterly results in fiscal 2022. We are beginning to recognize economic returns at levels that we have not experienced since 2014. As such, we believe there is significant momentum heading into fiscal 2023, and we plan to continue a posture of fiscal discipline, move forward with our supplemental shareholder return plan, and further implement our strategic initiative to expand internationally. These actions align with the Company's history of financial stewardship by increasing the Company's financial returns through long-term investment in the business and increasing cash returns to shareholders through the augmentation of our long-standing dividend commitment.
"Customer demand during the fourth fiscal quarter was satisfied by contractual churn and by reactivating one rig out of stack early in the quarter as expected. Our financial results improved substantially quarter over quarter as pricing increases and better contract economics took hold across more of our FlexRig® fleet. We anticipate a modest 16 rig uplift in our NAS rig count in fiscal 2023 of which roughly two-thirds are already committed and to attain a maximum of 192 active rigs for fiscal 2023 sometime during the second fiscal quarter of 2023. As in prior years, we expect our 2023 rig adds to be weighted toward the front half of the fiscal year, and do anticipate experiencing additional contractual churn throughout the year. We expect our financial results for the first fiscal quarter of 2023 to follow the improving trend of the past two fiscal quarters, where strong demand from customers coupled with rollovers of term contracts, should continue to drive higher average levels of pricing across the active fleet.
"For our International Solutions segment, the Company plans to deploy capital in preparation for more substantive growth in the future. We are seeing opportunities to bid in areas of existing operations as well as in countries that would be new to H&P. Most of these tenders are taking place where unconventional drilling is in its nascent stages, such as in the Middle East, and where we believe our proven drilling solutions can provide a lot of value to customers. We believe our international business is an important avenue of growth for the future and serves as a potential outlet for some of our currently idle super-spec rigs in the U.S. This initiative also adds more diversification to the Company's revenue streams over the long-term and this current allocation of investment capital plays an important part in executing on this strategy."
Senior Vice President and CFO Mark Smith also commented, "Maintaining economic discipline in our capital-intensive business remains paramount, and has resulted in increased capital efficiency and a positive impact on our financial returns. The Company will continue to allocate capital with this mindset. Our North America Solutions direct margins continue to improve, led by our fiscal discipline and robust pricing despite the current inflationary and supply chain challenges, which have been more apparent as of late with a labor-related cost increase just at the end of the fiscal fourth quarter and in our recently announced fiscal 2023 capex budget reflecting higher levels of maintenance expenditures.
"Looking out to fiscal 2023, we expect to see increased profitability for the Company propelling us forward to execute on other strategic capital allocation priorities, such as the recently announced 2023 supplemental shareholder return plan and diversification through further investment in our international operations. We believe both provide incremental returns; one that is more near-term and one that will develop over time. Even beyond these planned capital commitments, the Company should have flexibility to be positioned to take advantage of additional investment opportunities and/or further augment shareholder returns through additional supplemental dividends and/or share repurchases. Essentially in fiscal 2023, we plan to allocate roughly two-thirds of our cash flow generation after capex commitments to shareholders in the form of base and supplemental dividends, which would currently represent an approximate dividend yield of 4%, very competitive for our industry. The remaining one-third we believe, should give us an adequate amount of flexibility. This is further testament to the Company's strong cash flow generation and financial position."
John Lindsay concluded, "We enter fiscal 2023 with momentum and increased confidence that our initiatives in our North America Solutions segment have gained traction and are delivering positive financial results. We are also excited by the prospects and opportunities before us, particularly in our International Solutions segment. The successes the Company has achieved and plans to achieve would not be possible without our devoted and hard-working employee base, which I am proud to say continues to set the standard for our industry."
Operating Segment Results for the Fourth Quarter of Fiscal Year 2022
North America Solutions:
This segment had operating income of $92.1 million compared to operating income of $57.4 million during the previous quarter. The increase in operating income was primarily due to improving contract economics as market pricing continued to increase coupled with term contracts rolling onto market rates.
Direct margins(3) increased by $35.9 million to $203.5 million as both revenues and expenses increased sequentially. Quarterly operating results were impacted by the costs associated with reactivating rigs; $7.5 million in the fourth fiscal quarter compared to $6.5 million in the previous quarter.
International Solutions:
This segment had an operating loss of $0.8 million compared to an operating loss of $6.6 million during the previous quarter. The decrease in operating loss is primarily attributable to increased activity in Latin America, particularly with operations in Argentina.
Direct margins(3) during the fourth fiscal quarter were $3.3 million compared to a negative $3.2 million during the previous quarter. Current quarter results included a $1.2 million foreign currency loss compared to a $1.1 million foreign currency loss in the previous quarter.
Offshore Gulf of Mexico:
This segment had operating income of $6.6 million compared to operating income of $5.9 million during the previous quarter. Direct margins(3) for the quarter were $9.4 million compared to $8.8 million in the prior quarter.
Operational Outlook for the First Quarter of Fiscal Year 2023
North America Solutions:
- We expect North America Solutions direct margins(3) to be between $250-$270 million, which includes approximately $8.5 million in estimated reactivation costs
- We expect to exit the quarter between approximately 181-186 contracted rigs
International Solutions:
- We expect International Solutions direct margins(3) to be between $7-$10 million, exclusive of any foreign exchange gains or losses
- International Solutions direct margins(2) are expected to be reduced by operating costs related to establishing our Middle East hub
Offshore Gulf of Mexico:
- We expect Offshore Gulf of Mexico direct margins(3) to be between $8-$10 million
Other Estimates for Fiscal Year 2023
- Gross capital expenditures are expected to be approximately $425 to $475 million;
- approximately two-thirds expected for North America Solutions, including maintenance per active rig of $1.1 to $1.3 million and reactivating up to 16 super-spec rigs of which six are planned walking conversions
- approximately one-quarter for International Solutions, including five super-spec upgrades and six reactivations that will be also converted to walking capabilities for export from the U.S. fleet
- remainder for corporate and information technology expenditures
- ongoing asset sales include reimbursements for lost and damaged tubulars and sales of other used drilling equipment that offset a portion of the gross capital expenditures and are expected to total approximately $50 million in fiscal year 2023
- Depreciation for fiscal year 2023 is expected to be approximately $400 million
- Research and development expenses for fiscal year 2023 are expected to be roughly $28 million
- General and administrative expenses for fiscal year 2023 are expected to be approximately $195 million
- Cash taxes for fiscal year 2023 are expected to be approximately $190-$240 million
- inclusive of approximately $45 million relating to fiscal year 2022 amounts to be paid in fiscal 2023
- exclusive of roughly $28 million in income tax receivables of which $25 million was already received during the fiscal first quarter of 2023
Select Items(2) Included in Net Income per Diluted Share
Fourth quarter of fiscal year 2022 net income of $0.42 per diluted share included $(0.03) 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
- $0.01 of after-tax gains related to the sale of equipment
- $(0.06) of after-tax losses related to a lump sum settlement for a distribution from the pension plan
Third quarter of fiscal year 2022 net income of $0.16 per diluted share included $(0.11) in after-tax losses comprised of the following:
- $(0.11) of non-cash after-tax gains related to fair market value adjustments to equity investments
- $(0.00) of after-tax losses related to restructuring charges
Fiscal year 2022 net income of $0.05 per diluted share included $(0.05) in after-tax losses comprised of the following:
- $0.42 of non-cash after-tax gains related to fair market value adjustments to equity investments
- $0.13 of after-tax gains related to a settlement of a previous contractual dispute with an international customer
- $(0.01) of after-tax losses related to restructuring charges
- $(0.03) of after-tax losses related to the sale of equipment
- $(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
- $(0.06) of after-tax losses related to a lump sum settlement for a distribution from the pension plan
- $(0.47) of after-tax losses related to a debt make-whole premium and write-off of debt discount and issuance costs
Conference Call
A conference call will be held on Thursday, November 17, 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 fourth quarter fiscal year 2022 results. Dial-in information for the conference call is (877) 830-2596 for domestic callers or (785) 424-1877 for international callers. The call access code is 'Helmerich'. You may also listen to the conference call that will be broadcast live over the Internet by logging on to the Company's website at http://www.helmerichpayne.com and accessing the corresponding link through the investor relations section by clicking on "Investors" and then clicking on "News and Events - Events & Presentations" to find the event and the link to the webcast.
About Helmerich & Payne, Inc.
Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. H&P also develops and implements advanced automation, directional drilling and survey management technologies. At September 30, 2022, H&P's fleet included 236 land rigs in the United States, 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 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, share repurchases, investments, active rig count projections, budgets, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, capex spending, outlook for international markets, 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 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. 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.
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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) The Company's planned base and supplemental dividends represent our current intention of returning capital to shareholders during fiscal year 2023 based upon our outlook of market and industry conditions at present, including our current expectations surrounding rig pricing, activity levels, margins, cash generation, capital expenditures and other investment opportunities. In determining whether to proceed with the fiscal year 2023 base dividends and the supplemental dividends, management and the Board of Directors will continue to review the Company's financial position and performance together with relative market conditions at that time in order for the Board of Directors to determine the amount, timing and approval of any dividend payments.
(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) 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. We believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See Non-GAAP Measurements for a reconciliation of segment operating income(loss) to direct margin. Expected direct margin for the first quarter of fiscal 2023 is provided on a non-GAAP basis only because certain information necessary to calculate the cost comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future items and adjustments, which could be significant, we are unable to provide a reconciliation of expected direct margin to the most comparable GAAP measure without unreasonable effort.
| HELMERICH & PAYNE, INC. | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
| Three Months Ended |
| Year Ended | ||||||||||||||||
(in thousands, except per share amounts) | September 30, |
| June 30, |
| September 30, |
| September 30, | ||||||||||||
| 2022 |
|
|
| 2022 |
|
|
| 2021 |
|
|
| 2022 |
|
|
| 2021 |
| |
OPERATING REVENUES |
|
|
|
|
|
|
|
|
| ||||||||||
Drilling services | $ | 629,031 |
|
| $ | 547,906 |
|
| $ | 342,219 |
|
| $ | 2,049,841 |
|
| $ | 1,210,800 |
|
Other |
| 2,301 |
|
|
| 2,327 |
|
|
| 1,588 |
|
|
| 9,103 |
|
|
| 7,768 |
|
|
| 631,332 |
|
|
| 550,233 |
|
|
| 343,807 |
|
|
| 2,058,944 |
|
|
| 1,218,568 |
|
OPERATING COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
| ||||||||||
Drilling services operating expenses, excluding depreciation and amortization |
| 410,968 |
|
|
| 376,210 |
|
|
| 268,127 |
|
|
| 1,426,589 |
|
|
| 952,600 |
|
Other operating expenses |
| 1,222 |
|
|
| 1,053 |
|
|
| 1,021 |
|
|
| 4,638 |
|
|
| 5,138 |
|
Depreciation and amortization |
| 99,055 |
|
|
| 100,741 |
|
|
| 101,955 |
|
|
| 403,170 |
|
|
| 419,726 |
|
Research and development |
| 7,138 |
|
|
| 6,511 |
|
|
| 5,197 |
|
|
| 26,563 |
|
|
| 21,724 |
|
Selling, general and administrative |
| 46,667 |
|
|
| 44,933 |
|
|
| 51,824 |
|
|
| 182,366 |
|
|
| 172,195 |
|
Asset impairment charges |
| — |
|
|
| — |
|
|
| 14,436 |
|
|
| 4,363 |
|
|
| 70,850 |
|
Restructuring charges |
| — |
|
|
| 33 |
|
|
| 2,070 |
|
|
| 838 |
|
|
| 5,926 |
|
Gain on reimbursement of drilling equipment |
| (7,846 | ) |
|
| (9,895 | ) |
|
| (2,115 | ) |
|
| (29,443 | ) |
|
| (12,322 | ) |
Other (gain) loss on sale of assets |
| (2,670 | ) |
|
| (3,075 | ) |
|
| (1,672 | ) |
|
| (5,432 | ) |
|
| 11,280 |
|
|
| 554,534 |
|
|
| 516,511 |
|
|
| 440,843 |
|
|
| 2,013,652 |
|
|
| 1,647,117 |
|
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS |
| 76,798 |
|
|
| 33,722 |
|
|
| (97,036 | ) |
|
| 45,292 |
|
|
| (428,549 | ) |
Other income (expense) |
|
|
|
|
|
|
|
|
| ||||||||||
Interest and dividend income |
| 6,789 |
|
|
| 5,313 |
|
|
| 2,029 |
|
|
| 18,090 |
|
|
| 10,254 |
|
Interest expense |
| (4,327 | ) |
|
| (4,372 | ) |
|
| (6,094 | ) |
|
| (19,203 | ) |
|
| (23,955 | ) |
Gain (loss) on investment securities |
| 2,253 |
|
|
| (14,310 | ) |
|
| (1,126 | ) |
|
| 57,937 |
|
|
| 6,727 |
|
Loss on extinguishment of debt |
| — |
|
|
| — |
|
|
| — |
|
|
| (60,083 | ) |
|
| — |
|
Other |
| (8,949 | ) |
|
| (1,148 | ) |
|
| (2,630 | ) |
|
| (11,115 | ) |
|
| (5,657 | ) |
|
| (4,234 | ) |
|
| (14,517 | ) |
|
| (7,821 | ) |
|
| (14,374 | ) |
|
| (12,631 | ) |
Income (loss) from continuing operations before income taxes |
| 72,564 |
|
|
| 19,205 |
|
|
| (104,857 | ) |
|
| 30,918 |
|
|
| (441,180 | ) |
Income tax expense (benefit) |
| 27,532 |
|
|
| 1,730 |
|
|
| (25,323 | ) |
|
| 24,366 |
|
|
| (103,721 | ) |
Income (loss) from continuing operations |
| 45,032 |
|
|
| 17,475 |
|
|
| (79,534 | ) |
|
| 6,552 |
|
|
| (337,459 | ) |
Income from discontinued operations before income taxes |
| 507 |
|
|
| 277 |
|
|
| 373 |
|
|
| 401 |
|
|
| 11,309 |
|
Income tax provision |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Income from discontinued operations |
| 507 |
|
|
| 277 |
|
|
| 373 |
|
|
| 401 |
|
|
| 11,309 |
|
NET INCOME (LOSS) | $ | 45,539 |
|
| $ | 17,752 |
|
| $ | (79,161 | ) |
| $ | 6,953 |
|
| $ | (326,150 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Basic earnings (loss) per common share: |
|
|
|
|
|
|
|
|
| ||||||||||
Income (loss) from continuing operations | $ | 0.42 |
|
| $ | 0.16 |
|
| $ | (0.74 | ) |
| $ | 0.05 |
|
| $ | (3.14 | ) |
Income from discontinued operations |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.10 |
|
Net income (loss) | $ | 0.42 |
|
| $ | 0.16 |
|
| $ | (0.74 | ) |
| $ | 0.05 |
|
| $ | (3.04 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Diluted earnings (loss) per common share: |
|
|
|
|
|
|
|
|
| ||||||||||
Income (loss) from continuing operations | $ | 0.42 |
|
| $ | 0.16 |
|
| $ | (0.74 | ) |
| $ | 0.05 |
|
| $ | (3.14 | ) |
Income from discontinued operations |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.10 |
|
Net income (loss) | $ | 0.42 |
|
| $ | 0.16 |
|
| $ | (0.74 | ) |
| $ | 0.05 |
|
| $ | (3.04 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||||||||
Basic |
| 105,292 |
|
|
| 105,289 |
|
|
| 107,899 |
|
|
| 105,891 |
|
|
| 107,818 |
|
Diluted |
| 106,078 |
|
|
| 106,021 |
|
|
| 107,899 |
|
|
| 106,555 |
|
|
| 107,818 |
|
HELMERICH & PAYNE, INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
| September 30, |
| September 30, | ||||
(in thousands except share data and share amounts) |
| 2022 |
|
|
| 2021 |
|
ASSETS |
|
|
| ||||
Current Assets: |
|
|
| ||||
Cash and cash equivalents | $ | 232,131 |
|
| $ | 917,534 |
|
Restricted cash |
| 36,246 |
|
|
| 18,350 |
|
Short-term investments |
| 117,101 |
|
|
| 198,700 |
|
Accounts receivable, net of allowance of $2,975 and $2,068, respectively |
| 458,713 |
|
|
| 228,894 |
|
Inventories of materials and supplies, net |
| 87,957 |
|
|
| 84,057 |
|
Prepaid expenses and other, net |
| 66,463 |
|
|
| 67,578 |
|
Assets held-for-sale |
| 4,333 |
|
|
| 71,453 |
|
Total current assets |
| 1,002,944 |
|
|
| 1,586,566 |
|
|
|
|
| ||||
Investments |
| 218,981 |
|
|
| 135,444 |
|
Property, plant and equipment, net |
| 2,960,809 |
|
|
| 3,127,287 |
|
Other Noncurrent Assets: |
|
|
| ||||
Goodwill |
| 45,653 |
|
|
| 45,653 |
|
Intangible assets, net |
| 67,154 |
|
|
| 73,838 |
|
Operating lease right-of-use asset |
| 39,064 |
|
|
| 49,187 |
|
Other assets, net |
| 20,926 |
|
|
| 16,153 |
|
Total other noncurrent assets |
| 172,797 |
|
|
| 184,831 |
|
|
|
|
| ||||
Total assets | $ | 4,355,531 |
|
| $ | 5,034,128 |
|
|
|
|
| ||||
LIABILITIES & SHAREHOLDERS' EQUITY |
|
|
| ||||
Current liabilities: |
|
|
| ||||
Accounts payable | $ | 126,966 |
|
| $ | 71,996 |
|
Dividends payable |
| 26,693 |
|
|
| 27,332 |
|
Current portion of long-term debt, net |
| — |
|
|
| 483,486 |
|
Accrued liabilities |
| 241,151 |
|
|
| 283,492 |
|
Total current liabilities |
| 394,810 |
|
|
| 866,306 |
|
|
|
|
| ||||
Noncurrent Liabilities: |
|
|
| ||||
Long-term debt, net |
| 542,610 |
|
|
| 541,997 |
|
Deferred income taxes |
| 537,712 |
|
|
| 563,437 |
|
Other |
| 113,387 |
|
|
| 147,757 |
|
Noncurrent liabilities - discontinued operations |
| 1,540 |
|
|
| 2,013 |
|
Total noncurrent liabilities |
| 1,195,249 |
|
|
| 1,255,204 |
|
|
|
|
| ||||
Shareholders' Equity: |
|
|
| ||||
Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of September 30, 2022 and 2021, and 105,293,662 and 107,898,859 shares outstanding as of September 30, 2022 and 2021, respectively |
| 11,222 |
|
|
| 11,222 |
|
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued |
| — |
|
|
| — |
|
Additional paid-in capital |
| 528,278 |
|
|
| 529,903 |
|
Retained earnings |
| 2,473,572 |
|
|
| 2,573,375 |
|
Accumulated other comprehensive loss |
| (12,072 | ) |
|
| (20,244 | ) |
Treasury stock, at cost, 6,929,203 shares and 4,324,006 shares as of September 30, 2022 and 2021, respectively |
| (235,528 | ) |
|
| (181,638 | ) |
Total shareholders' equity |
| 2,765,472 |
|
|
| 2,912,618 |
|
Total liabilities and shareholders' equity | $ | 4,355,531 |
|
| $ | 5,034,128 |
|
HELMERICH & PAYNE, INC. |
|
| |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
| |||||||||
| Year Ended September 30, | ||||||||||
(in thousands) |
| 2022 |
|
|
| 2021 |
|
|
| 2020 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
| ||||||
Net income (loss) | $ | 6,953 |
|
| $ | (326,150 | ) |
| $ | (494,497 | ) |
Adjustment for income from discontinued operations |
| (401 | ) |
|
| (11,309 | ) |
|
| (1,895 | ) |
Income (loss) from continuing operations |
| 6,552 |
|
|
| (337,459 | ) |
|
| (496,392 | ) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
| ||||||
Depreciation and amortization |
| 403,170 |
|
|
| 419,726 |
|
|
| 481,885 |
|
Asset impairment charges |
| 4,363 |
|
|
| 70,850 |
|
|
| 563,234 |
|
Amortization of debt discount and debt issuance costs |
| 1,200 |
|
|
| 1,423 |
|
|
| 1,817 |
|
Loss on extinguishment of debt |
| 60,083 |
|
|
| — |
|
|
| — |
|
Provision for credit loss |
| 1,081 |
|
|
| 203 |
|
|
| 2,203 |
|
Stock-based compensation |
| 28,032 |
|
|
| 27,858 |
|
|
| 36,329 |
|
Loss (gain) on investment securities |
| (57,937 | ) |
|
| (6,727 | ) |
|
| 8,720 |
|
Gain on reimbursement of drilling equipment |
| (29,443 | ) |
|
| (12,322 | ) |
|
| (26,959 | ) |
Other (gain) loss on sale of assets |
| (5,432 | ) |
|
| 11,280 |
|
|
| (19,816 | ) |
Gain on sale of subsidiary |
| — |
|
|
| — |
|
|
| (14,963 | ) |
Deferred income tax benefit |
| (28,488 | ) |
|
| (89,752 | ) |
|
| (157,555 | ) |
Other |
| 6,533 |
|
|
| 13,794 |
|
|
| (2,423 | ) |
Changes in assets and liabilities |
| (155,728 | ) |
|
| 37,614 |
|
|
| 162,848 |
|
Net cash provided by operating activities from continuing operations |
| 233,986 |
|
|
| 136,488 |
|
|
| 538,928 |
|
Net cash used in operating activities from discontinued operations |
| (73 | ) |
|
| (48 | ) |
|
| (47 | ) |
Net cash provided by operating activities |
| 233,913 |
|
|
| 136,440 |
|
|
| 538,881 |
|
|
|
|
|
|
| ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
| ||||||
Capital expenditures |
| (250,894 | ) |
|
| (82,148 | ) |
|
| (140,795 | ) |
Other capital expenditures related to assets held-for-sale |
| (21,645 | ) |
|
| — |
|
|
| — |
|
Purchase of short-term investments |
| (165,109 | ) |
|
| (315,078 | ) |
|
| (134,641 | ) |
Purchase of long-term investments |
| (51,241 | ) |
|
| (102,523 | ) |
|
| (550 | ) |
Proceeds from sale of short-term investments |
| 244,728 |
|
|
| 207,716 |
|
|
| 94,646 |
|
Proceeds from sale of long-term investments |
| 22,042 |
|
|
| — |
|
|
| — |
|
Proceeds from sale of subsidiary |
| — |
|
|
| — |
|
|
| 15,056 |
|
Proceeds from asset sales |
| 62,304 |
|
|
| 43,515 |
|
|
| 78,399 |
|
Advance payment for sale of property, plant and equipment |
| — |
|
|
| 86,524 |
|
|
| — |
|
Other |
| (7,500 | ) |
|
| — |
|
|
| — |
|
Net cash used in investing activities |
| (167,315 | ) |
|
| (161,994 | ) |
|
| (87,885 | ) |
|
|
|
|
|
| ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
| ||||||
Dividends paid |
| (107,395 | ) |
|
| (109,130 | ) |
|
| (260,335 | ) |
Proceeds from debt issuance |
| — |
|
|
| 548,719 |
|
|
| — |
|
Debt issuance costs |
| — |
|
|
| (3,935 | ) |
|
| — |
|
Proceeds from stock option exercises |
| — |
|
|
| — |
|
|
| 4,100 |
|
Payments for employee taxes on net settlement of equity awards |
| (5,505 | ) |
|
| (2,162 | ) |
|
| (3,784 | ) |
Payment of contingent consideration from acquisition of business |
| (250 | ) |
|
| (7,250 | ) |
|
| (8,250 | ) |
Payments for early extinguishment of long-term debt |
| (487,148 | ) |
|
| — |
|
|
| — |
|
Make-whole premium payment |
| (56,421 | ) |
|
| — |
|
|
| — |
|
Share repurchases |
| (76,999 | ) |
|
| — |
|
|
| (28,505 | ) |
Other |
| (587 | ) |
|
| (719 | ) |
|
| (446 | ) |
Net cash provided by (used in) financing activities |
| (734,305 | ) |
|
| 425,523 |
|
|
| (297,220 | ) |
Net increase (decrease) in cash and cash equivalents and restricted cash |
| (667,707 | ) |
|
| 399,969 |
|
|
| 153,776 |
|
Cash and cash equivalents and restricted cash, beginning of period |
| 936,716 |
|
|
| 536,747 |
|
|
| 382,971 |
|
Cash and cash equivalents and restricted cash, end of period | $ | 269,009 |
|
| $ | 936,716 |
|
| $ | 536,747 |
|
HELMERICH & PAYNE, INC. | |||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||
| Three Months Ended |
| Year Ended | ||||||||||||||||
(in thousands, except operating statistics) | September 30, |
| June 30, |
| September 30, |
| September 30, | ||||||||||||
| 2022 |
|
|
| 2022 |
|
|
| 2021 |
|
|
| 2022 |
|
|
| 2021 |
| |
NORTH AMERICA SOLUTIONS |
|
|
|
|
|
|
|
|
| ||||||||||
Operating revenues | $ | 552,315 |
|
| $ | 486,004 |
|
| $ | 293,303 |
|
| $ | 1,788,167 |
|
| $ | 1,026,364 |
|
Direct operating expenses |
| 348,769 |
|
|
| 318,400 |
|
|
| 224,185 |
|
|
| 1,218,134 |
|
|
| 773,507 |
|
Depreciation and amortization |
| 92,200 |
|
|
| 93,612 |
|
|
| 95,177 |
|
|
| 375,250 |
|
|
| 392,415 |
|
Research and development |
| 7,195 |
|
|
| 6,545 |
|
|
| 5,411 |
|
|
| 26,728 |
|
|
| 21,811 |
|
Selling, general and administrative expense |
| 12,015 |
|
|
| 10,069 |
|
|
| 13,866 |
|
|
| 43,796 |
|
|
| 51,089 |
|
Asset impairment charges |
| — |
|
|
| — |
|
|
| 14,436 |
|
|
| 1,868 |
|
|
| 70,850 |
|
Restructuring charges |
| — |
|
|
| 25 |
|
|
| 899 |
|
|
| 498 |
|
|
| 3,868 |
|
Segment operating income (loss) | $ | 92,136 |
|
| $ | 57,353 |
|
| $ | (60,671 | ) |
| $ | 121,893 |
|
| $ | (287,176 | ) |
Financial Data and Other Operating Statistics1: |
|
|
|
|
|
|
|
|
| ||||||||||
Direct margin (Non-GAAP)2 | $ | 203,546 |
|
| $ | 167,604 |
|
| $ | 69,118 |
|
| $ | 570,033 |
|
| $ | 252,857 |
|
Revenue days3 |
| 16,178 |
|
|
| 15,796 |
|
|
| 11,429 |
|
|
| 59,672 |
|
|
| 39,199 |
|
Average active rigs4 |
| 176 |
|
|
| 174 |
|
|
| 124 |
|
|
| 163 |
|
|
| 107 |
|
Number of active rigs at the end of period5 |
| 176 |
|
|
| 175 |
|
|
| 127 |
|
|
| 176 |
|
|
| 127 |
|
Number of available rigs at the end of period |
| 236 |
|
|
| 236 |
|
|
| 236 |
|
|
| 236 |
|
|
| 236 |
|
Reimbursements of "out-of-pocket" expenses | $ | 75,082 |
|
| $ | 67,218 |
|
| $ | 34,536 |
|
| $ | 232,092 |
|
| $ | 113,897 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
INTERNATIONAL SOLUTIONS |
|
|
|
|
|
|
|
|
| ||||||||||
Operating revenues | $ | 42,373 |
|
| $ | 29,118 |
|
| $ | 17,308 |
|
| $ | 136,072 |
|
| $ | 57,917 |
|
Direct operating expenses |
| 39,114 |
|
|
| 32,364 |
|
|
| 17,741 |
|
|
| 120,780 |
|
|
| 68,672 |
|
Depreciation |
| 1,177 |
|
|
| 1,175 |
|
|
| 652 |
|
|
| 4,156 |
|
|
| 2,013 |
|
Selling, general and administrative expense |
| 2,871 |
|
|
| 2,129 |
|
|
| 4,565 |
|
|
| 8,779 |
|
|
| 8,028 |
|
Asset impairment charge |
| — |
|
|
| — |
|
|
| — |
|
|
| 2,495 |
|
|
| — |
|
Restructuring charges |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 207 |
|
Segment operating loss | $ | (789 | ) |
| $ | (6,550 | ) |
| $ | (5,650 | ) |
| $ | (138 | ) |
| $ | (21,003 | ) |
Financial Data and Other Operating Statistics1: |
|
|
|
|
|
|
|
|
| ||||||||||
Direct margin (Non-GAAP)2 | $ | 3,259 |
|
| $ | (3,246 | ) |
| $ | (433 | ) |
| $ | 15,292 |
|
| $ | (10,755 | ) |
Revenue days3 |
| 1,035 |
|
|
| 718 |
|
|
| 586 |
|
|
| 3,036 |
|
|
| 1,815 |
|
Average active rigs4 |
| 11 |
|
|
| 8 |
|
|
| 6 |
|
|
| 8 |
|
|
| 5 |
|
Number of active rigs at the end of period5 |
| 12 |
|
|
| 9 |
|
|
| 6 |
|
|
| 12 |
|
|
| 6 |
|
Number of available rigs at the end of period |
| 28 |
|
|
| 28 |
|
|
| 30 |
|
|
| 28 |
|
|
| 30 |
|
Reimbursements of "out-of-pocket" expenses | $ | 1,542 |
|
| $ | 699 |
|
| $ | 1,369 |
|
| $ | 4,910 |
|
| $ | 6,693 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
OFFSHORE GULF OF MEXICO |
|
|
|
|
|
|
|
|
| ||||||||||
Operating revenues | $ | 34,303 |
|
| $ | 32,701 |
|
| $ | 31,488 |
|
| $ | 125,465 |
|
| $ | 126,399 |
|
Direct operating expenses |
| 24,898 |
|
|
| 23,922 |
|
|
| 23,797 |
|
|
| 90,415 |
|
|
| 97,249 |
|
Depreciation |
| 2,066 |
|
|
| 2,328 |
|
|
| 2,420 |
|
|
| 9,175 |
|
|
| 10,557 |
|
Selling, general and administrative expense |
| 741 |
|
|
| 579 |
|
|
| 729 |
|
|
| 2,661 |
|
|
| 2,624 |
|
Segment operating income | $ | 6,598 |
|
| $ | 5,872 |
|
| $ | 4,542 |
|
| $ | 23,214 |
|
| $ | 15,969 |
|
Financial Data and Other Operating Statistics1: |
|
|
|
|
|
|
|
|
| ||||||||||
Direct margin (Non-GAAP)2 | $ | 9,405 |
|
| $ | 8,779 |
|
| $ | 7,691 |
|
| $ | 35,050 |
|
| $ | 29,150 |
|
Revenue days3 |
| 368 |
|
|
| 364 |
|
|
| 368 |
|
|
| 1,460 |
|
|
| 1,552 |
|
Average active rigs4 |
| 4 |
|
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
Number of active rigs at the end of period5 |
| 4 |
|
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
Number of available rigs at the end of period |
| 7 |
|
|
| 7 |
|
|
| 7 |
|
|
| 7 |
|
|
| 7 |
|
Reimbursements of "out-of-pocket" expenses | $ | 6,974 |
|
| $ | 7,219 |
|
| $ | 5,985 |
|
| $ | 26,077 |
|
| $ | 27,388 |
|
(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. 90 days). |
(5) | Defined as the number of rigs generating revenue at the applicable end date of the time period. |
Segment reconciliation amounts were as follows:
| Three Months Ended September 30, 2022 | |||||||||||||||||
(in thousands) | North America Solutions |
| Offshore Gulf of Mexico |
| International Solutions |
| Other |
| Eliminations |
| Total | |||||||
Operating revenue | $ | 552,315 |
| $ | 34,303 |
| $ | 42,373 |
| $ | 2,341 |
| $ | — |
|
| $ | 631,332 |
Intersegment |
| — |
|
| — |
|
| — |
|
| 15,470 |
|
| (15,470 | ) |
|
| — |
Total operating revenue | $ | 552,315 |
| $ | 34,303 |
| $ | 42,373 |
| $ | 17,811 |
| $ | (15,470 | ) |
| $ | 631,332 |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Direct operating expenses |
| 336,880 |
|
| 23,020 |
|
| 38,915 |
|
| 13,375 |
|
| — |
|
|
| 412,190 |
Intersegment |
| 11,889 |
|
| 1,878 |
|
| 199 |
|
| 20 |
|
| (13,986 | ) |
|
| — |
Total drilling services & other operating expenses | $ | 348,769 |
| $ | 24,898 |
| $ | 39,114 |
| $ | 13,395 |
| $ | (13,986 | ) |
| $ | 412,190 |
| Year Ended September 30, 2022 | |||||||||||||||||
(in thousands) | North America Solutions |
| Offshore Gulf of Mexico |
| International Solutions |
| Other |
| Eliminations |
| Total | |||||||
Operating revenue | $ | 1,788,167 |
| $ | 125,465 |
| $ | 136,072 |
| $ | 9,240 |
| $ | — |
|
| $ | 2,058,944 |
Intersegment |
| — |
|
| — |
|
| — |
|
| 57,047 |
|
| (57,047 | ) |
|
| — |
Total operating revenue | $ | 1,788,167 |
| $ | 125,465 |
| $ | 136,072 |
| $ | 66,287 |
| $ | (57,047 | ) |
| $ | 2,058,944 |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Direct operating expenses |
| 1,177,381 |
|
| 83,079 |
|
| 120,167 |
|
| 50,600 |
|
| — |
|
|
| 1,431,227 |
Intersegment |
| 40,753 |
|
| 7,336 |
|
| 613 |
|
| 83 |
|
| (48,785 | ) |
|
| — |
Total drilling services & other operating expenses | $ | 1,218,134 |
| $ | 90,415 |
| $ | 120,780 |
| $ | 50,683 |
| $ | (48,785 | ) |
| $ | 1,431,227 |
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 operating income (loss) per the information above to income (loss) from continuing operations before income taxes as reported on the Consolidated Statements of Operations:
| Three Months Ended |
| Year Ended | ||||||||||||||||
| September 30, |
| June 30, |
| September 30, |
| September 30, | ||||||||||||
(in thousands) |
| 2022 |
|
|
| 2022 |
|
|
| 2021 |
|
|
| 2022 |
|
|
| 2021 |
|
Operating income (loss) |
|
|
|
|
|
|
|
|
| ||||||||||
North America Solutions | $ | 92,136 |
|
| $ | 57,353 |
|
| $ | (60,671 | ) |
| $ | 121,893 |
|
| $ | (287,176 | ) |
International Solutions |
| (789 | ) |
|
| (6,550 | ) |
|
| (5,650 | ) |
|
| (138 | ) |
|
| (21,003 | ) |
Offshore Gulf of Mexico |
| 6,598 |
|
|
| 5,872 |
|
|
| 4,542 |
|
|
| 23,214 |
|
|
| 15,969 |
|
Other |
| 3,659 |
|
|
| 1,965 |
|
|
| (8,073 | ) |
|
| 12,720 |
|
|
| (9,704 | ) |
Eliminations |
| (969 | ) |
|
| (2,140 | ) |
|
| 7,277 |
|
|
| (6,422 | ) |
|
| (1,580 | ) |
Segment operating income (loss) | $ | 100,635 |
|
| $ | 56,500 |
|
| $ | (62,575 | ) |
| $ | 151,267 |
|
| $ | (303,494 | ) |
Gain on reimbursement of drilling equipment |
| 7,846 |
|
|
| 9,895 |
|
|
| 2,115 |
|
|
| 29,443 |
|
|
| 12,322 |
|
Other gain (loss) on sale of assets |
| 2,670 |
|
|
| 3,075 |
|
|
| 1,672 |
|
|
| 5,432 |
|
|
| (11,280 | ) |
Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges |
| (34,353 | ) |
|
| (35,748 | ) |
|
| (38,248 | ) |
|
| (140,850 | ) |
|
| (126,097 | ) |
Operating income (loss) | $ | 76,798 |
|
| $ | 33,722 |
|
| $ | (97,036 | ) |
| $ | 45,292 |
|
| $ | (428,549 | ) |
Other income (expense): |
|
|
|
|
|
|
|
|
| ||||||||||
Interest and dividend income |
| 6,789 |
|
|
| 5,313 |
|
|
| 2,029 |
|
|
| 18,090 |
|
|
| 10,254 |
|
Interest expense |
| (4,327 | ) |
|
| (4,372 | ) |
|
| (6,094 | ) |
|
| (19,203 | ) |
|
| (23,955 | ) |
Gain (loss) on investment securities |
| 2,253 |
|
|
| (14,310 | ) |
|
| (1,126 | ) |
|
| 57,937 |
|
|
| 6,727 |
|
Loss on extinguishment of debt |
| — |
|
|
| — |
|
|
| — |
|
|
| (60,083 | ) |
|
| — |
|
Other |
| (8,949 | ) |
|
| (1,148 | ) |
|
| (2,630 | ) |
|
| (11,115 | ) |
|
| (5,657 | ) |
Total unallocated amounts |
| (4,234 | ) |
|
| (14,517 | ) |
|
| (7,821 | ) |
|
| (14,374 | ) |
|
| (12,631 | ) |
Income (loss) from continuing operations before income taxes | $ | 72,564 |
|
| $ | 19,205 |
|
| $ | (104,857 | ) |
| $ | 30,918 |
|
| $ | (441,180 | ) |
SUPPLEMENTARY STATISTICAL INFORMATION Unaudited
U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS | |||||||
| November 16, |
| September 30, |
| June 30, |
| Q4FY22 |
| 2022 |
| 2022 |
| 2022 |
| Average |
U.S. Land Operations |
|
|
|
|
|
|
|
Term Contract Rigs | 119 |
| 119 |
| 115 |
| 122 |
Spot Contract Rigs | 61 |
| 57 |
| 60 |
| 54 |
Total Contracted Rigs | 180 |
| 176 |
| 175 |
| 176 |
Idle or Other Rigs | 56 |
| 60 |
| 61 |
| 60 |
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 9/30/22) | |||||||||||||
| Q1 |
| Q2 |
| Q3 |
| Q4 |
| Q1 |
| Q2 |
| Q3 |
Segment | FY23 |
| FY23 |
| FY23 |
| FY23 |
| FY24 |
| FY24 |
| FY24 |
U.S. Land Operations | 113.0 |
| 94.8 |
| 54.6 |
| 43.8 |
| 35.4 |
| 32.9 |
| 30.7 |
International Land Operations | 9.1 |
| 9.0 |
| 7.8 |
| 7.7 |
| 7.0 |
| 6.0 |
| 5.7 |
Offshore Operations | — |
| — |
| — |
| — |
| — |
| — |
| — |
Total | 122.1 |
| 103.8 |
| 62.4 |
| 51.5 |
| 42.4 |
| 38.9 |
| 36.4 |
(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees. | |||||||||||||
NON-GAAP MEASUREMENTS
NON-GAAP RECONCILIATION OF SELECT ITEMS AND ADJUSTED NET INCOME(**) | |||||||||||||||
| Three Months Ended September 30, 2022 | ||||||||||||||
(in thousands, except per share data) | Pretax |
| Tax |
| Net |
| EPS | ||||||||
Net income (GAAP basis) |
|
|
|
| $ | 45,539 |
|
| $ | 0.42 |
| ||||
(-) Fair market value adjustments to equity investments | $ | 2,287 |
|
| $ | 518 |
|
| $ | 1,769 |
|
| $ | 0.02 |
|
(-) Gain related to the sale of equipment | $ | 2,019 |
|
| $ | 458 |
|
| $ | 1,561 |
|
| $ | 0.01 |
|
(-) Lump sum settlement for distribution from pension | $ | (8,270 | ) |
| $ | (1,873 | ) |
| $ | (6,397 | ) |
| $ | (0.06 | ) |
Adjusted net income |
|
|
|
| $ | 48,606 |
|
| $ | 0.45 |
| ||||
| Three Months Ended June 30, 2022 | ||||||||||||||
(in thousands, except per share data) | Pretax |
| Tax |
| Net |
| EPS | ||||||||
Net income (GAAP basis) |
|
|
|
| $ | 17,752 |
|
| $ | 0.16 |
| ||||
(-) Fair market adjustment to equity investments | $ | (14,268 | ) |
| $ | (3,028 | ) |
| $ | (11,240 | ) |
| $ | (0.11 | ) |
(-) Restructuring charges | $ | (33 | ) |
| $ | (68 | ) |
| $ | 35 |
|
| $ | — |
|
Adjusted net income |
|
|
|
| $ | 28,957 |
|
| $ | 0.27 |
| ||||
| Twelve Months Ended September 30, 2022 | ||||||||||||||
(in thousands, except per share data) | Pretax |
| Tax |
| Net |
| EPS | ||||||||
Net income (GAAP basis) |
|
|
|
| $ | 6,953 |
|
| $ | 0.05 |
| ||||
(-) Fair market adjustment to equity investments | $ | 58,258 |
|
| $ | 13,196 |
|
| $ | 45,062 |
|
| $ | 0.42 |
|
(-) Settlement of a previous contractual dispute with an international customer | $ | 16,381 |
|
| $ | 2,469 |
|
| $ | 13,912 |
|
| $ | 0.13 |
|
(-) Gain related to the sale of equipment | $ | 2,019 |
|
| $ | 458 |
|
| $ | 1,561 |
|
| $ | 0.01 |
|
(-) Restructuring charges | $ | (838 | ) |
| $ | (190 | ) |
| $ | (648 | ) |
| $ | (0.01 | ) |
(-) Impairments for fair market value adjustments to equipment held for sale | $ | (4,363 | ) |
| $ | (658 | ) |
| $ | (3,705 | ) |
| $ | (0.03 | ) |
(-) Loss related to the sale of equipment | $ | (4,744 | ) |
| $ | (716 | ) |
| $ | (4,028 | ) |
| $ | (0.04 | ) |
(-) Lump sum settlement for distribution from pension | $ | (8,270 | ) |
| $ | (1,873 | ) |
| $ | (6,397 | ) |
| $ | (0.06 | ) |
(-) Debt make whole premium and write-off of debt discount and issuance | $ | (60,083 | ) |
| $ | (9,054 | ) |
| $ | (51,029 | ) |
| $ | (0.47 | ) |
Adjusted net income |
|
|
|
| $ | 12,225 |
|
| $ | 0.10 |
| ||||
(**)The Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future period results. Select items are excluded as they are deemed to be outside of the Company's core business operations. | |||||||||||||||
|
NON-GAAP RECONCILIATION OF DIRECT MARGIN
Direct margin is considered a non-GAAP metric. We define "direct margin" as operating revenues less direct operating expenses. Direct margin is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. Direct margin is not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures.
The following table reconciles direct margin to segment operating income (loss), which we believe is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to direct margin.
| Three Months Ended September 30, 2022 | ||||||||
(in thousands) | North America Solutions |
| International Solutions |
| Offshore Gulf of Mexico | ||||
Segment operating income (loss) | $ | 92,136 |
| $ | (789 | ) |
| $ | 6,598 |
Add back: |
|
|
|
|
| ||||
Depreciation and amortization |
| 92,200 |
|
| 1,177 |
|
|
| 2,066 |
Research and development |
| 7,195 |
|
| — |
|
|
| — |
Selling, general and administrative expense |
| 12,015 |
|
| 2,871 |
|
|
| 741 |
Direct margin (Non-GAAP) | $ | 203,546 |
| $ | 3,259 |
|
| $ | 9,405 |
| Three Months Ended June 30, 2022 | ||||||||
(in thousands) | North America Solutions |
| International Solutions |
| Offshore Gulf of Mexico | ||||
Segment operating income (loss) | $ | 57,353 |
| $ | (6,550 | ) |
| $ | 5,872 |
Add back: |
|
|
|
|
| ||||
Depreciation and amortization |
| 93,612 |
|
| 1,175 |
|
|
| 2,328 |
Research and development |
| 6,545 |
|
| — |
|
|
| — |
Selling, general and administrative expense |
| 10,069 |
|
| 2,129 |
|
|
| 579 |
Restructuring charges |
| 25 |
|
| — |
|
|
| — |
Direct margin (Non-GAAP) | $ | 167,604 |
| $ | (3,246 | ) |
| $ | 8,779 |
| Three Months Ended September 30, 2021 | |||||||||
(in thousands) | North America Solutions |
| International Solutions |
| Offshore Gulf of Mexico | |||||
Segment operating income (loss) | $ | (60,671 | ) |
| $ | (5,650 | ) |
| $ | 4,542 |
Add back: |
|
|
|
|
| |||||
Depreciation and amortization |
| 95,177 |
|
|
| 652 |
|
|
| 2,420 |
Research and development |
| 5,411 |
|
|
| — |
|
|
| — |
Selling, general and administrative expense |
| 13,866 |
|
|
| 4,565 |
|
|
| 729 |
Asset impairment charges |
| 14,436 |
|
|
| — |
|
|
| — |
Restructuring charges |
| 899 |
|
|
| — |
|
|
| — |
Direct margin (Non-GAAP) | $ | 69,118 |
|
| $ | (433 | ) |
| $ | 7,691 |
| Year Ended September 30, 2022 | ||||||||
(in thousands) | North America Solutions |
| International Solutions |
| Offshore Gulf of Mexico | ||||
Segment operating income (loss) | $ | 121,893 |
| $ | (138 | ) |
| $ | 23,214 |
Add back: |
|
|
|
|
| ||||
Depreciation and amortization |
| 375,250 |
|
| 4,156 |
|
|
| 9,175 |
Research and development |
| 26,728 |
|
| — |
|
|
| — |
Selling, general and administrative expense |
| 43,796 |
|
| 8,779 |
|
|
| 2,661 |
Asset impairment charges |
| 1,868 |
|
| 2,495 |
|
|
| — |
Restructuring charges |
| 498 |
|
| — |
|
|
| — |
Direct margin (Non-GAAP) | $ | 570,033 |
| $ | 15,292 |
|
| $ | 35,050 |
| Year Ended September 30, 2021 | |||||||||
(in thousands) | North America Solutions |
| International Solutions |
| Offshore Gulf of Mexico | |||||
Segment operating income (loss) | $ | (287,176 | ) |
| $ | (21,003 | ) |
| $ | 15,969 |
Add back: |
|
|
|
|
| |||||
Depreciation and amortization |
| 392,415 |
|
|
| 2,013 |
|
|
| 10,557 |
Research and development |
| 21,811 |
|
|
| — |
|
|
| — |
Selling, general and administrative expense |
| 51,089 |
|
|
| 8,028 |
|
|
| 2,624 |
Asset impairment charges |
| 70,850 |
|
|
| — |
|
|
| — |
Restructuring charges |
| 3,868 |
|
|
| 207 |
|
|
| — |
Direct margin (Non-GAAP) | $ | 252,857 |
|
| $ | (10,755 | ) |
| $ | 29,150 |
|
Contacts
Dave Wilson, Vice President of Investor Relations
investor.relations@hpinc.com
(918) 588-5190
