UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ~~ended:~~ended June 30, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission ~~File Number:~~file number 1-4221

HELMERICH & PAYNE, INC.

(Exact name of registrant as specified in its charter)


Delaware						73-0679879
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1437 South Boulder Avenue, Suite 1400, Tulsa, Oklahoma 74119

(Address of principal executive offices) (Zip Code)

(918) 742-5531

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year,

if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock ($0.10 par value)	HP	New York Stock Exchange

Indicate by check mark whether the ~~registrant~~Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the ~~registrant~~Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the ~~registrant~~Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the ~~registrant~~Registrant is a large accelerated filer, an accelerated filer, a ~~non-accelerated~~non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule ~~12b-2~~12b‑2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the ~~registrant~~Registrant is a shell company (as defined in Rule ~~12b-2~~12b‑2 of the Exchange Act). Yes ☐ No ☒


CLASS						OUTSTANDING AT July 20, ~~2022~~2023
Common Stock, $0.10 par value						~~105,290,017~~99,426,526

Table of Contents


HELMERICH & PAYNE, INC.
INDEX TO FORM 10‑Q



PART I		~~Page~~3
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets as of June 30 , ~~2022~~2023 and September 30, 20212	3
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30 , 2023 and 2022 ~~and 2021~~	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income (~~Loss~~)(Loss) for the Three and Nine Months Ended June 30 , 2023 and 2022 ~~and 2021~~	5
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended June 30 , 2023 and 2022 ~~and 2021~~	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30 3 0 , ~~2022~~2023 and ~~202~~20221	8
	Notes to Unaudited Condensed Consolidated Financial Statements	910
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2831
Item 3.3 .	Quantitative and Qualitative Disclosures about Market Risk	4546
Item 4.	Controls and Procedures	4546
PART II.		4546
Item 1.	Legal Proceedings	4546
Item 1A.	Risk Factors	4647
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 5.	Other Information	47
Item 6.	Exhibits	4647
SIGNATURES		47

Q3FY23 FORM 10-Q|2

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


HELMERICH & PAYNE, INC.	HELMERICH & PAYNE, INC.					HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS	UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS					UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
		June 30,		September 30,			June 30,		September 30,
(in thousands except share data and share amounts)	(in thousands except share data and share amounts)	2022		2021		(in thousands except share data and share amounts)	2023		2022
ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	188,663	$	917,534	Cash and cash equivalents	$	220,609	$	232,131
Restricted cash						Restricted cash	61,364		36,246
Short-term investments	Short-term investments	144,331		198,700		Short-term investments	72,609		117,101
Accounts receivable, net of allowance of $3,032 and $2,068, respectively		397,880		228,894
Accounts receivable, net of allowance of $4,983 and $2,975, respectively						Accounts receivable, net of allowance of $4,983 and $2,975, respectively	449,588		458,713
Inventories of materials and supplies, net	Inventories of materials and supplies, net	86,091		84,057		Inventories of materials and supplies, net	101,299		87,957
Prepaid expenses and other, net	Prepaid expenses and other, net	103,589		85,928		Prepaid expenses and other, net	86,371		66,463
Assets held-for-sale	Assets held-for-sale	25,604		71,453		Assets held-for-sale	988		4,333
Total current assets	Total current assets	946,158		1,586,566		Total current assets	992,828		1,002,944

Investments	Investments	213,956		135,444		Investments	246,059		218,981
Property, plant and equipment, net	Property, plant and equipment, net	2,987,107		3,127,287		Property, plant and equipment, net	2,932,593		2,960,809
Other Noncurrent Assets:	Other Noncurrent Assets:					Other Noncurrent Assets:
Goodwill	Goodwill	45,653		45,653		Goodwill	45,653		45,653
Intangible assets, net	Intangible assets, net	68,950		73,838		Intangible assets, net	62,183		67,154
Operating lease right-of-use assets	Operating lease right-of-use assets	40,539		49,187		Operating lease right-of-use assets	36,972		39,064
Other assets, net	Other assets, net	20,247		16,153		Other assets, net	24,528		20,926
Total other noncurrent assets	Total other noncurrent assets	175,389		184,831		Total other noncurrent assets	169,336		172,797

Total assets	Total assets	$	4,322,610	$	5,034,128	Total assets	$	4,340,816	$	4,355,531

LIABILITIES & SHAREHOLDERS' EQUITY	LIABILITIES & SHAREHOLDERS' EQUITY					LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities:	Current Liabilities:					Current Liabilities:
Accounts payable	Accounts payable	$	119,972	$	71,996	Accounts payable	$	151,671	$	126,966
Dividends payable	Dividends payable	26,693		27,332		Dividends payable	48,878		26,693
Current portion of long-term debt, net		—		483,486

Accrued liabilities	Accrued liabilities	254,611		283,492		Accrued liabilities	232,947		241,151
Total current liabilities	Total current liabilities	401,276		866,306		Total current liabilities	433,496		394,810

Noncurrent Liabilities:	Noncurrent Liabilities:					Noncurrent Liabilities:
Long-term debt, net	Long-term debt, net	542,290		541,997		Long-term debt, net	544,996		542,610
Deferred income taxes	Deferred income taxes	527,545		563,437		Deferred income taxes	541,424		537,712
Other	Other	116,770		147,757		Other	112,819		114,927
Noncurrent liabilities - discontinued operations		2,061		2,013

Total noncurrent liabilities	Total noncurrent liabilities	1,188,666		1,255,204		Total noncurrent liabilities	1,199,239		1,195,249
Commitments and contingencies (Note 13)		0		0
Commitments and Contingencies (Note 12)						Commitments and Contingencies (Note 12)
Shareholders' Equity:	Shareholders' Equity:					Shareholders' Equity:
Common stock, $.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of both June 30, 2022 and September 30, 2021, and 105,290,017 and 107,898,859 shares outstanding as of June 30, 2022 and September 30, 2021, respectively		11,222		11,222
Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of June 30, 2023 and September 30, 2022, and 99,426,526 and 105,293,662 shares outstanding as of June 30, 2023 and September 30, 2022, respectively						Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of June 30, 2023 and September 30, 2022, and 99,426,526 and 105,293,662 shares outstanding as of June 30, 2023 and September 30, 2022, respectively	11,222		11,222
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued	Preferred stock, no par value, 1,000,000 shares authorized, no shares issued	—		—		Preferred stock, no par value, 1,000,000 shares authorized, no shares issued	—		—
Additional paid-in capital	Additional paid-in capital	521,439		529,903		Additional paid-in capital	517,259		528,278
Retained earnings	Retained earnings	2,454,726		2,573,375		Retained earnings	2,655,287		2,473,572
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(19,067)		(20,244)		Accumulated other comprehensive loss	(11,305)		(12,072)
Treasury stock, at cost, 6,932,848 shares and 4,324,006 shares as of June 30, 2022 and September 30, 2021, respectively		(235,652)		(181,638)
Treasury stock, at cost, 12,796,339 shares and 6,929,203 shares as of June 30, 2023 and September 30, 2022, respectively						Treasury stock, at cost, 12,796,339 shares and 6,929,203 shares as of June 30, 2023 and September 30, 2022, respectively	(464,382)		(235,528)
Total shareholders’ equity	Total shareholders’ equity	2,732,668		2,912,618		Total shareholders’ equity	2,708,081		2,765,472
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	4,322,610	$	5,034,128	Total liabilities and shareholders' equity	$	4,340,816	$	4,355,531

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Q3FY23 FORM 10-Q|3

Table of Contents


HELMERICH & PAYNE, INC.	HELMERICH & PAYNE, INC.									HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS									UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended June 30,				Nine Months Ended June 30,					Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2022		2021		2022		2021		(in thousands, except per share amounts)	2023		2022		2023		2022
OPERATING REVENUES	OPERATING REVENUES									OPERATING REVENUES
Drilling services	Drilling services	$	547,906	$	329,774	$	1,420,810	$	868,581	Drilling services	$	721,567	$	547,906	$	2,205,419	$	1,420,810
Other	Other	2,327		2,439		6,802		6,180		Other	2,389		2,327		7,396		6,802
		550,233		332,213		1,427,612		874,761			723,956		550,233		2,212,815		1,427,612
OPERATING COSTS AND EXPENSES	OPERATING COSTS AND EXPENSES									OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization	Drilling services operating expenses, excluding depreciation and amortization	376,210		255,471		1,015,621		684,473		Drilling services operating expenses, excluding depreciation and amortization	429,182		376,210		1,306,543		1,015,621
Other operating expenses	Other operating expenses	1,053		1,481		3,416		4,117		Other operating expenses	1,003		1,053		3,317		3,416
Depreciation and amortization	Depreciation and amortization	100,741		104,493		304,115		317,771		Depreciation and amortization	94,811		100,741		287,721		304,115
Research and development	Research and development	6,511		5,610		19,425		16,527		Research and development	7,085		6,511		22,720		19,425
Selling, general and administrative	Selling, general and administrative	44,933		41,719		135,699		120,371		Selling, general and administrative	49,271		44,933		150,581		135,699
Asset impairment charge		—		2,130		4,363		56,414
Asset impairment charges										Asset impairment charges	—		—		12,097		4,363
Restructuring charges	Restructuring charges	33		2,110		838		3,856		Restructuring charges	—		33		—		838
Gain on reimbursement of drilling equipment	Gain on reimbursement of drilling equipment	(9,895)		(4,268)		(21,597)		(10,207)		Gain on reimbursement of drilling equipment	(10,642)		(9,895)		(37,940)		(21,597)
Other (gain) loss on sale of assets	Other (gain) loss on sale of assets	(3,075)		834		(2,762)		12,952		Other (gain) loss on sale of assets	4,504		(3,075)		(394)		(2,762)
		516,511		409,580		1,459,118		1,206,274			575,214		516,511		1,744,645		1,459,118
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS	OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS	33,722		(77,367)		(31,506)		(331,513)		OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS	148,742		33,722		468,170		(31,506)
Other income (expense)	Other income (expense)									Other income (expense)
Interest and dividend income	Interest and dividend income	5,313		1,527		11,301		8,225		Interest and dividend income	10,748		5,313		20,508		11,301
Interest expense	Interest expense	(4,372)		(5,963)		(14,876)		(17,861)		Interest expense	(4,324)		(4,372)		(12,918)		(14,876)
Gain (loss) on investment securities	Gain (loss) on investment securities	(14,310)		2,409		55,684		7,853		Gain (loss) on investment securities	(18,538)		(14,310)		6,123		55,684
Loss on extinguishment of debt	Loss on extinguishment of debt	—		—		(60,083)		—		Loss on extinguishment of debt	—		—		—		(60,083)
Other	Other	(1,148)		(970)		(2,166)		(3,027)		Other	(685)		(1,148)		(2,088)		(2,166)
		(14,517)		(2,997)		(10,140)		(4,810)			(12,799)		(14,517)		11,625		(10,140)
Income (loss) from continuing operations before income taxes	Income (loss) from continuing operations before income taxes	19,205		(80,364)		(41,646)		(336,323)		Income (loss) from continuing operations before income taxes	135,943		19,205		479,795		(41,646)
Income tax expense (benefit)	Income tax expense (benefit)	1,730		(23,659)		(3,166)		(78,398)		Income tax expense (benefit)	40,663		1,730		124,187		(3,166)
Income (loss) from continuing operations	Income (loss) from continuing operations	17,475		(56,705)		(38,480)		(257,925)		Income (loss) from continuing operations	95,280		17,475		355,608		(38,480)
Income (loss) from discontinued operations before income taxes	Income (loss) from discontinued operations before income taxes	277		1,150		(106)		10,936		Income (loss) from discontinued operations before income taxes	13		277		870		(106)
Income tax provision		—		—		—		—
Income tax expense										Income tax expense	—		—		—		—
Income (loss) from discontinued operations	Income (loss) from discontinued operations	277		1,150		(106)		10,936		Income (loss) from discontinued operations	13		277		870		(106)
NET INCOME (LOSS)	NET INCOME (LOSS)	$	17,752	$	(55,555)	$	(38,586)	$	(246,989)	NET INCOME (LOSS)	$	95,293	$	17,752	$	356,478	$	(38,586)

Basic earnings (loss) per common share:	Basic earnings (loss) per common share:									Basic earnings (loss) per common share:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	0.16	$	(0.53)	$	(0.37)	$	(2.40)	Income (loss) from continuing operations	$	0.93	$	0.16	$	3.39	$	(0.37)
Income from discontinued operations	Income from discontinued operations	—		0.01		—		0.10		Income from discontinued operations	—		—		0.01		—
Net income (loss)	Net income (loss)	$	0.16	$	(0.52)	$	(0.37)	$	(2.30)	Net income (loss)	$	0.93	$	0.16	$	3.40	$	(0.37)

Diluted earnings (loss) per common share:	Diluted earnings (loss) per common share:									Diluted earnings (loss) per common share:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	0.16	$	(0.53)	$	(0.37)	$	(2.40)	Income (loss) from continuing operations	$	0.93	$	0.16	$	3.38	$	(0.37)
Income from discontinued operations	Income from discontinued operations	—		0.01		—		0.10		Income from discontinued operations	—		—		0.01		—
Net income (loss)	Net income (loss)	$	0.16	$	(0.52)	$	(0.37)	$	(2.30)	Net income (loss)	$	0.93	$	0.16	$	3.39	$	(0.37)

Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	105,289		107,896		106,092		107,790		Basic	101,163		105,289		103,464		106,092
Diluted	Diluted	106,021		107,896		106,092		107,790		Diluted	101,550		106,021		103,852		106,092

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Q3FY23 FORM 10-Q|4

Table of Contents

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended
June 30, Nine Months Ended
June 30,
(in thousands) 2022 2021 2022 2021
Net income (loss) $ 17,752 $ (55,555) $ (38,586) $ (246,989)
Other comprehensive income, net of income taxes:
Net change related to employee benefit plans, net of income taxes of $(41.7) thousand and $(0.3) million for the three and nine months ended June 30, 2022, respectively, and $(0.2) million and $(0.5) million for the three and nine months ended June 30, 2021. 389 460 1,177 1,374
Other comprehensive income 389 460 1,177 1,374
Comprehensive income (loss) $ 18,141 $ (55,095) $ (37,409) $ (245,615)


HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Net income (loss)	$	95,293	$	17,752	$	356,478	$	(38,586)
Other comprehensive income, net of income taxes:

Net change related to employee benefit plans, net of income taxes of $(59.6) thousand and $(209.8) thousand for the three and nine months ended June 30, 2023, respectively, and $(41.7) thousand and $(268.4) thousand for the three and nine months ended June 30, 2022, respectively	255		389		767		1,177
Other comprehensive income	255		389		767		1,177
Comprehensive income (loss)	$	95,548	$	18,141	$	357,245	$	(37,409)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Q3FY23 FORM 10-Q|5

Table of Contents

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three and Nine Months Ended June 30, 2022
(in thousands, except per share amounts) Common Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Treasury Stock
Shares Amount Shares Amount Total
Balance, September 30, 2021 112,222 $ 11,222 $ 529,903 $ 2,573,375 $ (20,244) 4,324 $ (181,638) $ 2,912,618
Comprehensive loss:
Net loss — — — (51,362) — — — (51,362)
Other comprehensive income — — — — 394 — — 394
Dividends declared ($0.25 per share) — — — (26,807) — — — (26,807)
Vesting of restricted stock awards, net of shares withheld for employee taxes — — (21,152) — — (381) 17,040 (4,112)
Stock-based compensation — — 6,218 — — — — 6,218
Share repurchases — — — — — 2,548 (60,358) (60,358)
Balance, December 31, 2021 112,222 $ 11,222 $ 514,969 $ 2,495,206 $ (19,850) 6,491 $ (224,956) $ 2,776,591
Comprehensive loss:
Net loss — — — (4,976) — — — (4,976)
Other comprehensive income — — — — 394 — — 394
Dividends declared ($0.25 per share) — — — (26,565) — — — (26,565)
Vesting of restricted stock awards, net of shares withheld for employee taxes — — (7,197) — — (161) 5,805 (1,392)
Stock-based compensation — — 7,945 — — — — 7,945
Share repurchases — — — — — 607 (16,641) (16,641)
Other — — (946) — — — — (946)
Balance, March 31, 2022 112,222 $ 11,222 $ 514,771 $ 2,463,665 $ (19,456) 6,937 $ (235,792) $ 2,734,410
Comprehensive income:
Net income — — — 17,752 — — — 17,752
Other comprehensive income — — — — 389 — — 389
Dividends declared ($0.25 per share) — — — (26,691) — — — (26,691)
Vesting of restricted stock awards, net of shares withheld for employee taxes — — (136) — — (5) 140 4
Stock-based compensation — — 7,051 — — — — 7,051
Other — — (247) — — — — (247)
Balance, June 30, 2022 112,222 $ 11,222 $ 521,439 $ 2,454,726 $ (19,067) 6,932 $ (235,652) $ 2,732,668


HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
	Three and Nine Months Ended June 30, 2023
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
(in thousands, except per share amounts)	Shares	Amount								Shares	Amount		Total
Balance at September 30, 2022	112,222	$	11,222	$	528,278	$	2,473,572	$	(12,072)	6,929	$	(235,528)	$	2,765,472
Comprehensive income:
Net income	—	—		—		97,145		—		—	—		97,145
Other comprehensive income	—	—		—		—		256		—	—		256
Dividends declared ($0.25 base per share, $0.235 supplemental per share)	—	—		—		(76,611)		—		—	—		(76,611)

Vesting of restricted stock awards, net of shares withheld for employee taxes	—	—		(22,776)		—		—		(449)	13,293		(9,483)
Stock-based compensation	—	—		8,273		—		—		—	—		8,273
Share repurchases	—	—		—		—		—		844	(39,060)		(39,060)
Other	—	—		(847)		—		—		—	—		(847)
Balance at December 31, 2022	112,222	$	11,222	$	512,928	$	2,494,106	$	(11,816)	7,324	$	(261,295)	$	2,745,145
Comprehensive income:
Net income	—	—		—		164,040		—		—	—		164,040
Other comprehensive income	—	—		—		—		256		—	—		256
Dividends declared ($0.25 base per share, $0.235 supplemental per share)	—	—		—		(50,046)		—		—	—		(50,046)

Vesting of restricted stock awards, net of shares withheld for employee taxes	—	—		(11,769)		—		—		(229)	6,842		(4,927)
Stock-based compensation	—	—		7,431		—		—		—	—		7,431
Share repurchases	—	—		—		—		—		2,543	(106,708)		(106,708)

Other	—	—		615		—		—		—	—		615
Balance at March 31, 2023	112,222	$	11,222	$	509,205	$	2,608,100	$	(11,560)	9,638	$	(361,161)	$	2,755,806
Comprehensive income:
Net income	—	—		—		95,293		—		—	—		95,293
Other comprehensive income	—	—		—		—		255		—	—		255
Dividends declared ($0.25 base per share, $0.235 supplemental per share)	—	—		—		(48,106)		—		—	—		(48,106)


Stock-based compensation	—	—		8,180		—		—		—	—		8,180
Share repurchases	—	—		—		—		—		3,158	(103,221)		(103,221)

Other	—	—		(126)		—		—		—	—		(126)
Balance at June 30, 2023	112,222	$	11,222	$	517,259	$	2,655,287	$	(11,305)	12,796	$	(464,382)	$	2,708,081

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HELMERICH & PAYNE, INC.	HELMERICH & PAYNE, INC.																			HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED)																				UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED)
																					Three and Nine Months Ended June 30, 2022
		Three and Nine Months Ended June 30, 2021																			Common Stock					Additional Paid-In Capital				Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Treasury Stock
(in thousands, except per share amounts)	(in thousands, except per share amounts)	Common Stock			Additional Paid-In Capital				Retained Earnings			Accumulated Other Comprehensive Loss		Treasury Stock						(in thousands, except per share amounts)	Shares			Amount								Shares			Amount		Total
		Shares	Amount								Shares			Amount		Total
Balance, September 30, 2020		112,151	$	11,215			$	521,628				$	3,010,012	$	(26,188)	4,663		$	(198,153)			$	3,318,514
Comprehensive loss:
Balance at September 30, 2021																				Balance at September 30, 2021	112,222			$	11,222			$	529,903				$	2,573,375	$	(20,244)	4,324		$	(181,638)	$	2,912,618
Comprehensive income (loss):																				Comprehensive income (loss):
Net loss	Net loss	—	—		—				(70,431)			—		—		—		(70,431)		Net loss	—			—		—				(51,362)			—		—		—		(51,362)
Other comprehensive income	Other comprehensive income	—	—		—				—			457		—		—		457		Other comprehensive income	—			—		—				—			394		—		—		394
Dividends declared ($0.25 per share)		—	—		—				(27,324)			—		—		—		(27,324)
Dividends declared ($0.25 base per share)																				Dividends declared ($0.25 base per share)	—			—		—				(26,807)			—		—		—		(26,807)

Vesting of restricted stock awards, net of shares withheld for employee taxes																				Vesting of restricted stock awards, net of shares withheld for employee taxes	—			—		(21,152)				—			—		(381)		17,040		(4,112)
Stock-based compensation																				Stock-based compensation	—			—		6,218				—			—		—		—		6,218
Share repurchases																				Share repurchases	—			—		—				—			—		2,548		(60,358)		(60,358)

Balance at December 31, 2021																				Balance at December 31, 2021	112,222			$	11,222	$	514,969			$	2,495,206		$	(19,850)	6,491		$	(224,956)	$	2,776,591
Comprehensive income (loss):																				Comprehensive income (loss):
Net loss																				Net loss	—			—		—				(4,976)			—		—		—		(4,976)
Other comprehensive income																				Other comprehensive income	—			—		—				—			394		—		—		394
Dividends declared ($0.25 base per share)																				Dividends declared ($0.25 base per share)	—			—		—				(26,565)			—		—		—		(26,565)

Vesting of restricted stock awards, net of shares withheld for employee taxes																				Vesting of restricted stock awards, net of shares withheld for employee taxes				—		(7,197)				—			—		(161)		5,805		(1,392)
Stock-based compensation																				Stock-based compensation	—			—		7,945				—			—		—		—		7,945
Share repurchases																				Share repurchases	—			—		—				—			—		607		(16,641)		(16,641)

Other																				Other	—			—		(946)				—					—		—		(946)
Balance at March 31, 2022																				Balance at March 31, 2022	112,222			$	11,222	$	514,771			$	2,463,665		$	(19,456)	6,937		$	(235,792)	$	2,734,410
Comprehensive income (loss):																				Comprehensive income (loss):
Net income																				Net income	—			—		—				17,752			—		—		—		17,752
Other comprehensive income																				Other comprehensive income	—			—		—				—			389		—		—		389
Dividends declared ($0.25 base per share)																				Dividends declared ($0.25 base per share)	—			—		—				(26,691)			—		—		—		(26,691)

Vesting of restricted stock awards, net of shares withheld for employee taxes	Vesting of restricted stock awards, net of shares withheld for employee taxes	72	7		(16,742)				—			—		(295)		14,618		(2,117)		Vesting of restricted stock awards, net of shares withheld for employee taxes				—		(136)				—			—		(5)		140		4
Stock-based compensation	Stock-based compensation	—	—		7,451				—			—		—		—		7,451		Stock-based compensation	—			—		7,051				—			—		—		—		7,051

Cumulative effect adjustment for adoption of ASU No. 2016-13		—	—		—				(1,251)			—		—		—		(1,251)
Other		—	—		(381)				—			—		—		—		(381)
Balance, December 31, 2020		112,223	$	11,222	$	511,956			$	2,911,006		$	(25,731)	4,368		$	(183,535)	$	3,224,918
Comprehensive loss:
Net loss		—	—		—				(121,003)			—		—		—		(121,003)
Other comprehensive income		—	—		—				—			457		—		—		457
Dividends declared $0.25 per share)		—	—		—				(27,268)			—		—		—		(27,268)

Vesting of restricted stock awards, net of shares withheld for employee taxes		—	—		(1,678)				—			—		(39)		1,678		—
Stock-based compensation		—	—		6,826				—			—		—		—		6,826

Other	Other	—	—		(234)				—			—		—		—		(234)		Other	—			—		(247)				—			—		—		—		(247)
Balance, March 31, 2021		112,223	$	11,222	$	516,870			$	2,762,735		$	(25,274)	4,329		$	(181,857)	$	3,083,696
Comprehensive loss:
Net loss		—	—		—				(55,555)			—		—		—		(55,555)
Other comprehensive income		—	—		—				—			460		—		—		460
Dividends declared ($0.25 per share)		—	—		—				(27,321)			—		—		—		(27,321)

Vesting of restricted stock awards, net of shares withheld for employee taxes		—	—		(257)				—			—		(5)		216		(41)
Stock-based compensation		—	—		6,963				—			—		—		—		6,963

Other		—	—		(295)				—			—		—		—		(295)
Balance, June 30, 2021		112,223	$	11,222	$	523,281			$	2,679,859		$	(24,814)	4,324		$	(181,641)	$	3,007,907
Balance at June 30, 2022																				Balance at June 30, 2022	112,222			$	11,222	$	521,439			$	2,454,726		$	(19,067)	6,932		$	(235,652)	$	2,732,668

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Nine Months Ended June 30,
(in thousands)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	356,478	$	(38,586)
Adjustment for (income) loss from discontinued operations	(870)		106
Income (loss) from continuing operations	355,608		(38,480)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	287,721		304,115
Asset impairment charges	12,097		4,363
Amortization of debt discount and debt issuance costs	931		880
Loss on extinguishment of debt	—		60,083
Provision for credit loss	2,165		1,022

Stock-based compensation	23,884		21,214
Gain on investment securities	(6,123)		(55,684)
Gain on reimbursement of drilling equipment	(37,940)		(21,597)
Other gain on sale of assets	(394)		(2,762)

Deferred income tax expense (benefit)	4,197		(36,614)

Other	3,956		(2,765)
Change in assets and liabilities:
Accounts receivable	6,529		(173,625)
Inventories of materials and supplies	(13,899)		(2,482)
Prepaid expenses and other	(27,589)		9,209
Other noncurrent assets	(3,413)		1,829
Accounts payable	24,408		46,775
Accrued liabilities	(15,366)		22,511
Deferred income tax liability	(695)		454
Other noncurrent liabilities	2,980		(21,745)
Net cash provided by operating activities from continuing operations	619,057		116,701
Net cash used in operating activities from discontinued operations	(57)		(60)
Net cash provided by operating activities	619,000		116,641
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(281,790)		(174,958)
Other capital expenditures related to assets held-for-sale	—		(18,228)
Purchase of short-term investments	(102,140)		(109,318)
Purchase of long-term investments	(18,813)		(47,210)

Proceeds from sale of short-term investments	148,651		161,766
Proceeds from sale of long-term investments	—		22,042

Proceeds from asset sales	63,048		50,260

Other	—		(7,500)
Net cash used in investing activities	(191,044)		(123,146)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid	(152,579)		(80,702)



Payments for employee taxes on net settlement of equity awards	(14,410)		(5,515)
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	(247,213)		(76,999)
Other	(540)		(587)
Net cash used in financing activities	(414,992)		(707,622)
Net increase (decrease) in cash and cash equivalents and restricted cash	12,964		(714,127)
Cash and cash equivalents and restricted cash, beginning of period	269,009		936,716
Cash and cash equivalents and restricted cash, end of period	$	281,973	$	222,589

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30,
(in thousands) 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS $ (38,586) $ (246,989)
Adjustment for (income) loss from discontinued operations 106 (10,936)
Loss from continuing operations (38,480) (257,925)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 304,115 317,771
Asset impairment charge 4,363 56,414
Amortization of debt discount and debt issuance costs 880 994
Loss on extinguishment of debt 60,083 —
Provision for credit loss 1,022 8
Stock-based compensation 21,214 21,240
Gain on investment securities (55,684) (7,853)
Gain on reimbursement of drilling equipment (21,597) (10,207)
Other (gain) loss on sale of assets (2,762) 12,952
Deferred income tax benefit (36,614) (66,102)
Other (2,765) 8,849
Change in assets and liabilities:
Accounts receivable (173,625) (33,075)
Inventories of materials and supplies (2,482) 14,073
Prepaid expenses and other 9,209 (1,638)
Other noncurrent assets 1,829 (3,337)
Accounts payable 46,775 24,908
Accrued liabilities 22,511 8,643
Deferred income tax liability 454 (36)
Other noncurrent liabilities (21,745) 4,183
Net cash provided by operating activities from continuing operations 116,701 89,862
Net cash used in operating activities from discontinued operations (60) (41)
Net cash provided by operating activities 116,641 89,821
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (174,958) (49,173)
Other capital expenditures related to assets held-for-sale (18,228) —
Purchase of short-term investments (109,318) (234,465)
Purchase of long-term investments (47,210) (2,319)
Proceeds from sale of short-term investments 161,766 139,430
Proceeds from sale of long-term investments 22,042 —
Proceeds from asset sales 50,260 26,775
Other (7,500) —
Net cash used in investing activities (123,146) (119,752)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (80,702) (81,815)
Payments for employee taxes on net settlement of equity awards (5,515) (2,160)
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 (76,999) —
Other (587) (719)
Net cash used in financing activities (707,622) (84,944)
Net decrease in cash and cash equivalents and restricted cash (714,127) (114,875)
Cash and cash equivalents and restricted cash, beginning of period 936,716 536,747
Cash and cash equivalents and restricted cash, end of period $ 222,589 $ 421,872
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period:
Interest paid $ 10,889 $ 11,642
Income tax paid (received), net 3,392 (31,826)
Cash paid for amounts included in the measurement of lease liabilities:
Payments for operating leases 9,255 13,353
Non-cash operating and investing activities:
Changes in accounts payable and accrued liabilities related to purchases of property, plant and equipment (4,260) (746)
Changes in accounts receivable, property, plant and equipment and other noncurrent assets related to the sale of equipment — 9,290
Cumulative effect adjustment for adoption of ASU No. 2016-13 — (1,251)


HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
	Nine Months Ended June 30,
(in thousands)	2023		2022


























































SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period:
Interest paid	$	8,958	$	10,889
Income tax paid	155,725		3,454
Income tax received	(26,654)		(62)
Cash paid for amounts included in the measurement of lease liabilities:
Payments for operating leases	9,049		9,255
Non-cash operating and investing activities:
Change in accounts payable and accrued liabilities related to purchases of property, plant and equipment	2,031		(4,260)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HELMERICH & PAYNE, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 NATURE OF OPERATIONS

Our drilling services operations are organized into the following reportable operating business segments: North America Solutions, Offshore Gulf of Mexico and International Solutions. Our real estate operations, our incubator program for new research and development projects and our wholly-owned captive insurance companies are included in "Other." Refer to Note ~~14—~~13—Business Segments and Geographic Information for further details on our reportable segments.

Our North America Solutions operations are primarily located in Texas, but also traditionally ~~also~~ operate in other states, depending ~~upon~~on demand. Such states include: Colorado, Louisiana, New Mexico, ~~Nevada,~~ North Dakota, Ohio, Oklahoma, Pennsylvania, Utah, West Virginia, and Wyoming. Additionally, ~~our~~ Offshore Gulf of Mexico operations are conducted in Louisiana and in U.S. federal waters in the Gulf of Mexico and in our International Solutions weoperations have ~~operations~~rigs and/or services primarily located in 4four international locations: Argentina, Bahrain, Colombia and the United Arab Emirates. Our operations in Australia are expected to begin in the fourth quarter of fiscal year 2023.

We also own and operate a limited number of commercial real estate ~~properties.~~properties located in Tulsa, Oklahoma. Our real estate ~~assets, which are located exclusively within Tulsa, Oklahoma,~~investments include a shopping center and undeveloped real estate.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED RISKS AND UNCERTAINTIES

Interim Financial Information

The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by GAAP for complete financial statements and, therefore, should be read in conjunction with the Consolidated Financial Statements and notes thereto in our ~~2021~~2022 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments, consisting of those of a normal recurring nature, necessary to present fairly the results of the periods presented have been included. The results of operations for the interim periods presented may not necessarily be indicative of the results to be expected for the full year.

Principles of Consolidation

The Unaudited Condensed Consolidated Financial Statements include the accounts of Helmerich & Payne, Inc. and its domestic and foreign subsidiaries. Consolidation of a subsidiary begins when the Company gains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income, expenses and ~~expenses~~other comprehensive income or loss of a subsidiary acquired or disposed of during the fiscal year are included in the Unaudited Condensed Consolidated Statements of Operations and Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) from the date the Company gains control until the date when the Company ceases to control the subsidiary. All intercompany accounts and transactions have been eliminated upon consolidation.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents include cash on hand, demand deposits with banks and all highly liquid investments with original maturities of three months or less. Our cash, cash equivalents and short-term investments are subject to potential credit risk, and certain of our cash accounts carry balances greater than the federally insured limits.

We had restricted cash of ~~$33.9~~$61.4 million and ~~$51.3~~$33.9 million at June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$19.2~~$36.9 million and ~~$48.9~~$19.2 million at September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Of the total ~~restricted cash~~ at June 30, ~~2022~~2023 and September 30, ~~2021, $1.1~~2022, $0.7 million and ~~$1.5~~$1.1 million, respectively, is related to the acquisition of drilling technology companies, and ~~$32.8~~$60.7 million and ~~$17.7~~$35.8 million, respectively, represents an amount management has elected to restrict for the purpose of potential insurance claims in our wholly-owned captive insurance companies. The restricted amounts are primarily invested in short-term money market securities.

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~~The cash,~~Cash, cash equivalents, and restricted cash are reflected ~~within the following line items~~ on the Unaudited Condensed Consolidated Balance ~~Sheets:~~Sheets as follows:


		June 30,				September 30,					June 30,				September 30,
(in thousands)	(in thousands)	2022		2021		2021		2020		(in thousands)	2023		2022		2022		2021
Cash and cash equivalents	Cash and cash equivalents	$	188,663	$	370,553	$	917,534	$	487,884	Cash and cash equivalents	$	220,609	$	188,663	$	232,131	$	917,534
Restricted cash	Restricted cash									Restricted cash	61,364		33,242		36,246		18,350
Prepaid expenses and other, net		33,242		48,434		18,350		45,577
Restricted cash - long-term:										Restricted cash - long-term:
Other assets, net	Other assets, net	684		2,885		832		3,286		Other assets, net	—		684		632		832
Total cash, cash equivalents, and restricted cash	Total cash, cash equivalents, and restricted cash	$	222,589	$	421,872	$	936,716	$	536,747	Total cash, cash equivalents, and restricted cash	$	281,973	$	222,589	$	269,009	$	936,716

~~During~~Related Party Transactions

In October 2022, we made a $14.1 million equity investment, representing 106.0 million common shares in Tamboran, a publicly traded company on the ~~nine~~Australian Securities Exchange Ltd under the ticker "TBN." Tamboran is focused on playing a constructive role in the global energy transition towards a lower carbon future, by developing a significantly low CO2 gas resource within Australia's Beetaloo Sub-basin. Concurrent with the investment agreement, we entered into a fixed-term drilling services agreement with the same investee. Mobilization of the rig commenced during the three months ended June 30, ~~2022,~~2023, and, as a result, we recorded $6.7 million in receivables and $5.7 million as a contract liability on our ~~cash, cash equivalents, and restricted cash balance decreased approximately $714.1 million compared to our balance at September 30, 2021. This change was primarily driven by the redemption~~Unaudited Condensed Consolidated Balance Sheet as of ~~all the outstanding 2025 Notes, resulting in a cash outflow of $487.1 million during the nine months ended~~ June 30, ~~2022. Additionally,~~2023. We expect to earn $35.2 million in revenue over the ~~associated make-whole premium~~term of ~~$56.4 million was paid during~~ the ~~first~~contract, and, as such, this amount is included within our contract backlog as of June 30, 2023. Drilling services are expected to commence in the fourth fiscal quarter of ~~2022 contemporaneously with the October 27, 2021 debt extinguishment.~~2023.

~~Table~~Refer to Note 11—Fair Value Measurement of ~~Contents~~

Financial Instruments for additional information related to our investment.

Recently Issued Accounting Updates

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ~~("FASB"~~(“FASB”) in the form of Accounting Standards Updates ("ASUs") to the FASB Accounting Standards Codification ("ASC"). We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable, clarifications of ASUs listed below, immaterial, or already adopted by the Company.

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Table of Contents

The following table provides a brief description of a recently adopted accounting ~~pronouncement~~pronouncements and our analysis of the effects on our financial statements:


Standard	Description	Date of Adoption	Effect on the Financial Statements or Other Significant Matters
Recently Adopted Accounting Pronouncements
~~ASU No. 2019-12, Financial Instruments – Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~	This ASU simplifies the accounting for income taxes by removing certain exceptions related to Topic 740. The ASU also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This update is effective for annual and interim periods beginning after December 15, 2020. Early adoption of the amendment is permitted, including adoption in any interim period for public entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. Upon adoption, the amendments addressed in this ASU will be applied either prospectively, retrospectively or on a modified retrospective basis through a cumulative effect adjustment to retained earnings. This update is effective for annual periods beginning after December 15, 2020.	~~October 1, 2021~~	~~We adopted this ASU during the first quarter of fiscal year 2022. The adoption did not have a material effect on our Unaudited Condensed Consolidated Financial Statements and disclosures.~~
~~Standards that are not yet adopted as of June 30, 2022~~
ASU No. 2020-06, Debt with conversion and other options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s own equity (subtopic 815-40): Accounting ~~For~~for Convertible Instruments and Contracts In An Entity’s Own Equity	This ASU reduces the complexity of accounting for convertible debt and other equity-linked instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. This update is effective for annual and interim periods beginning after December ~~15,2021. Early adoption of the amendment is permitted.~~15, 2021.	October 1, 2022	We ~~plan to adopt~~adopted this ASU, as required, during the first quarter of fiscal year 2023. ~~Although we are currently evaluating the impact the new guidance may~~The adoption did not have a material effect on our Unaudited Condensed Consolidated Financial Statements and ~~disclosures, we do not believe the adoption will have a material effect thereon.~~disclosures.
ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The amendments in this update clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value (i.e., the entity would not apply a discount related to the contractual sale restriction). Furthermore, an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The following disclosures for equity securities subject to contractual sale restrictions will be required: (1) the fair value of the equity securities subject to contractual sale restrictions reflected in the balance sheet, (2) the nature and remaining duration of the restriction(s), and (3) the circumstances that could cause a lapse in the restriction(s). This update is effective for annual and interim periods beginning after December 15, 2023. ~~Early adoption of the amendment is permitted for both interim and annual financial statements.~~	October 1, 2022	We ~~plan to~~ early ~~adopt~~adopted this ASU during the first quarter of fiscal year 2023. ~~Although we are currently evaluating the impact the new guidance may~~The adoption did not have a material effect on our Unaudited Condensed Consolidated Financial Statements and ~~disclosures, we do not believe the adoption will have a material effect thereon.~~disclosures.

~~Table of Contents~~

Self-Insurance

Our wholly-owned insurance captives ~~("Captives"~~(the "Captives") incurred direct operating costs consisting primarily of adjustments to accruals for estimated losses of ~~$3.1~~$5.5 million and ~~$6.0~~$3.1 million for the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$2.7~~$10.2 million and ~~$8.8~~$2.7 million for the nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and rig and casualty insurance premiums of $9.7 million and $9.4 million ~~and $5.6 million for~~during the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022 respectively, and ~~$26.2~~$30.6 million and ~~$13.1~~$26.2 million for the nine months ended June 30, ~~2022~~2023 and ~~2021, respectively, and~~2022. These operating costs were recorded within ~~drilling~~Drilling services operating expenses in our Unaudited Condensed Consolidated Statement of Operations. Intercompany premium revenues recorded by the Captives ~~amounted to $14.7 million and $9.4 million~~ during the three months ended June 30, 2023 and 2022 amounted to $17.4 million and ~~2021,~~$14.7 million, respectively, and ~~$41.6~~$51.4 million and ~~$25.2~~$41.6 million during the nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, which were eliminated upon consolidation. These intercompany insurance premiums are reflected as segment operating expenses within the North America Solutions, Offshore Gulf of Mexico, and International Solutions reportable operating segments and are reflected as intersegment sales within "Other." The Company self-insures employee health plan exposures in excess of employee deductibles. Starting in the second quarter of fiscal year 2020, the ~~Captives~~Captive insurer issued a stop-loss program that will reimburse the Company's health plan for claims that exceed $50,000. This program is reviewed at the end of each policy year by an outside actuary. Our medical stop loss operating expenses for the three months ended June 30, 2023 and 2022 ~~and 2021~~ were ~~$3.8~~$2.1 million and ~~$3.2~~$3.8 million, respectively, and ~~$10.6~~$7.4 million and ~~$8.7~~$10.6 million for the nine months ended June 30, 2023 and 2022, ~~and 2021,~~ respectively.

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International Solutions Drilling Risks

International Solutions drilling operations may significantly contribute to our revenues and net operating income (loss). There can be no assurance that we will be able to successfully conduct such operations, and a failure to do so may have an adverse effect on our financial position, results of operations, and cash flows. Also, the success of our International Solutions operations will be subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general and regional economic conditions, geopolitical developments and tensions, war and uncertainty in oil-producing companies, fluctuations in currency exchange rates, modified exchange controls, changes in international regulatory requirements and international employment issues, risk of expropriation of real and personal property and the burden of complying with foreign laws. Additionally, in the event that extended labor strikes occur or a country experiences significant political, economic or social instability, we could experience shortages in labor and/or material and supplies necessary to operate some of our drilling rigs, thereby potentially causing an adverse material effect on our business, financial condition and results of operations.

We have also experienced certain risks specific to our Argentine operations. In Argentina, while our dayrate is denominated in U.S. dollars, we are paid the equivalent in Argentine pesos. The Argentine branch of one of our second-tier subsidiaries remits U.S. dollars to its U.S. parent by converting the Argentine pesos into U.S. dollars through the Argentine Foreign Exchange Market and repatriating the U.S. dollars. Argentina also has a history of implementing currency controls that restrict the conversion and repatriation of U.S. dollars. In September 2020, Argentina implemented additional currency controls in an effort to preserve Argentina's U.S. dollar reserves. As a result of these currency controls, our ability to remit funds from our Argentine subsidiary to its U.S. parent has been limited. In the past, the Argentine government has also instituted price controls on crude oil, diesel and gasoline prices and instituted an exchange rate freeze in connection with those prices. These price controls and an exchange rate freeze could be instituted again in the future. Further, there are additional concerns regarding Argentina's debt burden, notwithstanding Argentina's restructuring deal with international bondholders in August 2020, as Argentina attempts to manage its substantial sovereign debt issues. These concerns could further negatively impact Argentina's economy and adversely affect our Argentine operations. Argentina’s economy is considered highly inflationary, which is defined as cumulative inflation rates exceeding 100 percent in the most recent three-year period based on inflation data published by the respective governments. Nonetheless, all of our foreign subsidiaries use the U.S. dollar as the functional currency and local currency monetary assets and liabilities are remeasured into U.S. dollars with gains and losses resulting from foreign currency transactions included in current results of operations.

We recorded aggregate foreign currency losses of ~~$1.2~~$1.4 million and ~~$0.7~~$1.7 million forthe three and nine months ended June 30, ~~2022~~2023, respectively, and ~~2021,~~$1.2 million and $4.5 million ~~and $4.9 million~~ for thethree and nine months ended June 30, 2022 ~~and 2021,~~, respectively. In the future, we may incur larger currency devaluations, foreign exchange restrictions or other difficulties repatriating U.S. dollars from Argentina or elsewhere, which could have a material adverse impact on our business, financial condition and results of operations. As of June 30, ~~2022,~~2023, our cash balance in Argentina was ~~$3.8 million.~~the U.S. dollar equivalent of $24.0 million in Argentine Pesos.

Because of the impact of local laws, our future operations in certain areas may be conducted through entities in which local citizens own interests and through entities (including joint ventures) in which we hold only a minority interest or pursuant to arrangements under which we conduct operations under contract to local entities. While we believe that neither operating through such entities nor pursuant to such arrangements would have a material adverse effect on our operations or revenues, there can be no assurance that we will in all cases be able to structure or restructure our operations to conform to local law (or the administration thereof) on terms acceptable to us.

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Although we attempt to minimize the potential impact of such risks by operating in more than 1one geographical area, during the three and nine months ended June 30, ~~2022,~~2023, approximately ~~5.4~~6.8 percent and ~~6.7~~7.3 percent of our operating revenues were generated from international locations ~~in our drilling business~~ compared to ~~4.8~~5.4 percent and 6.7 percent during ~~both~~ the three and nine months ended June 30, ~~2021.~~2022, respectively. During the three and nine months ended June 30, ~~2022,~~2023, approximately ~~82.6~~84.8 percent and ~~78.4~~87.3 percent of operating revenues from international locations were from operations in South America compared to ~~52.2~~82.6 percent and ~~43.1~~78.4 percent during the three and nine months ended June 30, ~~2021,~~2022, respectively. Substantially all of the South American operating revenues were from Argentina and Colombia. The future occurrence of one or more international events arising from the types of risks described above could have a material adverse impact on our business, financial condition and results of operations.

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~~NOTE 3 DISCONTINUED OPERATIONS~~

Noncurrent liabilities from discontinued operations include an uncertain tax liability related to the country of Venezuela. Expenses incurred for in-country obligations are reported as discontinued operations within our Unaudited Condensed Consolidated Statements of Operations.

The activity for the three and nine months ended June 30, 2022 and 2021 was primarily due to the remeasurement of an uncertain tax liability as a result of the devaluation of the Venezuelan Bolivar. Early in 2018, the Venezuelan government announced that it changed the existing dual-rate foreign currency exchange system by eliminating its heavily subsidized foreign exchange rate, which was 10 Bolivars per United States dollar, and relaunched an exchange system known as DICOM. The Venezuelan government also established a new currency called the “Sovereign Bolivar,” which was determined by the elimination of five zeros from the old currency. The DICOM floating rate was approximately 4,181,782 and 3,220,598 Bolivars per United States dollar at September 30, 2021, and June 30, 2021, respectively. In October 2021, the Venezuelan government launched another monetary overhaul by cutting six zeros from the Bolivar in response to hyperinflation and to simplify accounting. As such, as of June 30, 2022, the DICOM floating rate was approximately 6 Bolivars per United States dollar. The DICOM floating rate might not reflect the barter market exchange rates.

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NOTE 43 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of June 30, ~~2022~~2023 and September 30, ~~2021~~2022 consisted of the following:


(in thousands)	(in thousands)	Estimated Useful Lives	June 30, 2022		September 30, 2021		(in thousands)	Estimated Useful Lives	June 30, 2023		September 30, 2022
Drilling services equipment	Drilling services equipment	4 - 15 years	$	6,327,863	$	6,229,011	Drilling services equipment	4 - 15 years	$	6,382,505	$	6,369,888
Tubulars	Tubulars	4 years	573,514		573,900		Tubulars	4 years	571,490		569,496
Real estate properties	Real estate properties	10 - 45 years	45,308		43,302		Real estate properties	10 - 45 years	47,045		45,557
Other	Other	2 - 23 years	416,163		459,741		Other	2 - 23 years	438,908		422,479
Construction in progress (1)			54,931		47,587
Construction in progress1							Construction in progress1		92,829		70,119
			7,417,779		7,353,541				7,532,777		7,477,539
Accumulated depreciation	Accumulated depreciation		(4,430,672)		(4,226,254)		Accumulated depreciation		(4,600,184)		(4,516,730)
Property, plant and equipment, net	Property, plant and equipment, net		$	2,987,107	$	3,127,287	Property, plant and equipment, net		$	2,932,593	$	2,960,809

Assets held-for-sale	Assets held-for-sale		$	25,604	$	71,453	Assets held-for-sale		$	988	$	4,333

(1)Included in construction in progress are costs for projects in progress to upgrade or refurbish certain rigs in our existing fleet. Additionally, we include other advances for capital maintenance ~~purchase orders~~purchase-orders that are open/in process. As these various projects are completed, the costs are then classified to their appropriate useful life category.

Depreciation

Depreciation expense ~~in the Unaudited Condensed Consolidated Statements of Operations was $97.5 million and $102.7 million, including $1.4 million and $1.3 million in abandonments, for~~during the three months ended June 30, 2023 and 2022 was $93.2 million and ~~2021,~~$97.5 million, including abandonments of $0.2 million and $1.4 million, respectively. Depreciation expense induring the nine months ended June 30, 2023 and 2022 was $282.7 million and $293.5 million including abandonments of $2.4 million and $5.2 million, respectively. These expenses are recorded within Depreciation and amortization on our Unaudited Condensed Consolidated Statements of ~~Operations~~Operations.

In November 2022, a fire at a wellsite caused substantial damage to one of our super spec-rigs within our North America Solutions segment. The major components were destroyed beyond repair and considered a total loss, and, as a result, these assets were written off and the rig was ~~$293.5~~removed from our available rig count. At the time of the loss, the rig was fully insured under replacement cost insurance. The insurance recovery is expected to exceed the net book value of the components written off. The loss of $9.2 million and ~~$312.4 million, including $5.2 million~~an offsetting insurance recovery for the same amount are recorded within Depreciation and ~~$1.7 million~~amortization in ~~abandonments~~our Unaudited Condensed Consolidated Statement of Operations for the nine months ended June 30, ~~2022 and 2021, respectively.~~

~~Table~~2023. During the third quarter of ~~Contents~~fiscal year 2023 we collected $7.8 million of the total expected insurance proceeds. Future proceeds in excess of the recognized loss will be recognized once all contingencies related to the insurance claim have been resolved.

Assets Held-for-Sale

The following ~~table reconciles~~is a summary of the changes in the balance (in thousands) of our assets held-for-sale atfor the ~~dates~~period indicated below:


Balance at September 30, ~~2021~~2022	$	~~71,453~~4,333
~~Additions~~	~~1,459~~ Plus:
~~Sales~~Asset additions	~~(47,308)~~1,177
Less:
Sale of assets held-for-sale	(1,789)
Impairment expense	(2,733)
Balance at June 30, ~~2022~~2023	$	~~25,604~~988

~~In March 2021,~~Fiscal Year 2023 Activity

During the ~~Company's leadership continued~~nine months ended June 30, 2023, the ~~execution of the current strategy focusing on operating various types of highly capable upgraded~~Company initiated a plan to decommission and scrap four international FlexRig® drilling rigs and ~~phasing out the older, less capable fleet.~~four conventional drilling rigs located in Argentina that are not suitable for unconventional drilling. As a result, ~~the Company has undertaken a plan to sell 71 Domestic non-super-spec~~these rigs all within our North America Solutions segment, the majority of which were previously decommissioned, written down and/or held as capital spares. The book values of those assets were written down to $13.5 million, which represented their fair value less estimated costs to sell, and were reclassified asto Assets held-for-sale ~~in the second and third quarters of fiscal year 2021. During the fiscal year ended September 30, 2021, we completed the sale of a portion of the assets with a~~on our Unaudited Condensed Consolidated Balance Sheets. The rigs’ aggregate net book value of ~~$6.5~~$8.8 million ~~that were originally classified as held-for-sale during~~was written down to the ~~second~~estimated scrap value of $0.7 million, which resulted in a non-cash impairment charge of $8.1 million within our International Solutions segment and ~~third quarters~~recorded in our Unaudited Condensed Consolidated Statement of ~~fiscal year 2021. Additionally,~~Operations during the nine months ended June 30, ~~2022, we completed~~2023.

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During the ~~sale of a portion of the remaining~~nine months ended June 30, 2023, our North America Solutions assets ~~with a net book value of $1.9 million~~ that were ~~originally~~previously classified as Assets held-for-sale ~~during the second and third quarters of fiscal year 2021.~~

~~During~~at September ~~2021, the Company agreed~~30, 2022 were either sold or written down to ~~sell 8 FlexRig~~® ~~land rigs with an~~scrap value. The aggregate net book value of ~~$55.6~~these remaining assets was $3.0 million, ~~to ADNOC Drilling Company P.J.S.C. ("ADNOC Drilling") for $86.5~~which exceeded the estimated scrap value of $0.3 million, resulting in a non-cash impairment charge of $2.7 million. ~~NaN of~~During the ~~8 rigs were already located in~~same period, we also identified additional equipment that met the U.A.E where ADNOC Drilling is domiciled with the remaining 6 rigs to be shipped from the United States. We received the $86.5 million in cash consideration in advance of delivering the rigs. As part of the sales agreement, the rigs are being deliveredasset held-for-sale criteria and ~~commissioned in stages over a twelve-month period subject to acceptance upon successful completion of final inspection~~was reclassified as Assets held-for-sale on ~~customary terms and conditions. As of June 30, 2022, ADNOC Drilling accepted delivery of 5 rigs with an~~our Unaudited Condensed Consolidated Balance Sheets. The aggregate net book value of ~~$34.5~~the equipment of $1.4 million ~~and, as~~was written down to its estimated scrap value of $0.1 million, resulting in a ~~result, we recognized a gain~~non-cash impairment charge of ~~$1.1~~$1.3 million ~~after incurring $15.7 million of selling costs,~~ during the nine months ended June 30, ~~2022. Upon final acceptance of delivery, these rigs were removed from assets classified as held-for-sale as of June 30, 2022. The gains~~2023. These impairment charges are recorded within our North America Solutions segment in ~~Other (Gain) Loss on Sale of Assets within~~ our Unaudited Condensed Consolidated Statement of ~~Operations for the~~ ~~three and nine~~ months ended June 30, 2022. The remaining cash proceeds received in advance of rig delivery and acceptance of $35.3 million is recorded in Accrued Liabilities within our Unaudited Condensed Consolidated Balance Sheets as of June 30, 2022. Additionally, the 3 remaining rigs not yet delivered and accepted are classified as held-for-sale in the Unaudited Condensed Consolidated Balance Sheets until each rig is delivered and accepted, at which time any related gain/loss on the sale will be recognized in the Unaudited Condensed Consolidated Statement of Operations. ~~Estimated cost to sell related to the remaining rigs is approximately $12.9 million, including approximately $6.9 million of expenses incurred during the nine months ended June 30,~~

Fiscal Year 2022 and approximately $6.0 million of expenses to be incurred in future periods. We paid approximately $18.2 million in cash charges related to costs to sell for the 8 rigs during the nine months ended June 30, 2022.Activity

During the fiscal year ended September 30, 2021, we formalized a plan to sell assets related to 2 of our lower margin service offerings, trucking and casing running assets, which contributed approximately 2.8 percent to our consolidated revenues during fiscal year 2021, all within our North America Solutions segment. The combined net book values of these assets of $23.2 million were written down to their combined fair value less estimated cost to sell of $8.8 million, and were reclassified as held-for-sale during the fourth quarter of fiscal year 2021. During the nine months ended June 30, 2022, we closed on the sale of ~~these assets in 2 separate transactions. The sale of~~ our trucking ~~assets was completed on November 3, 2021 while the sale of our~~and casing running assets ~~was completed on November 15, 2021~~ for total consideration less costs to sell of $6.0 million, in addition to the possibility of future earnout ~~revenue,~~proceeds, resulting in a loss of $3.4 ~~million. Losses related to the sale of these assets are~~million recorded in Other ~~(Gain) Loss~~(gain) loss on ~~Sale~~sale of ~~Assets~~assets within our Unaudited Condensed Consolidated Statements of Operations. We recognized earnout proceeds associated with the sale of our trucking and casing running assets of $1.4 million and $0.9 million during the nine months ended June 30, 2023 and 2022, respectively, in Other (gain) loss on sale of assets on the Unaudited Condensed Consolidated Statements of Operations.

During the ~~first quarter of fiscal year~~nine months ended June 30, 2022, we identified 2two partial rig substructures that met the asset held-for-sale criteria and were reclassified as ~~assets~~Assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. The combined net book value of the rig substructures of $2.0 million were written down to their estimated scrap value of $0.1 million, resulting in a non-cash impairment charge of $1.9 million within our North America Solutions segment and recorded in the Unaudited Condensed Consolidated Statement of Operations for the nine months ended June 30, 2022. During the ~~second quarter of fiscal year 2022,~~same period, we completed the sale of ~~a portion of the~~these assets with a net book value of approximately $0.1 million, resulting in no gain or loss as a result of the sale.

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During the ~~first quarter of fiscal year 2022,~~same period, we identified 2two international FlexRig® drilling rigs located in Colombia that met the asset held-for-sale criteria and were reclassified as ~~assets~~Assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. In conjunction with establishing a plan to sell the 2two international FlexRig® drilling rigs, we recognized a non-cash impairment charge of $2.5 million within our International Solutions segment and recorded in the Unaudited Condensed Consolidated Statement of Operations during the nine months ended June 30, 2022, as the rigs aggregate net book value of $3.4 million exceeded the fair value of the rigs less estimated cost to sell of $0.9 million. During the ~~second quarter of fiscal year~~nine months ended June 30, 2022, we completed the sale of ~~the 2 international FlexRig~~® ~~drilling rigs~~these assets for total consideration of $0.9 million, resulting in no gain or loss as a result of the sale.

During the nine months ended June 30, 2022, ADNOC Drilling accepted delivery of five rigs with an aggregate net book value of $34.5 million. As a result, we recognized a gain of $1.1 million, after incurring $15.7 million of selling costs, during the nine months ended June 30, 2022 in Other (gain) loss on sale of assets within our Unaudited Condensed Consolidated Statement of Operations. Upon final acceptance of delivery, these rigs were removed from assets classified as held-for-sale as of June 30, 2022.

The significant assumptions utilized in the ~~valuation~~valuations of ~~assets~~ held-for-sale were based on our intended method of disposal, historical sales of similar assets, and market quotes and are classified as Level 2 and Level 3 inputs by ASC Topic 820, Fair Value Measurement and Disclosures. Although we believe the assumptions used in our analysis are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and our resulting conclusion.

~~(Gain)/Loss~~Gain on ~~Sale~~Reimbursement of ~~Assets~~Drilling Equipment

We ~~had a gain~~recognized gains of $10.6 million and $37.9 million during the three and nine months ended June 30, 2023, respectively, and $9.9 million and $21.6 million during the three and nine months ended June 30, 2022, respectively, ~~and $4.3 million and $10.2 million, during the three and nine months ended June 30, 2021, respectively,~~ related to customer reimbursement for the current replacement value of lost or damaged drill pipe. Gains related to these asset sales are recorded in Gains on ~~Reimbursement~~reimbursement of ~~Drilling Equipment within our Unaudited Condensed Consolidated Statements of Operations.~~

During the three and nine months ended June 30, 2022, we had a gain of $3.1 million and $2.8 million, respectively, related to the sale of rig equipment and other capital assets. During the first quarter of fiscal year 2022, we closed on the sale of our trucking and casing running assets resulting in a loss of $3.4 million, as mentioned above. During the second quarter of fiscal year 2022, ADNOC Drilling accepted delivery of 2 rigs resulting in a gain of $1.2 million. During the third quarter of fiscal year 2022, ADNOC Drilling accepted delivery of 3 rigs which resulted in a nominal loss of $26.6 thousand. The (gain) loss related to the sale of these assets are recorded in Other (Gain) Loss on Sale of Assets within our Unaudited Condensed Consolidated Statements of Operations.

During the three and nine months ended June 30, 2021, we had a loss of $0.8 million and $13.0 million, respectively, related to sale of rig equipment and other capital assets. During the first quarter of fiscal year 2021, we completed the sale of an offshore platform rig within our Offshore Gulf of Mexico operating segment resulting in a gain of $9.2 million. During the second quarter of fiscal year 2021, we sold excess drilling equipment ~~and spares, which resulted in a net loss of $23.0 million. The gains and losses related to these asset sales were recorded in Other (Gain) Loss on Sale of Assets~~ within our Unaudited Condensed Consolidated Statements of Operations.

NOTE 54 GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of the purchase price over the fair values of the assets acquired and liabilities assumed in a business combination, at the date of acquisition. Goodwill is not amortized but is tested for potential impairment at the reporting unit level, at a minimum on an annual basis in the fourth fiscal quarter, or when indications of potential impairment exist. All of our goodwill is within our North America Solutions reportable segment.

During the three and nine months ended June 30, ~~2022,~~2023, we had no additions or impairments to goodwill. As of June 30, ~~2022~~2023 and September 30, ~~2021,~~2022, the goodwill balance was ~~$45.7 million~~.$45.7 million.

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Intangible Assets

Finite-lived intangible assets are amortized using the straight-line method over the period in which these assets contribute to our cash flows and are evaluated for impairment in accordance with our policies for valuation of long-lived assets. All of our intangible assets are within our North America Solutions reportable ~~segment. Intangible assets~~segment and consist of the following:


			June 30, 2022						September 30, 2021								June 30, 2023						September 30, 2022
(in thousands)	(in thousands)	Weighted Average Estimated Useful Lives	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net		(in thousands)	Weighted Average Estimated Useful Lives	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Finite-lived intangible asset:	Finite-lived intangible asset:														Finite-lived intangible asset:
Developed technology	Developed technology	15 years	$	89,096	$	26,648	$	62,448	$	89,096	$	22,182	$	66,914	Developed technology	15 years	$	89,096	$	32,603	$	56,493	$	89,096	$	28,137	$	60,959
Intellectual property	Intellectual property	13 years	2,000		300		1,700		1,500		216		1,284		Intellectual property	13 years	2,000		463		1,537		2,000		328		1,672
Trade name	Trade name	20 years	5,865		1,396		4,469		5,865		1,158		4,707		Trade name	20 years	5,865		1,712		4,153		5,865		1,475		4,390
Customer relationships	Customer relationships	5 years	4,000		3,667		333		4,000		3,067		933		Customer relationships	5 years	4,000		4,000		—		4,000		3,867		133
			$	100,961	$	32,011	$	68,950	$	100,461	$	26,623	$	73,838			$	100,961	$	38,778	$	62,183	$	100,961	$	33,807	$	67,154

Amortization expense in the Unaudited Condensed Consolidated Statements of Operations was $1.6 million and $1.8 million for ~~both~~ the three months ended June 30, 2023 and 2022 respectively and ~~2021,~~$5.0 million and $5.4 million for ~~both~~ the nine months ended June 30, 2023 and 2022 ~~and 2021. Amortization~~respectively. Amortization expense is estimated to be approximately ~~$1.8~~$1.6 million for the remainder of ~~fiscal year 2022, approximately $6.6 million for~~ fiscal year 2023, and approximately $6.4 million for fiscal ~~years~~year 2024 ~~2025 and 2026.~~through 2027.

NOTE 65 DEBT

We ~~had~~have the following unsecured long-term debt outstanding with maturities shown in the following table:


		June 30, 2022						September 30, 2021							June 30, 2023						September 30, 2022
(in thousands)	(in thousands)	Face Amount		Unamortized Discount and Debt Issuance Cost		Book Value		Face Amount		Unamortized Discount and Debt Issuance Cost		Book Value		(in thousands)	Face Amount		Unamortized Discount and Debt Issuance Cost		Book Value		Face Amount		Unamortized Discount and Debt Issuance Cost		Book Value
Unsecured senior notes:	Unsecured senior notes:													Unsecured senior notes:
Due March 19, 2025		$	—	$	—	$	—	$	487,148	$	(3,662)	$	483,486

Due September 29, 2031	Due September 29, 2031	550,000		(7,710)		542,290		550,000		(8,003)		541,997		Due September 29, 2031	$	550,000	$	(5,004)	$	544,996	$	550,000	$	(7,390)	$	542,610
		550,000		(7,710)		542,290		1,037,148		(11,665)		1,025,483			550,000		(5,004)		544,996		550,000		(7,390)		542,610

Less long-term debt due within one year		—		—		—		(487,148)		3,662		(483,486)
Less: long-term debt due within one year														Less: long-term debt due within one year	—		—		—		—		—		—
Long-term debt	Long-term debt	$	550,000	$	(7,710)	$	542,290	$	550,000	$	(8,003)	$	541,997	Long-term debt	$	550,000	$	(5,004)	$	544,996	$	550,000	$	(7,390)	$	542,610

Senior Notes

2.90% Senior Notes due 2031 On September 29, 2021, we issued $550.0 million aggregate principal amount of the 2.90 percent 2031 Notes in an offering to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act ~~(��~~(“Rule 144A”) and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act (“Regulation S”). Interest on the 2031 Notes is payable semi-annually on March 29 and September 29 of each year, commencing on March 29, 2022. The 2031 Notes will mature on September 29, 2031 and bear interest at a rate of 2.90 percent per annum.

In June 2022, we settled a registered exchange offer (the “Registered Exchange Offer”) to exchange the 2031 Notes for new, SEC-registered notes that are substantially identical to the terms of the 2031 Notes, except that the offer and issuance of the new notes have been registered under the Securities Act and certain transfer restrictions, registration rights and additional interest provisions relating to the 2031 Notes do not apply to the new notes. All of the 2031 Notes were exchanged in the Registered Exchange Offer.

The indenture governing the 2031 Notes contains certain covenants that, among other things and subject to certain exceptions, limit the ability of the Company and its subsidiaries to incur certain liens; engage in sale and lease-back transactions; and consolidate, merge or transfer all or substantially all of the assets of the Company. The indenture governing the 2031 Notes also contains customary events of default with respect to the 2031 Notes.

~~4.65% Senior Notes due 2025~~ On December 20, 2018, we issued approximately $487.1 million in aggregate principal amount of the 2025 Notes. Interest on the 2025 Notes was payable semi-annually on March 15 and September 15 of each year, commencing on March 15, 2019. The debt issuance cost was being amortized straight-line over the stated life of the obligation, which approximated the effective interest method.

On September 27, 2021, the Company delivered a conditional notice of optional full redemption for all of the outstanding 2025 Notes at a redemption price calculated in accordance with the indenture governing the 2025 Notes, plus accrued and unpaid interest on the 2025 Notes to be redeemed. The Company financed the redemption of the 2025 Notes with the net proceeds from the offering of the 2031 Notes, together with cash on hand. The Company’s obligation to redeem the 2025 Notes was conditioned upon the prior consummation of the issuance of the 2031 Notes, which was satisfied on September 29, 2021.

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4.65% Senior Notes due 2025 On October 27, 2021, we redeemed all of the outstanding 2025 Notes. As a result, the associated make-whole premium of $56.4 million and the write off of the unamortized discount and debt issuance costs of $3.7 million were recognized during the first fiscal quarter of 2022 contemporaneously with the October 27, 2021 debt extinguishment and recorded in Loss on ~~Extinguishment~~extinguishment of ~~Debt~~debt on our Unaudited Condensed Consolidated Statements of Operations during the nine months ended June 30, 2022.

Credit ~~Facilities~~Facility

On November 13, 2018, we entered into a credit agreement by and among the Company, as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, which was amended on November 13, 2019, providing for an unsecured revolving credit facility (as amended, the “2018 Credit Facility”), that was set to mature on November 13, 2024. On April 16, 2021, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 13, 2024 to November 12, 2025. ~~The remaining $70.0 million~~No other terms of ~~commitments under~~ the 2018 Credit Facility ~~will expire on November 13, 2024, unless extended by the applicable lender before such date. Additionally, on~~were amended in connection with this extension. On March 8, 2022, we entered into the second amendment to the 2018 Credit Facility, which, among other things, raised the number of potential future extensions of the maturity date applicable to extending lenders from one to two such potential extensions and replaced provisions in respect of interest rate determinations that were based on the London Interbank Offered Rate with provisions based on the Secured Overnight Financing Rate. ~~Lenders~~Additionally, lenders with $680.0 million of commitments under the 2018 Credit Facility ~~also~~ exercised their option to extend the maturity of the 2018 Credit Facility from November 12, 2025 to November 11, 2026. On February 10, 2023, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 11, 2026 to November 12, 2027. The remaining $70.0 million of commitments under the 2018 Credit Facility will expire on November 13, 2024, unless extended by the applicable lender before such date.

The 2018 Credit Facility has $750.0 million in aggregate availability with a maximum of $75.0 million available for use as letters of credit. As of June 30, ~~2022,~~2023, there were no borrowings or letters of credit outstanding, leaving $750.0 million available to borrow under the 2018 Credit Facility. For a full description of the 2018 Credit Facility, see Note 7—Debt to the Consolidated Financial Statements in our ~~2021~~2022 Annual Report on Form 10-K.

As of June 30, ~~2022,~~2023, we had ~~4 separate bi-lateral~~$95.0 million in uncommitted bilateral credit facilities, ~~with banks with an aggregate outstanding balance of $33.8 million.~~

~~As of June 30, 2022, we also had a $20.0 million unsecured standalone line of credit facility,~~ for the purpose of obtaining the issuance of international letters of credit, bank guarantees, and performance bonds. Of the ~~$20.0~~$95.0 million, ~~$5.8~~$40.0 million ~~of financial guarantees were~~was outstanding as of June 30, ~~2022.~~2023. Separately, we had $2.1 million in standby letters of credit and bank guarantees outstanding. In total, we had $42.1 million outstanding as of June 30, 2023.

The applicable agreements for all unsecured debt contain additional terms, conditions and restrictions that we believe are usual and customary in unsecured debt arrangements for companies that are similar in size and credit quality. At June 30, ~~2022,~~2023, we were in compliance with all debt covenants.

NOTE 76 INCOME TAXES

~~Although in the second quarter of fiscal year 2022 we anticipated using the discrete effective tax method to calculate income taxes for the remainder of the fiscal year, we used the~~We use an estimated annual effective tax rate ~~to calculate~~for purposes of determining the income tax provision ~~for the three and nine months ended June 30, 2022 as the estimated annual effective tax rate provides a reliable estimate.~~during interim reporting periods. In calculating our estimated annual effective tax rate, we consider forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and estimates could occur during the year as information and assumptions change ~~including,~~which could include, but are not limited to, changes to the forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates.

Our income tax expense ~~(benefit)~~ from continuing operations for the three months ended June 30, ~~2022~~2023 and ~~2021~~2022 was ~~$1.7~~$40.7 million and ~~$(23.7)~~$1.7 million, respectively, resulting in effective tax rates of ~~9.0~~29.9 percent and ~~29.4~~9.0 percent, respectively. Our income tax expense (benefit) from continuing operations for the nine months ended June 30, ~~2022~~2023 and ~~2021~~2022 was ~~$(3.2)~~$124.2 million and ~~$(78.4)~~$(3.2) million, respectively, resulting in effective tax rates of 25.9 percent and 7.6 percent, ~~and 23.3 percent,~~ respectively.

Effective tax rates differ from the U.S. federal statutory rate of 21.0 percent for the three and nine months ended June 30, ~~2022~~2023 and ~~2021~~2022 primarily due to state and foreign income taxes, permanent non-deductible items and discrete adjustments. The discrete adjustments for the three and nine months ended June 30, ~~2022~~2023 and ~~2021~~2022 are primarily due to changes in our deferred state income tax rate, return to provision adjustments, and equity compensation.

~~For~~As of June 30, 2023, we have recorded approximately $3.2 million of unrecognized tax benefits, interest, and penalties. We believe it is reasonably possible up to $2.6 million of the ~~next 12 months, we~~unrecognized tax benefits, interest, and penalties will be recognized as of June 30, 2024 as a result of a lapse of the statute of limitations. We cannot predict with certainty ~~whether~~if we will achieve ultimate resolution of any additional uncertain tax positions associated with our U.S. and international operations ~~that could result~~resulting in additional material increases or decreases of our unrecognized tax ~~benefits. However, we do not expect these increases or decreases to have a material effect on our results of continuing operations or financial position.~~benefits for the next twelve months.

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NOTE 87 SHAREHOLDERS’ EQUITY

The Company has an evergreen authorization from the Board of Directors ~~(the "Board")~~ for the repurchase of up to 4four million common shares in any calendar year. In December 2022, the Board of Directors increased the maximum number of shares authorized to be repurchased in calendar year 2023 to five million common shares. On June 7, 2023, the Board of Directors further increased the maximum number of shares authorized to be repurchased in calendar year 2023 to seven million shares. The repurchases ~~may be~~are made using our cash and cash equivalents or other available ~~sources.~~sources and are held as treasury shares on our Unaudited Condensed Consolidated Balance Sheets. During the three and nine months ended June 30, ~~2022,~~2023, we repurchased 3.2 million and 6.5 million common shares, at an aggregate cost of $103.2 million and $249.0 million, including excise tax of $1.0 million and $1.8 million, respectively. We repurchased 3.2 million common shares at an aggregate cost of $77.0 million ~~respectively, which are held as treasury shares. There were no repurchases of common shares~~ during the nine months ended June 30, ~~2021.~~2022. We did not repurchase any common shares during the three months ended June 30, 2022.

A base cash dividend of $0.25 per share and a supplemental dividend of $0.235 per share was declared on March ~~2, 2022~~1, 2023 for shareholders of record on May ~~13, 2022,~~18, 2023, and was paid on ~~May 27, 2022. An additional~~June 1, 2023. On June 7, 2023, the Board of Directors declared a base cash dividend of $0.25 per share ~~was declared on May 31, 2022~~and a supplemental cash dividend of $0.235 per share for shareholders of record on August 17, ~~2022,~~2023, payable on ~~September 1, 2022.~~August 31, 2023. As a result, we recorded ~~a dividend~~Dividends payable of ~~$26.7~~$48.9 million ~~within Dividends Payable~~on our Unaudited Condensed Consolidated Balance Sheets as of June 30, ~~2022.~~2023.

Accumulated Other Comprehensive Loss

Components of accumulated other comprehensive loss were as follows:


							June 30,		September 30,
(in thousands)	(in thousands)	June 30, 2022		September 30, 2021		(in thousands)	2023		2022
Pre-tax amounts:	Pre-tax amounts:					Pre-tax amounts:
Unrecognized net actuarial loss		$	(24,747)	$	(26,268)
Unrealized actuarial loss						Unrealized actuarial loss	$	(14,710)	$	(15,703)

		(24,747)		(26,268)			(14,710)		(15,703)
After-tax amounts:	After-tax amounts:					After-tax amounts:
Unrecognized net actuarial loss		(19,067)		(20,244)
Unrealized actuarial loss						Unrealized actuarial loss	$	(11,305)	$	(12,072)
		$	(19,067)	$	(20,244)
							$	(11,305)	$	(12,072)

The following is a summary of the changes in accumulated other comprehensive loss, net of tax, related to the defined benefit pension plan for the three and nine months ended June 30, ~~2022:~~2023:


(in thousands)	(in thousands)	Three Months Ended June 30, 2022		Nine Months Ended June 30, 2022		(in thousands)	Three Months Ended June 30, 2023		Nine Months Ended June 30, 2023
Balance at beginning of period	Balance at beginning of period	$	(19,456)	$	(20,244)	Balance at beginning of period	$	(11,560)	$	(12,072)
Activity during the period
Activity during the period:						Activity during the period:
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	389		1,177		Amounts reclassified from accumulated other comprehensive loss	255		767

Net current-period other comprehensive income	Net current-period other comprehensive income	389		1,177		Net current-period other comprehensive income	255		767
Balance at June 30, 2022		$	(19,067)	$	(19,067)
Balance at June 30, 2023						Balance at June 30, 2023	$	(11,305)	$	(11,305)

NOTE 98 REVENUE FROM CONTRACTS WITH CUSTOMERS

Drilling Services Revenue

The releases for rigs under term contracts result in early termination compensation owed to us. During the three months ended June 30, 2022 and 2021, we recognized no early termination revenue associated with term contracts, compared to $0.7 million and $7.7 million recognized during the nine months ended June 30, 2022 and 2021 respectively.

With most drilling contracts, we ~~also~~ receive payments contractually designated for the mobilization and demobilization of drilling rigs and other equipment to and from the client’s drill site. Revenue associated with the mobilization and demobilization of our drilling rigs to and from the client’s drill site do not relate to a distinct good or service. These revenues are deferred and recognized ratably over the related contract term that drilling services are provided. For any contracts that include a provision for pooled term days at contract inception, followed by the assignment of days to specific rigs throughout the contract term, we have elected, as a practical expedient, to recognize revenue in ~~the~~an amount tofor which the entity has a right to invoice, as permitted by ASC 606.

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Performance-based contracts are contracts pursuant to which we are compensated based upon our performance against a mutually agreed upon set of predetermined targets. These contracts typically have a lower base dayrate, but give us the opportunity to receive additional compensation by meeting or exceeding certain performance targets agreed to by our customers. We often use our automated technology solutions to assist in achieving the performance targets. Total revenue recognized from performance contracts, including performance bonuses, was $316.2 million and $191.2 million during the three months ended June 30, 2023 and 2022, respectively, and $883.3 million and $483.6 million during the nine months ended June 30, 2023 and 2022, respectively.

On November 12, 2021, we settled a drilling contract dispute related to drilling services provided from fiscal years 2016 through 2019 with YPF S.A. (Argentina) ("YPF"). The settlement required that YPF make a one-time cash payment to H&P in the amount of $11.0 million and enter into drilling service contracts for 3three drilling rigs, each with multi-year terms. In addition, both parties were released of all outstanding claims against each other, and as a result, H&P recognized $5.4 million in revenue primarily due to accrued ~~contingent liabilities for~~ disputed amounts. Total revenue recognized as a result of the settlement in the amount of $16.4 million is included in Drilling ~~Services Revenue~~services revenue within the International Solutions segment on our Unaudited Condensed Consolidated Statements of Operations for the nine months ended June 30, 2022.

Contract Costs

We had capitalized fulfillment costs of ~~$7.9~~$14.3 million and ~~$4.3~~$6.3 million as of June 30, ~~2022~~2023 and September 30, ~~2021,~~2022, respectively.

Remaining Performance Obligations

The total aggregate transaction price allocated to the unsatisfied performance obligations, commonly referred to as backlog, as of June 30, ~~2022~~2023 was approximately ~~$862.2 million,~~$1.1 billion, of which approximately ~~$338.7 million~~$0.4 billion is expected to be recognized during the remainder of fiscal year ~~2022,~~2023, approximately ~~$408.6 million~~$0.6 billion during fiscal year ~~2023,~~2024, and approximately ~~$114.9 million during~~$0.1 billion in fiscal year ~~2024~~2025 and thereafter. These amounts do not include anticipated contract renewals. Additionally, contracts that currently contain month-to-month terms are represented in our backlog as 1one month of unsatisfied performance obligations. Our contracts are subject to cancellation or modification at the election of the ~~customer, but also carry certain early termination provisions customers abide by in cases of cancellation or modification. Due~~customer; however, due to the level of capital deployed by our customers on underlying projects, we have not been materially adversely affected by contract cancellations or modifications in the past.

Contract Assets and Liabilities

The following tables summarize the balances of our contract assets (net of allowance for estimated credit losses) and liabilities at the dates ~~indicated below:~~indicated:


(in thousands)	(in thousands)	June 30, 2022		September 30, 2021		(in thousands)	June 30, 2023		September 30, 2022
Contract assets, net	Contract assets, net	$	5,772	$	4,513	Contract assets, net	$	6,905	$	6,319


(in thousands)	June 30, ~~2022~~2023
Contract liabilities balance at September 30, ~~2021~~2022	$	~~9,286~~20,646
Payment received/accrued and deferred	~~36,353~~64,035
Revenue recognized during the period	~~(28,610)~~(49,955)
Contract liabilities balance at June 30, ~~2022~~2023	$	~~17,029~~34,726

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NOTE 109 STOCK-BASED COMPENSATION

A summary of compensation ~~cost~~expense for stock-based payment arrangements recognized in ~~drilling~~Drilling services operating expense, ~~research~~Research and development expense and ~~selling,~~Selling, general and administrative expense on our Unaudited Condensed Consolidated Statements of Operations, is as follows:

Three Months Ended June 30, Nine Months Ended June 30,
(in thousands) 2022 2021 2022 2021
Stock-based compensation expense
Drilling services operating $ 1,340 $ 1,362 $ 3,862 $ 4,654
Research and development 400 351 1,146 958
Selling, general and administrative 5,311 5,250 16,206 15,628
$ 7,051 $ 6,963 $ 21,214 $ 21,240


	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Stock-based compensation expense
Drilling services operating	$	1,540	$	1,340	$	4,457	$	3,862
Research and development	500		400		1,411		1,146
Selling, general and administrative	6,140		5,311		18,016		16,206
	$	8,180	$	7,051	$	23,884	$	21,214

~~Table of Contents~~

Restricted Stock

A summary of the status of our restricted stock awards as of June 30, ~~2022~~2023 and changes in non-vested restricted stock outstanding during the nine months then ended is presented below:


(in thousands, except per share amounts)	(in thousands, except per share amounts)	Shares (1)	Weighted Average Grant Date Fair Value per Share		(in thousands, except per share amounts)	Shares1	Weighted-Average Grant Date Fair Value per Share
Non-vested restricted stock outstanding at September 30, 2021		1,412	$	37.36
Non-vested restricted stock outstanding at September 30, 2022					Non-vested restricted stock outstanding at September 30, 2022	1,493	$	30.85
Granted	Granted	744	25.83		Granted	592	44.48
Vested (2)		(606)	39.88
Vested2					Vested2	(708)	33.95
Forfeited	Forfeited	(53)	30.82		Forfeited	(11)	36.53
Non-vested restricted stock outstanding at June 30, 2022		1,497	$	30.85
Non-vested restricted stock outstanding at June 30, 2023					Non-vested restricted stock outstanding at June 30, 2023	1,366	$	35.10

(1)Restricted stock shares include restricted phantom stock units under our Director Deferred Compensation Plan. These phantom stock units confer the economic benefits of owning company stock without the actual ownership, transfer or issuance of any shares. Phantom stock units are subject to a vesting period of one year from the grant date. During the nine months ended June 30, ~~2022, 14,199~~2023, 12,591 restricted phantom stock units were granted and ~~18,906~~14,199 restricted phantom stock units ~~vested during the same period.~~vested.

(2)The number of restricted stock awards vested includes shares that we withheld on behalf of our employees to satisfy the statutory tax withholding requirements.

Performance Units

A summary of the status of our performance-vested restricted share units ("performance units") as of June 30, ~~2022~~2023 and changes in non-vested performance units outstanding during the nine months then ended is presented below:

(in thousands, except per share amounts) Performance Units Weighted Average Grant Date Fair Value per Performance Unit
Non-vested performance units outstanding at September 30, 2021 699 $ 41.55
Granted 227 30.12
Vested (1)
(161) 62.66
Dividend equivalent right performance units credited 11 32.47
Forfeited (54) 34.16
Non-vested performance units outstanding at June 30, 2022 (2)
722 $ 33.67


(in thousands, except per unit amounts)	Performance Units	Weighted-Average Grant Date Fair Value per Unit
Non-vested performance units outstanding at September 30, 2022	726	$	33.67
Granted	144	54.30
Vested	(286)	43.40
Dividend equivalent rights performance units credited and performance factor adjustment1	203	36.00

Non-vested performance units outstanding at June 30, 20232	787	$	34.51

(1) ~~The~~At the end of the Vesting Period, recipients receive dividend equivalents, if any, with respect to the number of vested performance units. The vesting of units ~~vested includes~~ranges from zero to 200 percent of the units ~~that we withheld~~granted depending on ~~behalf~~the Company’s total shareholder return ("TSR") relative to the TSR of ~~our employees to satisfy~~ the ~~statutory tax withholding requirements.~~Peer Group on the vesting date.

(2)Of the total non-vested performance units at the end of the period, specified performance criteria has been achieved with respect to ~~96,197~~229,421 performance units which is calculated based on the payout percentage for the completed performance ~~cycle.~~period. The vesting and number of the remainder of non-vested performance units reflected at the end of the period is contingent upon our achievement of specified target performance criteria. If we meet the specified maximum performance criteria, approximately ~~1,097,404~~386,073 additional performance units could vest or become eligible to vest.

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Subject to the terms and conditions set forth in the applicable performance share unit award agreements and the 2020 Plan, grants of performance units are subject to a vesting period of three years (the “Vesting Period”) that is dependent on the achievement of certain performance goals. Such performance unit grants consist of 2two separate components. Performance units that comprise the first component are subject to a three-year performance cycle. Performance units that comprise the second component are further divided into 3three separate tranches, each of which is subject to a separate one-year performance cycle within the full three-year performance cycle. The vesting of the performance units is generally dependent on (i) the achievement of the Company’s ~~total shareholder return (“TSR”)~~TSR performance goals relative to the TSR achievement of a peer group of companies over the applicable performance cycle, and (ii) the continued employment of the recipient of the performance unit award throughout the Vesting Period. The Vesting Period for performance units granted in ~~December 2018~~November 2019 ended on December 31, ~~2021~~2022 and the performance units ~~earned~~eligible to vest were settled in shares of common stock ~~during the second quarter of fiscal year 2022.~~in January 2023.

NOTE 1110 EARNINGS (LOSSES) PER COMMON SHARE

ASC 260, Earnings per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. We have granted and expect to continue to grant to employees restricted stock grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities under ASC 260. As such, we are required to include these grants in the calculation of our basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.

Basic earnings per share is computed utilizing the two-class method and is calculated based on the weighted-average number of common shares outstanding during the periods presented.

~~Table of Contents~~

Diluted earnings per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options, non-vested restricted stock and performance units.

Under the two-class method of calculating earnings per share, dividends paid and a portion of undistributed net income, but not losses, are allocated to unvested restricted stock grants that receive dividends, which are considered participating securities.

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The following table sets forth the computation of basic and diluted earnings (loss) per share:


		Three Months Ended June 30,				Nine Months Ended June 30,					Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2022		2021		2022		2021		(in thousands, except per share amounts)	2023		2022		2023		2022
Numerator:	Numerator:									Numerator:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	17,475	$	(56,705)	$	(38,480)	$	(257,925)	Income (loss) from continuing operations	$	95,280	$	17,475	$	355,608	$	(38,480)
Income (loss) from discontinued operations	Income (loss) from discontinued operations	277		1,150		(106)		10,936		Income (loss) from discontinued operations	13		277		870		(106)
Net income (loss)	Net income (loss)	17,752		(55,555)		(38,586)		(246,989)		Net income (loss)	95,293		17,752		356,478		(38,586)
Adjustment for basic earnings (loss) per share	Adjustment for basic earnings (loss) per share									Adjustment for basic earnings (loss) per share
Earnings allocated to unvested shareholders	Earnings allocated to unvested shareholders	(368)		(348)		(1,138)		(1,002)		Earnings allocated to unvested shareholders	(1,283)		(368)		(4,810)		(1,138)

Numerator for basic earnings (loss) per share:	Numerator for basic earnings (loss) per share:									Numerator for basic earnings (loss) per share:
From continuing operations	From continuing operations	17,107		(57,053)		(39,618)		(258,927)		From continuing operations	93,997		17,107		350,798		(39,618)
From discontinued operations	From discontinued operations	277		1,150		(106)		10,936		From discontinued operations	13		277		870		(106)
		17,384		(55,903)		(39,724)		(247,991)			94,010		17,384		351,668		(39,724)

Adjustment for diluted earnings (loss) per share										Adjustment for diluted earnings (loss) per share
Effect of reallocating undistributed earnings of unvested shareholders										Effect of reallocating undistributed earnings of unvested shareholders	2		—		9		—
Numerator for diluted earnings (loss) per share:	Numerator for diluted earnings (loss) per share:									Numerator for diluted earnings (loss) per share:
From continuing operations	From continuing operations	17,107		(57,053)		(39,618)		(258,927)		From continuing operations	93,999		17,107		350,807		(39,618)
From discontinued operations	From discontinued operations	277		1,150		(106)		10,936		From discontinued operations	13		277		870		(106)
		$	17,384	$	(55,903)	$	(39,724)	$	(247,991)		$	94,012	$	17,384	$	351,677	$	(39,724)
Denominator:	Denominator:									Denominator:
Denominator for basic earnings (loss) per share - weighted-average shares	Denominator for basic earnings (loss) per share - weighted-average shares	105,289		107,896		106,092		107,790		Denominator for basic earnings (loss) per share - weighted-average shares	101,163		105,289		103,464		106,092
Effect of dilutive shares from stock options, restricted stock and performance units		732		—		—		—
Effect of dilutive shares from restricted stock and performance share units										Effect of dilutive shares from restricted stock and performance share units	387		732		388		—
Denominator for diluted earnings (loss) per share - adjusted weighted-average shares	Denominator for diluted earnings (loss) per share - adjusted weighted-average shares	106,021		107,896		106,092		107,790		Denominator for diluted earnings (loss) per share - adjusted weighted-average shares	101,550		106,021		103,852		106,092

Basic earnings (loss) per common share:	Basic earnings (loss) per common share:									Basic earnings (loss) per common share:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	0.16	$	(0.53)	$	(0.37)	$	(2.40)	Income (loss) from continuing operations	$	0.93	$	0.16	$	3.39	$	(0.37)
Income from discontinued operations	Income from discontinued operations	—		0.01		—		0.10		Income from discontinued operations	—		—		0.01		—
Net loss		$	0.16	$	(0.52)	$	(0.37)	$	(2.30)

Net income (loss)										Net income (loss)	$	0.93	$	0.16	$	3.40	$	(0.37)
Diluted earnings (loss) per common share:	Diluted earnings (loss) per common share:									Diluted earnings (loss) per common share:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	0.16	$	(0.53)	$	(0.37)	$	(2.40)	Income (loss) from continuing operations	$	0.93	$	0.16	$	3.38	$	(0.37)
Income from discontinued operations	Income from discontinued operations	—		0.01		—		0.10		Income from discontinued operations	—		—		0.01		—
Net loss		$	0.16	$	(0.52)	$	(0.37)	$	(2.30)
Net income (loss)										Net income (loss)	$	0.93	$	0.16	$	3.39	$	(0.37)

We ~~had~~recorded a net loss ~~for all periods presented above except for~~during the ~~three~~nine months ended June 30, 2022. Accordingly, our diluted ~~loss~~earnings per share calculation for ~~these periods were~~that period was equivalent to our basic ~~loss~~earnings per share calculation since diluted ~~loss~~earnings per share excluded any assumed ~~exercise~~vesting of equity awards. These were excluded because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable period.

The following potentially dilutive average shares attributable to outstanding equity awards were excluded from the calculation of diluted earnings (loss) per share because their inclusion would have been anti-dilutive:


		Three Months Ended June 30,				Nine Months Ended June 30,					Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2022		2021		2022		2021		(in thousands, except per share amounts)	2023		2022		2023		2022
Potentially dilutive shares excluded as anti-dilutive	Potentially dilutive shares excluded as anti-dilutive	2,429		3,325		2,605		3,932		Potentially dilutive shares excluded as anti-dilutive	2,964		2,429		2,479		2,605
Weighted-average price per share	Weighted-average price per share	$	63.16	$	59.47	$	61.84	$	57.07	Weighted-average price per share	$	58.86	$	63.16	$	61.88	$	61.84

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NOTE 1211 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

We have certain assets and liabilities that are required to be measured and disclosed at fair value. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We use the fair value hierarchy established in ASC 820-10 to measure fair value to prioritize the inputs:

•Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

•Level 2 — Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Recurring Fair Value Measurements

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis and indicate the level in the fair value hierarchy in which we classify the fair value ~~measurement.~~measurement as of the dates indicated below:

June 30, 2022
(in thousands) Fair Value Level 1 Level 2 Level 3
Assets
Short-term investments:
Corporate debt securities $ 132,629 $ — $ 132,629 $ —
U.S. government and federal agency securities 11,702 11,702 — —
Total short-term investments 144,331 11,702 132,629 —
Investments:
Non-qualified supplemental savings plan 15,594 15,594 — —
Debt securities 3,524 — — 3,524
Equity investment in ADNOC Drilling 147,786 147,786 — —
Debt security investment in Galileo 33,000 — — 33,000
Total investments 199,904 163,380 — 36,524
Liabilities
Contingent consideration $ 3,996 $ — $ — $ 3,996


		September 30, 2021									June 30, 2023
(in thousands)	(in thousands)	Fair Value		Level 1		Level 2		Level 3		(in thousands)	Fair Value		Level 1		Level 2		Level 3
Assets	Assets									Assets
Short-term investments:	Short-term investments:									Short-term investments:
Corporate debt securities	Corporate debt securities	$	192,950	$	—	$	192,950	$	—	Corporate debt securities	$	51,721	$	—	$	51,721	$	—
U.S. government and federal agency securities	U.S. government and federal agency securities	5,750		5,750		—		—		U.S. government and federal agency securities	20,888		20,888		—		—
Total short-term investments	Total short-term investments	198,700		5,750		192,950		—		Total short-term investments	72,609		20,888		51,721		—

Investments:	Investments:									Investments:
Non-qualified supplemental savings plan	Non-qualified supplemental savings plan	18,221		18,221		—		—		Non-qualified supplemental savings plan	15,183		15,183		—		—
Equity and debt securities		14,358		13,858		—		500
Cornerstone investment in ADNOC Drilling		100,000		100,000		—		—
Equity investment in ADNOC Drilling										Equity investment in ADNOC Drilling	154,770		154,770		—		—
Equity investment in Tamboran										Equity investment in Tamboran	12,623		12,623		—		—
Debt security investment in Galileo										Debt security investment in Galileo	35,001		—		—		35,001
Other debt securities										Other debt securities	2,181		—		—		2,181
Total investments	Total investments	132,579		132,079		—		500		Total investments	219,758		182,576		—		37,182

Liabilities	Liabilities									Liabilities
Contingent consideration	Contingent consideration	$	2,996	$	—	$	—	$	2,996	Contingent consideration	$	8,580	$	—	$	—	$	8,580

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	September 30, 2022
(in thousands)	Fair Value		Level 1		Level 2		Level 3
Assets
Short-term investments:
Corporate debt securities	$	98,264	$	—	$	98,264	$	—
U.S. government and federal agency securities	18,837		18,837		—		—
Total short-term investments	117,101		18,837		98,264		—

Investments:
Non-qualified supplemental savings plan	14,301		14,301		—		—
Equity investment in ADNOC Drilling	147,370		147,370		—		—
Debt security investment in Galileo	33,000		—		—		33,000
Other debt securities	565		—		—		565
Total investments	195,236		161,671		—		33,565

Liabilities
Contingent consideration	$	4,022	$	—	$	—	$	4,022

Short-term Investments

Short-term investments primarily include securities classified as trading securities. Both realized and unrealized gains and losses on trading securities are included in other income (expense) in the Unaudited Condensed Consolidated Statements of Operations. ~~The~~These securities are recorded at fair value. Level 1 inputs include U.S. agency issued debt securities with active markets and money market funds. For these items, quoted current market prices are readily available. Level 2 inputs ~~included~~include corporate bonds measured using broker quotations that utilize observable market inputs.

Long-term Investments

~~Long-term Investments~~Equity Securities Our long-term investments include debt and equity securities and assets held in a Non-Qualified Supplemental Savings Plan ("Savings Plan") and are recorded within Investments on our Unaudited Condensed Consolidated Balance Sheets. Our assets that we hold in the Savings Plan are comprised of mutual funds that are measured using Level 1 inputs.

During September 2021, the Company made a $100.0 million cornerstone investment in ADNOC Drilling in advance of its announced initial public offering, representing 159.7 million shares of ADNOC Drilling, equivalent to a one percent ownership stake and subject to a three-year lockup period. ADNOC Drilling’s initial public offering was completed on October 3, 2021, and its shares are listed and traded on the Abu Dhabi Securities Exchange. Our investment is classified as a long-term equity investment within Investments on our Unaudited Condensed Consolidated Balance Sheets and measured at fair value with any gains or losses recognized through net income (loss) and recorded within Gain (loss) on investment securities on our Unaudited Condensed Consolidated Statements of Operations. During the nine months ended June 30, 2023, we early adopted ASU No. 2022-03 which states that the contractual restriction on the sale of an equity security that is publicly traded is not considered in measuring fair value. The provisions of ASU No. 2022-03 were consistent with our historical accounting for our investment in ADNOC Drilling. During the three and nine months ended June 30, 2023, we recognized a gain (loss) of $(17.0) million and $7.4 million, respectively, on our Unaudited Condensed Consolidated Statements of Operations, as a result of the change in fair value of the investment compared to a gain (loss) of $(17.0) million and $47.8 million during the three and nine months ended June 30, 2022, respectively. As of June 30, 2023, this investment is classified as a Level 1 investment based on the quoted stock price on the Abu Dhabi Securities Exchange.

During the nine months ended June 30, 2022, we sold our remaining equity securities of approximately 467.5 thousand shares in Schlumberger, Ltd. and received proceeds of approximately $22.0 million. For the three months ended June 30, 2022, we recorded a gain of $2.7 million related to this investment, which included a $0.5 million gain recognized upon the sale of our investment and a $2.2 million gain related to valuation adjustments. For the nine months ended June 30, 2022, we recorded a gain of $8.2 million related to this investment, which included a $0.5 million gain recognized upon the sale of our investment and a $7.7 million gain related to valuation adjustments. This activity is reported in Gain (loss) on investment securities in our Unaudited Condensed Consolidated Statement of Operations. This investment was classified as Level 1 and based on the quoted stock price.

Equity Securities with Fair Value Option In October 2022, we made a $14.1 million equity investment, representing 106.0 million common shares in Tamboran, a publicly traded company on the Australian Securities Exchange Ltd under the ticker "TBN." Tamboran is focused on playing a constructive role in the global energy transition towards a lower carbon future, by developing a significantly low CO2 gas resource within Australia's Beetaloo Sub-basin.

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We believe we have a significant influence, but not control or joint control over the investee, due to several factors, including our ownership percentage (approximately 6.2 percent as of June 30, 2023), operational involvement and role on the investee's board of directors. We consider this investment to have a readily determinable fair value and have elected to account for this investment using the fair value option with any changes in fair value recognized through net income (loss). Our investment is classified as a long-term equity investment within Investments on our Unaudited Condensed Consolidated Balance Sheet as of June 30, 2023. Under the guidance, Topic 820, Fair Value Measurement, this investment is classified as a Level 1 investment based on the quoted stock price which is publicly available. During the three and nine months ended June 30, 2023, we recognized a loss of $1.6 million and $1.5 million, respectively, recorded within Gain (loss) on investment securities on our Unaudited Condensed Consolidated Statements of Operations, as a result of the change in fair value of the investment during the period.

Debt Securities During April 2022, the Company made a $33.0 million cornerstone investment in Galileo Holdco 2 Limited Technologies ("Galileo Holdco 2"), part of the group of companies known as Galileo Technologies (“Galileo”) in the form of a convertible note. Galileo specializes in liquification, natural gas compression and re-gasification modular systems and technologies to make the production, transportation, and consumption of natural gas, biomethane, and hydrogen more economically viable. The convertible note bears interest at 5.0 percent per annum with a maturity date of the earlier of April 2027 or an exit event (as defined in the agreement as either an initial public offering or a sale of Galileo). If the conversion option is exercised, the note would convert into common shares of the parent of Galileo Holdco 2. We currently do not intend to sell this investment prior to its maturity date or an exit event. As of June 30, 2023, the fair value of the convertible note was approximately equal to the cost basis.

All of our long-term debt securities, including our investment in Galileo, are classified as available-for-sale and ~~considered a~~are measured using Level 3 ~~input~~unobservable inputs based on the absence of market activity. The following table reconciles changes in the fair value of our Level 3 assets for the periods presented below:


		Three Months Ended June 30,				Nine Months Ended June 30,					Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Assets at beginning of period	Assets at beginning of period	$	3,500	$	500	$	500	$	500	Assets at beginning of period	$	35,140	$	3,500	$	33,565	$	500
Additions		33,024		—		36,024		—

Purchases										Purchases	41		33,024		2,116		36,024
Accrued interest1										Accrued interest1	2,001		—		2,001		—
Transfers out2										Transfers out2	—		—		(500)		—
Assets at end of period	Assets at end of period	$	36,524	$	500	$	36,524	$	500	Assets at end of period	$	37,182	$	36,524	$	37,182	$	36,524

(1)During the three months ended June 30, 2022, we sold our remaining equity securities of approximately 467.5 thousand shares in Schlumberger, Ltd. and received proceeds of approximately $22.0 million. For the three months ended June 30, 2022, we recorded a gain of $2.7 million related to this investment, which included a $0.5 million gain recognized upon the sale of our investment and a $2.2 million gain related to valuation adjustments. This activity is reported in Gain (loss) on investment securities in our Unaudited Condensed Consolidated Statement of Operations. This investment was classified as Level 1 and based on the quoted stock price.

During September 2021, the Company made a $100.0 million cornerstone investment in ADNOC Drilling in advance of its announced IPO, representing 159.7 million shares of ADNOC Drilling, equivalent to a 1 percent ownership stake and subject to a three-year lockup period. ADNOC Drilling's IPO was completed on October 3, 2021, and its shares are listed and traded on the Abu Dhabi Securities Exchange (ADX). Our investment is classified as a long-term equity investment within Investments in our Unaudited Condensed Consolidated Balance Sheets. We have applied the guidance in Topic 820, Fair Value Measurement, in the initial accounting of the transaction and the subsequent revaluation of the investment balance, concluding that the contractual restriction on the sale of an equity security that is publicly traded is not considered in measuring fair value. During the three and nine months ended June 30, ~~2022,~~2023, our convertible note agreement with Galileo was amended to include any interest which has accrued but not yet compounded or issued as a note. As a result, we ~~recognized~~have included accrued interest in our total investment balance.

(2)We reclassified a ~~gain (loss)~~portion of ~~$(17.0) million~~our long-term debt securities to short-term notes receivable and ~~$47.8 million, respectively,~~is recorded in ~~our~~accounts receivable on the Unaudited Condensed Consolidated ~~Statement of Operations. As~~Balance Sheets as of June 30, ~~2022, this~~2023.

The following table provides quantitative information (in thousands) about our Level 3 unobservable significant inputs related to our debt security investment ~~is classified as a Level 1 investment~~with Galileo at June 30, 2023:


Fair Value		Valuation Technique	Unobservable Inputs
$	35,001	Black-Scholes-Merton model	Discount rate	22.4	%
			Risk-free rate	4.0	%
			Equity volatility	92.5	%

The above significant unobservable inputs are subject to change based on ~~the quoted stock price on the Abu Dhabi Securities Exchange. During the three months ended June 30, 2022, we also received dividends~~changes in economic and market conditions. The use of significant unobservable inputs creates uncertainty in the ~~amount~~measurement of ~~$3.2 million~~fair value as of the reporting date. Significant increases or decreases in the discount rate, risk-free rate, and equity volatility in isolation would result in a ~~result~~significantly lower or higher fair value measurement. It is not possible for us to predict the effect of ~~this investment.~~future economic or market conditions on our estimated fair values.

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Contingent Consideration ~~Our~~Other financial ~~liabilities~~instruments measured using Level 3 unobservable inputs primarily consist of potential earnout payments associated with our business acquisitions in fiscal year ~~2019 and certain consulting services. The contingent considerations are~~2019. Contingent consideration is recorded in Accrued ~~Liabilities~~liabilities and Other ~~Noncurrent Liabilities in~~noncurrent liabilities on the Unaudited Condensed Consolidated Balance Sheets based on the expected timing of milestone achievements. The following table reconciles changes in the fair value of our Level 3 liabilities for the periods presented below:


		Three Months Ended June 30,				Nine Months Ended June 30,					Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Liabilities at beginning of period	Liabilities at beginning of period	$	2,996	$	8,973	$	2,996	$	9,123	Liabilities at beginning of period	$	5,030	$	2,996	$	4,022	$	2,996
Additions	Additions	1,000		—		1,500		—		Additions	—		1,000		500		1,500
Total gains or losses:	Total gains or losses:									Total gains or losses:
Included in earnings	Included in earnings	—		823		(250)		923		Included in earnings	4,050		—		5,808		(250)
Settlements 1	Settlements 1	—		—		(250)		(250)		Settlements1	(500)		—		(1,750)		(250)
Liabilities at end of period	Liabilities at end of period	$	3,996	$	9,796	$	3,996	$	9,796	Liabilities at end of period	$	8,580	$	3,996	$	8,580	$	3,996

(1)Settlements represent earnout payments that have been paid or earned during the period.

~~Table of Contents~~

Nonrecurring Fair Value Measurements

We have certain assets that are subject to measurement at fair value on a nonrecurring basis. For these nonfinancial assets, measurement at fair value in periods subsequent to their initial recognition is applicable if they are determined to be impaired. These assets generally include property, plant and equipment, goodwill, intangible assets, and operating lease right-of-use assets. If measured at fair value in the Unaudited Condensed Consolidated Balance Sheets, these would generally be classified within Level 2 or 3 of the fair value hierarchy. Further details on any changes in valuation of these assets is provided in their respective footnotes.

Other Equity Securities We also hold various other equity securities without readily determinable fair ~~values.~~values, primarily comprised of geothermal investments. These equity securities are initially measured at cost, less any impairments, ~~on a nonrecurring basis.~~and will be marked to fair value when observable price changes in identical or similar investments from the same issuer occur. As of June 30, ~~2022~~2023 and ~~June~~September 30, ~~2021,~~2022, the aggregate balance of these equity securities was ~~$14.1~~$26.3 million and ~~$2.9~~$23.7 million, ~~respectively.~~respectively, which includes an investment with a balance of $10.7 million as of both June 30, 2023 and September 30, 2022, that was marked to fair value during the fourth fiscal quarter of 2022. This investment is classified as Level 3 based on the absence of market activity. During the three and nine months ended June 30, 2023 and 2022, we did not record any impairments on these investments.

~~The following table reconciles changes in the balance of our equity securities, without readily determinable fair values, for the periods presented below:~~

Three Months Ended
June 30, Nine Months Ended
June 30,
(in thousands) 2022 2021 2022 2021
Assets at beginning of period $ 13,990 $ 1,000 $ 2,865 $ —
Additions 62 1,865 11,187 2,865
Assets at end of period $ 14,052 $ 2,865 $ 14,052 $ 2,865

Geothermal Investments

As of June 30, ~~2022~~2023 and September 30, ~~2021~~2022 the aggregate balance of our debt and equity security investments in geothermal energy was $27.4 million~~$17.0 million~~ and ~~$2.7~~$23.7 million, respectively. ~~All of our geothermal investments are considered a Level 3 input based on the absence of market activity.~~ These investments include assets measured on both a recurring and nonrecurring ~~basis.~~basis (discussed in the subsections above). In circumstances where we are required to revalue these investments based on observable changes in fair market value, these investments would be classified as Level 3 based on the absence of market activity.

Other Financial Instruments

The carrying amount of cash and cash equivalents and restricted cash approximates fair value due to the short-term nature of these items. The majority of cash equivalents are invested in highly liquid money-market mutual funds invested primarily in direct or indirect obligations of the U.S. ~~Government~~government and in federally insured deposit accounts. The carrying value of accounts ~~receivables,~~receivable, other current and noncurrent assets, accounts payable, accrued liabilities and other liabilities approximated fair value at June 30, ~~2022~~2023 and September 30, ~~2021.~~2022.

The following information presents the supplemental fair value information for our ~~current and~~ long-term fixed-rate debt at June 30, ~~2022~~2023 and September 30, ~~2021:~~2022:


(in millions)	(in millions)	June 30, 2022		September 30, 2021		(in millions)	June 30, 2023		September 30, 2022
Current portion of long-term debt, net1
Carrying value		$	—	$	483.5
Fair value		—		541.6

Long-term debt, net	Long-term debt, net					Long-term debt, net
Carrying value	Carrying value	542.3		542.0		Carrying value	$	545.0	$	542.6
Fair value	Fair value	472.8		554.3		Fair value	443.3		430.7

~~(1)On October 27, 2021 we redeemed the outstanding 2025 Notes. See Note 6—Debt.~~

The fair values of the ~~current and~~ long-term fixed-rate debt is based on broker quotes ~~as of~~at June 30, ~~2022~~2023 and September 30, ~~2021.~~2022. The notes are classified within Level 2 of the fair value hierarchy as they are not actively traded in markets.

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NOTE 1312 COMMITMENTS AND CONTINGENCIES

Purchase Commitments

Equipment, parts, and supplies are ordered in advance to promote efficient construction and capital improvement progress. At June 30, ~~2022,~~2023, we had purchase commitments for equipment, parts and supplies of approximately ~~$106.6~~$134.2 million.

Guarantee Arrangements

We are contingently liable to sureties in respect of bonds issued by the sureties in connection with certain commitments entered into by us in the normal course of business. We have agreed to indemnify the sureties for any payments made by them in respect of such bonds.

Contingencies

During the ordinary course of our business, contingencies arise resulting from an existing condition, situation or set of circumstances involving an uncertainty as to the realization of a possible gain or loss contingency. We account for gain contingencies in accordance with the provisions of ASC 450, Contingencies, and, therefore, we do not record gain contingencies or recognize income until realized. The property and equipment of our Venezuelan subsidiary was seized by the Venezuelan government on June 30, 2010. Our wholly-owned subsidiaries, Helmerich & Payne International Drilling Co. ("HPIDC"), and Helmerich & Payne de Venezuela, C.A., filed a lawsuit in the United States District Court for the District of Columbia on September 23, 2011 against the Bolivarian Republic of Venezuela, Petroleos de Venezuela, S.A. and PDVSA Petroleo, S.A., seeking damages for the ~~taking~~seizure of their Venezuelan drilling business in violation of international law and for breach of contract. While there exists the possibility of realizing a recovery on HPIDC's expropriation claims, we are currently unable to determine the timing or amounts we may receive, if any, or the likelihood of recovery.

In May 2018, an employee of our subsidiary, HPIDC, was involved in a car accident in his personal vehicle while not clocked in for work. The accident resulted in a fatality of a passenger in the other vehicle. The estate of the victim, his widow and children subsequently brought a lawsuit against the employee and HPIDC in Texas State District Court in January 2020. In February 2022, trial began in the matter and the jury reached a verdict against HPIDC and our employee for approximately $126.0 million, including interest. In March 2022, the court entered a judgment consistent with the findings of the jury. In April 2022, the Company and its insurers filed post-trial motions, none of which were granted by the trial judge. However, onin June ~~23,~~ 2022, Plaintiffs' counsel filed a Voluntary Remittitur with the trial court, which formally reduced the verdict to $60.0 million. The Company and its insurers ~~are currently filing~~filed motions to appeal the judgement. ~~Accordingly, the Company cannot make an estimate of the possible loss at this time.~~ As of June 30, ~~2022,~~2023, we have ~~accrued a total of $3.0 million, and currently have~~ incurred ~~some expense,~~expenses, mainly legal fees, against the insurance deductible. At this time, we believe our insurance policies will be responsive to the amounts over our $3.0 million insurance deductible and that foreseeable exposures to the Company exceeding the deductible will be recovered through insurance. ~~Accordingly, we do not believe this exposure will exceed our insurance coverage limits.~~

The Company and its subsidiaries are parties to various other pending legal actions arising in the ordinary course of our business. We maintain insurance against certain business risks subject to certain deductibles. Although no assurance can be given, we believe, based on our experiences to date and taking into account established reserves and insurance, that the ultimate resolution of such items will not have a material adverse impact on our financial condition, cash flows, or results of operations. When we determine a loss is probable of occurring and is reasonably estimable, we accrue an undiscounted liability for such contingencies based on our best estimate using information available at that time. If the estimated loss is a range of potential outcomes and there is no better estimate within the range, we accrue the amount at the low end of the range. We disclose contingencies where an adverse outcome may be material, or in the judgment of management, we conclude the matter should otherwise be disclosed.

Significant Lease Not Yet Commenced

During the nine months ended June 30, 2023, we entered into a lease agreement for our new Tulsa corporate office. This lease is expected to commence sometime during the first half of calendar year 2024. The initial lease term is approximately 12 years with two unpriced five-year extension options. The aggregate future non-cancelable lease payments are estimated to be approximately $15.1 million.

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NOTE 1413 BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Description of the Business

We are a performance-driven drilling solutions and technologies company based in Tulsa, Oklahoma with operations in all major U.S. onshore oil and gas producing basins as well as South America and the Middle East. Our drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies. We believe we are the recognized industry leader in drilling as well as technological innovation. We focus on offering our customers an integrated solutions-based approach by combining proprietary rig technology, automation software, and digital expertise into our rig operations rather than a product-based offering, such as a rig or separate technology package. Our drilling services operations are organized into the following reportable operating business segments: North America Solutions, Offshore Gulf of Mexico and International Solutions.

~~Table of Contents~~

Each reportable operating segment is a strategic business unit that is managed separately, and consolidated revenues and expenses reflect the elimination of all material intercompany transactions. Our real estate operations, our incubator program for new research and development projects, and our wholly-owned captive insurance companies are included in "Other." External revenues included in “Other” primarily consist of rental income.

Segment Performance

We evaluate segment performance based on income or loss from continuing operations (segment operating income (loss)) before income taxes which includes:

•Revenues from external and internal customers

•Direct operating costs

•Depreciation and amortization

•Allocated general and administrative costs

•Asset impairment charges

•~~Restructuring charges~~

but excludes gain on reimbursement of drilling equipment, other (gain) loss on sale of assets, corporate selling, general and administrative costs, corporate depreciation, and corporate restructuring charges.

General and administrative costs are allocated to the segments based primarily on specific identification and, to the extent that such identification is not practical, other methods may be used which we believe to be a reasonable reflection of the utilization of services provided.

Summarized financial information of our reportable segments for the three and nine months ended June 30, ~~2022~~2023 and ~~2021~~2022 is shown in the following tables:


		Three Months Ended June 30, 2022													Three Months Ended June 30, 2023
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	External sales	$	486,004	$	32,701	$	29,118	$	2,410	$	—	$	550,233	External sales	$	641,612	$	31,221	$	48,692	$	2,431	$	—	$	723,956
Intersegment	Intersegment	—		—		—		14,725		(14,725)		—		Intersegment	—		—		—		17,359		(17,359)		—
Total sales	Total sales	486,004		32,701		29,118		17,135		(14,725)		550,233		Total sales	641,612		31,221		48,692		19,790		(17,359)		723,956

Segment operating income (loss)	Segment operating income (loss)	57,353		5,872		(6,550)		1,965		(2,140)		56,500		Segment operating income (loss)	$	169,499	$	4,705	$	(1,397)	$	2,104	$	4,470	$	179,381


		Three Months Ended June 30, 2021													Three Months Ended June 30, 2022
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	External sales	$	281,132	$	33,364	$	15,278	$	2,439	$	—	$	332,213	External sales	$	486,004	$	32,701	$	29,118	$	2,410	$	—	$	550,233
Intersegment	Intersegment	—		—		—		9,379		(9,379)		—		Intersegment	—		—		—		14,725		(14,725)		—
Total sales	Total sales	281,132		33,364		15,278		11,818		(9,379)		332,213		Total sales	486,004		32,701		29,118		17,135		(14,725)		550,233

Segment operating income (loss)	Segment operating income (loss)	(43,743)		5,707		(3,538)		(4,670)		(3,298)		(49,542)		Segment operating income (loss)	$	57,353	$	5,872	$	(6,550)	$	1,965	$	(2,140)	$	56,500

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		Nine Months Ended June 30, 2022													Nine Months Ended June 30, 2023
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	External sales	$	1,235,852	$	91,162	$	93,699	$	6,899	$	—	$	1,427,612	External sales	$	1,944,555	$	101,364	$	159,383	$	7,513	$	—	$	2,212,815
Intersegment	Intersegment	—		—		—		41,577		(41,577)		—		Intersegment	—		—		—		51,423		(51,423)		—
Total sales	Total sales	1,235,852		91,162		93,699		48,476		(41,577)		1,427,612		Total sales	1,944,555		101,364		159,383		58,936		(51,423)		2,212,815

Segment operating income (loss)		29,757		16,616		651		9,061		(5,453)		50,632
Segment operating income														Segment operating income	$	496,945	$	18,138	$	4,132	$	13,604	$	4,513	$	537,332


		Nine Months Ended June 30, 2021													Nine Months Ended June 30, 2022
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	External sales	$	733,061	$	94,911	$	40,609	$	6,180	$	—	$	874,761	External sales	$	1,235,852	$	91,162	$	93,699	$	6,899	$	—	$	1,427,612
Intersegment	Intersegment	—		—		—		25,181		(25,181)		—		Intersegment	—		—		—		41,577		(41,577)		—
Total sales	Total sales	733,061		94,911		40,609		31,361		(25,181)		874,761		Total sales	1,235,852		91,162		93,699		48,476		(41,577)		1,427,612

Segment operating income (loss)		(226,505)		11,427		(15,353)		(1,631)		(8,857)		(240,919)
Segment operating income														Segment operating income	$	29,757	$	16,616	$	651	$	9,061	$	(5,453)	$	50,632

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


		Three Months Ended June 30,				Nine Months Ended June 30,					Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Segment operating income (loss)		$	56,500	$	(49,542)	$	50,632	$	(240,919)
Segment operating income										Segment operating income	$	179,381	$	56,500	$	537,332	$	50,632
Gain on reimbursement of drilling equipment	Gain on reimbursement of drilling equipment	9,895		4,268		21,597		10,207		Gain on reimbursement of drilling equipment	10,642		9,895		37,940		21,597
Other gain (loss) on sale of assets	Other gain (loss) on sale of assets	3,075		(834)		2,762		(12,952)		Other gain (loss) on sale of assets	(4,504)		3,075		394		2,762
Corporate selling, general and administrative costs, corporate depreciation, and corporate restructuring charges		(35,748)		(31,259)		(106,497)		(87,849)
Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges										Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges	(36,777)		(35,748)		(107,496)		(106,497)
Operating income (loss) from continuing operations	Operating income (loss) from continuing operations	33,722		(77,367)		(31,506)		(331,513)		Operating income (loss) from continuing operations	148,742		33,722		468,170		(31,506)
Other income (expense)	Other income (expense)									Other income (expense)
Interest and dividend income	Interest and dividend income	5,313		1,527		11,301		8,225		Interest and dividend income	10,748		5,313		20,508		11,301
Interest expense	Interest expense	(4,372)		(5,963)		(14,876)		(17,861)		Interest expense	(4,324)		(4,372)		(12,918)		(14,876)
Gain (loss) on investment securities	Gain (loss) on investment securities	(14,310)		2,409		55,684		7,853		Gain (loss) on investment securities	(18,538)		(14,310)		6,123		55,684

Loss on extinguishment of debt	Loss on extinguishment of debt	—		—		(60,083)		—		Loss on extinguishment of debt	—		—		—		(60,083)
Other	Other	(1,148)		(970)		(2,166)		(3,027)		Other	(685)		(1,148)		(2,088)		(2,166)
Total unallocated amounts	Total unallocated amounts	(14,517)		(2,997)		(10,140)		(4,810)		Total unallocated amounts	(12,799)		(14,517)		11,625		(10,140)
Income (loss) from continuing operations before income taxes	Income (loss) from continuing operations before income taxes	$	19,205	$	(80,364)	$	(41,646)	$	(336,323)	Income (loss) from continuing operations before income taxes	$	135,943	$	19,205	$	479,795	$	(41,646)

The following table reconciles segment total assets to total assets as reported on the Unaudited Condensed Consolidated Balance Sheets:


(in thousands)	(in thousands)	June 30, 2022		September 30, 2021		(in thousands)	June 30, 2023		September 30, 2022
Total assets 1	Total assets 1					Total assets1
North America Solutions	North America Solutions	$	3,407,213	$	3,418,569	North America Solutions	$	3,381,446	$	3,406,824
Offshore Gulf of Mexico	Offshore Gulf of Mexico	79,483		84,580		Offshore Gulf of Mexico	77,539		80,993
International Solutions	International Solutions	333,776		269,820		International Solutions	406,471		330,974
Other	Other	113,342		95,398		Other	158,698		120,305
		3,933,814		3,868,367			4,024,154		3,939,096
Investments and corporate operations	Investments and corporate operations	388,796		1,165,761		Investments and corporate operations	316,662		416,435
		$	4,322,610	$	5,034,128		$	4,340,816	$	4,355,531

(1)Assets by segment exclude investments in subsidiaries and intersegment activity.

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The following table presents revenues from external customers by country based on the location of service provided:


		Three Months Ended June 30,				Nine Months Ended June 30,					Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Operating revenues	Operating revenues									Operating revenues
United States	United States	$	520,446	$	316,315	$	1,331,728	$	832,516	United States	$	674,658	$	520,446	$	2,051,133	$	1,331,728
Argentina	Argentina	18,615		7,999		63,216		16,532		Argentina	32,388		18,615		101,712		63,216
Columbia										Columbia	9,433		5,977		39,454		11,974
Bahrain	Bahrain	2,338		6,979		14,797		21,449		Bahrain	4,458		2,338		10,925		14,797
United Arab Emirates	United Arab Emirates	2,188		—		3,711		990		United Arab Emirates	2,401		2,188		7,280		3,711
Colombia		5,977		300		11,974		1,674
Other Foreign		669		620		2,186		1,600
Other foreign										Other foreign	618		669		2,311		2,186
Total	Total	$	550,233	$	332,213	$	1,427,612	$	874,761	Total	$	723,956	$	550,233	$	2,212,815	$	1,427,612

Refer to Note 9—8—Revenue from Contracts with Customers for additional information regarding the recognition of revenue.

NOTE 14 SUBSEQUENT EVENTS

Subsequent to the fiscal quarter ended June 30, 2023, we entered into a $9.0 million convertible note with Tamboran. The convertible note will be utilized to relieve Tamboran's outstanding accounts receivable balance owed to the Company, and therefore no cash was exchanged as part of the transaction. The convertible note bears interest at 5.5 percent per annum and matures in July 2028 and will be included in our Investments balance on our Consolidated Balance Sheet. If the conversion option is exercised, the note would convert to common shares of Tamboran in an amount equal to principal plus accrued interest.

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ITEM 2. ~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10‑Q (“Form 10‑Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included in this Form 10-Q, including without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans, objectives of management for future operations, contract terms, and financing and funding are forward-looking statements. In addition, forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “project,” “target,” “continue,” or the negative thereof or similar terminology. Forward-looking statements are based upon current plans, estimates, and expectations that are subject to risks, uncertainties, and assumptions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates, or expectations will be achieved.

These forward-looking statements include, among others, information concerning our possible or assumed future results of operations and statements about the following such as:

•our business strategy;

•estimates of our revenues, income, earnings per share, and market share;

•our capital structure and our ability to return cash to stockholders through dividends or share repurchases;

•the amount and nature of our future capital expenditures and how we expect to fund our capital expenditures;

•the volatility of future oil and natural gas prices;

•contracting of our rigs and actions by current or potential customers;

•the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries ~~("OPEC"~~(“OPEC”) and other oil producing nations (together, ~~"OPEC+"~~“OPEC+”) with respect to production levels or other matters related to the prices of oil and natural gas;

•changes in future levels of drilling activity and capital expenditures by our customers, whether as a result of global capital markets and liquidity, changes in prices of oil and natural gas or otherwise, which may cause us to idle or stack additional rigs, or increase our capital expenditures and the construction, upgrade or acquisition of rigs;

•the ongoing effect and impact ~~potential duration or other implications~~ of public health crises, such as the ~~novel strain of~~ coronavirus ("COVID-19") pandemic, including any variants of the virus, and the effectiveness of vaccines and distribution of vaccines to treat the virus, any reinstatement of governmental-imposed restrictions, and the pace of the economic recovery and any expectations we may have with respect thereto;pandemic;

•changes in worldwide rig supply and demand, competition, or technology;

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•possible cancellation, suspension, renegotiation or termination (with or without cause) of our contracts as a result of general or industry-specific economic conditions, mechanical difficulties, performance or other reasons;

•expansion and growth of our business and operations;

•our belief that the final outcome of our legal proceedings will not materially affect our financial results;

•impact of federal and state legislative and regulatory actions and policies, affecting our costs and increasing operation restrictions or delay and other adverse impacts on our business;

•environmental or other liabilities, risks, damages or losses, whether related to storms or hurricanes (including wreckage or debris removal), collisions, grounding, blowouts, fires, explosions, other accidents, terrorism or otherwise, for which insurance coverage and contractual indemnities may be insufficient, unenforceable or otherwise unavailable;

•impact of geopolitical developments and tensions, war and uncertainty in oil-producing countries (including the invasion of Ukraine by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy);

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•global economic conditions, such as a general slowdown in the global economy, ~~and~~supply chain disruptions, inflationary pressures, and instability of financial institutions, and their impact on the Company;

•our financial condition and liquidity;

•tax matters, including our effective tax rates, tax positions, results of audits, changes in tax laws, treaties and regulations, tax assessments and liabilities for taxes;

•the occurrence of cybersecurity incidents, attacks or other breaches to our information technology systems;

•potential impacts on our business resulting from climate change, greenhouse gas regulations, and the impact of climate ~~change-related~~change related changes in the frequency and severity of weather patterns;

•potential long-lived asset impairments; and

•our sustainability strategy, including expectations, plans, or goals related to corporate responsibility, sustainability and environmental matters, and any related reputational risks as a result of execution of this strategy.

Important factors that could cause actual results to differ materially from our expectations or results discussed in the forward‑looking statements are disclosed in our ~~2021~~2022 Annual Report on Form ~~10-K~~10‑K under Part I, Item 1A— “Risk ~~Factors,”~~Factors” and ~~Part II,~~ Item 7— “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All subsequent written and oral forward‑looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by such cautionary statements. Because of the underlying risks and uncertainties, we caution you against placing undue reliance on these forward-looking statements. We assume no duty to update or revise these forward‑looking statements based on changes in internal estimates, expectations or otherwise, except as required by law.

Executive Summary

Helmerich & Payne, Inc. (“H&P,” which, together with its subsidiaries, is identified as the “Company,” “we,” “us,” or “our,” except where stated or the context requires otherwise) through its operating subsidiaries provides performance-driven drilling solutions and technologies that are intended to make hydrocarbon recovery safer and more economical for oil and gas exploration and production companies. As of June 30, ~~2022,~~2023, our drilling rig fleet included a total of ~~271~~262 drilling rigs. Our reportable operating business segments consist of the North America Solutions segment with ~~236~~233 rigs, the Offshore Gulf of Mexico segment with seven offshore platform rigs and the International Solutions segment with 2822 rigs as of June 30, ~~2022.~~2023. At the close of the third quarter of fiscal year ~~2022,~~2023, we had ~~188~~170 active contracted rigs, of which ~~122~~103 were under a fixed-term contract and 6667 were working well-to-well, compared to ~~137~~192 contracted rigs at September 30, ~~2021.~~2022. Our long-term strategy remains focused on innovation, technology, safety, operational excellence and reliability. As we move forward, we believe that our advanced uniform rig fleet, technology offerings, financial strength, contract backlog and strong customer and employee base position us very well to respond to continued cyclical, and often times, volatile market conditions and to take advantage of future opportunities.

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Market Outlook

Our revenues are primarily derived from the capital expenditures of companies involved in the exploration, development and production of crude oil and natural gas (“E&Ps”). Generally, the level of capital expenditures is dictated by current and expected future prices of crude oil and natural gas, which are determined by ~~improving~~various supply and demand factors. Both commodities have historically been, and we expect them to continue to be, cyclical and highly volatile.

Our drilling services operations are organized into the following reportable operating segments: North America Solutions, Offshore Gulf of Mexico, and International Solutions. With respect to North America Solutions, the resurgence of oil and natural gas production coming from the United States brought about by unconventional shale drilling for oil has significantly impacted the supply of oil and natural gas and the type of rig utilized in the U.S. land drilling industry.

The technical requirements of drilling longer lateral unconventional shale wells often necessitate the use of rigs that are commonly referred to in the industry as super-spec rigs and have the following specific characteristics: AC drive, minimum of 1,500 horsepower drawworks, minimum of 750,000 lbs. hookload rating, 7,500 psi mud circulating system, and multiple-well pad capability.

There is a strong customer preference for super-spec rigs not only due to the higher rig specifications that enable more technical drilling but also due to the drilling efficiencies gained in utilizing a super-spec rig. As a result, there has been a structural decline in the use of non-super-spec rigs across the industry. We are the largest provider of super-spec rigs in the industry and, accordingly, we believe we are well positioned to respond to various market conditions.

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Historically there has been a strong correlation between crude oil and natural gas prices and the demand for drilling rigs with the rig count increasing and decreasing with the up and down movements in the commodity prices. However, beginning in 2021, rig activity has not moved in tandem with crude oil prices to the same extent it had historically as a large portion of our customers instituted a more disciplined approach to their operations and capital spending in order to enhance their own financial returns. Those customers established capital budgets based upon commodity price assumptions for the upcoming year and adhered to them, not adjusting activity plans as commodity prices moved.

~~The~~While overall customer capital budgets for calendar year ~~2022 established by our customers were done so in a~~2023 appear to be modestly higher ~~crude oil price environment compared to the prior year, resulting in a higher level of capital spending and activity~~than those experienced in calendar year 2022, ~~compared~~continued commodity price volatility, particularly the weakness in natural gas prices, has resulted in some customers, typically smaller ones, reducing activity and/or shifting activity to more crude oil-centric basins at least temporarily. This has led to some idle super-spec rigs being readily available in the market. That said, we have not seen and do not expect this level of idle supply in the market to have a material impact on overall rig pricing. We do see the potential for some of this recently idled super-spec capacity, especially as it relates to the Company's idled rigs, to be redeployed later in the calendar year ~~2021. In the U.S., this caused the demand for super-spec rigs~~2023 or early in calendar year 2024.

With regards to continue to strengthen. Despite this increased demand for super-spec rigs there is still idle super-spec rig capacity in the market; however, much of that idle capacity represents rigs that have not been active during the preceding two years and in some cases even longer. Consequently, there are additional costs that would be incurred to bring those long-idled rigs back into working condition, which resulted in upward pricing for super-spec rigs. This supply-demand dynamic combined with the value proposition we provide our customers through our drilling expertise, high-quality FlexRig fleet, and automation technology resulted in an improvement in our underlying contract economics. We believe these improvements will likely continue in the coming quarters as an increasing number of our rigs are re-priced at higher rates.

~~Our~~ North America Solutions ~~active~~segment, volatility in natural gas prices and the related reduced rig demand contributed to an increased level of rig releases in the market during the first half of the calendar year 2023. More recently, other non-commodity price related factors, such as customer capital budgets, drilling plans, productions levels and customer consolidations, have also led some customers to release rigs as well. The Company's rig count ~~has more than tripled from COVID pandemic lows~~sits at 153 as of ~~47 rigs in August 2020 to 175 rigs at~~ June 30, ~~2022. Considering~~2023 and while we still see further rig releases during our ~~disciplined~~fourth quarter of fiscal year 2023, the magnitude will likely be much more moderate than the 26 rigs that were idled during third quarter of fiscal year 2023. During fiscal year 2023, the Company has maintained a fiscally prudent approach to deploying capital and ~~maintaining our fiscal year 2022 capital budget of $250~~prioritizing economic margins over rig utilization, which we believe has been beneficial to ~~$270 million, and given~~ the ~~current market dynamics,~~Company's overall financial results. Going forward, we ~~expect our~~see the potential for the Company's active rig count to ~~reach 176~~increase in the ~~fourth~~first and second fiscal ~~quarter~~quarters of ~~fiscal year 2022. Looking beyond our fiscal year 2022 into fiscal 2023, we do expect further increases in our rig count~~2024 as customers reset their capital budgets for ~~calendar 2023 using higher commodity price assumptions than were used~~2024. Furthermore, we still believe the supply and demand dynamics surrounding our North America Solutions segment remain constructive for ~~calendar 2022 capital budgets.. While H&P stands ready to respond to the~~ future ~~demand for its super-spec rigs, we will do so by applying the same disciplined approach, focusing on financial returns. That said, the market for our rigs~~activity and others like them in the industry will likely remain tight as supply-chain challenges and labor constraints experienced across the energy industry may inhibit the industry’s ability overall to supply a significant quantity of super-specs rigs. As a result of increased customer demand and limited competitive supply we expect the momentum of the upward pressure on pricing ~~to continue into fiscal 2023.~~levels.

Collectively, our other business segments, Offshore Gulf of Mexico and International Solutions, are exposed to the same macro commodity price environment affecting our North America Solutions segment; however, activity levels in the International Solutions segment are also subject to other various geopolitical and financial factors specific to the countries of our operations. ~~While we do not expect much~~Currently, activity ~~change~~levels in ~~our Offshore Gulf of Mexico segment, we do expect margin improvements based on recent rate increases. Regarding our International Solutions segment, we see opportunities~~these business segments look to remain relatively steady at current levels for ~~improvement in activity and~~ the ~~related corresponding margin improvement, but those will likely occur on a more extended timeline compared to what we have experienced in the North America Solutions segment.~~foreseeable future.

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Recent Developments

~~Investments~~Credit Facility Extension

On February 10, 2023, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 11, 2026 to November 12, 2027. The remaining $70.0 million of commitments under the 2018 Credit Facility will expire on November 13, 2024, unless extended by the applicable lender before such date.

Investment in ~~Geothermal Energy~~Tamboran

~~During~~In October 2022, we made a $14.1 million equity investment, representing 106.0 million common shares in Tamboran, a publicly traded company on the Australian Securities Exchange Ltd under the ticker "TBN." Tamboran is focused on playing a constructive role in the global energy transition towards a lower carbon future, by developing a significantly low CO~~nine~~2 gas resource within Australia's Beetaloo Sub-basin. Concurrent with the investment agreement, we entered into a fixed-term drilling services agreement with the same investee. Mobilization of the rig commenced during the three months ended June 30, ~~2022~~,2023, and, as a result, we ~~made an additional $14.3~~recorded $6.7 million in ~~geothermal energy investments consisting of both debt~~receivables and equity securities. Investments were made in four separate companies that are pursuing technological concepts to make unconventional geothermal energy a viable economic renewable energy source. These companies are developing an enhanced geothermal system ("EGS") and closed loop concepts. The EGS concept uses horizontal drilling, induced permeability, and fiber optic sensing. The closed loop concepts use multilateral wellbores, proprietary working fluid, or coaxial pipe configurations. All of these concepts are designed to harvest geothermal heat to create carbon-free, baseload energy. Our aggregate balance of investments in geothermal energy companies was $17.0$5.7 million at ~~June 30, 2022~~.

~~Investment in ADNOC Drilling~~

During September 2021, the Company made a $100.0 million cornerstone investment in ADNOC Drilling in advance of its announced IPO, representing 159.7 million shares of ADNOC Drilling, equivalent to a one percent ownership stake and subject to a three-year lockup period. ADNOC Drilling's IPO was completed on October 3, 2021, and its shares are listed and traded on the Abu Dhabi Securities Exchange (ADX). Our investment is classified as a ~~long-term equity investment within Investments in~~contract liability on our Unaudited Condensed Consolidated Balance ~~Sheets.~~Sheet as of June 30, 2023. We ~~have applied~~expect to earn $35.2 million in revenue over the ~~guidance in Topic 820, Fair Value Measurement,~~term of the contract, and, as such, this amount is included within our contract backlog as of June 30, 2023. Drilling services are expected to commence in the ~~initial accounting~~fourth fiscal quarter of the transaction and the subsequent revaluation of the investment balance, concluding that the contractual restriction on the sale of an equity security that is publicly traded is not considered in measuring fair value. 2023.

During the three and nine months ended June 30, ~~2022,~~2023, we recognized a ~~gain (loss)~~loss of ~~$(17.0)~~$1.6 million and ~~$47.8~~$1.5 million, respectively, inrecorded within Gain (loss) on investment securities on our Unaudited Condensed Consolidated ~~Statement~~Statements of Operations. As of June 30, 2022, this investment is classified as a Level 1 investment based on the quoted stock price on the Abu Dhabi Securities Exchange. During the three months ended June 30, 2022, we also received dividends in the amount of $3.2 millionOperations, as a result of ~~this investment.~~the change in fair value of the investment during the period.

~~Investment in Galileo Technologies~~

~~During~~Subsequent to the ~~three months~~fiscal quarter ended June 30, ~~2022, the Company made~~2023, we entered into a ~~$33.0~~$9.0 million cornerstone investment in Galileo Holdco 2 Limited Technologies ("Galileo Holdco 2"), part of the group of companies known as Galileo Technologies (“Galileo”) in the form of a convertible note. Galileo specializes in liquification, natural gas compression and re-gasification modular systems and technologies to make the production, transportation, and consumption of natural gas, biomethane, and hydrogen more economically viable. The convertible note ~~bears interest at 5.0 percent per annum~~ with ~~a maturity date of~~Tamboran. Refer to Note 14—Subsequent Events to the earlier of April 2027 or an exit event (as defined in the agreement as either an initial public offering or a sale of Galileo). If the conversion option is exercised, the note would convert into common shares of the parent of Galileo Holdco 2 ("Galileo Parent"). Two of our Directors are independent directors of Galileo Parent. Neither Director has a direct or indirect material interest in the transaction.

~~Pension Plan Lump-sum Distribution~~

During March 2022, the Company's domestic noncontributory defined benefit pension plan was amended to include a limited lump sum distribution option and a special eligibility window to be available to certain participants. During the period beginning on May 2, 2022 and ending on June 30, 2022, these participants could elect the limited lump sum distribution, to be paid in August 2022. As a result, we estimateUnaudited Condensed Consolidated Financial Statements for additional ~~one time pension settlement charges in the range of $7.0 to $9.0 million to be incurred during the fourth fiscal quarter of 2022.~~details.

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Significant Lease Not Yet Commenced

Contract Backlog

As of June 30, ~~2022~~2023 and September 30, ~~2021,~~2022, our contract drilling backlog, being the expected future dayrate revenue from executed contracts, was ~~$862.2 million~~$1.1 billion and ~~$572.0 million,~~$1.2 billion, respectively. These amounts do not include anticipated contract renewals or expected performance bonuses. The ~~increase~~decrease in backlog at June 30, ~~2022~~2023 from September 30, ~~2021~~2022 is primarily ~~due to an increase~~driven by a decrease in the number of fixed term drilling contracts executed. Approximately ~~60.7~~65.3 percent of the June 30, ~~2022~~2023 total backlog is reasonably expected to be fulfilled in fiscal year ~~2023~~2024 and thereafter.

The following table sets forth the total backlog by reportable segment as of June 30, ~~2022~~2023 and September 30, ~~2021,~~2022, and the percentage of the June 30, ~~2022~~2023 backlog reasonably expected to be fulfilled in fiscal year ~~2023~~2024 and thereafter:


(in millions)		June 30, 2022		September 30, 2021		Percentage Reasonably Expected to be Filled in Fiscal Year 2023 and Thereafter
(in billions)								(in billions)	June 30, 2023		September 30, 2022		Percentage Reasonably Expected to be Fulfilled in Fiscal Year 2024 and Thereafter
North America Solutions	North America Solutions	$	628.8	$	429.6	53.2	%	North America Solutions	$	0.9	$	0.9	61.2	%
Offshore Gulf of Mexico	Offshore Gulf of Mexico	6.6		17.2		4.5		Offshore Gulf of Mexico	—		—		—
International Solutions	International Solutions	226.8		125.2		83.3		International Solutions	0.2		0.3		82.1
		$	862.2	$	572.0				$	1.1	$	1.2

The early termination of a contract may result in a rig being idle for an extended period of time, which could adversely affect our financial condition, results of operations and cash flows. In some limited circumstances, such as sustained unacceptable performance by us, no early termination payment would be paid to us. Early terminations could cause the actual amount of revenue earned to vary from the backlog reported. See ~~“Item 1A.~~ Item 1A—"Risk ~~Factors –~~ Factors—Our current backlog of drilling services and solutions revenue may ~~continue to~~ decline and may not be ultimately realized as fixed‑term contracts and may, in certain instances, be terminated without an early termination payment,” inwithin our ~~2021~~2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), regarding fixed term contract risk. Additionally, see ~~"Item 1A.~~ Item 1A—"Risk ~~Factors –~~ Factors—The impact and effects of public health crises, pandemics and epidemics, such as the COVID-19 pandemic, could have ~~adversely affected and are expected to continue to adversely affect~~a material adverse effect on our business, financial condition and results of operations" within our ~~2021~~2022 Annual Report on Form 10-K.

Results of Operations for the Three Months Ended June 30, ~~2022~~2023 and ~~2021~~2022

Consolidated Results of Operations

Net Income ~~(Loss)~~We reported income from continuing operations of $95.3 million ($0.93 per diluted share) from operating revenues of $724.0 million for the three months ended June 30, 2023 compared to income from continuing operations of $17.5 million ($0.16 per diluted share) onfrom operating revenues of $550.2 million for the three months ended June 30, ~~2022 compared to a loss from continuing operations of $56.7 million ($0.53 loss per diluted share) on operating revenues of $332.2 million for the three months ended June 30, 2021.~~2022. Included in net income for the three months ended June 30, ~~2022~~2023 is income of ~~$0.3 million~~$12.6 thousand (with no impact on a per diluted share basis) from discontinued operations. Including discontinued operations, we recorded net income of $95.3 million ($0.93 per diluted share) for the three months ended June 30, 2023 compared to net income of $17.8 million ($0.16 per diluted share) for the three months ended June 30, ~~2022 compared to a net loss of $55.6~~2022.

Operating Revenue Consolidated operating revenues were $724.0 million ~~($0.52 loss per diluted share)~~and $550.2 million for the three months ended June 30, ~~2021.~~2023 and 2022, respectively. The increase is primarily driven by an increase in average rig pricing in our North America Solutions segment and an increase in activity levels in our International Solutions segment. Refer to segment results below for further details.

Direct Operating Expenses, Excluding Depreciation and AmortizationDirect operating expenses were $430.2 million and $377.3 million for the three months ended June 30, 2023 and 2022, respectively. The increase was primarily attributable to a North America Solutions wage increase that became effective at the end of fiscal year 2022, in conjunction with the aforementioned higher activity levels in our International Solutions segment.

Selling, General and Administrative Expense Selling, general and administrative expenses increased to $49.3 million during the three months ended June 30, 2023 compared to $44.9 million during the three months ended June 30, ~~2022 compared to $41.7 million during the three months ended June 30, 2021.~~2022. The ~~$3.2 million~~ increase ~~in fiscal year 2022 compared to the same period in fiscal year 2021~~ is primarily due to ~~increases~~a $3.1 million increase in labor and ~~IT infrastructure expense.~~labor-related expenses.

~~Asset Impairment Charge~~ ~~During the three months ended June 30, 2022, we reported no asset impairment charges compared to an impairment charge~~Q3FY23 FORM 10-Q|34

Table of $2.1 million for the three months ended June 30, 2021 as three Domestic non super-spec rigs were reclassified as assets held-for sale and the book values of these rigs were written down to their fair value less cost to sell of $0.4 million.Contents

Loss on Investment Securities During the three months ended June 30, ~~2022,~~2023, we recognized an aggregate ~~net~~loss of $18.5 million on investment securities compared to an aggregate loss of $14.3 million ~~on investment securities. This~~during the three months ended June 30, 2022. The aggregate loss ~~was~~in both periods primarily ~~comprised~~consisted of a $17.0 million loss on our equity investment in ADNOC Drilling caused by a decrease in the fair market value of the stock. In September 2021, the Company made a cornerstone equity investment consisting of 159.7 million shares for $100.0 million as part of ADNOC Drilling's initial public offering. This investment is subject to a three-year lock-up period. During the three months ended June 30, 2022, we sold our remaining equity securities of approximately 467.5 thousand shares in Schlumberger, Ltd. and received proceeds of approximately $22.0 million. For the three months ended June 30, 2022, we recordedthis loss was offset by a gain of $2.7 million ~~related to this investment, which included a $0.5 million gain recognized upon~~on the sale of our equity investment ~~and a $2.2 million gain related to valuation adjustments.~~in Schlumberger, Ltd.

~~Table of Contents~~

Income TaxesWe had income tax expense of ~~$1.7~~$40.7 million for the three months ended June 30, ~~2022~~2023 (which includes discrete tax expense of approximately $2.4 million primarily related to an increase in our deferred state income tax rate and return to provision adjustments) compared to income tax expense of $1.7 million (which includes discrete tax expense of approximately $6.5 million primarily related to an increase in our deferred state income tax rate and return to provision adjustments) ~~compared to an income tax benefit of $23.7 million~~ for the three months ended June 30, ~~2021 (which includes discrete tax benefits of approximately $5.8 million related to a decrease in our deferred state income tax rate and return to provision adjustments).~~2022. Our statutory federal income tax rate for fiscal year ~~2022~~2023 is 21.0 percent (before incremental state and foreign taxes).

North America Solutions
Three Months Ended June 30,
(in thousands, except operating statistics) 2022 2021 % Change
Operating revenues $ 486,004 $ 281,132 72.9
Direct operating expenses 318,400 206,172 54.4
Depreciation and amortization 93,612 96,997 (3.5)
Research and development 6,545 5,605 16.8
Selling, general and administrative expense 10,069 12,583 (20.0)
Asset impairment charge — 2,130 (100.0)
Restructuring charges 25 1,388 (98.2)
Segment operating income (loss) $ 57,353 $ (43,743) (231.1)
Financial Data and Other Operating Statistics1:

Direct margin (Non-GAAP)2
167,604 74,960 123.6
Revenue days3
15,796 10,854 45.5
Average active rigs4
174 119 46.2
Number of active rigs at the end of period5
175 121 44.6
Number of available rigs at the end of period 236 242 (2.5)
Reimbursements of "out-of-pocket" expenses $ 67,218 $ 33,282 102.0


	Three Months Ended June 30,
(in thousands, except operating statistics)	2023		2022		% Change
Operating revenues	$	641,612	$	486,004	32.0	%
Direct operating expenses	364,688		318,400		14.5
Depreciation and amortization	87,209		93,612		(6.8)
Research and development	7,254		6,545		10.8
Selling, general and administrative expense	12,962		10,069		28.7

Restructuring charges	—		25		(100.0)
Segment operating income	$	169,499	$	57,353	195.5

Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2	$	276,924	$	167,604	65.2
Revenue days3	15,075		15,796		(4.6)
Average active rigs4	166		174		(4.6)
Number of active rigs at the end of period5	153		175		(12.6)
Number of available rigs at the end of period	233		236		(35.2)
Reimbursements of "out-of-pocket" expenses	$	82,688	$	67,218	23.0

(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 ~~(e.g.~~(i.e., 91 ~~days for the three months ended June 30, 2022 and 2021)~~days).

(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating RevenuesOperating revenues were ~~$486.0~~$641.6 million and ~~$281.1~~$486.0 million in the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~72.9 percent~~$155.6 million increase in operating revenue is primarily due to higher pricing levels partially offset by a ~~45.5~~4.6 percent ~~increase~~decrease in activity ~~levels and higher pricing~~ levels.

Direct Operating ExpensesDirect operating expenses increased to $364.7 million during the three months ended June 30, 2023 as compared to $318.4 million during the three months ended June 30, ~~2022 as compared~~2022. This increase was primarily due to ~~$206.2~~an increase of $23.5 million in labor and labor related expenses driven by increased field wages beginning in late September 2022. Additionally, materials and supplies expense increased $3.8 million, which were driven by higher pricing levels for consumable inventory issuance.

Depreciation and Amortization Depreciation and amortization expense decreased to $87.2 million during the three months ended June 30, ~~2021. The increase in direct operating expense was due to higher activity levels and an increase in field wages in December of 2021.~~

~~Depreciation and Amortization~~ ~~Depreciation and amortization decreased~~2023 as compared to $93.6 million during the three months ended June 30, ~~2022 as compared~~2022. This decrease is reflective of the downstream effect of lower capital expenditures over the past several years.

Selling, General and Administrative Expense Selling, general and administrative expense increased to ~~$97.0~~$13.0 million during the three months ended June 30, ~~2021. The decrease was primarily attributable~~2023 as compared to ~~the termination of depreciation on six rigs located in the U.S. that were included in the ADNOC sale~~$10.1 million during ~~the fourth quarter of fiscal year 2021 coupled with ongoing relatively low levels of capital expenditures.~~

~~Asset Impairment Charge~~ ~~During~~ the three months ended June 30, ~~2022, we reported no asset impairment charge, compared to an impairment charge of $2.1~~2022. The increase was largely driven by a $1.8 million for the three months ended June 30, 2021 as three Domestic non super-spec rigs were reclassified as assets held-for sale and the book values of these rigs were written down to their fair value less cost to sell of $0.4 million.increase in professional fees.

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Offshore Gulf of Mexico
Three Months Ended June 30,
(in thousands, except operating statistics) 2022 2021 % Change
Operating revenues $ 32,701 $ 33,364 (2.0)
Direct operating expenses 23,922 24,127 (0.8)
Depreciation 2,328 2,938 (20.8)
Selling, general and administrative expense 579 592 (2.2)
Segment operating income $ 5,872 $ 5,707 2.9
Financial Data and Other Operating Statistics1:

Direct margin (Non-GAAP)2
8,779 9,237 (5.0)
Revenue days3
364 364 —
Average active rigs4
4 4 —
Number of active rigs at the end of period5
4 4 —
Number of available rigs at the end of period 7 7 —
Reimbursements of "out-of-pocket" expenses $ 7,219 $ 8,342 (13.5)


	Three Months Ended June 30,
(in thousands, except operating statistics)	2023		2022		% Change
Operating revenues	$	31,221	$	32,701	(4.5)	%
Direct operating expenses	23,913		23,922		—
Depreciation	1,873		2,328		(19.5)
Selling, general and administrative expense	730		579		26.1

Segment operating income	$	4,705	$	5,872	(19.9)

Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2	$	7,308	$	8,779	(16.8)
Revenue days3	364		364		—
Average active rigs4	4		4		—
Number of active rigs at the end of period5	4		4		—
Number of available rigs at the end of period	7		7		—
Reimbursements of "out-of-pocket" expenses	$	7,823	$	7,219	8.4

(3)Defined as the number of contractual days we recognized revenue for during the period.

(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were ~~$32.7~~$31.2 million and ~~$33.4~~$32.7 million in the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~2.0~~4.5 percent decrease ~~was~~in operating revenue is primarily driven by ~~the mix of rigs working at full rates as compared~~a rig moving from an operating dayrate to ~~being on~~a lower ~~standby or mobilization rates as well as a $1.1 million decrease in reimbursable expenses.~~demobilization rate.

~~Direct Operating Expenses~~ Direct operating expenses decreased to $23.9 million during the three months ended June 30, 2022 as compared to $24.1 million during the three months ended June 30, 2021. The decrease was primarily driven by the factors described above.

~~Table of Contents~~

International Solutions
Three Months Ended June 30,
(in thousands, except operating statistics) 2022 2021 % Change
Operating revenues $ 29,118 $ 15,278 90.6
Direct operating expenses 32,364 16,690 93.9
Depreciation 1,175 573 105.1
Selling, general and administrative expense 2,129 1,346 58.2
Restructuring charges — 207 (100.0)
Segment operating loss $ (6,550) $ (3,538) 85.1
Financial Data and Other Operating Statistics1:

Direct margin (Non-GAAP)2
(3,246) (1,412) 129.9
Revenue days3
718 488 47.1
Average active rigs4
8 5 60.0
Number of active rigs at the end of period5
9 6 50.0
Number of available rigs at the end of period 28 32 (12.5)
Reimbursements of "out-of-pocket" expenses $ 699 $ 1,152 (39.3)


	Three Months Ended June 30,
(in thousands, except operating statistics)	2023		2022		% Change
Operating revenues	$	48,692	$	29,118	67.2	%
Direct operating expenses	45,390		32,364		40.2
Depreciation	2,171		1,175		84.8
Selling, general and administrative expense	2,528		2,129		18.7


Segment operating loss	$	(1,397)	$	(6,550)	78.7

Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2	$	3,302	$	(3,246)	201.7
Revenue days3	1,215		718		69.2
Average active rigs4	13		8		69.2
Number of active rigs at the end of period5	13		9		44.4
Number of available rigs at the end of period	22		28		(21.4)
Reimbursements of "out-of-pocket" expenses	$	2,098	$	699	200.1

(3)Defined as the number of contractual days we recognized revenue for during the period.

(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.

Q3FY23 FORM 10-Q|36

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Operating Revenues Operating revenues increased to $48.7 million during the three months ended June 30, 2023 compared to $29.1 million during the three months ended June 30, ~~2022 as compared~~2022. This increase is primarily driven by a 69.2 percent increase in activity levels.

Direct Operating Expenses Direct operating expenses increased to ~~$15.3~~$45.4 million during the three months ended June 30, ~~2021. The change was primarily driven by a 47.1 percent increase in activity~~2023 as ~~well as the mix of rigs working.~~

~~Direct Operating Expenses~~ ~~Direct operating expenses increased~~compared to $32.4 million during the three months ended June 30, ~~2022 as compared to $16.7 million during the three months ended June 30, 2021.~~2022. This increase was primarily driven by ~~the factors described above.~~

~~Selling, General and Administrative Expense~~ We recognized a $0.8 million increase in selling, general and administrative costs during the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily driven by higher compensation expense due to an increase of $7.4 million in ~~sales personnel.~~labor and labor-related expenses and an increase of $1.7 million in materials and supplies given higher activity levels.

Other Operations

Results of our other operations, excluding corporate ~~restructuring charges, corporate~~ selling, general and administrative costs, corporate restructuring, and corporate depreciation, are as follows:


		Three Months Ended June 30,						Three Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		% Change	(in thousands)	2023		2022		% Change
Operating revenues	Operating revenues	$	17,135	$	11,818	45.0	Operating revenues	$	19,790	$	17,135	15.5	%
Direct operating expenses	Direct operating expenses	14,690		15,865		(7.4)	Direct operating expenses	16,790		14,690		14.3
Depreciation	Depreciation	480		357		34.5	Depreciation	515		480		7.3
Research and development		—		5		(100.0)

Selling, general and administrative expense	Selling, general and administrative expense	—		261		(100.0)	Selling, general and administrative expense	381		—		—

Operating income (loss)		$	1,965	$	(4,670)	(142.1)
Operating income							Operating income	$	2,104	$	1,965	7.1

Operating Revenues~~On October 1, 2019, we elected~~We continue to ~~capitalize a new~~use our Captive insurance ~~company~~companies to insure the deductibles for our domestic workers’ compensation, general liability, ~~and~~ automobile liability claims programs, and medical stop-loss program and to ~~continue~~insure the ~~practice of insuring~~ deductibles from the Company's international casualty and rig property programs. Intercompany premium revenues recorded by the Captives during the three months ended June 30, ~~2022~~2023 and ~~2021~~2022 amounted to ~~$14.7~~$17.4 million and ~~$9.4~~$14.7 million, respectively, which were eliminated upon consolidation.

~~Table of Contents~~

Direct Operating Expenses Direct operating ~~costs~~expenses consisted primarily of ~~$3.1~~$5.5 million and ~~$6.0~~$3.1 million in adjustments to accruals for estimated losses allocated to the Captives and rig and casualty insurance premiums of ~~$9.4~~$9.7 million and ~~$5.6~~$9.4 million during the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~decrease in~~change to accruals for estimated losses is primarily due to actuarial valuation adjustments by our third-party actuary.

Results of Operations for the Nine Months Ended June 30, ~~2022~~2023 and ~~2021~~2022

Consolidated Results of Operations

Net ~~Loss~~Income (Loss) We reported income from continuing operations of $355.6 million ($3.38 per diluted share) from operating revenues of $2.2 billion for the nine months ended June 30, 2023 compared to a loss from continuing operations of $38.5 million ($0.37 loss per diluted share) onfrom operating revenues of $1.4 billion for the nine months ended June 30, ~~2022 compared to a loss from continuing operations of $257.9 million ($2.40 loss per diluted share) on operating revenues of $0.9 billion~~2022. Included in net income for the nine months ended June 30, ~~2021. Included in the~~2023 is income of $0.9 million ($0.01 per diluted share) from discontinued operations. Including discontinued operations, we recorded net ~~loss~~income of $356.5 million ($3.39 per diluted share) for the nine months ended June 30, ~~2022 is a loss of $0.1 million (with no impact on a per diluted share basis) from discontinued operations. Including discontinued operations, we recorded~~2023 compared to a net loss of $38.6 million ($0.37 loss per diluted share) for the nine months ended June 30, ~~2022 compared to a net loss of $247.0 million ($2.30 loss per diluted share)~~2022.

Operating Revenue Consolidated operating revenues were $2.2 billion for the nine months ended June 30, ~~2021.~~2023 and $1.4 billion for the nine months ended June 30, 2022. The increase is primarily driven by an increase in average rig pricing and activity levels in our North America Solutions segment and increased activity levels in our International Solutions segment. Refer to segment results below for further details.

Direct Operating Expenses, Excluding Depreciation and AmortizationDirect operating expenses for the nine months ended June 30, 2023 were $1.3 billion, compared to $1.0 billion for the nine months ended June 30, 2022. The increase was primarily attributable to the aforementioned higher activity levels as well as a North America Solutions wage increase that became effective at the end of fiscal year 2022.

Selling, General and Administrative Expense Selling, general and administrative expenses increased to $150.6 million during the nine months ended June 30, 2023 compared to $135.7 million during the nine months ended June 30, ~~2022 compared~~2022. The increase is primarily due to ~~$120.4~~a $5.1 million ~~during~~increase in professional fees and a $7.4 million increase in labor and labor-related expenses.

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Asset Impairment Charges During the nine months ended June 30, ~~2021.~~2023, we recorded $12.1 million in asset impairment charges as the Company initiated a plan to decommission, scrap and/or sell certain assets including four international FlexRig® drilling rigs, four international conventional drilling rigs, and additional equipment. The ~~$15.3~~aggregate net book value of these assets of $13.2 million ~~increase in fiscal year 2022 compared~~was written down to ~~the same period in fiscal year 2021 is primarily due to increases in professional services fees, IT infrastructure spending and labor expense.~~

~~Asset Impairment Charge~~ their estimated scrap value of $1.1 million. During the nine months ended June 30, 2022, we identified various assets that met the asset held-for-sale criteria and were reclassified as assets held-for-sale onwithin our ~~Unaudited Condensed Consolidated Balance Sheets. The combined net book value of these assets was $5.4 million~~North America Solutions and ~~were written down to their estimated fair value less cost to sell of $1.0 million, resulting~~International Solutions segment, which resulted in a non-cash impairment charge of $4.4 million ~~within our North America Solutions and International Solutions segment. The impairment charge was recorded in the Unaudited Condensed Consolidated Statement of Operations~~ for the nine months ended June 30, 2022.

Gain on Investment Securities During the nine months ended June 30, ~~2021,~~2023, we ~~undertook~~recognized an aggregate gain of $6.1 million on investment securities. This gain is mainly comprised of a ~~plan to sell 71 Domestic non-super-spec rigs, all within~~$7.4 million gain on our ~~North America Solutions segment, the majority~~equity investment in ADNOC Drilling, partially offset against a $1.5 million loss on our investment in Tamboran, both of which were ~~previously decommissioned, written down and/or held as spares, which resulted~~a result of fluctuations in ~~an impairment charge~~the fair market value of ~~$56.4 million for~~ the ~~nine months ended June 30, 2021.~~

~~Gain on Investment Securities~~stocks. During the nine months ended June 30, 2022, we recognized an aggregate gain of $55.7 ~~million on investment securities.~~million. This gain was primarily ~~comprised of~~driven by a $47.8 million gain on our equity investment in ADNOC Drilling caused by an increase in the fair market value of the stock. In September 2021, the Company made a cornerstone equity investment consisting of 159.7 million shares for $100.0 million as part of ADNOC Drilling's initial public offering. This investment is subject to a three-year lock-up period. Additionally, during the nine months ended June 30, 2022 we recognizedstock and a gain of $8.2 million on the sale of our equity investment in Schlumberger, Ltd.

~~Loss on Extinguishment of Debt~~ On October 27, 2021, we redeemed all of the outstanding 2025 Notes. As a result, the associated make-whole premium of $56.4 million and the write off of the unamortized discount and debt issuance costs of $3.7 million were recognized during the first fiscal quarter of 2022 contemporaneously with the October 27, 2021 debt extinguishment and recorded in Loss on Extinguishment of Debt on our Unaudited Condensed Consolidated Statements of Operations during the nine months ended June 30, 2022.

~~Restructuring Charges~~ During the nine months ended June 30, 2022 and 2021, we incurred $0.8 million and $3.9 million, respectively, in restructuring charges. The charges incurred during the nine months ended June 30, 2021 included $0.9 million in one-time severance benefits paid to employees who were voluntarily or involuntarily terminated coupled with charges of $3.0 million related to the relocation of the Houston assembly facility and the downsizing of storage yard facilities.

Income Taxes We had an income tax ~~benefit~~expense of ~~$3.2~~$124.2 million for the nine months ended June 30, ~~2022~~2023 (which includes a discrete tax expense of ~~$10.0~~$2.3 million primarily related to an increase in our deferred state income tax rate, return to provision adjustments and equity compensation) compared to an income tax benefit of ~~$78.4~~$3.2 million (which ~~includes a~~included discrete tax ~~benefit~~expense of ~~approximately $1.9~~$10.0 million primarily related to ~~a decrease~~an increase in our deferred state income tax rate and equity compensation) for the nine months ended June 30, ~~2021.~~2022. Our statutory federal income tax rate for fiscal year ~~2022~~2023 is 21.0 percent (before incremental state and foreign taxes).

~~Table of Contents~~

North America Solutions
Nine Months Ended June 30,
(in thousands, except operating statistics) 2022 2021 % Change
Operating revenues $ 1,235,852 $ 733,061 68.6
Direct operating expenses 869,365 549,322 58.3
Depreciation and amortization 283,050 297,238 (4.8)
Research and development 19,533 16,400 19.1
Selling, general and administrative expense 31,781 37,223 (14.6)
Asset impairment charge 1,868 56,414 (96.7)
Restructuring charges 498 2,969 (83.2)
Segment operating income (loss) $ 29,757 $ (226,505) (113.1)
Financial Data and Other Operating Statistics1:

Direct margin (Non-GAAP)2
366,487 183,739 99.5
Revenue days3
43,494 27,770 56.6
Average active rigs4
159 102 55.9
Number of active rigs at the end of period5
175 121 44.6
Number of available rigs at the end of period 236 242 (2.5)
Reimbursements of "out-of-pocket" expenses $ 157,010 $ 79,361 97.8


	Nine Months Ended June 30,
(in thousands, except operating statistics)	2023		2022		% Change
Operating revenues	$	1,944,555	$	1,235,852	57.3	%
Direct operating expenses	1,111,154		869,365		27.8
Depreciation and amortization	266,093		283,050		(6.0)
Research and development	23,051		19,533		18.0
Selling, general and administrative expense	43,364		31,781		36.4
Asset impairment charges	3,948		1,868		111.3
Restructuring charges	—		498		(100.0)
Segment operating income	$	496,945	$	29,757	1,570.0

Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2	$	833,401	$	366,487	127.4
Revenue days3	48,142		43,494		10.7
Average active rigs4	176		159		10.7
Number of active rigs at the end of period5	153		175		(12.6)
Number of available rigs at the end of period	233		236		(1.3)
Reimbursements of "out-of-pocket" expenses	$	239,288	$	157,010	52.4

(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 ~~(e.g.~~(i.e., 273 ~~days for the nine months ended June 30, 2022 and 2021)~~days).

(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating RevenuesOperating revenues were $1.9 billion and $1.2 billion in the nine months ended June 30, 2023 and 2022, respectively. The $0.7 billion increase in operating revenue is primarily due to higher pricing levels and a 10.7 percent increase in activity levels.

Direct Operating Expenses Direct operating expenses increased to $1.1 billion during the nine months ended June 30, ~~2022 and 2021, respectively. The 68.6 percent increase in operating revenue is primarily due~~2023 as compared to ~~a 56.6 percent increase in activity levels and higher pricing levels, partially offset by a decrease in early termination revenue. For~~$0.9 billion during the nine months ended June 30, ~~2022, we reported $0.2~~2022. This increase was primarily driven by a $127.7 million increase in ~~early termination revenue associated with term contracts compared to $5.8~~labor and labor-related expenses driven by higher activity levels and increased field wages beginning in late September 2022. Additionally, materials and supplies expense increased by $24.4 million, ~~during the same period of fiscal year 2021.~~which was also primarily driven by higher activity levels.

~~Direct Operating Expenses~~ ~~Direct operating expenses increased~~Q3FY23 FORM 10-Q|38

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Depreciation and Amortization Depreciation and amortization expense decreased to ~~$869.4~~$266.1 million during the nine months ended June 30, ~~2022~~2023 as compared ~~to $549.3 million during the nine months ended June 30, 2021. The increase in direct operating expense was primarily due to higher activity levels and higher rig recommissioning expenses.~~

~~Depreciation and Amortization~~ ~~Depreciation and amortization decreased~~ to $283.1 million during the nine months ended June 30, ~~2022 as compared~~2022. This decrease is reflective of the downstream effect of lower capital expenditures over the last several years.

Selling, General and Administrative Expense Selling, general and administrative expense increased to ~~$297.2~~$43.4 million during the nine months ended June 30, ~~2021. The decrease was primarily attributable~~2023 as compared to ~~the termination of depreciation on six rigs located in the U.S. that were included in the ADNOC sale~~$31.8 million during the ~~fourth quarter of fiscal year 2021 coupled with ongoing relatively low levels of capital expenditures.~~nine months ended June 30, 2022. The increase was largely driven by a $8.1 million increase in professional fees.

Asset Impairment ~~Charge~~Charges During the ~~first quarter~~nine months ended June 30, 2023, our North America Solutions assets that were previously classified as Assets held-for-sale at September 30, 2022 were either sold or written down to scrap value. The aggregate net book value of ~~fiscal year~~these remaining assets was $3.0 million, which exceeded the estimated scrap value of $0.3 million, resulting in a non-cash impairment charge of $2.7 million. During the same period, we also identified additional equipment that met the asset held-for-sale criteria and was reclassified as Assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. The aggregate net book value of the equipment of $1.4 million was written down to its estimated scrap value of $0.1 million, resulting in a non-cash impairment charge of $1.3 million during the nine months ended June 30, 2023. These impairment charges are recorded within our North America Solutions segment in our Unaudited Condensed Consolidated Statement of Operations. During the nine months ended June 30, 2022, we identified two partial rig substructures that met the ~~asset~~assets held-for-sale criteria and were reclassified as assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. ~~The combined net~~This resulted in a non-cash impairment charge of $1.9 million as the book ~~value~~values of these ~~assets of $2.0 million~~rig substructures were written down to their estimated scrap value of $0.1 million, resulting in a non-cash impairment charge of $1.9 million during the nine months ended June 30, 2022 in the Unaudited Condensed Consolidated Statement of Operations. During the nine months ended June 30, 2021, we undertook a plan to sell 71 Domestic non-super-spec rigs, all within our North America Solutions segment, the majority of which were previously decommissioned, written down and/or held as spares, which resulted in an impairment charge of $56.4 million for the nine months ended June 30, 2021.million.

~~Restructuring Charges~~ During the nine months ended June 30, 2022 and 2021, we incurred $0.5 million and $3.0 million in restructuring charges respectively. The restructuring charges during the nine months ended June 30, 2021 primarily related to the relocation of the Houston assembly facility and the downsizing of storage yard facilities.

~~Table of Contents~~

Offshore Gulf of Mexico
Nine Months Ended June 30,
(in thousands, except operating statistics) 2022 2021 % Change
Operating revenues $ 91,162 $ 94,911 (4.0)
Direct operating expenses 65,517 73,452 (10.8)
Depreciation 7,109 8,137 (12.6)
Selling, general and administrative expense 1,920 1,895 1.3
Segment operating income $ 16,616 $ 11,427 45.4
Financial Data and Other Operating Statistics1:

Direct margin (Non-GAAP)2
25,645 21,459 19.5
Revenue days3
1,092 1,184 (7.8)
Average active rigs4
4 4 —
Number of active rigs at the end of period5
4 4 —
Number of available rigs at the end of period 7 7 —
Reimbursements of "out-of-pocket" expenses $ 19,103 $ 21,403 (10.7)


	Nine Months Ended June 30,
(in thousands, except operating statistics)	2023		2022		% Change
Operating revenues	$	101,364	$	91,162	11.2	%
Direct operating expenses	75,292		65,517		14.9
Depreciation	5,671		7,109		(20.2)
Selling, general and administrative expense	2,263		1,920		17.9

Segment operating income	$	18,138	$	16,616	9.2

Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2	$	26,072	$	25,645	1.7
Revenue days3	1,092		1,092		—
Average active rigs4	4		4		—
Number of active rigs at the end of period5	4		4		—
Number of available rigs at the end of period	7		7		—
Reimbursements of "out-of-pocket" expenses	$	23,006	$	19,103	20.4

(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 ~~(e.g.~~(i.e., 273 ~~days for the nine months ended June 30, 2022 and 2021)~~days).

(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were $101.4 million and $91.2 million ~~and $94.9 million in~~during the nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~4.0~~11.2 percent ~~decrease was~~increase in operating revenue is primarily driven by ~~lower reimbursable expenses~~pricing increases and wage increase pass-throughs which occurred in the ~~mix~~latter portion of ~~rigs working at full rates as compared to being on lower standby or mobilization rates.~~fiscal year 2022.

Direct Operating ExpensesDirect operating expenses ~~decreased~~increased to $75.3 million during the nine months ended June 30, 2023 as compared to $65.5 million during the nine months ended June 30, ~~2021 as compared to $73.5 million during the nine months ended June 30, 2021.~~2022. The ~~decrease~~increase was primarily driven by ~~a favorable adjustment~~the mix of rigs working at full utilization as opposed to mobilizing or being on standby, in ~~self-insurance liabilities related~~addition to ~~prior period claims as well as~~ the factors described above.

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International Solutions
Nine Months Ended June 30,
(in thousands, except operating statistics) 2022 2021 % Change
Operating revenues $ 93,699 $ 40,609 130.7
Direct operating expenses 81,666 50,931 60.3
Depreciation 2,979 1,361 118.9
Selling, general and administrative expense 5,908 3,463 70.6
Asset impairment charge 2,495 — 100.0
Restructuring charges — 207 (100.0)
Segment operating income (loss) $ 651 $ (15,353) (104.2)
Financial Data and Other Operating Statistics1:

Direct margin (Non-GAAP)2
12,033 (10,322) (216.6)
Revenue days3
2,010 1,229 63.5
Average active rigs4
7 5 40.0
Number of active rigs at the end of period5
9 6 50.0
Number of available rigs at the end of period 28 32 (12.5)
Reimbursements of "out-of-pocket" expenses $ 3,368 $ 5,324 (36.7)


	Nine Months Ended June 30,
(in thousands, except operating statistics)	2023		2022		% Change
Operating revenues	$	159,383	$	93,699	70.1	%
Direct operating expenses	133,642		81,666		63.6
Depreciation	5,215		2,979		75.1
Selling, general and administrative expense	8,245		5,908		39.6
Asset impairment charges	8,149		2,495		226.6

Segment operating income	$	4,132	$	651	534.7

Financial Data and Other Operating Statistics1:
Direct margin (Non-GAAP)2	$	25,741	$	12,033	113.9
Revenue days3	3,618		2,010		80.0
Average active rigs4	13		7		80.0
Number of active rigs at the end of period5	13		9		44.4
Number of available rigs at the end of period	22		28		(21.4)
Reimbursements of "out-of-pocket" expenses	$	7,743	$	3,368	129.9

(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 ~~(e.g.~~(i.e., 273 ~~days for the nine months ended June 30, 2022 and 2021)~~days).

(5)Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues increased to $159.4 million during the nine months ended June 30, 2023 compared to $93.7 million during the nine months ended June 30, 2022. This increase is primarily driven by a 80.0 percent increase in activity levels. Additionally, during the nine months ended June 30, 2022, ~~as compared~~we recognized $16.4 million in revenue related to ~~$40.6~~the settlement of a contract drilling dispute related to drilling services provided from fiscal year 2016 through 2019 with YPF S.A. Refer to Note 8 - Revenue from Contracts with Customers for additional details.

Direct Operating Expenses Direct operating expenses increased to $133.6 million during the nine months ended June 30, ~~2021. The change was primarily driven by a 63.5 percent increase in activity~~2023 as well as the settlement of a contractual dispute that was recognized in operating revenues during the nine months ended June 30, 2022. Refer to Note 9—Revenue from Contracts with Customers for additional details. For the nine months ended June 30, 2022, we reported $0.5 million in early termination revenue associated with term contracts compared ~~to $1.9 million during the same period of fiscal year 2021.~~

~~Direct Operating Expenses~~ ~~Direct operating expenses increased~~ to $81.7 million during the nine months ended June 30, ~~2022 as compared~~2022. This increase was primarily driven by an increase of $25.2 million in labor and labor-related expense and an increase of $16.8 million in materials and supplies given higher activity levels.

Asset Impairment ChargesDuring the nine months ended June 30, 2023, the Company initiated a plan to ~~$50.9~~decommission and scrap four international FlexRig® drilling rigs and four conventional drilling rigs located in Argentina that are not suitable for unconventional drilling. As a result, these rigs were reclassified to Assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. The rigs’ aggregate net book value of $8.8 million was written down to the estimated scrap value of $0.7 million, which resulted in a non-cash impairment charge of $8.1 million within our International Solutions segment and recorded in our Unaudited Condensed Consolidated Statement of Operations during the nine months ended June 30, ~~2021. This increase was primarily driven by higher activity levels partially offset by fixed cost leverage.~~

~~Selling, General and Administrative Expense~~ ~~We recognized a $2.4 million increase in selling, general and administrative costs during~~2023. During the nine months ended June 30, 2022, ~~compared to the nine months ended June 30, 2021. This increase was primarily driven by primarily driven by higher compensation expense due to an increase in sales personnel.~~

~~Asset Impairment Charge~~ ~~During the first quarter of fiscal year 2022,~~ we identified two international FlexRig®drilling rigs that met the ~~asset~~assets held-for-sale criteria and were reclassified as assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. ~~In conjunction with establishing a plan to sell these rigs we recognized a non-cash~~This resulted in an impairment charge of $2.5 million ~~during the nine months ended June 30, 2022 in the Unaudited Condensed Consolidated Statement of Operations,~~ as the ~~aggregate net~~ book ~~value~~values of ~~$3.4 million exceeded the~~these international drilling rigs were written down to their fair value less estimated cost to sell of $0.9 million.

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Other Operations


		Nine Months Ended June 30,						Nine Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		% Change	(in thousands)	2023		2022		% Change
Operating revenues	Operating revenues	$	48,476	$	31,361	54.6	Operating revenues	$	58,936	$	48,476	21.6	%
Direct operating expenses	Direct operating expenses	37,288		30,837		20.9	Direct operating expenses	43,035		37,288		15.4
Depreciation	Depreciation	1,195		1,075		11.2	Depreciation	1,428		1,195		19.5
Research and development		—		127		(100.0)

Selling, general and administrative expense	Selling, general and administrative expense	932		953		(2.2)	Selling, general and administrative expense	869		932		(6.8)

Operating income (loss)		$	9,061	$	(1,631)	(655.5)
Operating income							Operating income	$	13,604	$	9,061	50.1

Operating Revenues~~On October 1, 2019, we elected~~We continue to ~~capitalize a new~~use our Captive insurance ~~company~~companies to insure the deductibles for our domestic workers’ compensation, general liability, ~~and~~ automobile liability claims programs, and medical stop-loss program and to ~~continue~~insure the ~~practice of insuring~~ deductibles from the Company's international casualty and rig property programs. Intercompany premium revenues recorded by the Captives during the nine months ended June 30, ~~2022~~2023 and ~~2021~~2022 amounted to ~~$41.6~~$51.4 million and ~~$25.2~~$41.6 million, respectively, which were eliminated upon consolidation.

Direct Operating Expenses Direct operating ~~costs~~expenses consisted primarily of ~~$2.7~~$10.2 million and ~~$8.8~~$2.7 million in adjustments to accruals for estimated losses allocated to the Captives and rig and casualty insurance premiums of ~~$26.2~~$30.6 million and ~~$13.1~~$26.2 million during the nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~decrease in~~change to accruals for estimated losses is primarily due to actuarial valuation adjustments by our third-party actuary.

Liquidity and Capital Resources

Sources of Liquidity

Our sources of available liquidity include existing cash balances on hand, cash flows from operations, and availability under the 2018 Credit Facility. Our liquidity requirements include meeting ongoing working capital needs, funding our capital expenditure projects, paying dividends declared, and repaying our outstanding indebtedness. Historically, we have financed operations primarily through internally generated cash flows. During periods when internally generated cash flows are not sufficient to meet liquidity needs, we may utilize cash on hand, borrow from available credit sources, access capital markets or sell our investments. Likewise, if we are generating excess cash flows or have cash balances on hand beyond our near-term needs, we may return cash to shareholders through dividends or share repurchases, or we may invest in highly rated short‑term money market and debt securities. These investments can include U.S. Treasury securities, U.S. Agency issued debt securities, highly rated corporate bonds and commercial paper, certificates of deposit and money market funds. However, in some international locations we may make short-term investments that are less conservative, as equivalent highly rated investments are unavailable. See—Note 2—Summary of Significant Accounting Policies and Related Risks and Uncertainties—International Solutions Drilling Risks.

We may seek to access the debt and equity capital markets from time to time to raise additional capital, increase liquidity as necessary, fund our additional purchases, exchange or redeem senior notes, or repay any amounts under the 2018 Credit Facility. Our ability to access the debt and equity capital markets depends on a number of factors, including our credit rating, market and industry conditions and market perceptions of our industry, general economic conditions, our revenue backlog and our capital expenditure commitments.

Cash Flows

Our cash flows fluctuate depending on a number of factors, including, among others, the number of our drilling rigs under contract, the revenue we receive under those contracts, the efficiency with which we operate our drilling rigs, the timing of collections on outstanding accounts receivable, the timing of payments to our vendors for operating costs, and capital expenditures. As our revenues increase, operating net working capital is typically a use of capital, while conversely, as our revenues decrease, operating net working capital is typically a source of capital. To date, general inflationary trends have not had a material effect on our operating margins or cash flows as we have been able to ~~more than~~ offset these cumulative cost trends with rate increases.

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As of June 30, ~~2022,~~2023, we had ~~$188.7 million of~~ cash and cash equivalents ~~on hand~~of $220.6 million and ~~$144.3 million~~short-term investments of ~~short-term investments.~~$72.6 million. Our cash flows for the nine months ended June 30, ~~2022~~2023, and ~~2021~~2022 are presented below:


		Nine Months Ended June 30,					Nine Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	116,641	$	89,821	Operating activities	$	619,000	$	116,641
Investing activities	Investing activities	(123,146)		(119,752)		Investing activities	(191,044)		(123,146)
Financing activities	Financing activities	(707,622)		(84,944)		Financing activities	(414,992)		(707,622)
Net decrease in cash and cash equivalents and restricted cash		$	(714,127)	$	(114,875)
Net increase (decrease) in cash and cash equivalents and restricted cash						Net increase (decrease) in cash and cash equivalents and restricted cash	$	12,964	$	(714,127)

Operating Activities

Our operating net working capital (non-GAAP) as of June 30, ~~2022~~2023 and September 30, ~~2021~~2022 is presented below:


		June 30,		September 30,			June 30,		September 30,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Total current assets	Total current assets	$	946,158	$	1,586,566	Total current assets	$	992,828	$	1,002,944
Less:	Less:					Less:
Cash and cash equivalents	Cash and cash equivalents	188,663		917,534		Cash and cash equivalents	220,609		232,131
Short-term investments	Short-term investments	144,331		198,700		Short-term investments	72,609		117,101
Assets held-for-sale	Assets held-for-sale	25,604		71,453		Assets held-for-sale	988		4,333
		587,560		398,879			698,622		649,379

Total current liabilities	Total current liabilities	401,276		866,306		Total current liabilities	433,496		394,810
Less:	Less:					Less:
Dividends payable	Dividends payable	26,693		27,332		Dividends payable	48,878		26,693
Current portion of long-term debt, net		—		483,486
Advance payment for sale of property, plant and equipment	Advance payment for sale of property, plant and equipment	35,281		86,524		Advance payment for sale of property, plant and equipment	—		600
		$	339,302	$	268,964		$	384,618	$	367,517

Operating net working capital (non-GAAP)	Operating net working capital (non-GAAP)	$	248,258	$	129,915	Operating net working capital (non-GAAP)	$	314,004	$	281,862

Cash flows provided by operating activities were approximately ~~$116.6~~$619.0 million and ~~$89.8~~$116.6 million for the nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The change in cash provided by operating activities is primarily driven by higher activity and rates, partially offset by changes in operating net working capital. ~~For the nine months ended June 30, 2022, working capital was a source of cash.~~ For the purpose of understanding the impact on our cash flows from operating activities, operating net working capital is calculated as current assets, excluding cash and cash equivalents, short-term investments, and assets held-for-sale, less current liabilities, excluding dividends payable ~~short-term debt~~ and advance payments for sale of property, plant and equipment. Operating net working capital was ~~$248.3~~$314.0 million and $281.9 million as of June 30, ~~2022 compared to $129.9 million as of~~2023 and September 30, ~~2021.~~2022, respectively. This metric is considered a non-GAAP measure of the Company's liquidity. The Company considers operating net working capital to be a supplemental measure for presenting and analyzing trends in our cash flows from operations over time. Likewise, the Company believes that operating net working capital is useful to investors because it provides a means to evaluate the operating performance of the business using criteria that are used by our internal decision makers. The sequential increase in operating net working capital was primarily driven by higher rig activity and seasonal payments of annual incentive compensation and ad valorem taxes. Included in accounts receivable as of June 30, 2022 was $27.9 million of income tax receivables, a portion of which we expect to collect before the end of calendar year 2022.

Investing Activities

Capital Expenditures Our capital expenditures during the nine months ended June 30, ~~2022~~2023 were ~~$175.0~~$281.8 million compared to ~~$49.2~~$175.0 million during the nine months ended June 30, ~~2021.~~2022. The increase in capital expenditures is driven by higher activity and ~~spending on walking~~increased costs associated with rig ~~conversions.~~upgrades.

~~Purchase (Sales)~~Net Sales of Short-Term Investments Our net sales of short-term investments during the nine months ended June 30, ~~2022~~2023 were ~~$(52.4)~~$46.5 million compared to ~~net purchases of $95.0~~$52.4 million during the nine months ended June 30, ~~2021.~~2022. The ~~change~~activity in both periods is driven by our ongoing liquidity management.

~~Table of Contents~~

~~Purchase~~Net Purchases of Long-Term Investments Our net purchases of long-term investments during the nine months ended June 30, ~~2022~~2023 were ~~$25.2~~$18.8 million compared to ~~$2.3~~$25.2 million during the nine months ended June 30, ~~2021. The increase is~~2022. During the nine months ended June 30, 2023, our activity was primarily driven by our purchase of $14.1 million equity investment in Tamboran Resources Limited and $4.1 million in debt and equity security investments in various geothermal energy companies. The activity during the nine months ended June 30, 2022 was driven by our purchase of a $33.0 million cornerstone investment, inthrough a convertible note, in Galileo Holdco 2, in addition to purchases of geothermal investments of $14.2 million, offset by the $22.0 million of proceeds received from the liquidation of our remaining equity securities in Schlumberger, Ltd. ~~during the nine months ended June 30, 2022.~~

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Sale of Assets Our proceeds from asset sales during the nine months ended June 30, ~~2022~~2023 were ~~$50.3~~$63.0 million compared to proceeds of ~~$26.8~~$50.3 million during the nine months ended June 30, ~~2021.~~2022. The increase in proceeds is mainly driven by higher rig activity which drives higher reimbursement from customers for lost or damaged drill ~~pipe. The increase is also attributable to the sale~~pipe and other used drilling equipment.

Financing Activities

DividendsWe paid dividends of ~~our casing running~~$1.46 per share, comprised of a base cash dividend of $0.75 and ~~trucking assets that occurred~~a supplemental cash dividend of $0.71, during the nine months ended June 30, ~~2022.~~

~~Financing Activities~~

~~Dividends~~ ~~We paid dividends of $0.75 per share~~2023. Comparatively, during ~~both~~ the nine months ended June 30, 2022, ~~and 2021.~~we paid dividends of $0.75 per share. Total dividends paid were ~~$80.7~~$152.6 million and ~~$81.8~~$80.7 million during the nine months ended June 30, 2023 and 2022, ~~and 2021,~~ respectively. AOn June 7, 2023, the Board of Directors declared a base cash dividend of $0.25 per share ~~was declared on May 31, 2022~~and a supplemental cash dividend of $0.235 per share for shareholders of record on August 17, ~~2022,~~2023, payable on ~~September 1, 2022.~~August 31, 2023. The declaration and amount of future dividends is at the discretion of the Board and subject to our financial condition, results of operations, cash flows, and other factors the Board deems relevant.

Redemption of 4.65% Senior Notes due 2025 On October 27, 2021, we redeemed all of the outstanding 2025 Notes, resulting in a cash outflow of $487.1 million. As a result, the associated make-whole premium of $56.4 million was paid during the first fiscal quarter of 2022 contemporaneously with the October 27, 2021 debt extinguishment. The Company financed the redemption of the 2025 Notes with the net proceeds from the offering of the 2031 Notes, together with cash on hand. Additional details are fully discussed in Note 5—Debt.

Repurchase of Shares ~~We have~~The Company has an evergreen authorization from the Board of Directors for the repurchase of up to four million common shares in any calendar year. In December 2022, the Board of Directors increased the maximum number of shares authorized to be repurchased in calendar year 2023 to five million common shares. On June 7, 2023, the Board of Directors further increased the maximum number of shares authorized to be repurchased in calendar year 2023 to seven million shares. The repurchases may be made using our cash and cash equivalents or other available ~~sources.~~sources and are held as treasury shares on our Unaudited Condensed Consolidated Balance Sheets. During the nine months ended June 30, 2023, we repurchased 6.5 million common shares, at an aggregate cost of $249.0 million, including accrued excise tax of $1.8 million, resulting in a net cash outflow of $247.2 million. During the nine months ended June 30, 2022, ~~we repurchased~~ 3.2 million common shares were repurchased at an aggregate cost of $77.0 ~~million, which are held as treasury shares. There were no purchases of common shares during the nine months ended June 30, 2021.~~million.

Credit ~~Facilities~~Facility

On November 13, 2018, we entered into a credit agreement by and among the Company, as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, which was amended on November 13, 2019, providing for an unsecured revolving credit facility (as amended, the “2018 Credit Facility”), that was set to mature on November 13, 2024. On April 16, 2021, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 13, 2024 to November 12, 2025. No other terms of the 2018 Credit Facility were amended in connection with this extension. ~~The remaining $70.0 million of commitments under the 2018 Credit Facility will expire on November 13, 2024, unless extended by the applicable lender before such date.~~ On March 8, 2022, we entered into the second amendment to the 2018 Credit Facility, which, among other things, raised the number of potential future extensions of the maturity date applicable to extending lenders from one to two such potential extensions and replaced provisions in respect of interest rate determinations that were based on the London Interbank Offered Rate with provisions based on the Secured Overnight Financing Rate. ~~Lenders~~Additionally, lenders with $680.0 million of commitments under the 2018 Credit Facility ~~also~~ exercised their option to extend the maturity of the 2018 Credit Facility from November 12, 2025 to November 11, 2026. On February 10, 2023, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 11, 2026 to November 12, 2027. The remaining $70.0 million of commitments under the 2018 Credit Facility will expire on November 13, 2024, unless extended by the applicable lender before such date.

The 2018 Credit Facility has $750.0 million in aggregate availability with a maximum of $75.0 million available for use as letters of credit. As of June 30, ~~2022,~~2023, there were no borrowings or letters of credit outstanding, leaving $750.0 million available to borrow under the 2018 Credit Facility. For a full description of the 2018 Credit Facility, see Note 7—Debt to the ~~consolidated financial statements~~Consolidated Financial Statements in our ~~2021~~2022 Annual Report on Form 10-K.

As of June 30, ~~2022,~~2023, we had ~~four separate bi-lateral~~$95.0 million in uncommitted bilateral credit facilities, ~~with banks with an aggregate outstanding balance of $33.8 million.~~

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Senior Notes

2.90% Senior Notes due 2031 On September 29, 2021, we issued $550.0 million aggregate principal amount of the 2.90 percent 2031 Notes in an offering to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act (“Rule 144A”) and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act (“Regulation S”). Interest on the 2031 Notes is payable semi-annually on March 29 and September 29 of each year, commencing on March 29, 2022. The 2031 Notes will mature on September 29, 2031 and bear interest at a rate of 2.90 percent ~~per~~ annum.

4.65% Senior Notes due 2025 On December 20, 2018, we issued approximately $487.1 million in aggregate principal amount of the 2025 Notes. ~~Interest on the 2025 Notes was payable semi-annually on March 15 and September 15 of each year, commencing on March 15, 2019.~~ The debt issuance cost was being amortized straight-line over the stated life of the obligation, which approximated the effective interest method.

On October 27, 2021, we redeemed all of the outstanding 2025 Notes. As a result, the associated make-whole premium of $56.4 million and the write off of the unamortized discount and debt issuance costs of $3.7 million were recognized during the first fiscal quarter of 2022 contemporaneously with the October 27, 2021 debt extinguishment and recorded in Loss on ~~Extinguishment~~extinguishment of ~~Debt~~debt on our Unaudited Condensed Consolidated Statements of Operations during the nine months ended June 30, ~~2021.~~2022.

Future Cash Requirements

Our operating cash requirements, scheduled debt repayments, interest payments, any declared dividends, and estimated capital expenditures for fiscal year ~~2022~~2023 and 2024 are expected to be funded through current cash and cash to be provided from operating activities. However, there can be no assurance that we will continue to generate cash flows at current levels. If needed, we may decide to obtain additional funding from our $750.0 million 2018 Credit Facility. We currently do not anticipate the need to draw on the 2018 Credit Facility. Our indebtedness under our unsecured senior notes totaled $550.0 million at June 30, ~~2022~~2023 and matures on September 29, 2031.

As of June 30, ~~2022,~~2023, we had a ~~$527.5~~$541.4 million deferred tax liability on our Unaudited Condensed Consolidated Balance Sheets, primarily related to temporary differences between the financial and income tax basis of property, plant and equipment. Our levels of capital expenditures over the last several years have been subject to accelerated depreciation methods (including bonus depreciation) available under the Internal Revenue Code of 1986, as amended, enabling us to defer a portion of cash tax payments to future years. Future levels of capital expenditures and results of operations will determine the timing and amount of future cash tax payments. We expect to be able to meet any such obligations utilizing cash and investments on hand, as well as cash generated from ongoing operations.

AtAs of June 30, ~~2022,~~2023, we ~~had $4.6~~have recorded approximately $3.2 million ~~recorded for uncertain~~of unrecognized tax ~~positions and related~~benefits, interest, and penalties. ~~However,~~We believe it is reasonably possible up to $2.6 million of the ~~timing~~unrecognized tax benefits, interest, and penalties will be recognized as of ~~such~~June 30, 2024 as a result of a lapse of the statute of limitations. Any further reversals or payments toof the ~~respective taxing authorities~~liability cannot be estimated at this time.

The ~~long-term~~long‑term debt to total capitalization ratio was ~~16.8 percent and 15.9~~16.9 percent at June 30, ~~2022~~2023 and 16.6 percent at September 30, ~~2021, respectively.~~2022. For additional information regarding debt agreements, refer to Note 6—5—Debt to the Unaudited Condensed Consolidated Financial Statements.

There were no other significant changes in our financial position since September 30, ~~2021.~~2022.

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Material Commitments

Material commitments as reported in our ~~2021~~2022 Annual Report on Form 10-K have not changed significantly atas of June 30, ~~2022,~~2023, other than those disclosed in Note ~~6—Debt and Note 13—~~12—Commitments and Contingencies to the Unaudited Condensed Consolidated Financial Statements.

~~Table of Contents~~

Critical Accounting Policies and Estimates

Our accounting policies and estimates that are critical or the most important to understand our financial condition and results of operations, and that require management to make the most difficult judgments, are described in our ~~2021~~2022 Annual Report on Form 10-K. There have been no material changes in these critical accounting policies and estimates.

Recently Issued Accounting ~~Policies~~Standards

See Note 2—Summary of Significant Accounting Policies and Related Risks and Uncertainties to the Unaudited Condensed Consolidated Financial Statements for recently adopted accounting standards and new accounting standards not yet adopted.

Non-GAAP Measurements

Direct Margin

Direct margin is considered a non-GAAP metric. We define ~~"direct~~"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 June 30, 2022							Three Months Ended June 30, 2023
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions
Segment operating income (loss)	Segment operating income (loss)	$	57,353	$	5,872	$	(6,550)	Segment operating income (loss)	$	169,499	$	4,705	$	(1,397)
Add back:	Add back:							Add back:
Depreciation and amortization	Depreciation and amortization	93,612		2,328		1,175		Depreciation and amortization	87,209		1,873		2,171
Research and development	Research and development	6,545		—		—		Research and development	7,254		—		—
Selling, general and administrative expense	Selling, general and administrative expense	10,069		579		2,129		Selling, general and administrative expense	12,962		730		2,528

Restructuring charges		25		—		—

Direct margin (Non-GAAP)	Direct margin (Non-GAAP)	$	167,604	$	8,779	$	(3,246)	Direct margin (Non-GAAP)	$	276,924	$	7,308	$	3,302


		Three Months Ended June 30, 2021							Three Months Ended June 30, 2022
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions
Segment operating income (loss)	Segment operating income (loss)	$	(43,743)	$	5,707	$	(3,538)	Segment operating income (loss)	$	57,353	$	5,872	$	(6,550)
Add back:	Add back:							Add back:
Depreciation and amortization	Depreciation and amortization	96,997		2,938		573		Depreciation and amortization	93,612		2,328		1,175
Research and development	Research and development	5,605		—		—		Research and development	6,545		—		—
Selling, general and administrative expense	Selling, general and administrative expense	12,583		592		1,346		Selling, general and administrative expense	10,069		579		2,129
Asset impairment charge		2,130		—		—

Restructuring charges	Restructuring charges	1,388		—		207		Restructuring charges	25		—		—
Direct margin (Non-GAAP)	Direct margin (Non-GAAP)	$	74,960	$	9,237	$	(1,412)	Direct margin (Non-GAAP)	$	167,604	$	8,779	$	(3,246)

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		Nine Months Ended June 30, 2022							Nine Months Ended June 30, 2023
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions
Segment operating income	Segment operating income	$	29,757	$	16,616	$	651	Segment operating income	$	496,945	$	18,138	$	4,132
Add back:	Add back:							Add back:
Depreciation and amortization	Depreciation and amortization	283,050		7,109		2,979		Depreciation and amortization	266,093		5,671		5,215
Research and development	Research and development	19,533		—		—		Research and development	23,051		—		—
Selling, general and administrative expense	Selling, general and administrative expense	31,781		1,920		5,908		Selling, general and administrative expense	43,364		2,263		8,245
Asset impairment charge		1,868		—		2,495
Restructuring charges		498		—		—
Asset impairment charges								Asset impairment charges	3,948		—		8,149

Direct margin (Non-GAAP)	Direct margin (Non-GAAP)	$	366,487	$	25,645	$	12,033	Direct margin (Non-GAAP)	$	833,401	$	26,072	$	25,741


		Nine Months Ended June 30, 2021							Nine Months Ended June 30, 2022
(in thousands)	(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions
Segment operating income (loss)		$	(226,505)	$	11,427	$	(15,353)
Segment operating income								Segment operating income	$	29,757	$	16,616	$	651
Add back:	Add back:							Add back:
Depreciation and amortization	Depreciation and amortization	297,238		8,137		1,361		Depreciation and amortization	283,050		7,109		2,979
Research and development	Research and development	16,400		—		—		Research and development	19,533		—		—
Selling, general and administrative expense	Selling, general and administrative expense	37,223		1,895		3,463		Selling, general and administrative expense	31,781		1,920		5,908
Asset impairment charge		56,414		—		—
Asset impairment charges								Asset impairment charges	1,868		—		2,495
Restructuring charges	Restructuring charges	2,969		—		207		Restructuring charges	498		—		—
Direct Margin (Non-GAAP)		$	183,739	$	21,459	$	(10,322)
Direct margin (Non-GAAP)								Direct margin (Non-GAAP)	$	366,487	$	25,645	$	12,033

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a description of our market risks, see the following:

•Note ~~12—~~11—Fair Value Measurement of Financial Instruments to the Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I hereof with regard to equity price risk which is incorporated herein by reference;

•~~Part II,~~ “Item ~~7A— "Quantitative~~7A. Quantitative and Qualitative Disclosures About Market Risk” in our ~~2021~~2022 Annual Report on Form 10-K filed with the SEC on November ~~18, 2021;~~16, 2022;

•Note 6—5—Debt to the Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I hereof with regard to interest rate risk which is incorporated herein by reference; and

•Note 2—Summary of Significant Accounting Policies and Related Risks and Uncertainties to the Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I hereof with regard to foreign currency exchange rate risk which is incorporated herein by reference.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, an evaluation was performed with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, ~~2022~~2023 at ensuring that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and ~~forms.~~forms and accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no material changes in our internal controls over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART ~~II.~~II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note ~~13—~~12—Commitments and Contingencies to the Unaudited Condensed Consolidated Financial Statements for information regarding our legal proceedings.

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ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors previously disclosed in Part 1,I, Item 1A— “Risk Factors” in our ~~2021~~2022 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below sets forth the information with respect to our repurchases of common shares during the three months ended June 30, 2023 (in thousands except per share amounts):


Period	Total Number of Shares Purchased1	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs1
April 1 - April 30	—	—		—	2,457
May 1 - May 31	2,457	$	31.85	2,457	—
June 1 - June 30	701	34.15		701	1,299
Total	3,158			3,158

(1)Prior to January 1, 2023, the Company had an evergreen authorization from the Board of Directors for the repurchase of up to four million common shares in any calendar year. In December 2022, the Board of Directors increased the maximum number of shares authorized to be repurchased in calendar year 2023 to five million common shares. On June 7, 2023, the Board of Directors further increased the maximum number of shares authorized to be repurchased in calendar year 2023 to seven million shares. The repurchases may be made using our cash and cash equivalents or other available sources. Shares of stock repurchased pursuant to such authorization are held as treasury shares.

ITEM 5. OTHER INFORMATION

On June 27, 2023, Raymond ("Trey") Adams III, Senior Vice President of Digital Operations, Sales, & Marketing, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 13,500 shares of Company common stock between September 25, 2023 and July 5, 2024, subject to certain conditions.

ITEM 6. EXHIBITS

The following documents are included as exhibits to this Form 10-Q. Those exhibits below that are incorporated herein by reference are indicated as such by the information supplied in the parenthetical thereafter. If no parenthetical appears after an exhibit, the exhibit is filed or furnished herewith.


Exhibit Number			Description

3.1			Amended and Restated Certificate of Incorporation of Helmerich & Payne, Inc. (incorporated herein by reference to Exhibit 3.1 of the Company’s Form 8‑K filed on March 14, 2012, SEC File No. 001‑04221).
3.2			Amended and Restated By‑laws of Helmerich & Payne, Inc. (incorporated herein by reference to Exhibit 3.1 of the ~~Company’s~~Company's Form ~~8‑K~~8-K filed on ~~June 2, 2021,~~March 3, 2023, SEC File No. ~~001‑04221)~~001-04221).
~~10.1~~			~~Amendment to Standard Three-Year Performance-Vested Restricted Share Unit Award Agreement for the 2020 Helmerich & Payne, Inc. 2020 Omnibus Incentive Plan, dated June 6, 2022.~~
31.1			Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32			Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101			Financial statements from the quarterly report on Form 10-Q of Helmerich & Payne, Inc. for the quarter ended June 30, ~~2022,~~2023, filed on July ~~27, 2022,~~26, 2023, formatted in Inline Extensive Business Reporting Language (XBRL): (i) the Unaudited Condensed Consolidated Balance Sheets, (ii) the Unaudited Condensed Consolidated Statements of Operations, (iii) the Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Unaudited Condensed Consolidated Statements of Shareholders’ Equity, (v) the Unaudited Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Condensed Consolidated Financial Statements.
104			Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		HELMERICH & PAYNE, INC.
		(Registrant)

Date:	July ~~27, 2022~~26, 2023	By:	/S/ JOHN W. LINDSAY
			John W. Lindsay Director, President and Chief Executive Officer

Date:	July ~~27, 2022~~26, 2023	By:	/S/ MARK W. SMITH
			Mark W. Smith Senior Vice President and Chief Financial Officer (Principal Financial Officer)

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