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Item 1. Financial Statements

2025-05-09 compared with 2025-02-05 · 614 added, 236 removed, 622 unchanged (58% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, September 30,

March 31, September 30,

(in thousands except share data) 2025 2024

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Accrued liabilities 582,798 286,841

Current portion of long-term debt, net

Total current liabilities 887,565 446,949

2 unchanged sentences

Deferred income taxes 646,213 495,481

Retirement benefit obligations

108,117 6,524

Other 314,486 133,610

2 unchanged sentences

Shareholders' Equity:

Common stock, $ 0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of December 31, 2024 and September 30, 2024, and 99,186,843 and 98,755,412 shares outstanding as of December 31, 2024 and September 30, 2024, respectively

Common stock, $ 0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of March 31, 2025 and September 30, 2024, and 99,415,281 and 98,755,412 shares outstanding as of March 31, 2025 and September 30, 2024, respectively

11,222 11,222

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Retained earnings 2,889,608 2,883,590

Accumulated other comprehensive loss ( 5,987 ) ( 6,350 )

Treasury stock, at cost, 13,036,022 shares and 13,467,453 shares as of December 31, 2024 and September 30, 2024, respectively

Accumulated other comprehensive income (loss)

1,064 ( 6,350 )

Treasury stock, at cost, 12,807,584 shares and 13,467,453 shares as of March 31, 2025 and September 30, 2024, respectively

( 464,901 ) ( 489,393 )

Non-controlling interest 117,289 —

Total shareholders’ equity 3,052,263 2,917,152

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Three Months Ended

March 31, Six Months Ended

(in thousands, except per share amounts) 2025 2024 2025 2024

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Acquisition transaction costs 29,867 850 40,402 850

Asset impairment charges 1,844 — 1,844 —

Gain on reimbursement of drilling equipment ( 9,973 ) ( 7,461 ) ( 19,376 ) ( 14,955 )

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OPERATING INCOME 42,163 111,167 133,049 236,405

89,983 123,468

Other income (expense)

1 unchanged sentence

Interest expense ( 28,338 ) ( 4,261 ) ( 50,636 ) ( 8,633 )

Loss on investment securities ( 13,367 ) ( 4,034 )

Gain (loss) on investment securities 27,788 3,747 14,421 ( 287 )

Foreign currency exchange loss

( 6,018 ) ( 595 ) ( 6,921 ) ( 2,365 )

Other 1,596 400 1,956 ( 143 )

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NET INCOME 2,986 84,831 57,758 180,004

Basic earnings per common share $ 0.55 $ 0.95

Diluted earnings per common share:

Net income attributable to non-controlling interest

1,332 — 1,332 —

NET INCOME ATTRIBUTABLE TO HELMERICH & PAYNE, INC.

$ 1,654 $ 84,831 $ 56,426 $ 180,004

Earnings per share attributable to Helmerich & Payne, Inc.:

$ 0.01 $ 0.85 $ 0.56 $ 1.79

$ 0.01 $ 0.84 $ 0.56 $ 1.79

Weighted average shares outstanding:

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Three Months Ended

March 31, Six Months Ended

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

Other comprehensive income, net of income taxes:

Net change related to employee benefit plans, net of income taxes of $( 15.7 ) thousand and $( 39.5 ) thousand for the three months ended December 31, 2024 and 2023, respectively

Unrealized gain on available-for-sale debt security, net of income taxes of $( 91.0 ) thousand for the three months ended December 31, 2024

Net change related to employee benefit plans

53 134 107 268

Unrealized gain on available-for-sale debt securities

Currency translation adjustment

6,407 — 6,407 —

Other comprehensive income

7,051 134 7,414 268

Comprehensive income

$ 10,037 $ 84,965 $ 65,172 $ 180,272

Comprehensive income attributable to non-controlling interest

1,332 — 1,332 —

Comprehensive income attributable to Helmerich & Payne, Inc.

$ 8,705 $ 84,965 $ 63,840 $ 180,272

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

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Three Months Ended December 31, 2024

Three and Six Months Ended March 31, 2025

Common Stock Additional

1 unchanged sentence

Comprehensive

Income (Loss) Treasury Stock

Income (Loss) Treasury Stock Non-controlling Interest

(in thousands, except per share amounts) Shares Amount Shares Amount Total

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Other comprehensive income — — — — 363 — — — 363

Dividends declared ($ 0.25 per share)

Dividends declared

— — — ( 25,151 ) — — — — ( 25,151 )

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Balance at December 31, 2024 112,222 $ 11,222 $ 501,516 $ 2,913,211 $ ( 5,987 ) 13,036 $ ( 473,181 ) $ — $ 2,946,781

Three Months Ended December 31, 2023

Comprehensive income:

Net income — $ — $ — $ 1,654 $ — — $ — $ 1,332 $ 2,986

Other comprehensive income — — — — 7,051 — — — 7,051

Estimated preliminary fair value of non-controlling interests acquired

— — — — — — — 116,061 116,061

Dividends declared

— — — ( 25,257 ) — — — ( 104 ) ( 25,361 )

Vesting of restricted stock awards, net of shares withheld for employee taxes — — ( 11,974 ) — — ( 228 ) 8,280 — ( 3,694 )

Stock-based compensation — — 8,098 — — — — — 8,098

Other — — 341 — — — — — 341

Balance at March 31, 2025 112,222 $ 11,222 $ 497,981 $ 2,889,608 $ 1,064 12,808 $ ( 464,901 ) $ 117,289 $ 3,052,263

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

Q2 FY25 FORM 10-Q | 6

Three and Six Months Ended March 31, 2024

Common Stock Additional

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Balance at December 31, 2023 112,222 $ 11,222 $ 506,672 $ 2,743,794 $ ( 7,847 ) 13,599 $ ( 494,195 ) $ 2,759,646

Comprehensive income:

Net income — — — 84,831 — — — 84,831

Other comprehensive income — — — — 134 — — 134

Dividends declared ($ 0.25 base per share, $ 0.17 supplemental per share)

— — — ( 42,130 ) — — — ( 42,130 )

Vesting of restricted stock awards, net of shares withheld for employee taxes — — ( 12,012 ) — — ( 230 ) 8,656 ( 3,356 )

Stock-based compensation — — 8,429 — — — — 8,429

Share repurchases — — — — — 102 ( 3,977 ) ( 3,977 )

Other — — ( 503 ) — — — — ( 503 )

Balance at March 31, 2024 112,222 $ 11,222 $ 502,586 $ 2,786,495 $ ( 7,713 ) 13,471 $ ( 489,516 ) $ 2,803,074

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

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

Six Months Ended March 31,

(in thousands) 2025 2024

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Depreciation and amortization 256,737 198,536

Asset impairment charges 1,844 —

Amortization of debt discount and debt issuance costs 3,462 297

Stock-based compensation 14,949 16,101

Loss on investment securities 13,367 4,034

(Gain) loss on investment securities

( 14,421 ) 287

Gain on reimbursement of drilling equipment ( 19,376 ) ( 14,955 )

Other (gain) loss on sale of assets

1,673 ( 2,443 )

Deferred income tax benefit

( 34,313 ) ( 15,933 )

Other 1,951 1,423

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Purchase of long-term investments ( 1,461 ) ( 8,013 )

Payment for acquisition of business, net of cash acquired ( 1,838,852 ) —

Proceeds from sale of short-term investments 364,078 87,122

1 unchanged sentence

Proceeds from asset sales 26,090 20,898

Net cash provided by (used in) investing activities 52,651 ( 113,067 )

Net cash used in investing activities ( 1,815,523 ) ( 224,473 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Dividends paid ( 50,328 ) ( 84,371 )

Proceeds from debt issuance 400,000 —

Debt issuance costs ( 2,629 ) —

Payments for employee taxes on net settlement of equity awards ( 10,607 ) ( 12,176 )

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

Payments on unsecured long-term debt

Share repurchases — ( 51,302 )

Net cash used in financing activities ( 33,150 ) ( 98,728 )

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

Other ( 329 ) ( 250 )

Net cash provided by (used in) financing activities 311,107 ( 148,099 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

( 1,283,606 ) ( 54,055 )

Cash and cash equivalents and restricted cash, beginning of period 1,528,660 316,238

Cash and cash equivalents and restricted cash, end of period $ 1,706,519 $ 279,241

Cash, cash equivalents and restricted cash, beginning of period

1,528,660 316,238

Cash, cash equivalents and restricted cash, end of period

$ 245,054 $ 262,183

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

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Income tax paid 100,802 81,294

Income tax received — —

Cash paid for amounts included in the measurement of lease liabilities:

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(“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.

Our drilling services operations are organized into the following reportable operating business segments:

North America Solutions, International Solutions and Offshore Gulf of Mexico.

Our real estate operations and our wholly-owned captive insurance companies are included in "Other." Refer to Note 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 operate in other states, depending on demand.

Such states include:

Colorado, Louisiana, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Utah, and West Virginia.

Our International Solutions operations have rigs and/or services primarily located in five international locations:

Argentina, Australia, Bahrain, Colombia, and Saudi Arabia.

Our Offshore Gulf of Mexico operations are conducted in Louisiana and in U.S.

federal waters in the Gulf of Mexico.

We also own and operate a limited number of commercial real estate properties located in Tulsa, Oklahoma.

Our real estate investments include a shopping center and undeveloped real estate.

KCA Deutag Acquisition

On January 16, 2025 (the “Closing Date”), H&P completed its acquisition of the entire issued share capital (the "Acquisition") of KCA Deutag International Limited (KCA Deutag") pursuant to the Sale and Purchase Agreement (the "Purchase Agreement").

H&P paid aggregate cash consideration of approximately $ 2.0 billion, which consisted of the share purchase price of $ 0.9 billion and $ 1.1 billion which was used to contemporaneously repay or redeem certain of KCA Deutag existing debt, including, as applicable, the payment of all accrued and unpaid interest, premiums, and fees.

For additional information regarding the completion of the Acquisition, refer to Note 14—Subsequent Events.

On January 16, 2025 (the “Closing Date” or "Acquisition Date"), H&P completed its acquisition of the entire issued share capital (the "Acquisition") of KCA Deutag International Limited ("KCA Deutag") pursuant to the Sale and Purchase Agreement (the "Purchase Agreement").

H&P paid aggregate cash consideration of approximately $ 2.0 billion, which consisted of the share purchase price of $ 0.9 billion and $ 1.1 billion which was used to contemporaneously repay or redeem certain of KCA Deutag's existing debt, including, as applicable, the payment of all accrued and unpaid interest, premiums, and fees.

It is important to note that results presented for the three and six months ended March 31, 2025 reflect a full 90 and 182 days of H&P operations, respectively, and 75 days of KCA Deutag operations, as the Acquisition was completed on January 16, 2025.

KCA Deutag is a diverse global drilling company.

The company has a significant land drilling presence in the Middle East, which represents approximately two-thirds of the company’s calendar year 2023 Operating EBITDA, with additional operations in South America, Europe and Africa.

In addition to its land operations, KCA Deutag has asset-light offshore management contract operations in the North Sea, Angola, Azerbaijan and Canada, with super major customers and long-term earnings visibility through a robust backlog.

KCA Deutag’s Kenera segment comprises manufacturing and engineering businesses, including Bentec, with three facilities serving the energy industry, representing a longer-term growth opportunity.

The company derives a significant portion of its revenues and cash flow from its land operations and has a substantial land drilling presence in the Middle East with additional operations in South America, Europe, and Africa.

In addition to its land operations, the company has asset-light offshore management contract operations in the North Sea, Angola, Azerbaijan and Canada.

KCA Deutag’s Kenera business unit comprises manufacturing and engineering operations, including Bentec, with three facilities serving the energy industry.

For additional information regarding the completion of the Acquisition, refer to Note 3—Business Combination.

Segments of the Business

During the second quarter of fiscal year 2025, the naming convention for one of our reportable segments changed from Offshore Gulf of Mexico to Offshore Solutions.

Beginning on the Closing Date, Offshore Solutions now includes the results from the acquired KCA Deutag offshore management contract operations.

Similarly, our International Solutions segment now includes the results from the acquired KCA Deutag land operations.

Operating results related to KCA Deutag's Kenera business unit are included in "Other" along with results from our real estate operations and our wholly-owned captive insurance companies.

Our North America Solutions operating segment remains unchanged.

Refer to Note 14—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 operate in other states, depending on demand.

Our International Solutions operations are conducted in major international oil and gas markets, primarily in the Middle East and Latin America.

Our Offshore Solutions operations is comprised of asset-light offshore management contracts and contracted rig platforms located in U.S.

federal waters, the North Sea, Norwegian Sea, Caspian Sea and other international waters.

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

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Q2 FY25 FORM 10-Q | 9

Prior to the three months ended March 31, 2025, foreign currency exchange gain (loss) was presented in the operating costs and expense line items to which they relate to, namely within Drilling services operating expenses, on our Unaudited Condensed Consolidated Statements of Operations.

To conform with the current fiscal quarter presentation, we reclassified amounts previously presented in separate line items within operating costs and expenses to the Foreign currency exchange gain (loss) line on our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2024.

Principles of Consolidation

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Specifically, income, expenses and 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 from the date the Company gains control until the date when the Company ceases to control the subsidiary.

The equity attributable to non-controlling interests in subsidiaries is shown separately in the accompanying Unaudited Condensed Consolidated Balance Sheets.

All intercompany accounts and transactions have been eliminated upon consolidation.

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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 recorded restricted cash of $ 1.3 billion and $ 65.1 million at December 31, 2024 and 2023, respectively, and $ 1.3 billion and $ 59.1 million at September 30, 2024 and 2023, respectively.

Of the total at December 31, 2024 and September 30, 2024, $ 1.2 billion represents net proceeds from senior notes issued in fiscal year 2024 to finance the purchase price of the Acquisition and to repay certain of KCA Deutag's outstanding indebtedness, and $ 73.2 million and $ 68.9 million represents the amount management has elected to restrict for the purpose of potential insurance claims in our wholly-owned captive insurance companies at December 31, 2024 and September 30, 2024 respectively.

As of March 31, 2025 and 2024, restricted cash was $ 70.3 million and $ 68.5 million, respectively, and $ 1.3 billion and $ 59.1 million at September 30, 2024 and 2023, respectively.

Of the total at March 31, 2025 and September 30, 2024, $ 68.7 million and $ 68.9 million, respectively, represents the amount management has elected to restrict for the purpose of potential insurance claims in our wholly-owned captive insurance companies.

Additionally, of the total at September 30, 2024, $ 1.2 billion represents net proceeds from senior notes issued in fiscal year 2024 to finance the purchase price of the Acquisition and to repay certain of KCA Deutag's outstanding indebtedness and was subsequently used during the three months ended March 31, 2025 to fund the Acquisition.

For additional information regarding the completion of the Acquisition, refer to Note 3—Business Combination.

The restricted amounts are primarily invested in short-term money market securities.

Subsequent to December 31, 2024, $ 1.2 billion of restricted cash was used to fund the Acquisition.

For additional information regarding the completion of the Acquisition, refer to Note 14—Subsequent Events.

Cash, cash equivalents, and restricted cash are reflected on the Unaudited Condensed Consolidated Balance Sheets as follows:

December 31, September 30,

March 31, September 30,

(in thousands) 2025 2024 2024 2023

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completed an initial public offering of its common stock on the NYSE and its common stock is listed on the NYSE, under the ticker "TBN".

As a result of this offering, the convertible note of $ 9.4 million was converted into 0.5 million common shares in Tamboran Corp.

As a result of this offering, the convertible note of $ 9.4 million was converted into 0.5 million common shares of Tamboran Corp.

Additionally and separately, one of our executive officers serves as a director of Tamboran Corp.

Refer to Note 11—Fair Value Measurement of Financial Instruments for additional information related to our investment.

Concurrent with the October 2022 investment agreement, we entered into a fixed-term drilling services agreement with Tamboran Resources.

As of December 31, 2024, we recorded $ 1.0 million in receivables and $ 3.4 million in contract liabilities on our Unaudited Condensed Consolidated Balance Sheet.

As of September 30, 2024, we recorded $ 5.0 million in receivables and $ 3.9 million in contract liabilities on our Consolidated Balance Sheet.

We recognized $ 4.8 million and $ 4.3 million in revenue on our Unaudited Condensed Consolidated Statement of Operations during the three months ended December 31, 2024, and 2023 respectively, related to the drilling services agreement with Tamboran Resources.

We expect to earn $ 35.0 million in revenue over the remaining contract term, and, as such, this amount is included within our contract backlog as of December 31, 2024.

Q2 FY25 FORM 10-Q | 10

Concurrent with the October 2022 investment agreement, we entered into a fixed-term drilling services agreement with Tamboran Resources.

As of March 31, 2025, we recorded $ 2.6 million in receivables and $ 4.7 million in contract liabilities on our Unaudited Condensed Consolidated Balance Sheets.

As of September 30, 2024, we recorded $ 5.0 million in receivables and $ 3.9 million in contract liabilities on our Consolidated Balance Sheets.

We recognized $ 3.5 million and $ 8.3 million in revenue on our Unaudited Condensed Consolidated Statement of Operations during the three and six months ended March 31, 2025, respectively, related to the drilling services agreement with Tamboran Resources, compared to $ 2.7 million and $ 7.0 million for the three and six months ended March 31, 2024, respectively.

We expect to earn $ 32.3 million in revenue over the remaining contract term, and, as such, this amount is included within our contract backlog as of March 31, 2025.

Recently Issued Accounting Updates

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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.

The following table provides a brief description of recently adopted accounting pronouncements and our analysis of the effects on our Unaudited Condensed Consolidated Financial Statements:

The following table provides a brief description of recent accounting pronouncements and our analysis of the effects on our financial statements:

Standard Description Date of

1 unchanged sentence

Statements or Other Significant Matters

Standards that are not yet adopted as of December 31, 2024

Standards that are not yet adopted as of March 31, 2025

2023-07, Segment Reporting (Topic 280):

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These premiums are currently held in a restricted cash account, resulting in a transfer of risk from our operating subsidiaries to the Captives.

Direct operating costs primarily consisted of adjustments to accruals for estimated losses of $ 3.9 million and $ 3.5 million and rig and casualty insurance premiums of $ 10.5 million and $ 9.1 million during the three months ended December 31, 2024 and 2023, respectively.

Direct operating costs primarily consisted of adjustments of $ 10.3 million and $ 1.6 million to accruals for estimated losses for the three months ended March 31, 2025 and 2024, respectively, and $ 14.2 million and $ 5.1 million for the six months ended March 31, 2025 and 2024, respectively, and rig and casualty insurance premiums of $ 11.2 million and $ 9.9 million during the three months ended March 31, 2025 and 2024, respectively, and $ 21.7 million and $ 19.0 million for the six months ended March 31, 2025 and 2024, respectively.

These operating costs were recorded within Drilling services operating expenses in our Unaudited Condensed Consolidated Statement of Operations.

Intercompany premium revenues recorded by the Captives during the three months ended December 31, 2024 and 2023 amounted to $ 16.6 million and $ 15.2 million, respectively, which were eliminated upon consolidation.

These intercompany insurance premiums are reflected as segment operating expenses within the North America Solutions, International Solutions, and Offshore Gulf of Mexico reportable operating segments and are reflected as intersegment sales within "Other." Our medical stop loss operating expenses for the three months ended December 31, 2024 and 2023 were $ 5.2 million and $ 4.1 million, respectively.

International Solutions Drilling Risks

International Solutions drilling operations may significantly contribute to our revenues and net operating income.

Intercompany premium revenues recorded by the Captives during the three months ended March 31, 2025 and 2024 amounted to $ 17.9 million and $ 15.8 million, respectively, and $ 34.5 million and $ 31.0 million for the six months ended March 31, 2025 and 2024, respectively, which were eliminated upon consolidation.

These intercompany insurance premiums are reflected as segment operating expenses within the North America Solutions, International Solutions, and Offshore Solutions reportable operating segments and are reflected as intersegment sales within "Other." Our medical stop loss operating expenses for the three months ended March 31, 2025 and 2024 were $ 5.2 million and $ 3.2 million, respectively, and $ 10.4 million and $ 7.3 million for the six months ended March 31, 2025 and 2024, respectively .

Foreign Currencies

The reporting and functional currency of the parent company, H&P, is the United States Dollar ("USD").

Our foreign subsidiaries are measured using the currency of the primary economic environment in which the entity operates in (the functional currency).

For some of our foreign subsidiaries, functional currency is not measured in U.S.

Dollars, and, instead, equal to the local currency.

On consolidation, the assets and liabilities of our non U.S.

Dollar functional entities are translated at exchange rates in effect at the balance sheet date.

Revenue and expenses are translated at the average exchange rates prevailing during the reporting period.

Translation adjustments are recorded as a separate component of stockholders’ equity and are included in Other comprehensive income or loss on the Unaudited Condensed Consolidated Statements of Comprehensive Income.

For foreign subsidiaries where the functional currency is the USD, monetary assets and liabilities are remeasured at the exchange rate in effect at the balance sheet date, while non-monetary items are remeasured at historical exchange rates.

Revenues and expenses are remeasured at the average exchange rates prevailing during the reporting period.

Gains and losses resulting from remeasurement are included within Foreign currency exchange gain (loss) on the Unaudited Condensed Consolidated Statements of Operations.

International Drilling Risks

International drilling operations may significantly contribute to our revenues and net operating income.

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 countries, 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.

Also, the success of our international 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 countries, fluctuations in currency exchange rates, foreign currency exchange restrictions and other difficulties repatriating cash from foreign countries, 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.

Argentina also has a history of implementing currency controls that restrict the conversion and repatriation of U.S.

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.

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 $ 0.9 million and $ 1.8 million for the three months ended December 31, 2024 and 2023, respectively.

Following Argentina's devaluation of i ts peso relative to the U.S.

dollar by approximately 55 percent in December 2023, the peso continued to depreciate during the calendar year 2024.

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.

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 acc eptable to us.

Because of the impact of local laws, some of our current operations and potential future operations in certain areas may be conducted through entities in which local citizens own interests.

Additionally, these operations might involve entities (including joint ventures) where we hold only a minority interest or be carried out under contracts with local entities.

Q2 FY25 FORM 10-Q | 12

Although we attempt to minimize the potential impact of such risks by operating in more than one geographical area, during the three months ended December 31, 2024, approximately 7.2 percent of our operating revenues were generated from international locations compared to 8.2 percent during the three months ended December 31, 2023, respectively.

During the three months ended December 31, 2024, approximately 71.3 percent of operating revenues from international locations were from operations in South America compared to 78.5 percent during the three months ended December 31, 2023, respectively.

All of the South American operating revenues were from Argentina and Colombia.

Although we attempt to minimize the potential impact of such risks by operating in more than one geographical area, during the three and six months ended March 31, 2025, approximately 42.1 percent and 28.1 percent of our total consolidated operating revenues were generated from international locations compared to 6.9 percent and 7.5 percent during the three and six months ended March 31, 2024, respectively.

During the three and six months ended March 31, 2025, approximately 18.2 percent and 11.4 percent of our total consolidated operating revenues were from operations in the Middle East compared to 1.2 percent and 1.1 percent during the three and six months ended March 31, 2024, respectively.

The majority of our operating revenues in the Middle East were from operations in Saudi Arabia and Oman.

During the three and six months ended March 31, 2025, a single customer in Saudi Arabia accounted for 9.3 percent and 5.8 percent of our total consolidated operating revenues , respectively.

This customer has the ability to suspend rigs and a portion of our rigs with this customer are currently suspended.

I t is important to note that results presented for the three and six months ended March 31, 2025 reflect a full 90 and 182 days of H&P operations, respectively, and 75 days of KCA Deutag operations, as the Acquisition was completed on January 16, 2025.

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 .

NOTE 3 BUSINESS COMBINATION

On January 16, 2025 (the “Closing Date” or "Acquisition Date"), H&P and certain of its wholly owned subsidiaries completed the previously announced agreement to acquire KCA Deutag.

Upon closing, H&P paid aggregate cash consideration of approximately $ 2.0 billion, which consisted of the share purchase price of $ 0.9 billion and $ 1.1 billion which was used to contemporaneously repay or redeem certain of KCA Deutag's existing debt, including, as applicable, the payment of all accrued and unpaid interest, premiums, and fees.

Of the $ 0.9 billion, approximately $ 80.0 million was deposited into a customary escrow on the Closing Date pending the resolution of certain potential tax obligations of KCA Deutag.

This amount is presented within Noncurrent assets—Other assets with a corresponding liability within Noncurrent Liabilities—Other on our Unaudited Condensed Consolidated Balance Sheet as of March 31, 2025.

To finance the purchase price and to pay related fees and expenses, we completed a private offering of $ 1.25 billion aggregate principal amount of senior notes, together with the proceeds of a term loan credit agreement, cash on hand, and monetization of our investment in ADNOC Drilling.

Refer to Note 6—Debt for further details on the senior notes and term loan credit agreement.

The Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations , which requires the assets acquired and liabilities assumed to be recorded at their acquisition date fair values.

Determining the fair value of acquired assets and liabilities assumed requires the use of independent valuation specialists and the use of significant estimates and assumptions with respect to future rig counts, estimated economic useful lives, operating and capital cost estimates, and a weighted average discount rate reflecting the cost of capital for market participants of 11.0 percent.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, deferred income, contingent liabilities, and provisions and other payables approximate their fair values due to their nature.

The remaining assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs.

The purchase price allocation presented below is preliminary, as certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, the final valuation of assets acquired and liabilities assumed, working capital adjustments, and valuation of deferred taxes.

Management is also evaluating certain assumptions of assets acquired and liabilities assumed and may adjust the allocation in subsequent periods.

The final valuation will be completed no later than one year from the acquisition date.

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The following table summarizes the preliminary purchase price and the fair values of assets acquired and liabilities assumed at the Acquisition Date:

(in thousands)

Total cash consideration $ 2,035,523

Allocation of purchase price

Current assets acquired:

Cash and cash equivalents 196,667

Short-term investments 33

Accounts receivable, net 1

Inventories of materials and supplies, net 193,599

Noncurrent assets acquired:

Investments, net 1,146

Property, plant and equipment, net 1,460,732

Intangible assets, net 468,663

Operating lease right-of-use assets 47,277

Total assets acquired 2,735,285

Current liabilities assumed:

Accounts payable and accrued liabilities

Current portion of long-term debt, net 6,755

Noncurrent liabilities assumed:

Long-term debt, net 78,188

Deferred income taxes 184,849

Retirement benefit obligations 99,043

Total liabilities assumed 881,865

Estimated preliminary fair value of net assets $ 1,853,420

Estimated preliminary fair value of non-controlling interests acquired 116,061

Goodwill $ 298,164

(1) The preliminary estimated fair value of accounts receivable is $ 367.2 million, with the gross contractual amount being $ 381.3 million.

The Company estimates $ 14.1 million to be uncollectible.

Inventory includes materials, supplies and spare parts used as part of contract drilling operations and was valued at fair value using a replacement cost approach.

Property, Plant and Equipment

Property, plant and equipment consists primarily of drilling rigs and equipment and will be depreciated on a straight-line basis over the estimated useful lives of the assets.

These assets were valued using a combination of replacement cost and a market approach.

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Intangible Assets

Intangible assets included in the Acquisition consist of developed technology, customer relationships, a trade name, and in-process research and development.

The fair values were determined using a combination of the income and market approach.

These assets will be amortized over their respective periods of expected benefit.

Refer to Note 5—Goodwill and Intangible Assets for estimated amortization expense over the next five years.

The preliminary values assigned to each intangible asset and the corresponding preliminary useful lives, as of the Acquisition Date, are as follows:

(in thousands) Amount

Weighted Average Useful life

Customer relationships $ 430,300 15 years

Trade name 10,830 10 years

Developed technology 21,350 11 years

In-process research and development 6,183 Indefinite

Estimated fair value of acquired intangible assets $ 468,663

Operating Lease Right-of-Use Assets

In connection with the Acquisition, we acquired operating lease right-of-use assets and a corresponding current and noncurrent liability as summarized below:

(in thousands) Amount

Real estate properties

Drilling equipment

Total operating lease right-of-use asset

Current portion of lease liabilities within Accounts payable and accrued liabilities

Noncurrent portion of operating lease liabilities within Other noncurrent liabilities

We measured the lease liability at the present value of the remaining lease payments, applying a weighted average discount rate of 5.6 percent, as if the acquired lease was a new lease of H&P at the acquisition date.

The right-of-use asset was measured at the same amount as the lease liability and adjusted by $ 9.8 million to reflect unfavorable terms of the leases when compared to market terms.

We have elected to apply the short-term lease measurement and recognition exemption to leases that have a remaining lease term of 12 months or less at the acquisition date.

The weighted average remaining lease term for the acquired leases is approximately 10.5 years.

The amount of goodwill recognized in the Acquisition represents the excess of the gross consideration transferred and the amount of any non-controlling interest over the fair value of the underlying net tangible and identifiable intangible assets acquired and liabilities assumed.

Goodwill is attributed to the assembled workforce, anticipated operational synergies, and the allocation of proceeds in excess of the fair value of net identifiable assets acquired.

Goodwill arising from the Acquisition is not expected to be deductible for tax reporting purposes.

Refer to Note 5—Goodwill and Intangible Assets for additional details.

Long-Term Debt

As discussed above, we paid $ 1.1 billion to contemporaneously repay or redeem certain of KCA Deutag's existing debt upon consummation of the acquisition.

As of the Closing Date, we assumed an aggregate $ 84.9 million in secured term loan borrowings comprised of two separate agreements as summarized in Note 6—Debt — 2024 KCA Deutag Oman Facility and —2023 KCA Deutag Oman Facility .

End-of-Service Benefit Plans

As a result of the Acquisition, we assumed a liability of $ 39.6 million related to end-of-service benefit plans.

This liability arises from KCA Deutag's compliance with local legislation in various Middle Eastern and South American countries, where end-of-service benefit plans are mandated.

These plans require payments to employees upon the conclusion of their service, calculated based on their most recent salary and years of service.

These plans are not pre-funded.

A significant portion of this liability stems from operations in the Middle East for which we relied on independent actuaries to assess the value of these obligations.

The primary costs associated with these plans include the present value of benefits accrued for an additional year of service and the interest on the obligation related to employee service in previous years.

This liability is presented within Accrued liabilities on our Unaudited Condensed Consolidated Balance Sheets.

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Defined Benefit Pension Plans

In connection with the Acquisition, we now maintain pension plans in Germany and the UK.

Refer to Note 12—Employee Benefit Plans for additional details.

Non-controlling Interest

The non-controlling interests acquired represents the portion of certain consolidated subsidiaries that are owned by third-parties and is recorded at estimated fair market value.

The non-controlling interests are presented as a separate component of equity in our Unaudited Condensed Consolidated Balance Sheets and the consolidated net income attributable to non-controlling interests is disclosed separately in the Unaudited Condensed Consolidated Statements of Operations.

Results of Operations

KCA Deutag's results of operations for its land operations and offshore management contract operations are reported within our International Solutions and Offshore Solutions operating segments, respectively.

KCA Deutag's manufacturing and engineering operations results are included in "Other".

The results of operations attributable to the Acquisition have been included in our Unaudited Condensed Consolidated Financial Statements since the date of the acquisition, on January 16, 2025, through March 31, 2025.

Revenue and net loss attributable to the net assets acquired for the period January 16, 2025 through March 31, 2025, were $ 320.6 million and $ 32.3 million, respectively.

During the three and six months ended March 31, 2025, we recognized approximately $ 29.9 million and $ 40.4 million, respectively, in acquisition transaction costs associated with the Acquisition, as compared to $ 0.9 million for the three and six months ended March 31, 2024.

These non-recurring costs are primarily related to third-party legal and advisory services and are included in Acquisition transaction costs on the Unaudited Condensed Consolidated Statements of Operations.

Pro Forma Financial Information

The supplemental pro forma financial information presented below is for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the Acquisition had been completed on the date indicated, does not reflect synergies that might have been achieved, and is not indicative of future results of operations.

The summarized unaudited pro forma financial information reflects several adjustments to reflect preliminary purchase price accounting and differences in accounting policies between International Financial Reporting Standards ("IFRS") and U.S.

These adjustments account for incremental depreciation and amortization expenses based on the fair value of KCA Deutag’s assets, the elimination of interest expenses from KCA Deutag’s historical borrowings, and the addition of H&P debt to fund the acquisition.

The pro forma adjustments are based upon currently available information and certain assumptions that H&P believes are reasonable under the circumstances.

The tax impact of these adjustments was determined using statutory tax rates.

The following unaudited pro forma combined financial information presents results for the three and six months ended March 31, 2025 and 2024, as if we had completed the Acquisition on October 1, 2023:

Three Months Ended March 31, Six Months Ended March 31,

(in thousands) 2025 2024 2025 2024

Revenue $ 1,070,802 $ 1,114,231 $ 2,179,394 $ 2,226,996

Net income (loss)

3,881 75,035 ( 15,811 ) 156,336

Net income (loss) attributable to non-controlling interest

2,166 3,018 5,084 ( 2,964 )

Net income (loss) attributable to Helmerich & Payne, Inc.

$ 1,715 $ 72,017 $ ( 20,895 ) $ 159,300

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NOTE 4 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of December 31, 2024 and September 30, 2024 consisted of the following:

(in thousands) Estimated Useful Lives December 31, 2024 September 30, 2024

Property, plant and equipment as of March 31, 2025 and September 30, 2024 consisted of the following:

(in thousands) Estimated Useful Lives March 31, 2025 September 30, 2024

Drilling services equipment 2 - 15 years

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As these various projects are completed, the costs are then classified to their appropriate useful life category.

Depreciation expense during the three months ended December 31, 2024 and 2023 was $ 97.0 million and $ 92.4 million, including abandonments of $ 0.7 million and $ 0.5 million, respectively.

During the three months ended December 31, 2024, depreciation expense included $ 1.2 million of accelerated depreciation for components on rigs that are scheduled for conversion in fiscal year 2025 compared to $ 0.9 million in the three months ended December 31, 2023.

KCA Deutag Acquisition

Refer to Note 3—Business Combination for additional information regarding the property, plant and equipment acquired in connection with the Acquisition.

Depreciation expense during the three months ended March 31, 2025 and 2024 was $ 147.3 million and $ 102.9 million, including abandonments of $ 1.2 million and $ 2.6 million, respectively.

Depreciation expense during the six months ended March 31, 2025 and 2024 was $ 244.3 million and $ 195.3 million, including abandonments of $ 1.9 million and $ 3.1 million, respectively.

These expenses are recorded within Depreciation and amortization on our Unaudited Condensed Consolidated Statements of Operations.

I n 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 removed from our available rig count.

At the time of the loss, the rig was fully insured under replacement cost insurance.

During the three months ended March 31, 2024, we recognized a gain on involuntary conversion of the rig of $ 5.5 million which represents the insurance proceeds received in excess of the carrying value of the rig and therefore was recognized as a gain within operating income during the three months ended March 31, 2024.

Asset Impairment Charges

During the three months ended March 31, 2025, we identified a domestic drilling rig that met the asset held-for-sale criteria.

The rig's net book value of $ 1.7 million was written down to its estimated scrap value of $ 0.2 million, resulting in a non-cash impairment charge of $ 1.5 million in our North America Solutions segment during the three and six months ended March 31, 2025.

Gain on Reimbursement of Drilling Equipment

We recognized a gain of $ 9.4 million and $ 7.5 million during the three months ended December 31, 2024 and 2023, 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 Gain on reimbursement of drilling equipment within our Unaudited Condensed Consolidated Statements of Operations.

We recognized gains of $ 10.0 million and $ 19.4 million during the three and six months ended March 31, 2025 as compared to $ 7.5 million and $ 15.0 million during the three and six months ended March 31, 2024, 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 of drilling equipment within our Unaudited Condensed Consolidated Statements of Operations.

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NOTE 5 GOODWILL AND INTANGIBLE ASSETS

Due to the Acquisition, we recognized increases to our goodwill and intangible assets balances as of March 31, 2025.

The goodwill and intangible assets recognized as a result of the Acquisition is considered preliminary.

The purchase price allocation may be subject to future adjustments due to the final valuation of acquired assets and assumed liabilities, working capital adjustments, and the valuation of deferred taxes.

The final valuation will be completed within the measurement period, no later than one year from the acquisition date, as allowed by ASC 805.

Management is also evaluating certain assumptions of assets acquired and liabilities assumed and may adjust the allocation and/or the weighted average useful lives in subsequent periods.

For additional information regarding the completion of the Acquisition, refer to Note 3—Business Combination.

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 months ended December 31, 2024, there were no additions or impairments to goodwill.

As of December 31, 2024 and September 30, 2024, the goodwill balance was $ 45.7 million .

The following table sets forth our goodwill balance by segment for the periods indicated:

(in thousands) North America Solutions International Solutions Offshore Solutions Other Total

Goodwill balance at September 30, 2024

$ 45,653 $ — $ — $ — $ 45,653

Acquisition of KCA Deutag 1

— 131,351 121,906 44,907 298,164

Goodwill balance at March 31, 2025

$ 45,653 $ 131,351 $ 121,906 $ 44,907 $ 343,817

(1) The allocation of goodwill is preliminary and may be updated as we continue to evaluate the benefits of expected commercial synergies to our segments.

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.

Our intangible assets are within our North America Solutions reportable segment and consist of the following:

December 31, 2024 September 30, 2024

After initial recognition, in-process research and development ("IPR&D") assets should be considered indefinite-lived until the abandonment or completion of the associated research and development effort.

Acquired IPR&D is not amortized, but they are subject to an annual impairment assessment.

Our intangible assets consist of the following:

March 31, 2025 September 30, 2024

(in thousands) Weighted Average Estimated Useful Lives Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net

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Developed technology 14 years $ 110,446 $ 43,319 $ 67,127 $ 89,096 $ 40,047 $ 49,049

Customer relationships

15 years 430,300 7,871 422,429 — — —

Intellectual property 13 years 2,000 741 1,259 2,000 662 1,338

Trade name 13 years 16,695 2,398 14,297 5,865 2,105 3,760

In-process research and development

6,183 — 6,183 — — —

Amortization expense in the Unaudited Condensed Consolidated Statements of Operations was $ 1.6 million for the three months ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and September 30, 2024, we had the following unsecured long-term debt outstanding with maturity shown in the following table:

December 31, 2024 September 30, 2024

$ 565,624 $ 54,329 $ 511,295 $ 96,961 $ 42,814 $ 54,147

Amortization expense in the Unaudited Condensed Consolidated Statements of Operations was $ 9.9 million and $ 1.6 million for the three months ended March 31, 2025 and 2024, respectively and $ 11.5 million and $ 3.2 million for the six months ended March 31, 2025 and 2024, respectively.

Over the next five years, amortization expense is estimated to be as follows:

(in thousands)

Remainder of 2025

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As of March 31, 2025 and September 30, 2024, we have the following long-term debt outstanding with maturity shown in the following table:

March 31, 2025 September 30, 2024

(in thousands) Face Amount Unamortized Discount and Debt Issuance Cost Book Value Face Amount Unamortized Discount and Debt Issuance Cost Book Value

7 unchanged sentences

550,000 ( 7,080 ) 542,920 550,000 ( 6,946 ) 543,054

Long-term debt $ 1,800,000 $ ( 18,326 ) $ 1,781,674 $ 1,800,000 $ ( 17,818 ) $ 1,782,182

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Total unsecured senior notes

$ 1,800,000 $ ( 17,620 ) $ 1,782,380 $ 1,800,000 $ ( 17,818 ) $ 1,782,182

Unsecured term loan credit agreement:

Due January 15, 2027

375,000 ( 1,362 ) 373,638 — — —

Secured term loan credit agreements:

Due December 31, 2033

41,505 ( 942 ) 40,563 — — —

Due December 31, 2034

44,802 ( 1,009 ) 43,793 — — —

Total secured term loan credit agreements

$ 86,307 $ ( 1,951 ) $ 84,356 $ — $ — $ —

$ 2,261,307 $ ( 20,933 ) $ 2,240,374 $ 1,800,000 $ ( 17,818 ) $ 1,782,182

current portion of long-term debt

( 6,755 ) — ( 6,755 ) — — —

Total long-term debt

$ 2,254,552 $ ( 20,933 ) $ 2,233,619 $ 1,800,000 $ ( 17,818 ) $ 1,782,182

Senior Notes Issued in Fiscal Year 2024

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On January 16, 2025, H&P completed the Acquisition, and the Company used the net proceeds of the Notes, together with the proceeds of its term loan credit agreement (discussed below) and cash on hand, to finance the purchase price for the Acquisition, to repay or redeem certain of KCA Deutag’s outstanding indebtedness, and to pay related fees and expenses.

For additional information regarding the completion of the Acquisition, refer to Note 14—Subsequent Events.

For additional information regarding the completion of the Acquisition, refer to Note 3—Business Combination.

The net proceeds reduced the commitments under the Company’s Bridge Loan Facility (discussed herein) for purposes of financing the Acquisition.

5 unchanged sentences

If, among other events, the Registered Exchange Offer is not completed by the Exchange Offer Closing Deadline, then special additional interest will accrue in an amount equal to 0.25 percent per annum of the principal amount of the Notes, from and including the date on which such default shall occur to but excluding the date on which such default is cured.

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The indenture governing the Notes contains certain covenants that, among other things, limit the ability of the Company and its subsidiaries to incur certain liens;

3 unchanged sentences

Senior Notes Issued in Fiscal Year 2021

On September 29, 2021, we issued $ 550.0 million aggregate principal amount of the 2.90 percent senior notes due 2031 ("the 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 and to certain non-U.S.

persons in transactions outside the United States pursuant to Regulation S under the Securities Act.

7 unchanged sentences

Term Loan Credit Agreement

On August 14, 2024, the Company entered into a unsecured term loan credit agreement (the "Term Loan Credit Agreement"), dated as of August 14, 2024, among the Company, Morgan Stanley Senior Funding, Inc.

On August 14, 2024, the Company entered into an unsecured term loan credit agreement (the "Term Loan Credit Agreement"), dated as of August 14, 2024, among the Company, Morgan Stanley Senior Funding, Inc.

(“MSSF”) as administrative agent, and the other lenders party thereto.

Under the Term Loan Credit Agreement, the Company may obtain unsecured term loans in a single delayed draw in an aggregate principal amount up to $ 400.0 million, which reduced the commitments under the Company's Bridge Loan Facility (discussed herein) for purposes of financing the Acquisition.

On the Closing Date, the Company drew an aggregate principal amount of $ 400.0 million, under the Term Loan Credit Agreement for purposes of financing the Acquisition.

The Term Loan Credit Agreement matures at the two -year anniversary of the funding of the term loans unless earlier terminated pursuant to the terms of the Term Loan Credit Agreement.

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On January 16, 2025, H&P completed the Acquisition, and the Company used the proceeds from the Term Loan Credit Agreement, together with the net proceeds from the Notes, and cash on hand, to finance the purchase price for the Acquisition, to repay or redeem certain of KCA Deutag's outstanding indebtedness, and to pay related fees and expenses.

For additional information regarding the completion of the Acquisition, refer to Note 3—Business Combination.

During the three months ended March 31, 2025, the Company repaid $ 25.0 million of the outstanding balance on the Term Loan Credit Agreement.

As such, the outstanding balance as of March 31, 2025, was $ 375.0 million .

The benchmark rate is the Secured Overnight Financing Rate ("SOFR").

6 unchanged sentences

Commitment fees for both rates range from 0.10 percent to 0.250 percent per annum.

Based on the unsecured debt rating of the Company on December 31, 2024 , the spread over SOFR would have been 1.375 percent had borrowings been outstanding under the Term Loan Credit Agreement and commitment fees would have been 0.175 percent.

The funding of the term loans had not occurred as of December 31, 2024.

On January 16, 2025, H&P completed the Acquisition, and the Company used the proceeds from the Term Loan Credit Agreement, together with the net proceeds from the sale of the Notes and cash on hand, to finance the purchase price for the Acquisition, to repay or redeem certain of KCA Deutag's outstanding indebtedness, and to pay related fees and expenses.

For additional information regarding the completion of the Acquisition, refer to Note 14—Subsequent Events.

Based on the unsecured debt rating of the Company on March 31, 2025, the spread over SOFR was 1.375 percent and commitment fees were 0.175 percent.

As of March 31, 2025 , the interest rate on the Term Loan was 5.660 percent per annum.

The weighted average variable interest rate on all amounts outstanding under the Term Loan was 5.659 percent for the three months ended March 31, 2025 .

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Bridge Loan Facility

2 unchanged sentences

Due to the execution of the other financing arrangements discussed above, the commitments under the Bridge Loan Facility were reduced to $ 335.3 million as of September 30, 2024.

As a result, we recognized approximately $ 9.2 million of commitment fees within Interest expense on the Consolidated Statement of Operations during fiscal year 2024.

As a result, we recognized approximately $ 9.2 million of commitment fees recorded within Interest expense on the Consolidated Statement of Operations during fiscal year 2024.

As of September 30, 2024, approximately $ 1.4 million in commitment fees were deferred and included in Prepaid assets and other, net within the Consolidated Balance Sheet.

On October 15, 2024, the remaining commitments under the Bridge Loan Facility were reduced such that there were no remaining commitments available, and the Bridge Loan Facility was automatically terminated in accordance with its terms.

Upon termination of the facility, we recognized the remaining $ 1.4 million of commitment fees within Interest expense on the Unaudited Condensed Consolidated Statement of Operations during the three months ended December 31, 2024.

Revolving Credit Facility

2024 Oman Facility

In connection with the completion of the Acquisition, KCA Deutag Energy LLC (“KCAD Energy”) became a wholly-owned subsidiary of the Company.

On April 25, 2024, KCAD Energy entered into the 2024 Oman Facility, which is fully drawn.

The 2024 Oman Facility provides for term loan borrowings of $ 45.5 million, which bear interest payable quarterly at a fixed rate of 7.00 percent per annum for the first two years and thereafter, at a rate that is the higher of (x) 5.50 percent and (y) the reference rate specified in the 2024 Oman Facility plus 2.60 percent.

During the three months ended March 31, 2025, the Company received the final draw down of $ 1.4 million and repaid $ 0.9 million of the outstanding balance on the facility.

Of the $ 44.8 million borrowings outstanding at March 31, 2025, a total of $ 3.4 million is payable within one year.

These secured bank loans are wholly denominated in Omani rial.

The value of these borrowings in Omani rial is OMR 17.6 million.

The commitments under the 2024 Oman Facility mature December 31, 2034.

There is an annual financial covenant in the 2024 Oman Facility that requires KCAD Energy to maintain a debt service coverage ratio of at least 1.20 :1.00.

The 2024 Oman Facility and related agreements contain additional terms, conditions, restrictions and covenants that we believe are usual and customary in secured debt arrangements for companies of similar size and credit quality.

2023 Oman Facility

In connection with the completion of the Acquisition, KCAD Energy became a wholly-owned subsidiary of the Company.

On June 19, 2023, KCAD Energy entered into the 2023 Oman Facility, which is fully drawn.

The 2023 Oman Facility provides for term loan borrowings of $ 45.6 million, which bear interest payable quarterly at a fixed rate of 6.25 percent per annum for the first two years and thereafter, at a rate that is the higher of (x) 5.50 percent and (y) the reference rate specified in the 2023 Oman Facility plus 2.79 percent.

During the three months ended March 31, 2025, the Company repaid $ 0.9 million of the outstanding balance on the facility.

Of the $ 41.5 million borrowings outstanding at March 31, 2025, a total of $ 3.4 million is payable within one year.

These secured bank loans are wholly denominated in Omani rial.

The value of these borrowings in Omani rial is OMR 17.6 million.

The commitments under the 2023 Oman Facility mature December 31, 2033.

There is an annual financial covenant in the 2023 Oman Facility that requires KCAD Energy to maintain a debt service coverage ratio of at least 1.20 :1.00.

The 2023 Oman Facility and related agreements contain additional terms, conditions, restrictions and covenants that we believe are usual and customary in secured debt arrangements for companies of similar size and credit quality.

Amended Credit Facility

On August 14, 2024, the Company entered into an Amended and Restated Credit Agreement (the "Amended Credit Facility") with the lenders party thereto (the "Revolving Credit Agreement Lenders"), the issuing lenders party thereto and Wells Fargo, National Association ("Wells Fargo") as administrative agent, swing line lender and issuing lender, which amended and restated the Credit Agreement, dated as of November 13, 2018 (as amended through Amendment No.

2 to the Credit Agreement dated as of March 8, 2022, the “Existing Credit Agreement”), among the Company, the lenders party thereto and Wells Fargo, as administrative agent, swing line lender and issuing lender.

Under the terms of the Amended Credit Facility, the Company may obtain unsecured revolving loans in an aggregate principal amount not to exceed $ 950.0 million outstanding at any time (the “Revolving Credit Facility”).

$ 775.0 million of the revolving commitments under the Amended Credit Facility expire on November 12, 2028 and $ 175.0 million of the revolving commitments mature on November 10, 2027 (the “Stated Maturity Date”), but the Company may request two one-year extensions of the Stated Maturity Date, subject to satisfaction of certain conditions.

Under the terms of the Amended Credit Facility, the Company may obtain unsecured revolving loans in an aggregate principal amount not to exceed $ 950.0 million outstanding at any time.

$ 775.0 million of the revolving commitments under the Amended Credit Facility expire on November 12, 2028 and $ 175.0 million of the revolving commitments mature on November 10, 2027 (the “Stated Maturity Date”), but the Company may request two one -year extensions of the Stated Maturity Date, subject to

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satisfaction of certain conditions.

Commitments under the Amended Credit Facility may be increased by up to $ 100.0 million, subject to the agreement of the Company and new or existing Revolving Credit Agreement Lenders.

The proceeds of the loans made under the Amended Credit Facility may be used by the Company for (i) working capital and other general corporate purposes, (ii) for the payment of fees and expenses related to the entering into of the Amended Credit Facility and the other credit documents and (iii) for the refinancing of the extensions of credit under the Existing Credit Agreement.

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The benchmark rate is the SOFR.

6 unchanged sentences

Commitment fees for both rates range from 0.075 percent to 0.200 percent per annum.

Based on the unsecured debt rating of the Company on December 31, 2024, the spread over SOFR would have been 1.250 percent had borrowings been outstanding under the Amended Credit Facility and commitment fees would have been 0.150 percent.

Based on the unsecured debt rating of the Company on March 31, 2025, the spread over SOFR would have been 1.25 percent had borrowings been outstanding under the Amended Credit Facility and commitment fees would have been 0.15 percent.

There is a financial covenant in the Amended Credit Facility that requires us to maintain a total funded debt to total capitalization ratio of less than or equal to 55.0 percent.

The Amended Credit Facility contains additional terms, conditions, restrictions and covenants that we believe are usual and customary in unsecured debt arrangements for companies of similar size and credit quality, including a limitation that priority debt (as defined in the credit agreement) may not exceed 17.5 percent of the net worth of the Company.

As of December 31, 2024, there were no borrowings or letters of credit outstanding, leaving $ 950.0 million available to borrow under the Amended Credit Facility.

As of December 31, 2024, we had $ 160.0 million in uncommitted bilateral credit facilities, for the purpose of obtaining the issuance of international letters of credit, bank guarantees, and performance bonds.

Of the $ 160.0 million, $ 47.2 million was outstanding as of December 31, 2024.

As of March 31, 2025, there were no borrowings or letters of credit outstanding, leaving $ 950.0 million available to borrow under the Amended Credit Facility.

As of March 31, 2025, we had $ 375.0 million in uncommitted bilateral credit facilities, for the purpose of obtaining the issuance of international letters of credit, bank guarantees, and performance bonds.

Of the $ 375.0 million, $ 153.4 million was outstanding as of March 31, 2025.

Separately, we had $ 47.1 million in standby letters of credit and bank guarantees outstanding.

In total, we had $ 52.2 million outstanding as of December 31, 2024.

In total, we had $ 200.5 million outstanding as of March 31, 2025.

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 December 31, 2024, we were in compliance with all debt covenants.

At March 31, 2025, we were in compliance with all debt covenants.

NOTE 7 INCOME TAXES

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Adjustments to the effective tax rate and estimates could occur during the year as information and assumptions change 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 from continuing operations for the three months ended December 31, 2024 and 2023 was $ 21.6 million and $ 30.1 million, respectively, resulting in effective tax rates of 28.3 percent and 24.0 percent, respectively.

Our income tax expense for the three months ended March 31, 2025 and 2024 was $ 41.5 million and $ 32.2 million, respectively, resulting in effective tax rates of 93.3 percent and 27.5 percent, respectively.

Our income tax expense for the six months ended March 31, 2025 and 2024 was $ 63.1 million and $ 62.3 million , respectively, resulting in effective tax rates of 52.2 percent and 25.7 percent , respectively.

Effective tax rates differ from the U.S.

federal statutory rate of 21.0 percent for the three months ended December 31, 2024 and 2023 primarily due to state and foreign income taxes, permanent non-deductible items, and discrete adjustments.

The discrete adjustments for the three months ended December 31, 2024 and 2023 are primarily due to tax expense (benefit) related to equity compensation of $ 0.7 million and $( 0.9 ) million, respectively.

As of December 31, 2024, we have recorded unrecognized tax benefits and related interest and penalties of approximately $ 0.6 million.

We cannot predict with certainty if we will achieve ultimate resolution of any additional uncertain tax positions associated with our U.S.

and international operations resulting in any additional material increases or decreases of our unrecognized tax benefits for the next twelve months.

federal statutory rate of 21.0 percent for the three and six months ended March 31, 2025, primarily due to state and foreign income taxes, permanent non-deductible items, and foreign losses for which no tax benefit has been recognized.

Additionally, the effective tax rate for the six months ended March 31, 2025 differs from U.S.

federal statutory rate of 21.0 percent primarily due to a discrete tax expense of $ 0.7 million related to equity compensation.

Effective tax rates differ from the U.S.

federal statutory rate of 21.0 percent for the three and six months ended March 31, 2024 primarily due to state and foreign income taxes, and permanent non-deductible items.

Additionally, the effective tax rate for the six months ended March 31, 2024 differ from the U.S.

federal statutory rate of 21.0 percent primarily due to a discrete tax benefit of $ 0.9 million related to equity compensation.

NOTE 8 SHAREHOLDERS’ EQUITY

The Company has an evergreen authorization from the Board of Directors ("the Board") for the repurchase of up to four million common shares in any calendar year.

The repurchases are made using our cash and cash equivalents or other available sources and are held as treasury shares on our Unaudited Condensed Consolidated Balance Sheets.

We did not make any share repurchases during the three months ended December 31, 2024.

We repurchased 1.3 million common shares at an aggregate cost of $ 47.7 million, including excise tax of $ 0.3 million during the three months ended December 31, 2023.

A cash dividend of $ 0.25 per share was declared on December 11, 2024 for shareholders of record on February 14, 2025, payable on February 28, 2025.

As a result, we recorded a Dividend payable of $ 25.2 million on our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2024.

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.

The repurchases may be made using our cash and cash equivalents or other available sources and are held as treasury shares on our Unaudited Condensed Consolidated Balance Sheets.

We did not make any share repurchases during the three or six months ended March 31, 2025.

During the three and six months ended March 31, 2024, we repurchased 0.1 million and 1.4 million common shares at an aggregate cost of $ 4.0 million and $ 51.6 million, respectively, including excise tax of $ 0.3 million during the six months ended March 31, 2024.

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Accumulated Other Comprehensive Loss

Components of accumulated other comprehensive loss were as follows:

December 31, September 30,

A cash dividend of $ 0.25 per share was declared on March 6, 2025 for shareholders of record on May 15, 2025, payable on May 30, 2025.

As a result, we recorded a Dividend payable of $ 25.2 million on our Unaudited Condensed Consolidated Balance Sheets as of March 31, 2025.

Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) were as follows:

March 31, September 30,

(in thousands) 2025 2024

Pre-tax amounts:

Unrealized pension actuarial loss $ ( 7,563 ) $ ( 7,632 )

Unrealized loss on available-for-sale debt security

Unrealized pension actuarial loss on U.S.

$ ( 7,494 ) $ ( 7,632 )

Unrealized gain (loss) on available-for-sale debt securities

Unrealized gain on foreign currency translation adjustment

$ 36 $ ( 8,294 )

After-tax amounts:

Unrealized pension actuarial loss $ ( 5,784 ) $ ( 5,838 )

Unrealized loss on available-for-sale debt security

Unrealized pension actuarial loss on U.S.

$ ( 5,731 ) $ ( 5,838 )

Unrealized gain (loss) on available-for-sale debt securities

Unrealized gain on foreign currency translation adjustment

$ 1,064 $ ( 6,350 )

Fluctuations in pension actuarial gains and losses are primarily due to changes in the discount rate and investment returns related to the defined benefit pension plan.

Investments classified as available-for-sale debt securities are reported at fair value with unrealized gains and losses excluded from net income and reported in other comprehensive income.

The following is a summary of the changes in accumulated other comprehensive loss, net of tax, for the three months ended December 31, 2024:

Three Months Ended December 31, 2024

(in thousands) Unrealized Loss on Available-for-Sale Securities

Defined Benefit Pension Plan Total

The following is a summary of the changes in accumulated other comprehensive loss, net of tax, for the three and six months ended March 31, 2025:

Three Months Ended March 31, 2025

(in thousands) Unrealized Gain (Loss) on Available-for-Sale Securities

Defined Benefit Pension Plan Foreign Currency

Translation Adjustment

Balance at beginning of period $ ( 203 ) $ ( 5,784 ) $ — $ ( 5,987 )

Other comprehensive income before reclassifications 591 — 6,407 6,998

Amounts reclassified from accumulated other comprehensive loss

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive income

Balance at December 31 $ ( 203 ) $ ( 5,784 ) $ ( 5,987 )

591 53 6,407 7,051

Balance at March 31 2025 $ 388 $ ( 5,731 ) $ 6,407 $ 1,064

Six Months Ended March 31, 2025

(in thousands) Unrealized Gain (Loss) on Available-for-Sale Securities

Defined Benefit Pension Plan Foreign Currency

Translation Adjustment Total

Balance at beginning of period $ ( 512 ) $ ( 5,838 ) $ — $ ( 6,350 )

Other comprehensive income before reclassifications 900 — 6,407 7,307

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive income 900 107 6,407 7,414

Balance at March 31 2025 $ 388 $ ( 5,731 ) $ 6,407 $ 1,064

Q2 FY25 FORM 10-Q | 23

NOTE 9 REVENUE FROM CONTRACTS WITH CUSTOMERS

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The variable consideration that we expect to receive is estimated at the most likely amount, and constrained to an amount such that it is probable a significant reversal of revenue previously recognized will not occur based on the performance targets.

Total revenue recognized from performance contracts, including performance bonuses, was $ 305.8 million and $ 298.2 million, of which $ 16.9 million and $ 15.2 million was related to performance bonuses recognized due to the achievement of performance targets during the three months ended December 31, 2024 and 2023, respectively.

Q1 FY25 FORM 10-Q | 17

Contracts generally contain renewal or extension provisions exercisable at the option of the customer at prices mutually agreeable to us and the customer.

For contracts that are terminated by customers prior to the expiration of their fixed terms, contractual provisions customarily require early termination amounts to be paid to us.

Revenues from early terminated contracts are recognized when all contractual requirements have been met.

During the three months ended December 31, 2024 and 2023 , early termination revenue associated with term contracts was $ 1.4 million and $ 5.4 million, respectively.

Total revenue recognized from performance contracts, including performance bonuses, was $ 325.8 million and $ 631.6 million, of which $ 17.0 million and $ 33.9 million was related to performance bonuses recognized due to the achievement of performance targets during the three and six months ended March 31, 2025 , respectively.

Total revenue recognized from performance contracts, including performance bonuses, was $ 287.8 million and $ 586.0 million, of which $ 10.4 million and $ 25.6 million was related to performance bonuses recognized due to the achievement of performance targets during the three and six months ended March 31, 2024 , respectively.

Contract Costs

As of December 31, 2024 and September 30, 2024, we had capitalized fulfillment costs of $ 29.9 million and $ 19.2 million, respectively.

As of March 31, 2025 and September 30, 2024, we had capitalized fulfillment costs of $ 34.7 million and $ 19.2 million, respectively.

Remaining Performance Obligations

The total aggregate transaction price allocated to the unsatisfied performance obligations, commonly referred to as backlog, as of December 31, 2024 was approximately $ 1.5 billion, of which approximately $ 0.8 billion is expected to be recognized during the remainder of fiscal year 2025, approximately $ 0.7 billion during fiscal year 2026 and thereafter.

The total aggregate transaction price allocated to the unsatisfied performance obligations, commonly referred to as backlog, as of March 31, 2025 was approximately $ 5.5 billion, of which approximately $ 1.0 billion is expected to be recognized during the remainder of fiscal year 2025, approximately $ 4.5 billion during fiscal year 2026 and thereafter.

The backlog figure includes $ 4.2 billion attributed to our recently acquired subsidiary, KCA Deutag International Limited.

These amounts do not include anticipated contract renewals or expected performance bonuses as part of its calculation.

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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.

The agreements within our recently acquired subsidiary, KCA Deutag International, contain provisions for optional early termination or suspension without any associated early termination fee and could cause the actual amount of revenue earned to significantly vary from the backlog reported.

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:

(in thousands) December 31, 2024 September 30, 2024

(in thousands) March 31, 2025 September 30, 2024

Contract assets, net $ 9,970 $ 4,563

(in thousands) December 31, 2024

(in thousands) March 31, 2025

Contract liabilities balance at September 30, 2024

Acquisition of KCA Deutag 1

Payment received/accrued and deferred

Revenue recognized during the period ( 42,096 )

Contract liabilities balance at December 31, 2024

NOTE 9 ACQUISITION TRANSACTION COSTS

During the three months ended December 31, 2024, we recognized approximately $ 10.5 million in acquisition transaction costs associated with the Acquisition.

These non-recurring costs are primarily related to third-party legal, consulting and advisory services and are included in Acquisition transaction costs on the Unaudited Condensed Consolidated Statements of Operations.

Contract liabilities balance at March 31, 2025

(1) Contract liabilities acquired in the KCA Deutag Acquisition were measured at fair value at the acquisition date.

Refer to Note 3—Business Combination for additional information regarding the Acquisition.

Q2 FY25 FORM 10-Q | 24

NOTE 10 EARNINGS PER COMMON SHARE

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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.

Q1 FY25 FORM 10-Q | 18

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

Three Months Ended

March 31, Six Months Ended

(in thousands, except per share amounts) 2025 2024 2025 2024

Net income $ 54,772 $ 95,173

Net income attributable to common shareholders

$ 1,654 $ 84,831 $ 56,426 $ 180,004

Adjustment for basic earnings per share

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Three Months Ended

March 31, Six Months Ended

(in thousands, except per share amounts) 2025 2024 2025 2024

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Weighted-average price per share $ 48.45 $ 57.93 $ 56.82 $ 60.63

Q2 FY25 FORM 10-Q | 25

NOTE 11 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

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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.

Q1 FY25 FORM 10-Q | 19

Fair Value Measurements

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

December 31, 2024

March 31, 2025

(in thousands) Fair Value Level 1 Level 2 Level 3

Short-term investments:

Money market mutual funds $ 72,305 $ 72,305 $ — $ —

Corporate and municipal debt securities $ 18,326 $ — $ 18,326 $ —

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Investment in Tamboran 23,052 23,052 — —

Other equity securities

1,519 1,519 — —

Debt securities:

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Total 86,307 45,278 — 41,029

As of December 31, 2024, our equity security investments in geothermal energy were $ 26.2 million, of which $ 0.5 million was measured at fair value as of December 31, 2024.

As of March 31, 2025, our equity security investments in geothermal energy were $ 40.6 million, of which $ 35.1 million was measured at fair value as of March 31, 2025.

The remaining $ 5.5 million is measured at cost, less any impairments.

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These investments are measured at cost, less any impairments.

Q2 FY25 FORM 10-Q | 26

September 30, 2024

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These investments are measured at cost, less any impairments.

Q1 FY25 FORM 10-Q | 20

Recurring Fair Value Measurements

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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.

During September 2024, the three-year lockup period expired and the balance was reclassified to Short-term investments on our Unaudited Condensed Consolidated Balance Sheet.

During the three months ended December 31, 2024, we sold our equity securities of 159.7 million shares in ADNOC Drilling and received net proceeds of approximately $ 193.3 million.

During the three months ended December 31, 2024, we recognized a loss of $ 12.4 million on our Unaudited Condensed Consolidated Statements of Operations, related to this investment, of which $ 8.4 million is associated with the change in the fair value of the investment and $ 4.0 million relates to transaction fees associated with the sale of the securities.

During the three months ended December 31, 2023, we recognized a loss of $ 10.4 million on our Unaudited Condensed Consolidated Statements of Operations as a result of the change in fair value of the investment.

This investment was classified as a Level 1 investment based on the quoted stock price on the Abu Dhabi Securities Exchange, and was measured at fair value with any losses recorded within Loss on investment securities on our Unaudited Condensed Consolidated Statements of Operations.

During September 2024, the three-year lockup period expired and the balance was reclassified to Short-term investments on our Consolidated Balance Sheets.

During the six months ended March 31, 2025, we sold our equity securities of 159.7 million shares in ADNOC Drilling and received net proceeds of approximately $ 193.3 million.

During the six months ended March 31, 2025, we recognized a loss of $ 12.4 million on our Unaudited Condensed Consolidated Statements of Operations, related to this investment, of which $ 8.4 million is associated with the change in fair value of the investment and $ 4.0 million relates to transaction fee associated with the sale of the securities.

During the three and six months ended March 31, 2024, we recognized a gain (loss) of $ 8.3 million and $( 2.1 ) million, respectively, as a result of the change in fair value of the investment.

This investment was classified as a Level 1 investment based on the quoted stock price on the Abu Dhabi Securities Exchange, and was measured at fair value with any gains or losses recorded within Gain (loss) on investment securities on our Unaudited Condensed Consolidated Statements of Operations.

Long-term Investments

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Our assets that we hold in the Savings Plan are comprised of mutual funds that are measured using Level 1 inputs.

Q2 FY25 FORM 10-Q | 27

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 Resources.

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The convertible note agreement provided that the notes converted into shares of common stock of Tamboran Corp.

under certain circumstances in connection with an initial public offering in which its stock was listed on the New York Stock Exchange ("NYSE") or NASDAQ Stock Exchange.

under certain circumstances in connection with an initial public offering in which its stock was listed on the NYSE or NASDAQ Stock Exchange.

On June 26, 2024, Tamboran Corp.

completed an initial public offering of its common stock on the NYSE and its common stock is listed on the NYSE, under the ticker "TBN".

As a result of this offering, the convertible note of $ 9.4 million was converted into 0.5 million common shares in Tamboran Corp.

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 and recorded within Loss on investment securities on our Unaudited Condensed Consolidated Statements of Operations.

Our shares received in this initial public offering were subject to a 180 -day lockup period.

As a result of this offering, the convertible note of $ 9.4 million was converted into 0.5 million common shares of Tamboran Corp.

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 and recorded within Gain (loss) on investment securities on our Unaudited Condensed Consolidated Statements of Operations.

Our shares received in this initial public offering are subject to a 180 -day lockup period.

We believe we have a significant influence, but not control or joint control over the investee, due to several factors, including our ownership percentage, operational involvement and role on the investee's board of directors.

As of December 31, 2024, our combined equity ownership was approximately 7.2 percent representing 1.0 million common shares in Tamboran Corp.

As of March 31, 2025, our combined equity ownership was approximately 7.2 percent representing 1.0 million common shares in Tamboran Corp.

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.

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 months ended December 31, 2024 and 2023 , we recognized a gain (loss) of $( 1.1 ) million and $ 6.3 million, respectively, recorded within Loss on investment securities on our Unaudited Condensed Consolidated Statements of Operations, as a result of the change in fair value of the investment.

Q1 FY25 FORM 10-Q | 21

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 notes with an option to convert into common shares of the parent of Galileo Holdco 2 ("Galileo parent").

During the three and six months ended March 31, 2025, we recognized gains of $ 3.2 million and $ 2.1 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 compared to a gain (loss) of $( 4.5 ) million and $ 1.8 million during the three and six months ended March 31, 2024, respectively.

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).

The convertible note bears interest at 5.0 percent per annum with a maturity date 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).

During the fiscal year ended September 30, 2023, our convertible note agreement was amended to include any interest which has accrued but not yet compounded or issued as a note.

As a result, we include accrued interest in our total investment balance.

During the six months ended March 31, 2025, our convertible note agreement was amended to extend the maturity date to the earlier of December 2027 or an exit event.

The convertible note will continue to bear interest through the extended maturity date.

We do not intend to sell this investment prior to its maturity date or an exit event.

As of December 31, 2024 and September 30, 2024, our net debt security investment in Galileo was $ 27.5 million and $ 27.0 million, respectively.

The significant unobservable inputs related to the valuation of our debt security investment with Galileo are subject to change based on changes in economic and market conditions.

During three months ended March 31, 2025, as a result of the change in fair value of the investment, we recorded a gain of $ 10.2 million within Gain (loss) on investment securities on our Unaudited Condensed Consolidated Statements of Operations and $ 0.7 million within other comprehensive income, respectively.

The following table provides quantitative information (in thousands) about our Level 3 unobservable significant inputs related to our debt security investment with Galileo at the dates included below:

March 31, 2025

(in thousands)

Valuation Technique Unobservable Inputs

$ 38,779 Black-Scholes-Merton model Discount rate 17.5 %

Risk-free rate 4.0 %

Equity volatility 95.0 %

September 30, 2024

(in thousands)

Valuation Technique Unobservable Inputs

$ 27,044 Black-Scholes-Merton model Discount rate 18.7 %

Risk-free rate 3.5 %

Equity volatility 66.0 %

Q2 FY25 FORM 10-Q | 28

The above significant unobservable inputs are subject to change based on changes in economic and market conditions.

The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date.

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It is not possible for us to predict the effect of future economic or market conditions on our estimated fair values.

During the three months ended December 31, 2024, there were no changes to the Level 3 unobservable significant inputs.

A majority of our long-term debt securities, including our investment in Galileo, are classified as available-for-sale and are measured using Level 3 unobservable inputs based on the absence of market activity.

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Three Months Ended

March 31, Six Months Ended

(in thousands) 2025 2024 2025 2024

Assets at beginning of period $ 29,749 $ 37,868 $ 29,294 $ 37,440

Purchases — 250 — 250

Accrued interest 455 433 910 866

Total losses:

Included in earnings

10,162 — 10,162 ( 5 )

Included in other comprehensive income

Assets at end of period $ 41,029 $ 38,551 $ 41,029 $ 38,551

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Three Months Ended

March 31, Six Months Ended

(in millions) 2025 2024 2025 2024

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Purchases 288 2,245 934 2,536

— ( 616 ) — ( 616 )

Included in earnings 1

14,386 — 14,495 —

Assets at end of period $ 45,519 $ 30,152 $ 45,519 $ 30,152

Q1 FY25 FORM 10-Q | 22

(1) The gain recorded during the three months ended March 31, 2025 was attributable to the change in fair value of various geothermal equity investments as a result of observable price changes in identical or similar investments during the period.

Other Financial Instruments

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Government and in federally insured deposit accounts.

The carrying value of accounts receivable, other current and noncurrent assets, accounts payable, accrued liabilities and other liabilities approximated fair value at December 31, 2024 and September 30, 2024.

The following information presents the supplemental fair value information for our long-term fixed-rate debt at December 31, 2024 and September 30, 2024:

December 31, September 30,

(in millions) 2024 2024

Long-term debt, net

Carrying value 1,781.7 1,782.2

Fair value 1,666.5 1,702.9

The fair values of the long-term fixed-rate debt is based on broker quotes at December 31, 2024 and September 30, 2024.

The carrying value of accounts receivable, other current and noncurrent assets, accounts payable, accrued liabilities and other liabilities approximated fair value at March 31, 2025 and September 30, 2024.

Q2 FY25 FORM 10-Q | 29

The fair values of the long-term fixed-rate debt is based on broker quotes at March 31, 2025 and September 30, 2024.

The notes are classified within Level 2 of the fair value hierarchy as they are not actively traded in markets.

The following information presents the supplemental fair value information for our long-term fixed-rate debt at March 31, 2025 and September 30, 2024:

Carrying Value at March 31, 2025

Fair Value at March 31, 2025

Using Inputs Considered as:

(in thousands)

Unsecured senior notes:

2027 Notes $ 343,806 $ — $ 348,887 $ —

2029 Notes 346,244 — 340,291 —

2031 Notes 546,037 — 464,992 —

2034 Notes 542,920 — 522,126 —

Unsecured term loan credit agreement:

2027 Term Loan

373,639 — 373,808 —

Secured term loan credit agreements:

2023 Oman Facility 1

40,563 — — 40,563

2024 Oman Facility 1

40,410 — — 40,410

Total long-term debt

$ 2,233,619 $ — $ 2,050,104 $ 80,973

(1) The secured term credit agreements are classified as nonpublic debt, meaning their value was directly negotiated between the involved parties and is not observable in the market.

As a result, they are categorized as Level 3.

Since this debt is nonpublic, the carrying value and the fair value of the loans are identical.

Carrying Value at September 30, 2024

Fair Value at September 30, 2024

Using Inputs Considered as:

(in millions) Level 1

Unsecured senior notes:

$ 347,093 $ — $ 350,700 $ —

2029 Notes 346,297 — 345,100 —

545,738 — 471,350 —

543,054 — 535,700 —

Total long-term debt

$ 1,782,182 $ — $ 1,702,850 $ —

NOTE 12 EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plans

We maintain a domestic noncontributory defined benefit pension plan covering certain U.S.

employees who meet certain age and service requirements.

In July 2003, we revised the Helmerich & Payne, Inc.

Employee Retirement Plan (“U.S.

Plan”) to close the Pension Plan to new participants effective October 1, 2003, and reduce benefit accruals for current participants through September 30, 2006, at which time benefit accruals were discontinued and the Pension Plan was frozen.

In connection with the Acquisition, we now maintain pension plans in Germany and the UK (collectively, the "Non-U.S.

These plans have a net pension liability of $ 103.2 million ($ 136.4 million in obligations and $ 33.2 million in plan assets) as of the Acquisition Date.

Of the $ 103.2 million, $ 4.2 million is presented in Accrued liabilities within Current liabilities and $ 99.0 million is presented in Retirement benefit obligations within Noncurrent liabilities, on the opening balance sheet presented in Note 3—Business Combination.

In fiscal year 2025, we do not expect minimum contributions required by law to be needed.

However, we may make contributions in fiscal year 2025 if needed as benefit payments come due.

The Company recognizes the underfunded status of its defined benefit pension plans, based on the projected benefit obligation, as retirement benefit obligations.

Changes in the funded status are recognized in our Unaudited Condensed Consolidated Statements of Comprehensive Income in the period in which they occur.

Prior to March 31, 2025, Retirement benefit obligations were presented in Other within Noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets.

To conform with the current fiscal quarter presentation, we reclassified amounts previously presented in Other within Noncurrent liabilities to the Retirement benefit obligations line, within Noncurrent liabilities, on our Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024.

Q2 FY25 FORM 10-Q | 30

Components of the net periodic pension expense recognized in the Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2025 and 2024, respectively, is comprised of the following:

Three Months Ended

March 31, Three Months Ended

(in thousands) 2025 2024 2025

Service cost $ — $ — $ 964

Interest cost 657 754 1,582

Expected return on plan assets 2

( 573 ) ( 482 ) ( 554 )

Recognized net actuarial loss 69 174 —

Net pension expense $ 153 $ 446 $ 1,992

Six Months Ended

March 31, Six Months Ended

(in thousands) 2025 2024 2025

Service cost $ — $ — $ 964

Interest cost 1,314 1,508 1,582

Expected return on plan assets 2

( 1,146 ) ( 964 ) ( 554 )

Recognized net actuarial loss 138 348 —

Net pension expense $ 306 $ 892 $ 1,992

(1) The Company did not have Non-U.S.

Plans prior to the Acquisition which occurred on January 16, 2025.

(2) The Company uses the fair value of plan assets in determining the expected return on plan assets.

Service cost is included within Selling, general and administrative while all other components are recorded within Other income (expense) on the Unaudited Condensed Consolidated Statements of Operations.

NOTE 13 COMMITMENTS AND CONTINGENCIES

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Equipment, parts, and supplies are ordered in advance to promote efficient construction and capital improvement progress.

At December 31, 2024, we had purchase commitments for equipment, parts and supplies of approximately $ 129.6 million.

At March 31, 2025, we had outstanding purchase commitments for equipment, parts and supplies of approximately $ 213.7 million.

Guarantee Arrangements

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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.

Q2 FY25 FORM 10-Q | 31

The Company and its subsidiaries are parties to various other pending legal actions arising in the ordinary course of our business.

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We disclose contingencies where an adverse outcome may be material, or in the judgment of management, we conclude the matter should otherwise be disclosed.

Q1 FY25 FORM 10-Q | 23

NOTE 14 BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Description of the Business

During the second quarter of fiscal year 2025, the naming convention for one of our reportable segments changed from Offshore Gulf of Mexico to Offshore Solutions.

Beginning on the Closing Date, Offshore Solutions now includes the results from the acquired KCA Deutag offshore management contract operations.

Similarly, our International Solutions segment now includes the results from the acquired KCA Deutag land operations.

Operating results related to KCA Deutag's Kenera business unit are included in "Other" along with results from our real estate operations and our wholly-owned captive insurance companies.

Our North America Solutions operating segment remains unchanged.

For additional information regarding the completion of the Acquisition, refer to Note 3—Business Combination.

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, the Middle East and Australia.

onshore oil and gas producing basins as well as the Middle East, Europe, Latin America, and Australia.

Our drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies.

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Our drilling services operations are organized into the following reportable operating business segments:

North America Solutions, International Solutions, and Offshore Gulf of Mexico.

North America Solutions, International Solutions, and Offshore Solutions.

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 and our wholly-owned captive insurance companies are included in "Other." External revenues included in “Other” primarily consist of rental income.

External revenues included in “Other” primarily consist of rental, manufacturing and engineering services income.

Segment Performance

We evaluate segment performance based on income, segment operating income (loss) before income taxes which includes:

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

• Revenues from external and internal customers

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• Allocated general and administrative expenses

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

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 acquisition transactions costs.

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 months ended December 31, 2024 and 2023 is shown in the following tables:

Three Months Ended December 31, 2024

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

Summarized financial information of our reportable segments for the three and six months ended March 31, 2025 and 2024 is shown in the following tables:

Three Months Ended March 31, 2025

(in thousands) North America Solutions International Solutions Offshore Solutions Other Eliminations Total

External sales $ 599,451 $ 247,740 $ 149,080 $ 19,768 $ 1,016,039

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$ 151,943 $ ( 34,983 ) $ 17,375 $ ( 1,375 ) $ ( 8,463 ) $ 124,497

Three Months Ended December 31, 2023

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

Q2 FY25 FORM 10-Q | 32

Three Months Ended March 31, 2024

(in thousands) North America Solutions International Solutions Offshore Solutions Other Eliminations Total

External sales $ 613,339 $ 45,878 $ 25,913 $ 2,813 $ — $ 687,943

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$ 147,224 $ 4,070 $ 78 $ 2,785 $ ( 772 ) $ 153,385

Q1 FY25 FORM 10-Q | 24

Six Months Ended March 31, 2025

(in thousands) North America Solutions International Solutions Offshore Solutions Other Eliminations Total

External sales $ 1,197,374 $ 295,220 $ 178,290 $ 22,457 $ — $ 1,693,341

Intersegment 465 169 — 42,349 ( 42,983 ) —

Total sales 1,197,839 295,389 178,290 64,806 ( 42,983 ) 1,693,341

Segment operating income (loss)

$ 304,154 $ ( 49,467 ) $ 20,880 $ ( 601 ) $ ( 8,361 ) $ 266,605

Six Months Ended March 31, 2024

(in thousands) North America Solutions International Solutions Offshore Solutions Other Eliminations Total

External sales $ 1,207,621 $ 100,630 $ 51,444 $ 5,395 $ — $ 1,365,090

Intersegment — — — 30,972 ( 30,972 ) —

Total sales 1,207,621 100,630 51,444 36,367 ( 30,972 ) 1,365,090

Segment operating income (loss)

$ 291,623 $ 11,354 $ 3,130 $ 2,718 $ ( 438 ) $ 308,387

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

Three Months Ended

March 31, Six Months Ended

(in thousands) 2025 2024 2025 2024

Segment operating income $ 124,497 $ 153,385 $ 266,605 $ 308,387

Acquisition transaction costs ( 10,535 ) —

Gain on reimbursement of drilling equipment 9,973 7,461 19,376 14,955

Other gain (loss) on sale of assets 884 ( 2,431 ) ( 789 ) 12

Corporate selling, general and administrative costs and corporate depreciation ( 48,417 ) ( 39,701 )

Corporate selling, general and administrative costs, corporate depreciation, and corporate acquisition transaction costs

( 93,191 ) ( 47,248 ) ( 152,143 ) ( 86,949 )

Operating income 42,163 111,167 133,049 236,405

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Interest expense ( 28,338 ) ( 4,261 ) ( 50,636 ) ( 8,633 )

Loss on investment securities ( 13,367 ) ( 4,034 )

Gain (loss) on investment securities 27,788 3,747 14,421 ( 287 )

Foreign currency exchange loss

( 6,018 ) ( 595 ) ( 6,921 ) ( 2,365 )

Other 1,596 400 1,956 ( 143 )

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Income before income taxes $ 44,448 $ 117,025 $ 120,867 $ 242,278

Q2 FY25 FORM 10-Q | 33

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

(in thousands) December 31, 2024 September 30, 2024

(in thousands) March 31, 2025 September 30, 2024

Total assets 1

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International Solutions 2,745,953 685,833

Offshore Gulf of Mexico 69,542 73,119

Offshore Solutions 729,600 73,119

Other 391,021 157,877

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Three Months Ended

March 31, Six Months Ended

(in thousands) 2025 2024 2025 2024

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United States $ 588,251 $ 640,689 $ 1,216,931 $ 1,262,306

Saudi Arabia 94,690 — 97,921 —

Argentina 44,952 34,024 79,611 69,900

Norway 78,305 — 78,305 —

Oman 69,620 — 69,620 —

Azerbaijan 42,759 — 42,759 —

Germany 17,052 — 17,052 —

Bahrain 8,424 4,535 13,272 9,032

Australia 4,757 4,312

Columbia 10,946 1,242 10,946 8,945

Kuwait 9,172 — 9,172 —

Other Foreign 51,868 7,453 57,752 14,907

Total $ 1,016,039 $ 687,943 $ 1,693,341 $ 1,365,090

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

The following table presents property, plant and equipment by country based on the location of service provided:

(in thousands) March 31, 2025 September 30, 2024

Property, plant and equipment, net

United States $ 2,624,159 $ 2,752,325

Saudi Arabia 998,535 149,472

Oman 468,832 —

Germany 86,494 —

Argentina 69,587 62,533

Kuwait 42,299 —

Colombia 39,505 19,243

United Arab Emirates — 2,365

Norway 23,826 —

Bahrain 23,507 19,807

Other Foreign 108,600 12,897

Total $ 4,485,344 $ 3,016,277

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

Q2 FY25 FORM 10-Q | 34

NOTE 14 SUBSEQUENT EVENTS

On January 16, 2025 (the “Closing Date”), H&P completed the Acquisition of KCA Deutag pursuant to the Purchase Agreement.

Of the $ 0.9 billion, approximately $ 80.0 million was deposited into a customary escrow on the Closing Date pending the resolution of certain potential tax obligations of KCA Deutag.

On the Closing Date, the Company drew an aggregate principal amount of $ 400.0 million under the Term Loan Credit Agreement for p urposes of financing the Acquisition as further described in Note 5—Debt .

The cash consideration was funded through a combination of net proceeds from the Company’s September 2024 senior notes offering, net proceeds from the funding of the Company’s Term Loan Credit Agreement, cash on hand, and monetization of our investment in ADNOC Drilling.

The $ 1.1 billion repayment or redemption of certain KCA Deutag existing debt consisted of (a) the redemption in full of all of (i) KCA Deutag UK Finance PLC’s outstanding $ 500 million aggregate principal amount of 9.875 % Senior Secured Notes due 2025, (ii) KCA Deutag UK Finance PLC’s outstanding $ 250 million aggregate principal amount of Senior Secured Floating Rate Notes due 2025 and (iii) KCA Deutag PIKCO PLC’s outstanding $ 272.2 million aggregate principal amount (which includes approximately $ 72.2 million of accrued and capitalized interest) of 15.0 %/ 17.5 % Payment-In-Kind Notes due 2027, and (b) the repayment of all of the (i) approximately $ 50 million of outstanding borrowings under KCA Deutag’s Senior Secured Guarantee and Revolving Credit Facilities provided by Barclays Bank plc and (ii) approximately $ 50 million of outstanding borrowings under KCA Deutag’s Senior Secured Revolving Credit Facilities provided by Deutsche Bank AG, in each case including, as applicable, the payment of all accrued and unpaid interest, premiums and fees in connection with each such redemption or repayment.

To date, the initial accounting for the Acquisition is incomplete.

Due to the limited time since the Closing Date, it is impracticable for the Company to include business combination disclosures related to the Acquisition.

The Company is still gathering the necessary information to provide such disclosures in future filings.

Effective January 16, 2025, and as a result of the Acquisition, the naming convention for one of our reportable segments changed from Offshore Gulf of Mexico to Offshore Solutions.

Q1 FY25 FORM 10-Q | 26

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements