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Item 7. Management’s Discussion and Analysis

2025-11-21 compared with 2024-11-13 · 282 added, 237 removed, 333 unchanged (61% of the section changed)

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H&P 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.

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 BENTEC™ 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.

As of September 30, 2025, our drilling rig fleet included a total of 367 drilling rigs.

Our reportable operating business segments consist of the North America Solutions segment with 228 rigs, the International Solutions segment with 27 rigs, and the Offshore Gulf of Mexico segment with seven offshore platform rigs as of September 30, 2024.

Our reportable operating business segments consist of the North America Solutions segment with 223 rigs, the International Solutions segment with 137 rigs, and the Offshore Solutions segment with seven offshore platform rigs as of September 30, 2025.

Although the Offshore Solutions segment has a fleet of platform rigs, the majority of its revenues are derived from asset-light management contracts.

At the close of fiscal year 2025, we had 208 active contracted rigs, of which 131 were under a fixed-term contract and 77 were working well-to-well, compared to 170 contracted rigs at September 30, 2024.

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As we move forward, we believe that our rig fleet, technology offerings, financial strength, contract backlog and strong customer and employee base position us very well to respond to continued cyclical and often times volatile market conditions and to take advantage of future opportunities.

Pending KCA Deutag Acquisition

On July 25, 2024, H&P and certain of its wholly owned subsidiaries entered into the Purchase Agreement to acquire KCA Deutag for total cash consideration of approximately $2.0 billion, which consists of the $0.9 billion unadjusted share purchase price and $1.1 billion to contemporaneously repay or redeem certain of KCA Deutag's existing debt upon consummation of the Acquisition.

Total consideration is subject to adjustment as set forth in the Purchase Agreement.

The transaction is expected to close prior to calendar 2024 year end, subject to customary closing conditions and regulatory approvals.

Market Outlook

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Generally, the level of capital expenditures is dictated by capital budgets set to achieve respective production targets in relation to current and expected future prices of crude oil and natural gas, which are determined by various supply and demand factors and have historically been volatile.

Furthermore, E&Ps have become more fiscally disciplined in their level of capital expenditures relative to commodity price fluctuations, which has resulted in less volatility within the oilfield service businesses, including our operations.

The capital budgets for calendar year 2025 have not yet been established by many of our customers;

however, based upon the crude oil and natural gas pricing environment and many of our customers' desire to at least maintain their current production levels, we expect the level of capital spending and activity in calendar year 2025 to be similar to that experienced in calendar year 2024.

The overall demand for super-spec rigs in the U.S.

remains relatively strong and while some readily available idle super-spec capacity exists in the market, it is not to a level that has materially impacted pricing as it could be quickly reabsorbed into the market.

This supply-demand dynamic combined with the value proposition we provide our customers through our drilling expertise, high-quality FlexRig® fleet, and automation technology remains constructive for our underlying contract economics.

With regard to our North America Solutions segment, our rig count remained relatively range-bound during fiscal 2024 despite a decline in the overall industry rig count.

The rig market was pressured by continued weakness in natural gas prices as well as other non-commodity price related factors, such as customer capital budgets, drilling plans, production levels and customer consolidations.

We still believe the supply and demand dynamics surrounding our North America Solutions segment remain constructive for future activity and pricing levels.

As such, heading into fiscal year 2025, we expect our rig activity to remain relatively stable bound absent any significant changes to commodity prices.

The Company also expects its strategy around employing a fiscally prudent approach to deploying capital and prioritizing economic margins over rig utilization to remain intact.

Collectively, our other business segments, Offshore Gulf of Mexico and International Solutions, are exposed to the same macro commodity price environment affecting our North America Solutions segment;

however, activity levels in the International Solutions segment are also subject to other various geopolitical and financial factors specific to the countries of our operations.

During fiscal 2025, our operational presence in certain international markets, primarily the Middle East and the offshore management contract business, is expected to increase substantially upon consummation of the pending Acquisition.

Outside the pending Acquisition our activity in the Middle East region is expected to increase from a historical level of 2 to 3 rigs working in the region to approximately 9 to 11 rigs as we export rigs from the U.S.

and begin operations in Saudi Arabia.

The pending Acquisition and commencement of rig operations in Saudi Arabia is a continuation of the Company's strategy of international growth and diversification.

Currently, activity levels in our Offshore Gulf of Mexico business segment look to remain relatively steady at current levels for the foreseeable future.

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Furthermore, E&Ps have become more fiscally disciplined in their level of capital expenditures relative to commodity price fluctuations and the amount of free cash flows that can be returned to their shareholders, which has resulted in less volatility within the oilfield service businesses, including our operations.

Earlier in calendar 2025, the announcements by the U.S.

government regarding the implementation of global tariffs and OPEC+ regarding the planned increase of crude oil supply created continued uncertainty in the global energy markets.

More recently, heightened geopolitical tensions in the Middle East have perpetuated and elevated the level of uncertainty further.

Although we do not anticipate that these announcements and events, particularly the tariff announcements and the armed conflict in the Middle East, will have a direct material impact on the Company's operations or financial results, we believe the indirect effects could potentially lead to reduced activity in fiscal year 2026 as operators evaluate activity levels commensurate with commodity prices.

Both crude oil and natural gas prices are volatile and global economic conditions heavily influence activity levels in the United States.

In our international operations, commodity pricing has an impact on potential activity by our customers;

however, other variables have a heavy influence on those activity levels, including disparate country budgets and the need to fund other commitments in certain areas.

Subsequent to September 30, 2025, we received notifications for seven rigs to resume operations in Saudi Arabia during the first half of calendar year 2026.

With the rig resumptions, the total operating rig count in country will increase to 24 total rigs by the middle of calendar year 2026.

Recent Developments

International Revenue Contracts

In February 2024, the Company finalized the contractual terms with Saudi Aramco for a seven super-spec FlexRig® tender award for work in the Kingdom of Saudi Arabia.

These rigs are expected to commence operations shortly after delivery.

The rigs are being sourced from our idle super-spec rigs in the U.S., converted to walking configurations, and further equipped to suit contractual specifications.

During the year ended September 30, 2024, we began mobilizing five super-spec rigs to the Kingdom of Saudi Arabia.

We commenced operations in the first quarter of fiscal 2025.

Pending KCA Deutag Acquisition

Total consideration is subject to adjustment as set forth in the Purchase Agreement.

The transaction is expected to close prior to calendar 2024 year end, subject to customary closing conditions and regulatory approvals.

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.

Senior Notes Issued in Fiscal Year 2024

On September 17, 2024, we completed a private offering of $1.25 billion aggregate principal amount of the Notes, comprised of the following tranches:

$350.0 million aggregate principal amount of 4.65 percent senior notes due 2027 issued at a price equal to 99.958 percent of their face value, $350.0 million aggregate principal amount of 4.85 percent senior notes due 2029 issued at a price equal to 99.883 percent of their face value and $550.0 million aggregate principal amount of 5.50 percent senior notes due 2034 issued at a price equal to 99.670 percent of their face value.

The Company intends to use the net proceeds, together with the proceeds of its term loan credit facility (discussed below) and cash on hand, to finance the purchase price for the Acquisition, to repay certain of KCA Deutag’s outstanding indebtedness, and to pay related fees and expenses.

For additional information regarding the Notes, refer to Note 6—Debt to the Consolidated Financial Statements.

Term Loan Credit Agreement

On August 14, 2024, the Company entered into 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.

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.

We expect to use 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 certain of KCA Deutag's outstanding indebtedness, and pay related fees and expenses.

The funding of the term loans had not occurred as of September 30, 2024.

KCA Deutag Acquisition

On the Closing Date, H&P completed the Acquisition of KCA Deutag pursuant to 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.

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.

2025 FORM 10-K | 41

Revolving Credit Facility

On August 14, 2024, the Company entered into the Amended Credit Facility with the lenders party thereto (the “Revolving Credit Agreement Lenders”), the issuing lenders party thereto and Wells Fargo Bank, 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 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 million outstanding at any time.

$775 million of the revolving commitments under the Amended Credit Facility expire on November 12, 2028 and $175 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.

Commitments under the Amended Credit Facility may be increased by up to $100 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.

KCA Deutag is a diverse global drilling company.

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 Northern Africa.

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

Management contract operations provide services to customer platforms where the customer owns the drilling rig.

KCA Deutag’s BENTEC™ (formally Kenera) business unit comprises manufacturing and engineering operations with four facilities serving the energy industry.

Subsequent to the announcement of the Acquisition in July 2024 through September 2025, KCA Deutag and the Company have received notifications of contract suspensions for rigs from the legacy KCA Deutag rig fleet operating in Saudi Arabia.

Through September 30, 2025, the Company's total rig suspensions were 27 rigs.

Subsequent to the fiscal year ended September 30, 2025, we received resumption notices for seven rigs.

The suspended rigs are expected to resume performance in fiscal year 2026.

At the time the Acquisition was announced, we initially expected to realize approximately $25 million in synergies.

Since that time, we have been able to conduct a more detailed analysis of possible synergies, and we also launched a broader review of our enterprise cost structure.

We now anticipate realizing in excess of our original expectations from the combination of synergies associated with the Acquisition and other permanent cost-saving initiatives (such as our workforce reduction plan discussed in Note 16—Restructuring Charges) and expect our general and administrative expenses will be reduced by $50 million relative to our pro forma annualized expectations.

We believe these cost-saving efforts will become increasingly evident in the forthcoming quarters.

Subsequent to September 30, 2025, we announced the rebranding of KCA Deutag’s Kenera business unit to BENTEC™.

The BENTEC™ name, already recognized in the market, will now represent all products and services previously associated with Kenera and its sub-brands.

Accordingly, throughout this document and in future references, Kenera will be referred to as BENTEC™.

Contract Backlog

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As of September 30, 2025 and 2024, our contract drilling backlog was $7.0 billion and $1.5 billion, respectively.

The increase in backlog at September 30, 2024 compared to 2023 is primarily due to the Company finalizing contractual terms with Saudi Aramco for a seven super-spec FlexRig® tender award for work in the Kingdom of Saudi Arabia.

The increase in backlog at September 30, 2025 compared to 2024 is primarily due to the completion of the Acquisition.

The total backlog figures for the International Solutions and Offshore Solutions reporting segments, as of September 30, 2025 include $3.4 billion and $2.3 billion, respectively, are attributable to our recently acquired subsidiary, KCA Deutag.

Approximately 22.6 percent of the September 30, 2025 total backlog is reasonably expected to be fulfilled in fiscal year 2026.

The following table sets forth the total backlog by reportable segment as of September 30, 2024 and 2023, and the percentage of the September 30, 2024 backlog reasonably expected to be fulfilled in fiscal year 2025:

(in billions) September 30, 2024 September 30, 2023 Percentage Reasonably

Expected to be Fulfilled in Fiscal Year 2025

The following table sets forth the total backlog by reportable segment as of September 30, 2025 and 2024:

(in billions) September 30, 2025 September 30, 2024

Firm contracts 1 :

North America Solutions $ 0.5 $ 0.7

International Solutions 3.4 0.8

Offshore Gulf of Mexico — — —

The early termination of a contract may result in a rig being idle for an extended period of time, which could adversely affect our financial condition, results of operations and cash flows.

In some limited circumstances, such as sustained unacceptable performance by us, no early termination payment would be paid to us.

Early terminations could cause the actual amount of revenue earned to vary from the backlog reported.

See Item 1A—Risk Factors—" Our current backlog of drilling services and solutions revenue may decline and may not be ultimately realized as fixed‑term contracts and may, in certain instances, be terminated without an early termination payment.

” within this Form 10-K regarding fixed term contract risk.

Additionally, see Item 1A—Risk Factors—" The impact and effects of public health crises, pandemics and epidemics, such as the COVID-19 pandemic, could have a material adverse effect on our business, financial condition and results of operations." within this Form 10-K.

Offshore Solutions 0.9 —

Optional contract extension periods:

International Solutions 2

Offshore Solutions 1.5 —

Total backlog

(1) These amounts do not include anticipated contract renewals or expected performance bonuses.

(2) Included in the International Solutions reportable segment's optional backlog balance at September 30, 2025 is $478.5 million of expected revenue from certain contracts in Saudi Arabia that have been temporarily suspended and are expected to gradually resume operations.

The information presented in the table above reflects the fact that we expect these contracts to be extended for a period of time at least equal to the suspension period.

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The early termination of a contract or suspension of operations may result in a rig being idle for an extended period of time, which could adversely affect our financial condition, results of operations and cash flows.

The agreements within our recently acquired subsidiary, KCA Deutag, contain provisions for optional early termination or suspension without any associated early termination fees.

Early terminations could cause the actual amount of revenue earned to significantly vary from the backlog reported.

See Item 1A—Risk Factors—" Our current backlog of drilling services and solutions revenue may decline and may not be fully realized as fixed‑term contracts and, in certain instances, these contracts can be terminated without an early termination payment or suspended without standby or force majeure compensation.

” within this Form 10-K regarding fixed term contract risk.

Additionally, see Item 1A—Risk Factors—" The impact and effects of public health crises, pandemics and epidemics could have a material adverse effect on our business, financial condition and results of operations." within this Form 10-K.

Subsequent to September 30, 2025, we received an early termination notice for one of our rigs operating within the International Solutions segment.

As a result, our total backlog as of September 30, 2025 reflects approximately $34.9 million of revenue that we no longer expect to recognize in future periods.

Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024

The Company's results presented for the fiscal year ended September 30, 2025 reflect a full 365 days of legacy H&P operations and 258 days of KCA Deutag operations, as the Acquisition was completed on January 16, 2025.

Consolidated Results of Operations

Net Income We recorded income of $344.2 million ($3.43 per diluted share) for the fiscal year ended September 30, 2024 compared to income of $434.1 million ($4.16 per diluted share) for the fiscal year ended September 30, 2023.

Net Income (Loss) Attributable to Helmerich & Payne Inc.

We recorded a loss of $163.7 million ($1.66 loss per diluted share) for the fiscal year ended September 30, 2025 compared to income of $344.2 million ($3.43 per diluted share) for the fiscal year ended September 30, 2024.

Operating Revenue Consolidated operating revenues were $3.7 billion and $2.8 billion during fiscal years 2025 and 2024, respectively.

The $0.1 billion decrease was primarily driven by lower activity levels.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $1.0 billion of revenue during the fiscal year ended September 30, 2025.

Direct Operating Expenses, Excluding Depreciation and Amortization Direct operating expenses in fiscal year 2025 were $2.5 billion, compared to direct operating expenses of $1.6 billion in fiscal year 2024.

The decrease was primarily attributable to the aforementioned lower activity levels.

Additionally, we recognized $6.7 million in direct operating expenses associated with the fair value adjustments of contingent consideration related to earnout payments associated with our business acquisition in fiscal year 2019, partially offset by a gain on involuntary conversion of a rig of approximately $5.5 million.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $789.7 million in direct operating expenses during the fiscal year ended September 30, 2025.

Other Operating Expenses Other operating expenses were $56.0 million and $4.5 million during fiscal years 2025 and 2024, respectively.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $51.3 million of costs associated with BENTEC™'s manufacturing and engineering operations.

Depreciation and Amortization Depreciation and amortization expense was $625.1 million in fiscal year 2025 and $397.3 million in fiscal year 2024.

The increase was primarily driven by $12.7 million of accelerated depreciation for components on rigs that were scheduled for conversion in fiscal year 2024 compared to $2.4 million for fiscal year 2023.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $212.2 million in depreciation and amortization expense during the fiscal year ended September 30, 2025.

Depreciation and amortization includes amortization of intangible assets of $50.6 million and $6.4 million and abandonments of equipment of $2.9 million and $6.5 million in fiscal years 2025 and 2024, respectively.

Research and Development Expense Research and development expense was $34.1 million and $41.0 million in fiscal years 2025 and 2024, respectively.

The increase was primarily driven by an associated asset acquisition during the fiscal year ended September 30, 2024, as well as costs related to expanded project scopes.

The decrease was primarily driven by an asset acquisition completed during the fiscal year ended September 30, 2024, along with reductions in project scope implemented as part of the Company’s cost-reduction initiatives.

Selling, General and Administrative Expense Selling, general and administrative expenses increased to $287.1 million in the fiscal year ended September 30, 2025 compared to $244.9 million in the fiscal year ended September 30, 2024.

The $38.2 million increase in fiscal year 2024 is primarily due to a $19.6 million increase in labor and labor-related expenses;

and a $8.9 million increase in IT related and professional service expenses.

Asset Impairment Charges During the fiscal year ended September 30, 2023, the Company initiated a plan to decommission, scrap and/or sell certain assets including four international FlexRig ® drilling rigs, four international conventional drilling rigs, and additional equipment.

The aggregate net book value of these assets of $13.2 million was written down to their estimated scrap value of $1.1 million, resulting in non-cash impairment charges of $12.1 million for the fiscal year ended September 30, 2023, of which $8.1 million of the charge is recorded within the International Solutions segment.

The remaining $4.0 million is recorded within the North America Solutions segment.

The impairment charge was recorded in the Consolidated Statement of Operations for the fiscal year ended September 30, 2023.

Acquisition Transaction Costs During the fiscal year ended September 30, 2024, we recognized approximately $15.0 million in acquisition transaction costs associated with the acquisition of KCA Deutag.

These non-recurring costs are primarily related to third-party legal and advisory services.

See Note 11—Acquisition Transaction Costs for additional details related to the Acquisition.

Gain on Investment Securities During the fiscal year ended September 30, 2024, we recognized an aggregate gain of $14.0 million on investment securities.

This gain consisted primarily of $30.9 million and $1.6 million gains on our equity investments in ADNOC Drilling and Tamboran Corp.;

both of which were a result of increases in the fair market values of the stocks.

The gains on our equity investments in ADNOC Drilling and Tamboran Corp.

during the fiscal year ended September 30, 2024 were offset by $10.2 million and $1.4 million of losses on our investments in Galileo and a geothermal equity security, respectively, due to changes in the fair values of the investments, and a $7.1 million loss as a result of a Blue Chip Swap transaction.

See Note 2—Summary of Significant Accounting Policies, Related Risks and Uncertainties—International Solutions Drilling Risks for additional details related to the Blue Chip Swap.

During the fiscal year ended September 30, 2023, we recognized an aggregate gain of $11.3 million on investment securities.

This gain was mainly comprised of a $27.4 million gain on our equity investment in ADNOC Drilling, partially offset against a $4.2 million loss on our investment in Tamboran Corp.;

both of which were a result of fluctuations in the fair market value of the stocks.

Additionally, the aggregate gain was offset by a $12.2 million loss on investment recognized during the fiscal year ended September 30, 2023 as a result of a Blue Chip Swap transaction that occurred during the period.

Interest and Dividend Income Interest and dividend income was $41.2 million and $28.4 million in fiscal years 2024 and 2023, respectively.

The increase was primarily due to $11.1 million in dividends received from ADNOC Drilling compared to $3.4 million in fiscal year 2023.

The increase in fiscal year 2025 is primarily driven by the completion of the Acquisition, resulting in an additional $48.3 million in selling, general and administrative expenses during the fiscal year ended September 30, 2025.

Acquisition Transaction Costs During the fiscal year ended September 30, 2025, we recognized approximately $54.7 million in acquisition transaction costs associated with the Acquisition.

These non-recurring costs are primarily related to third-party legal, advisory and valuation services.

See Note 3—Business Combination for additional details related to the Acquisition.

Asset Impairment Charges During the fiscal year ended September 30, 2025, we recorded asset impairment charges of $194.0 million primarily driven by a non-cash goodwill impairment charge of $192.2 million associated with our International Solutions and BENTEC™ reporting units.

See Note 6—Goodwill and Intangible Assets for additional details related to the impairment charges.

Restructuring Charges During the fiscal year ended September 30, 2025, we recorded restructuring charges of $12.1 million primarily driven by a one-time severance payments to involuntarily terminated employees.

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Interest and Dividend Income Interest and dividend income was $35.2 million and $41.2 million in fiscal years 2025 and 2024, respectively.

The decrease primarily reflects the liquidation of our investment in ADNOC Drilling during the year ended September 30, 2025, which resulted in no dividend income for the period compared to $11.1 million in dividend income recognized during the year ended 2024, partially offset to high market interest rates in fiscal year 2025.

Interest Expense Interest expense totaled $107.8 million in fiscal year 2025 and $29.1 million in fiscal year 2024.

The increase was primarily attributable to approximately $9.2 million of commitment fees recognized during the twelve months ended September 30, 2024 related to a bridge loan facility the Company entered into during the period.

For additional information regarding commitment fees, refer to Note 6—Debt to the Consolidated Financial Statements.

The increase was primarily driven by interest expense associated with our September 2024 senior notes offering and Term Loan Credit Agreement.

For additional information regarding debt agreements, refer to Note 7—Debt to the Consolidated Financial Statements.

Gain (Loss) on Investment Securities During the fiscal year ended September 30, 2025, we recognized an aggregate loss of $22.4 million on investment securities.

The aggregate loss consisted primarily of a $29.6 million loss on our investment in Galileo, due to an allowance for credit loss on the convertible note, driven by heightened liquidity constraints and changes in governance, which led management to conclude that the fair value of the investment was not recoverable and a $12.4 million loss on our sale of equity securities in ADNOC Drilling, 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.

The loss was partially offset by $15.4 million and $5.0 million of gains on various geothermal equity investments and our investment in Tamboran, respectively, due to changes in the fair value of the investments.

During the fiscal year ended September 30, 2024, we recognized an aggregate gain of $14.0 million on investment securities.

This gain consisted primarily of $30.9 million and $1.6 million gains on our equity investment in ADNOC Drilling and Tamboran Corp;

both of which were a result of increases in the fair market values of the stocks.

The gains on our equity investments in ADNOC Drilling and Tamboran Corp.

during the fiscal year ended September 30, 2024 were offset by a $10.2 million and $1.4 million of losses on our investments in Galileo and a geothermal equity security, respectively, due to changes in the fair values of the investments, and a $7.1 million loss as a result of a Blue Chip Swap transaction.

Income Taxes We had an income tax expense of $85.8 million in fiscal year 2025 compared to an income tax expense of $136.9 million in fiscal year 2024.

1 unchanged sentence

The effective rates differ from the U.S.

federal statutory rate (21.0 percent for the fiscal years 2024 and 2023) primarily due to non-deductible permanent items and state and foreign income taxes.

federal statutory rate (21.0 percent for the fiscal years 2025 and 2024) primarily due to non-deductible goodwill impairment, other non-deductible permanent items, and state and foreign income taxes.

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities.

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See Note 8—Income Taxes to our Consolidated Financial Statements for additional income tax disclosures.

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North America Solutions

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Selling, general and administrative expense 68,047 61,113 11.3

Acquisition transaction costs 41 — —

Asset impairment charges 1,507 — —

Restructuring charges 4,121 — —

Segment operating income $ 579,961 $ 610,623 (5.0)

7 unchanged sentences

Number of active rigs at the end of period 5

144 151 (4.6)

Number of available rigs at the end of period 223 228 (2.2)

4 unchanged sentences

See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.

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

(3) Defined as the number of contractual days for owned and leased rigs with recognized revenue during the period.

(4) Active rigs generate revenue for the Company;

2 unchanged sentences

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

Operating Revenues Operating revenues were $2.4 billion and $2.5 billion in fiscal year 2024 and 2023, respectively.

The $73.8 million decrease in operating revenues was primarily due to a 10.4 percent decrease in activity levels partially offset by higher average pricing levels.

Operating Revenues During fiscal year ended September 30, 2025, operating revenue decrease by $83.6 million compared to the same period in 2024.

This decrease was mainly driven by reduced activity levels.

Direct Operating Expenses Direct operating expenses decreased by $43.8 million during fiscal year ended September 30, 2025.

The decrease was primarily driven by lower activity levels, partially offset by an increase in per revenue day labor and materials and supplies expense.

Depreciation and Amortization Depreciation and amortization expense increased to $366.4 million during the fiscal year ended September 30, 2024 as compared to $354.0 million during the fiscal year ended September 30, 2023.

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Research and Development Expense Research and development expense increased to $41.3 million during the fiscal year ended September 30, 2024 as compared to $30.5 million during the fiscal year ended September 30, 2023.

The increase was driven by an associated asset acquisition during the fiscal year ended September 30, 2024, as well as costs related to expanded project scopes.

The decrease was primarily driven by reduced activity levels.

Depreciation and Amortization Depreciation and amortization expense decreased to $351.8 million during the fiscal year ended September 30, 2025 as compared to $366.4 million during the fiscal year ended September 30, 2024.

The decrease was primarily driven by $12.7 million of accelerated depreciation in fiscal year 2024 for components on rigs that were scheduled for conversion.

Research and Development Expense Research and development expense decreased to $34.1 million during the fiscal year ended September 30, 2025 as compared to $41.3 million during the fiscal year ended September 30, 2024.

Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $68.0 million during the fiscal year ended September 30, 2025 as compared to $61.1 million during the fiscal year ended September 30, 2024.

This increase was primarily driven by a $5.2 million increase in labor and labor-related expenses partially offset by a $3.0 million decrease in professional service expenses.

Asset Impairment Charges During the fiscal year ended September 30, 2023, assets that were previously classified as Assets held-for-sale were either sold or written down to scrap value.

The aggregate net book value of these remaining assets was $3.0 million, which exceeded the estimated scrap value of $0.3 million, resulting in a non-cash impairment charge of $2.7 million during the fiscal year ended September 30, 2023.

During the same period, we also identified additional equipment that met the asset held-for-sale criteria and were reclassified as Assets held-for-sale on our Consolidated Balance Sheets.

The aggregate net book value of the equipment of $1.4 million was written down to its estimated scrap value of $0.1 million, resulting in a non-cash impairment charge of $1.3 million during the fiscal year ended September 30, 2023.

The increase was primarily driven by a $10.0 million increase in credit loss expense related to a long-term note receivable.

2025 FORM 10-K | 45

International Solutions

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Direct operating expenses 718,822 169,033 325.3

Depreciation 10,863 7,615 42.7

Depreciation and amortization

218,817 10,863 1,914.3

Selling, general and administrative expense 17,232 9,427 82.8

Acquisition transaction costs 1,585 — —

Asset impairment charges 132,720 — —

Segment operating loss

Restructuring charges 4,945 — —

Segment operating income (loss)

$ (291,695) $ 4,652 (6,370.3)

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See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.

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

(3) Defined as the number of contractual days for owned and leased rigs with recognized revenue during the period.

(4) Active rigs generate revenue for the Company;

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Operating Revenues Operating revenues were $802.4 million and $194.0 million in the fiscal years ended September 30, 2025 and 2024, respectively.

The $18.6 million decrease in operating revenue was primarily driven by a 3.6 percent decrease in activity levels and decreases in per revenue day pricing, partially offset by higher ancillary services revenue.

Operating Expenses Direct operating expenses decreased to $174.6 million during the fiscal year ended September 30, 2024 as compared to $187.3 million during the fiscal year ended September 30, 2023.

This decrease was primarily driven by a 3.6 percent decrease in activity levels and decreases in per revenue day materials and supplies expense.

The $608.5 million increase in operating revenue was primarily driven by an additional $542.4 million in revenue generated from expanded operations following the Acquisition.

Additionally, the increase in operating revenues was attributable to increased FlexRig ® activity levels in Saudi Arabia from the commencement of operations for rigs previously awarded during fiscal year 2024.

Operating Expenses Direct operating expenses increased to $718.8 million during the fiscal year ended September 30, 2025 as compared to $169.0 million during the fiscal year ended September 30, 2024.

This increase was primarily driven by the completion of the Acquisition, resulting in an additional $443.8 million in direct operating expenses during the fiscal year ended September 30, 2025.

Additionally, the increase in direct operating expenses was attributable to start-up costs associated with our increased FlexRig ® activity levels in Saudi Arabia from the commencement of operations for rigs previously awarded during fiscal year 2024.

Depreciation and Amortization Expense Depreciation expense increased to $218.8 million during the fiscal year ended September 30, 2025 compared to $10.9 million during the fiscal year ended September 30, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $180.9 million in depreciation and amortization expense during the fiscal year ended September 30, 2025.

Asset Impairment Charges During the fiscal year ended September 30, 2025, we recorded a non-cash goodwill impairment charge of $132.7 million associated with our International Solutions reporting unit.

See Note 6—Goodwill and Intangible Assets for additional details related to the goodwill impairment charges.

2025 FORM 10-K | 46

Asset Impairment Charges During the fiscal year ended September 30, 2023, the Company initiated a plan to decommission and scrap four international FlexRig ® drilling rigs and four conventional drilling rigs located in Argentina that are not suitable for unconventional drilling.

As a result, these rigs were reclassified to Assets held-for-sale on our Consolidated Balance Sheets.

The rigs’ aggregate net book value of $8.8 million was written down to the estimated scrap value of $0.7 million, which resulted in a non-cash impairment charge of $8.1 million recorded in Asset impairment charges within our Consolidated Statement of Operations during the fiscal year ended September 30, 2023.

Offshore Gulf of Mexico

The following table presents certain information with respect to our Offshore Gulf of Mexico reportable segment:

Offshore Solutions

The following table presents certain information with respect to our Offshore Solutions reportable segment:

(in thousands, except operating statistics) 2025 2024 % Change

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Direct operating expenses 430,135 82,668 420.3

Depreciation 7,530 7,622 (1.2)

Depreciation and amortization

32,461 7,530 331.1

Selling, general and administrative expense 4,619 3,594 28.5

Acquisition transaction costs 2,971 — —

Restructuring charges 266 — —

Segment operating income $ 49,942 $ 12,415 302.3

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See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.

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

(3) Defined as the number of contractual days for owned and leased rigs with recognized revenue during the period.

(4) Active rigs generate revenue for the Company;

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Operating Revenues Operating revenues were $520.4 million and $106.2 million in the fiscal year ended September 30, 2025 and 2024, respectively.

The 18.5 percent decrease in operating revenue was primarily due to a 23.9 percent decrease in activity levels, partially offset by higher per revenue day reimbursable revenue.

Direct Operating Expenses Direct operating expenses decreased to $82.7 million during the fiscal year ended September 30, 2024 as compared to $96.8 million during the fiscal year ended September 30, 2023.

The decrease was primarily driven by a decrease in activity levels as described above, partially offset by an increase in per revenue day materials and supplies expense.

The increase in operating revenue was primarily driven by an additional $407.1 million in revenue generated from expanded operations following the Acquisition.

Direct Operating Expenses Direct operating expenses increased to $430.1 million during the fiscal year ended September 30, 2025 as compared to $82.7 million during the fiscal year ended September 30, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $345.9 million in direct operating expenses during the fiscal year ended September 30, 2025.

Depreciation and Amortization Expense Depreciation expense increased to $32.5 million during the fiscal year ended September 30, 2025 compared to $7.5 million during the fiscal year ended September 30, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $25.7 million in depreciation and amortization expense during the fiscal year ended September 30, 2025.

2025 FORM 10-K | 47

Other Operations

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Direct operating expenses 181,634 69,756 160.4

Depreciation 1,627 2,014 (19.2)

Depreciation and amortization

5,711 1,627 251.0

Research and development 353 — —

Selling, general and administrative expense 7,086 1,606 341.2

Operating income (loss)

Acquisition transaction costs 1,517 — —

Asset impairment charges 59,466 — —

Restructuring charges 500 — —

Operating loss

$ (103,397) $ (1,359) (7,508.3)

2024 FORM 10-K | 51

Operating Revenues We continue to use our Captive insurance companies to insure the deductibles for our domestic workers’ compensation, general liability, automobile liability claims programs, and medical stop-loss program and to insure the deductibles from the Company's international casualty and rig property programs.

Operating Revenues We continue to use our Captive insurance companies to fund SIRs and deductibles for our domestic workers’ compensation, general liability, automobile liability claims programs, medical stop-loss program, and certain international casualty and rig property programs.

Operating revenues of $152.9 million and $71.6 million during the fiscal years ended September 30, 2025 and 2024, respectively, primarily consisted of $69.2 million and $61.2 million, respectively, in intercompany premium revenues recorded by the Captives.

These revenues were eliminated upon consolidation.

During the fiscal year ended September 30, 2025, operating revenues also consisted of $72.3 million from BENTEC™ manufacturing and engineering operations, of which, $17.1 million is related to intercompany revenues that were eliminated upon consolidation.

Direct Operating Expenses Direct operating expenses of $181.6 million and $69.8 million during the fiscal years ended September 30, 2025 and 2024, respectively, primarily consisted of $39.9 million and $11.4 million, respectively, in adjustments to accruals for estimated losses allocated to the Captives, rig and casualty insurance premiums of $42.7 million and $37.6 million, respectively, and medical stop loss expenses of $20.7 million and $15.5 million, respectively.

The change to accruals for estimated losses is primarily due to actuarial valuation adjustments by our third-party actuary.

During the fiscal year ended September 30, 2025, direct operating expenses also consisted of $68.4 million from BENTEC™ manufacturing and engineering operations of which, $17.1 million is related to intercompany revenues that were eliminated upon consolidation.

Asset Impairment Charges During the fiscal year ended September 30, 2025, we recorded a non-cash goodwill impairment charge of $59.5 million associated with our BENTEC™ reporting unit.

See Note 6—Goodwill and Intangible Assets for additional details related to the goodwill impairment charges.

Results of Operations for the Fiscal Years Ended September 30, 2024 and 2023

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Our sources of available liquidity include existing cash balances on hand, cash flows from operations, and availability under the Amended Credit Facility.

Our liquidity requirements include meeting ongoing working capital needs, funding our capital expenditure projects, paying dividends declared, repaying our outstanding indebtedness, and funding the pending acquisition of KCA Deutag.

Historically, we have financed operations primarily through internally generated cash flows.

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However, in some international locations we may make short-term investments that are less conservative, as equivalent highly rated investments are unavailable.

See—Note 2—Summary of Significant Accounting Policies, Related Risks and Uncertainties—International Solutions Drilling Risks.

See—Note 2—Summary of Significant Accounting Policies, Related Risks and Uncertainties.

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We may seek to access the debt and equity capital markets from time to time to raise additional capital, increase liquidity as necessary, fund our additional purchases, exchange or redeem senior notes, or repay any amounts under the Amended Credit Facility.

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Our cash flows fluctuate depending on a number of factors, including, among others, the number of our drilling rigs under contract, the revenue we receive under those contracts, the efficiency with which we operate our drilling rigs, the timing of collections on outstanding accounts receivable, the timing of payments to our vendors for operating costs, and capital expenditures.

As our revenues increase, operating net working capital is typically a use of capital, while conversely, as our revenues decrease, operating net working capital is typically a source of capital.

As our revenues increase, net working capital is typically a use of capital, while conversely, as our revenues decrease, operating net working capital is typically a source of capital.

Net working capital (defined as current assets less current liabilities) was $650.6 million and $745.1 million as of September 30, 2025 and September 30, 2024, respectively.

As of September 30, 2025 and 2024, we had cash and cash equivalents of $196.8 million and $217.3 million and short-term investments of $21.5 million and $292.9 million, respectively.

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Financing activities 66,661 986,507 (463,869)

Effect of exchange rate changes on cash, cash equivalents and restricted cash 12,971 — —

Net increase (decrease) in cash and cash equivalents and restricted cash $ (1,302,760) $ 1,212,422 $ 47,229

2024 FORM 10-K | 52

Operating Activities

Our operating net working capital (non-GAAP) as of September 30, 2024, 2023, and 2022 is presented below:

Year Ended September 30,

(in thousands) 2024 2023 2022

Total current assets $ 1,192,069 $ 1,006,625 $ 1,002,944

Cash and cash equivalents 217,341 257,174 232,131

Short-term investments 292,919 93,600 117,101

Assets held-for-sale — 645 4,333

Prepaid property, plant and equipment 23,249 21,821 10,091

$ 658,560 $ 633,385 $ 639,288

Total current liabilities 446,949 418,931 394,810

Dividends payable 25,024 25,194 26,693

Advance payment for sale of property, plant and equipment — — 600

$ 421,925 $ 393,737 $ 367,517

Operating net working capital (non-GAAP) $ 236,635 $ 239,648 $ 271,771

Cash flows provided by operating activities were approximately $543.0 million, $684.7 million, and $833.7 million for the fiscal year ended September 30, 2025, 2024, and 2023 respectively.

The change in cash provided by operating activities between fiscal years 2024 and 2023 is primarily driven by lower activity levels partially offset by higher average pricing levels.

The increase in cash provided by operating activities between fiscal years 2023 and 2022 was primarily driven by higher activity and pricing.

For the purpose of understanding the impact on our cash flows from operating activities, operating net working capital is calculated as current assets, excluding cash and cash equivalents, short-term investments, assets held-for-sale, and prepaid property, plant and equipment, less current liabilities, excluding dividends payable, short-term debt and advance payments for sale of property, plant and equipment.

Operating net working capital was $236.6 million, $239.6 million and $271.8 million as of September 30, 2024, 2023 and 2022, respectively.

This metric is considered a non-GAAP measure of the Company's liquidity.

The Company considers operating net working capital to be a supplemental measure for presenting and analyzing trends in our cash flows from operations over time.

Likewise, the Company believes that operating net working capital is useful to investors because it provides a means to evaluate the operating performance of the business using criteria that are used by our internal decision makers.

The change in cash provided by operating activities between fiscal years 2025 and 2024 is primarily driven by start-up costs associated with our commencement of our operations in Saudi Arabia and acquisition transaction costs associated with the Acquisition.

The decrease in cash provided by operating activities between fiscal years 2024 and 2023 was primarily driven by lower activity levels partially offset by higher average pricing levels.

Net cash flows provided by (used) related to the change in working capital was $(79.8) million, $(38.4) million and $34.5 million as of September 30, 2025, 2024 and 2023, respectively.

Investing Activities

Capital Expenditures Our capital expenditures were $426.4 million, $495.1 million and $395.5 million in fiscal years 2025, 2024 and 2023, respectively.

The increase in capital expenditures is driven by the timing of procurement associated with equipment overhauls and certain long-term projects including the procurement of long lead items for international expansion projects.

The decrease in capital expenditures is driven by lower equipment overhauls and certain long-term projects including skidding to walking rig conversions.

Our fiscal year 2026 capital spending is currently estimated to be between $280.0 million and $320.0 million.

This estimate includes normal capital maintenance requirements, planned rig-related equipment upgrades, and skidding to walking conversions for up to six rigs.

This estimate includes normal capital maintenance requirements, planned rig-related equipment upgrades and reactivation-related capital across the global fleet of operating drilling rigs.

Net Sales of Short-Term Investments Our net sales of short-term investments during fiscal year 2025 were $261.3 million compared to net sales of $3.5 million and $14.3 million in fiscal years 2024 and 2023, respectively.

The change in activity is driven by our ongoing liquidity management.

Additionally, the Central Bank of Argentina maintains currency controls that limit our ability to access U.S.

The increase in activity is driven by $193.3 million of net proceeds received from the liquidation of shares in ADNOC Drilling and our ongoing liquidity management.

The Central Bank of Argentina maintains currency controls that limit our ability to access U.S.

dollars in Argentina and remit cash from our Argentine operations.

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during 2024 and 2023, respectively.

Net Purchases of Long-Term Investments Our net purchases of long-term investments were $9.1 million, $20.7 million and $29.2 million in fiscal years 2024, 2023 and 2022, respectively.

Our activity during the fiscal year ended September 30, 2024, was driven by $9.1 million of investments in various debt and equity securities.

Our activity during the fiscal year ended September 30, 2023, was driven by a $14.1 million equity investment in Tamboran Resources Corporation, $4.1 million in debt and equity security investments in various geothermal energy companies, and $2.5 million investments in other equity securities.

Our activity during the fiscal year ended September 30, 2022, was driven by a $33.0 million cornerstone investment in Galileo Holdco 2 Limited Technologies and the purchase of $18.2 million in various geothermal investments, offset by $22.0 million of proceeds received from the liquidation of our remaining equity securities in Schlumberger, Ltd.

2025 FORM 10-K | 49

Insurance Proceeds from Involuntary Conversion In November 2022, a fire at a wellsite caused substantial damage to one of our super-spec rigs within our North America Solutions segment.

The major components were destroyed beyond repair and considered a total loss, and, as a result, these assets were written off and the rig was removed from our available rig count.

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

During the fiscal year ended September 30, 2024, we collected $5.5 million of the total expected insurance proceeds.

The total insurance proceeds received during the period exceeds the recognized loss and therefore was recognized as a gain within operating income during the fiscal year ended September 30, 2024.

During the fiscal year ended September 30, 2023, we collected $9.2 million of the total expected insurance proceeds.

Net Purchases and Sales of Long-Term Investments Our net sales of long-term investments during fiscal year 2025 were $28.7 million compared to net purchases of $9.1 million and $20.7 million in fiscal years 2025, 2024 and 2023, respectively.

During the year ended September 30, 2025, the increase in net sales activity is primarily driven by $27.1 million and $4.9 million of proceeds received from the liquidation of one of our equity security investments and one of our debt security investments, respectively.

Our activity during the fiscal year ended September 30, 2024, was driven by $9.1 million in purchases of investments in various debt and equity securities.

Our activity during the fiscal year ended September 30, 2023, was driven by purchases of a $14.1 million equity investment in Tamboran Resources Corporation, $4.1 million in debt and equity security investments in various geothermal energy companies, and $2.5 million investments in other equity securities.

Payment for the Acquisition of Business, Net of Cash Received During fiscal year 2025, H&P completed the Acquisition by paying approximately $2.0 billion in cash.

This included acquiring $199.4 million in cash and cash equivalents, resulting in a net cash payment of $1.8 billion.

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

Sale of Assets Our proceeds from asset sales totaled $45.8 million, $46.4 million and $70.1 million in fiscal year 2025, 2024 and 2023, respectively.

The decrease in proceeds is mainly driven by lower rig activity which drives lower reimbursement from customers for lost or damaged drill pipe and other used drilling equipment.

The decrease in proceeds compared to fiscal year 2023 is mainly driven by lower rig activity which drives lower reimbursement from customers for lost or damaged drill pipe and other used drilling equipment.

Financing Activities

Dividends We paid dividends of $1.68 per share, comprised of a base cash dividend of $1.00 and a supplemental cash dividend of $0.68 during the fiscal year 2024.

Comparatively, we paid dividends of $1.94 and $1.00 per share in 2023 and 2022.

Dividends We paid dividends of $1.00 per share during the fiscal year 2025.

Comparatively, we paid dividends of $1.68 and $1.94 per share in 2024 and 2023, respectively.

Total dividends paid were $100.7 million, $168.5 million and $201.5 million in fiscal years 2025, 2024 and 2023, respectively.

Debt Issuance Proceeds and Costs On September 17, 2024, we issued $1.2 billion net aggregate principal amount of senior notes.

Debt issuance costs paid in fiscal year 2024 were $22.9 million, of which $9.6 million relates to the senior notes issued in the current year and $13.3 million relates to other financing arrangements.

For additional information regarding debt issuance and related costs, refer to Note 6—Debt to the Consolidated Financial Statements.

Debt Issuance Proceeds and Costs On January 16, 2025, we received $400.0 million of proceeds from the Term Loan Credit Agreement.

During fiscal year 2025, the Company repaid $200.0 million of the outstanding balance on the Term Loan Credit agreement.

On September 17, 2024, we issued $1.2 billion net aggregate principal amount of senior notes.

Debt issuance costs paid in fiscal year 2024 were $22.9 million, of which $9.6 million relates to the senior notes and $13.3 million relates to other financing arrangements.

For additional information regarding debt agreements, refer to Note 7—Debt to the Consolidated Financial Statements.

Repurchase of Shares 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.

During the fiscal year ended September 30, 2024, we repurchased 1.4 million common shares at an aggregate cost of $51.6 million, including accrued excise tax of $0.3 million, resulting in a net cash outflow of $51.3 million.

During the fiscal year ended September 30, 2023, we repurchased 6.5 million common shares at an aggregate cost of $249.0 million, including excise tax of $1.8 million, resulting in a net cash outflow $247.2 million.

During the fiscal year ended September 30, 2022, we repurchased 3.2 million common shares at an aggregate cost of $77.0 million.

Senior Notes Issued in Fiscal Year 2024

On September 17, 2024, we completed a private offering of $1.25 billion aggregate principal amount of the Notes, comprised of the following tranches:

During the fiscal year ended September 30, 2024, we repurchased 1.4 million common shares at an aggregate cost of $51.6 million, including excise tax of $0.3 million, resulting in a net cash outflow of $51.3 million.

Senior Notes Iss ued in Fiscal Year 2024

On September 17, 2024, we completed a private offering of $1.25 billion aggregate principal amount of senior notes, comprised of the following tranches (collectively, the “Notes”):

The Notes are subject to a “special mandatory redemption,” which would require the Company to redeem the Notes at a special mandatory redemption price equal to 101.0 percent of the principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon in the event that (i) the consummation of the Acquisition does not occur on or before October 25, 2025, (or such later date as the Company may agree to extend the "Long Stop Date" under the Purchase Agreement), (ii) the Purchase Agreement is terminated without the consummation of the Acquisition or (iii) if the Company otherwise notifies the trustee of the Notes that it will not pursue the consummation of the Acquisition.

Interest on the Notes is payable semi-annually on June 1 and December 1 of each year, commencing on June 1, 2025.

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 3—Business Combination.

In connection with the issuance of the Notes, the Company also entered into a registration rights agreement, dated as of September 17, 2024 (the "Registration Rights Agreement"), with the initial purchasers of the Notes named therein.

Under the Registration Rights Agreement, the Company agreed, among other things, to:

(i) file a registration statement (the “Exchange Offer Registration Statement”) with the SEC to register an offer to exchange each series of the Notes for freely tradable notes having terms identical in all material respects to each such series of Notes (the “Registered Exchange Offer”);

(ii) use commercially reasonable efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act not later than the later of (x) the 30th day following the Company’s filing of a Current Report on Form 8-K or an amendment thereto including the financial statements of KCA Deutag and pro forma financial information related to the Company’s acquisition of KCA Deutag required by Items 9.01(a) and 9.01(b) of Form 8-K (the “KCA Deutag Financials Form 8-K”) and (y) June 16, 2025;

and (iii) use commercially reasonable efforts to cause the Registered Exchange Offer to be completed not later than the later of (x) the 60th day following the Company’s filing of the KCA Deutag Financials Form 8-K and (y) July 14, 2025 (the “Exchange Offer Closing Deadline”), subject to certain limitations.

Under the Registration Rights Agreement, the Company agreed, among other things, to use commercially reasonable efforts to file with the SEC, and cause to be declared effective, a registration statement with respect to an offer to exchange each series of the Notes for freely tradable notes (“Registered Notes”) having terms identical in all material respects to each such series of Notes (the “Registered Exchange Offer”).

Accordingly, on May 15, 2025, the Company filed a registration statement on Form S-4 with the SEC, which was declared effective on May 28, 2025.

On May 28, 2025, the Company launched the Registered Exchange Offer, which expired on July 10, 2025.

Substantially all of the Notes were tendered and exchanged for Registered Notes in the Exchange Offer.

2025 FORM 10-K | 50

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.

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;

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The indenture governing the Notes also contains customary events of default with respect to the Notes.

Senior Notes Extinguished in Fiscal Year 2022

On December 20, 2018, we issued approximately $487.1 million in aggregate principal amount of the 4.65 percent senior notes due 2025 (the "2025 Notes").

On September 27, 2021, the Company delivered a conditional notice of optional full redemption for all of the outstanding 2025 Notes at a redemption price calculated in accordance with the indenture governing the 2025 Notes, plus accrued and unpaid interest on the 2025 Notes to be redeemed.

The Company financed the redemption of the 2025 Notes with the net proceeds from the offering of the 2031 Notes (discussed below), together with cash on hand.

The Company’s obligation to redeem the 2025 Notes was conditioned upon the prior consummation of the issuance of the 2031 Notes, which was satisfied on September 29, 2021.

On October 27, 2021, we redeemed all of the outstanding 2025 Notes.

As a result, the associated make-whole premium of $56.4 million and the write off of the unamortized discount and debt issuance costs of $3.7 million were recognized during the first fiscal quarter of 2022 contemporaneously with the October 27, 2021 debt extinguishment and recorded in Loss on extinguishment of debt on our Consolidated Statements of Operations during the fiscal year ended September 30, 2022.

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.

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Term Loan Credit Agreement

On August 14, 2024, the Company entered into the Term Loan Credit Agreement, dated as of August 14, 2024, among the Company, 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.

On August 14, 2024, the Company entered into the Term Loan Credit Agreement, among the Company, Morgan Stanley Senior Funding, Inc.

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

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.

We expect to use the proceeds from the Term Loan Credit Agreement, together with the net proceeds from the sale of Notes and cash on hand, to finance the purchase price for the Acquisition, to repay certain of KCA Deutag's outstanding indebtedness, and to pay related fees and expenses.

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 fiscal year ended September 30, 2025, the Company repaid $200.0 million of the outstanding balance on the Term Loan Credit Agreement.

As such, the outstanding balance as of September 30, 2025, was $200.0 million.

In October 2025, we repaid $10.0 million, decreasing the outstanding balance on the Term Loan Credit Agreement to $190.0 million.

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

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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 September 30, 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 September 30, 2024.

Based on the unsecured debt rating of the Company on September 30, 2025, the spread over SOFR was 1.375 percent and commitment fees were 0.175 percent.

As of September 30, 2025, the interest rate on the Term loan was 5.610 percent per annum.

The weighted average variable interest rate on all amounts outstanding under the Term Loan was 5.750 percent the year ended September 30, 2025.

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.

During the fiscal year ended September 30, 2025, our 2024 Oman Facility was amended to bear interest payable quarterly at a fixed rate of 6.00 percent per annum for two years and thereafter, at a rate that is the higher of (x) 5.00 percent and (y) the reference rate specified in the 2024 Oman Facility plus 1.75 percent.

On February 9, 2025, we received the final draw down of $1.4 million.

During the fiscal year ended September 30, 2025, the Company repaid $2.6 million of the outstanding balance on the facility.

Of the $43.1 million borrowings outstanding at September 30, 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.

2025 FORM 10-K | 51

Bridge Loan Facility

In connection with, and concurrently with the entry into, the Purchase Agreement, the Company entered into a debt commitment letter dated July 25, 2024 with MSSF, pursuant to which MSSF has committed, subject to satisfaction of standard conditions, to provide the Company with an unsecured 364-day bridge loan facility in an aggregate principal amount of approximately $2.0 billion (the “Bridge Loan Facility”) the proceeds of which, if drawn, would have been used to fund the Acquisition.

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.

For additional information regarding the Bridge Loan Facility, refer to Note 6—Debt to the Consolidated Financial Statements.

Revolving Credit Facility

On August 14, 2024, the Company entered into the Amended Credit Facility with the Revolving Credit Agreement Lenders, the issuing lenders party thereto and 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.

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.

During the fiscal year ended September 30, 2025, our 2023 Oman Facility was amended to bear interest payable quarterly at a fixed rate of 6.00 percent per annum for two years and thereafter, at a rate that is the higher of (x) 5.00 percent and (y) the reference rate specified in the 2023 Oman Facility plus 1.75 percent.

During the fiscal year ended September 30, 2025, the Company repaid $2.6 million of the outstanding balance on the facility.

Of the $39.8 million borrowings outstanding at September 30, 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 ("Wells Fargo") as administrative agent, swingline 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”).

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 satisfaction of certain conditions.

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We can elect to borrow at either an adjusted SOFR rate or an adjusted base rate, plus an applicable margin.

The adjusted SOFR rate is the forward-looking term rate based on SOFR for the applicable tenor of one, three, or six months, plus 0.10 percent per annum.

The adjusted base rate is a fluctuating rate per annum equal to the highest of (i) the administrative agent's prime rate, (ii) the federal funds effective rate plus 0.50 percent, or (iii) the one-month adjusted SOFR rate plus 1.0 percent.

The adjusted SOFR rate is the forward-looking term rate based on SOFR for the applicable tenor of one, three, or six months, plus .001 per annum.

The adjusted base rate is a fluctuating rate per annum equal to the highest of (i) the administrative agent's prime rate, (ii) the federal funds effective rate plus .005, or (iii) the one-month adjusted SOFR rate plus .01.

We also pay a commitment fee on the unused balance of the facility.

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Of the $400.0 million, $186.4 million was outstanding as of September 30, 2025.

Separately, we had $5.0 million in standby letters of credit and bank guarantees outstanding.

In total, we had $44.7 million outstanding as of September 30, 2024.

2025 FORM 10-K | 52

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.

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If needed, we may decide to obtain additional funding from our $950.0 million Amended Credit Facility.

Our indebtedness under our unsecured senior notes totaled $1.8 billion at September 30, 2024 and comprised with the following maturities:

Our indebtedness under our unsecured senior notes totaled $1.8 billion at September 30, 2025 and is comprised with the following maturities:

$350.0 million due December 2027, $350.0 million due December 2029, $550.0 million due September 2031, and $550.0 million due December 2034.

2024 FORM 10-K | 56

Total consideration is subject to adjustment as set forth in the Purchase Agreement.

The transaction is expected to close prior to calendar 2024 year end, subject to customary closing conditions and regulatory approvals.

Our indebtedness under our unsecured term loan credit agreement totaled $200.0 million at September 30, 2025 and matures in January 2027.

Our indebtedness under our secured term loan credit agreements totaled $82.9 million at September 30, 2025, of which $6.9 million is due within one year, and the remaining balance is required to be paid on a quarterly basis through the respective maturity dates of December 2033 and December 2034.

This debt is allocated specifically to finance the ongoing rig construction activities in Oman.

As of September 30, 2025, we had a $624.0 million deferred tax liability on our Consolidated Balance Sheets, primarily related to temporary differences between the financial and income tax basis of property, plant and equipment.

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We expect to be able to meet any such obligations utilizing cash and investments on hand, as well as cash generated from ongoing operations.

At September 30, 2024, we have recorded approximately $0.8 million of unrecognized tax benefits, interest, and penalties.

As of September 30, 2025, we have recorded approximately $23.9 million of unrecognized tax benefits, interest, and penalties.

We believe approximately $6.9 million of the unrecognized tax benefits, interest, and penalties will be recognized as of December 31, 2025, as the result of payment of an assessed amount.

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.

The long‑term debt to total capitalization ratio was 38.2 percent and 16.6 percent as of September 30, 2024 and 2023.

For additional information regarding debt agreements, refer to Note 6—Debt to the Consolidated Financial Statements.

There were no other significant changes in our financial position since September 30, 2023.

Material Commitments

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2025 FORM 10-K | 53

Fair Value Estimates in Business Combination Accounting

In addition to the critical accounting policies and estimates previously disclosed, due to the Acquisition, we also consider estimates used in applying the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations , to be part of our critical accounting policies and estimates due to the high degree of judgment and complexity in its application.

The acquisition method of accounting involves the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

This allocation process involves the use of estimates and assumptions made in connection with estimating the fair value of assets acquired and liabilities assumed including cash flows expected to be derived from the use of the asset, the timing of such cash flows, the remaining useful life of assets, estimated asset replacement costs, and applicable discount rates.

Acquisition accounting allows for up to one year to obtain the information necessary to finalize the fair value of all assets acquired and liabilities assumed at January 16, 2025.

During September 2025, we finalized the allocation of the purchase price.

Refer to Note 3—Business Combination to the accompanying Consolidated Financial Statements for additional information about accounting for the Acquisition.

Property, Plant and Equipment

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Certain events, such as unforeseen changes in operations, technology or market conditions, could materially affect our estimates and assumptions related to depreciation or result in abandonments.

For the fiscal years presented in this Form 10-K, no significant changes were made to the determinations of useful lives or salvage values.

Except for the property, plant and equipment acquired in connection with the Acquisition, there were no significant changes to the determinations of useful lives or salvage values during the fiscal years presented in this Form 10-K.

Upon retirement or other disposal of fixed assets, the cost and related accumulated depreciation are removed from the respective accounts and any gains or losses are recorded in the results of operations.

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however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit.

During the third fiscal quarter of 2025, due primarily to the sustained decline in our share price and market capitalization, we identified indicators of potential impairment of goodwill and performed an interim impairment test.

We estimated the fair value of each reporting unit using a market approach, incorporating significant unobservable, or Level 3, inputs, as defined by the fair value hierarchy.

We employed a combination of the guideline public company method and the guideline transactions method, leveraging company comparisons and analyst reports from the energy industry, which supported a range of fair values derived from annualized earnings before interest, income taxes, depreciation and amortization ("EBITDA") multiples between 2.5x and 5.5x for guideline public companies and between 3.4x and 7.6x for guideline transactions.

We then derived an estimated fair value of each reporting unit based on an EBITDA multiple at or below the peer-median trading multiple.

2025 FORM 10-K | 54

Based on our interim goodwill impairment test as of June 30, 2025, we concluded that the International Solutions and BENTEC™ (formally Kenera) reporting units' carrying value exceeded their respective estimated fair value.

As a result, we recorded a non-cash goodwill impairment charge of $128.4 million and $44.9 million, respectively, which represented a full impairment of the goodwill allocated to these reporting units.

The estimated fair values of our H&P Technologies and Offshore Solutions reporting units as of June 30, 2025 exceeded their respective carrying values by approximately 76 percent and 20 percent, respectively.

During the three months ended September 30, 2025, primarily as a result of measurement period adjustments, we recorded an additional $4.4 million and $14.5 million in impairment expense related to the International Solutions and BENTEC™ reporting units, respectively.

Our annual review of goodwill during the fourth fiscal quarter of 2025 did not result in any additional impairments.

Due to the goodwill impairment described above, we also considered whether there was an indicator of impairment of our long-lived assets (including our finite-lived intangible assets) as of June 30, 2025.

Although our market capitalization has decreased due to factors in the equities market, we believe there has not been a material change in our long-term cash flow projections, significant change in the business environment, or loss of one or more significant customers that would indicate potential impairment of our long-lived assets which, unlike goodwill, are evaluated for impairment based on undiscounted future cash flows.

Based on these considerations, we concluded there were no indicators of impairment as it related to our long-lived assets as June 30, 2025.

These determinations were based on conditions at the time;

should circumstances change, our conclusions could materially differ.

Our annual review of long-lived assets during the fourth fiscal quarter of 2025 did not identify any impairment indicators.

See Note 6—Goodwill and Intangible Assets for additional discussion of goodwill and intangible assets.

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However, we self-insure large deductibles under these policies.

We also carry insurance with varying deductibles and coverage limits with respect to stacked rigs, offshore platform rigs, and “named wind storm” risk in the Gulf of Mexico.

We also carry insurance with varying deductibles and coverage limits with respect to stacked rigs, offshore platform rigs, and “named wind storm” risk in the Gulf of America.

We self‑insure a number of other risks, including loss of earnings and business interruption.

We self‑insure a significant portion of expected losses relating to workers’ compensation, general liability, employer’s liability, auto liability, and certain other insurance coverages.

Generally, deductibles range from $1 million to $10 million per occurrence depending on the coverage and whether a claim occurs outside or inside of the United States.

Insurance is purchased over deductibles to reduce our exposure to catastrophic events but there can be no assurance that such coverage will apply or be adequate in all circumstances.

Generally, SIRs and deductibles range from $1 million to $10 million per occurrence depending on the coverage and whether a claim occurs outside or inside of the United States.

Insurance is purchased over SIRs and deductibles to reduce our exposure to catastrophic events but there can be no assurance that such coverage will apply or be adequate in all circumstances.

Estimates are recorded for incurred outstanding liabilities for workers’ compensation and other casualty claims.

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These estimates are based on adjusters’ estimates, our historical loss experience and statistical methods commonly used within the insurance industry that we believe are reliable.

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We also engage a third-party actuary to perform a periodic review of our casualty losses.

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Unanticipated changes in these factors may produce materially different amounts of expense that would be reported under these programs.

Our wholly‑owned captive insurance companies finance a significant portion of the physical damage risk on company‑owned drilling rigs as well as casualty deductibles and other risk retentions.

Our wholly‑owned captive insurance companies finance a significant portion of the physical damage risk on company‑owned drilling rigs as well as casualty SIRs, deductibles, and other risk retentions.

An actuary reviews the loss reserves retained by the Company and the Captives on an annual basis.

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While costs incurred to relocate rigs and other drilling equipment to areas in which a contract has not been secured are expensed as incurred.

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We also act as a principal for certain reimbursable services and auxiliary equipment provided by us to our clients, for which we incur costs and earn revenues.

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Direct margin is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time.

Direct margin is not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures.

Direct margin is not a substitute for financial measures prepared in accordance with U.S.

GAAP and should therefore be considered only as supplemental to such U.S.

GAAP financial measures.

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The following table reconciles direct margin to segment operating income, which we believe is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to direct margin.

Year Ended September 30, 2024

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

Segment operating income (loss)

The following table reconciles direct margin to segment operating income, which we believe is the financial measure calculated and presented in accordance with U.S.

GAAP that is most directly comparable to direct margin.

(in thousands) Year Ended September 30, 2025 Year Ended September 30, 2024

NORTH AMERICA SOLUTIONS

Segment operating income

$ 579,961 $ 610,623

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Selling, general and administrative expense 68,047 61,113

Acquisition transaction costs 41 —

Asset impairment charges 1,507 —

Restructuring charges 4,121 —

Direct margin (Non-GAAP) $ 1,039,630 $ 1,079,475

Year Ended September 30, 2023

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

INTERNATIONAL SOLUTIONS

Segment operating income (loss)

$ (291,695) $ 4,652

Depreciation and amortization 218,817 10,863

Research and development 30,457 — —

Selling, general and administrative expense 17,232 9,427

Acquisition transaction costs 1,585 —

Asset impairment charges 132,720 —

Restructuring charges 4,945 —

Direct margin (Non-GAAP) $ 83,604 $ 24,942

OFFSHORE SOLUTIONS

Segment operating income

$ 49,942 $ 12,415

Depreciation and amortization

Selling, general and administrative expense 4,619 3,594

Acquisition transaction costs 2,971 —

Restructuring charges 266 —

Direct margin (Non-GAAP) $ 90,259 $ 23,539

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-K

Item 7. Management’s Discussion and Analysis