HP 10-K & 10-Q changes, risk factors and insider trading

An investment in our securities involves a variety of risks. In addition to the other information included and incorporated by reference in this Form 10-K and the risk factors discussed elsewhere in this Form 10-K, the following risk factors should be carefully considered,considered and read in conjunction with the other information in this Form 10-K, as they could have a material adverse effect on our business, financial condition and results of operations. There may be other additional risks, uncertainties and matters not presently known to us or that we believe to be immaterial that could nevertheless have a material adverse effect on our business, financial condition and results of operations.

Our business depends on the conditions of the land and offshore oil and natural gas industry. Demand for our services and the rates we are able to charge for such services depend on oil and natural gas industry exploration and production activity and expenditure levels, which are directly affected by both long- and short-term trends in oil and natural gas prices and market expectations regarding such prices. Oil prices are particularly sensitive to actual and perceived threats to geopolitical stability, global economic conditions, and to changes in production from OPEC+ member states. For example, the ongoing armed conflicts between (i) Russia and Ukraine and (ii) the conflicts in Israelthe Middle East and the continuation of, or any escalation in the severity of, these conflicts, has led and may continue to lead to an increase in the volatility of global oil and gas prices, which could have a corresponding negative impact on the capital expenditure of oil and gas companies as a result of the higher perceived risk.

•expectations about future oil and natural gas prices and production levels (including as a result of certain economic initiatives, such as those related to artificial intelligence);

•taxtax, trade and tariff policies of the United States and other countries involved in global energy markets;

•technological advances that are related to oil and natural gas recovery or that affect the global demand or supply for energy;

•increased focus by the investment community on sustainability practices in the oil and natural gas industry;

Concerns over global economic conditions, energy costs, geopolitical issues, supply chain disruptions, inflation, the availability and cost of credit have contributed to increased economic uncertainty. An economic slowdown or recession in the United States or in any other country that significantly affects the supply of or demand for oil or natural gas could negatively impact our operations and therefore adversely affect our results. Global economic conditions have a significant impact on oil and natural gas prices and stagnation or deterioration in global economic conditions could result in less demand for our services and could cause our customers to reduce their planned spending on exploration and development drilling. Adverse global economic conditions may cause our customers, vendors and/or suppliers to lose access to the financing necessary to sustain or increase their current level of operations, fulfill their commitments and/or fund future operations and obligations. Furthermore, challenging economic conditions may result in certain of our customers experiencing bankruptcy or otherwise becoming unable to pay vendors, including us. In the past, global economic conditions, and expectations for future global economic conditions, have sometimes experiencedsignificantly significant deteriorationdeteriorated in a relatively short period of time and there can be no assurance that global economic conditions or expectations for future global economic conditions will recover in the near term or not quickly deteriorate again due to one or more factors. These conditions could have a material adverse effect on our business, financial condition and results of operations.

We periodically seek to increase the prices on our services to offset rising costs, earn returns on our capital investment and otherwise generate higher returns for our stockholders. However, we operate in a very competitive industryindustry, and we are not always successful in raising or maintaining our existing prices. From time to time we are able to increase our prices, but we may not be able to do so at a rate that is sufficient to offset rising costs. The inability to maintain our pricing and to increase our pricing as costs increase to offset rising costs and capital expenditures could adversely affect our rig utilization and profit margins.

Further, as a result of any significant reduction in the demand for oil and natural gas services, certain of our competitors may engage in bankruptcy proceedings, debt refinancing transactions, management changes, or other strategic initiatives in an attempt to reduce operating costs to maintain a position in the market. This could result in such competitors emerging with stronger or healthier balance sheets and in turn an improved ability to compete with us in the future. We may also see corporate consolidations among our competitors and customers, which could significantly alter industry conditions and competition within the industry, and have a material adverse effect on our business, financial condition and results of operations.

Our operations are subject to many hazards inherent in the business in which we operate, including inclement weather, natural disasters, unplanned power outages, blowouts, explosions, well fires, loss of well control, equipment failure, computer system disruptions, pollution, and reservoir damage. These hazards could cause significant environmental and reservoir damage, personal injury and death, suspension of operations, serious damage or destruction of equipment and property and substantial damage to producing formations and surrounding lands and waters. An accident or other event resulting in significant environmental or property damage, or injuries or fatalities involving our employees or other persons could also trigger investigations by federal, state or local authorities. Such an accident or other event and subsequent crisis management efforts could cause us to incur substantial expenses in connection with investigation and remediation as well as cause lasting damage to our reputation, loss of customers and an inability to obtain insurance.

Our Offshore Gulf of MexicoSolutions operations are also subject to potentially significant risks and liabilities attributable to or resulting from adverse environmental conditions, including pollution of offshore waters and related negative impact on wildlife and habitat, adverse sea conditions and platform damage or destruction due to collision with aircraft or marine vessels. Our Offshore Gulf of MexicoSolutions operations may also be negatively affected by a blowout or an uncontrolled release of oil or hazardous substances by third parties whose offshore operations are unrelated to our operations. We operate several platform rigs in the Gulf of Mexico.America. The Gulf of MexicoAmerica experiences hurricanes and other extreme weather conditions on a frequent basis, which may increase in frequency and severity as a result of climate change. See below “—The physical effects of climate change and the regulation of greenhouse gases and climate change could have a negative impact on our business.” Damage caused by high winds and turbulent seas could potentially curtail operations on our platform rigs for significant periods of time until the damage can be repaired. Moreover, we may experience disruptions in operations due to damage to customer platforms and other related facilities in the area. We also lease a fabrication facility near the Houston, Texas ship channel, regularly have land drilling operations proximate to the gulf coast, and our principal fabricator and other vendors are also located in the gulf coast region, all of which could be exposed to damage or disruption by hurricanes and other extreme weather conditions, including coastal flooding, which in turn could result in increased operating costs or decreases in revenues and adversely affect our business, financial condition, and results of operations.

In addition, we maintain insurance coverage of the types and in the amounts that we believe to be customary in the industry, but we do not insure against all risks, either because insurance is not available or because it is not commercially justifiable. See Item 1—Business—"Insurance and Risk Management” for a description of our insurance coverage. Our insurance will not in all situations provide sufficient funds to protect us from all losses and liabilities that could result from our operations. Our coverage includes aggregate policy limits. As a result, we retain the risk for any loss in excess of these limits. No assurance can be given that insurance coverage will continue to be available at rates considered reasonable or that our coverage will respond to a specific loss. In addition, our insurance may not cover losses associated with pandemics such as the COVID-19 pandemic. Further, we may experience difficulties in collecting from our insurers or our insurers may deny all or a portion of our claims for insurance coverage.

Our operations depend on effective and secure information technology systems, including our own systems and the systems of third party vendors upon which we rely, such as those providing cloud services to us. Potential unauthorized occurrences on or through our information technology systems, including as a result of cybersecurity incidents, that may result in adverse effects on the confidentiality, integrity, and availability of these systems and data residing therein continue to grow. Cybersecurity threats could include, but are not limited to, cybersecurity incidents, such as ransomware attacks, denial-of-service attacks, phishing attacks, malicious software; unauthorized or unlawful access, release, corruption or loss of our data; employee or insider error; interruptions in communication; loss of our intellectual property or theft of our FlexRig® and other sensitive or proprietary technology; or loss or damage to our data delivery systems or other cybersecurity and infrastructure systems, including our property and equipment. In 2021, the Company introduced full-time or part-time remote work as a permanent option for select employees andaddition, a significant number of our employees now work remotely. Remote work relies heavily on the use of remote networking and online conferencing services that enable employees to work outside of our corporate infrastructure and, in some cases, use their own personal devices, which exposes the Company to additional cybersecurity risks. This risk is exacerbated with the advancement of technologies like artificial intelligence, which malicious third parties are using to create new, sophisticated and more frequent attacks. Furthermore, geopolitical tensions or conflicts, such as the ongoing armed conflicts between Russia and Ukraine and the conflicts in Israel,the Middle East, may further heighten the risk of cybersecurity attacks. Our information technology systems and those of our third party vendors are also subject to disruptions due to occurrences other than cybersecurity incidents, such as natural disasters or power outages.

We continually seek opportunities to maximize efficiency and value through various transactions, including purchases or sales of assets, businesses, investments, or joint venture interests. For example, in 2024 we entered into the Purchase Agreement related to the Acquisition (see below “KCA Deutag Acquisition Related Risks” for a description of additional risks specific to the Acquisition). These strategic transactions, among others, are intended to (but may not) result in access to new markets, the realization of savings, the creation of efficiencies, the offering of new products or services, the generation of cash or income, or the reduction of risk and the failure to achieve such intended benefits could have a material adverse effect on our business. Acquisition transactions may use cash on hand or be financed by additional borrowings or by the issuance of our common stock. These transactions may also affect our liquidity, consolidated results of operations and consolidated financial condition.

In fiscal year 2024,2025, we received approximately 58.254.0 percent of our consolidated operating revenues from our ten largest drilling services and solutions customers (including their affiliates) and approximately 27.325.6 percent of our consolidated operating revenues from our three largest drilling services and solutions customers (including their affiliates). If one or more of our larger customers terminated their contracts, failed to renew existing contracts with us, suspended active contracts for a prolonged period or refused to award us with new contracts, it could have a material adverse effect on our business, financial condition and results of operations. Further, consolidation among oil and natural gas exploration and production companies may reduce the number of available customers. See “—Consolidation in our industry may impact our results of operations” for additional disclosure regarding consolidations in our industry.

We currently own and operate rigs and have deployed technology under contracts with foreign national oil companies. In the future, we may expand our internationalInternational solutionsSolutions operations and enter into additional, significant contracts with national oil companies. The terms of these contracts may contain non-negotiable provisions and may expose us to greater commercial, political, operational, and other risks than we assume in other contracts. Foreign contracts may expose us to materially greater environmental liability and other claims for damages (including consequential damages) and personal injury related to our operations, or the risk that the contract may be terminated or suspended by our customer without cause on short-term notice, contractually or by governmental action, or under certain conditions that may not provide us with an early termination payment.payment or standby compensation. We can provide no assurance that increased risk exposure will not have an adverse impact on our future operations or that we will not increase the number of rigs contracted, or the amount of technology deployed, to national oil companies with commensurate additional contractual risks. Risks that accompany contracts with national oil companies could ultimately have a material adverse impact on our business, financial condition and results of operations.

Increases in the cost of labor, materials, parts, equipment, global transportation and logistics costs and other operational components hashave the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our services. In addition, our customers are also affected by inflation and the rising costs of goods and services used in their businesses, which could negatively impact their ability to purchase our services, which could adversely impact our revenue and profitability. There is no guarantee that we can increase selling prices, replace lost revenue, or reduce costs to fully mitigate the effect of inflation on our costs and business, which may adversely impact our sales margins and profitability.

Public health crises, pandemics and epidemics, such as the COVID-19 pandemic,epidemics and fear of such events have adversely impacted and may in the future again adversely impact our operations, the operations of our customers and the global economy, including worldwide demand for oil and natural gas and the level of demand for our services. Such public health crises, pandemics and epidemics are continuously evolving, and weWe are not able to enumerate all potential risks to our business from such events; however, we believe that in addition to the impacts described above, other current and potential impacts include, but are not limited to: significant volatility and disruption of the global financial markets; continued volatility of crude oil prices and related uncertainties around OPEC+ production; disruption of our operations, including suspension of drilling activities; impact to costs; loss of workers; labor shortages; supply chain disruptions or equipment shortages; logistics constraints; customer demand for our services and industry demand generally; capital spending by oil and gas companies; our liquidity; the price of our securities and trading markets with respect thereto; our ability to access capital markets; asset impairments and other accounting changes; certain of our customers experiencing bankruptcy or otherwise becoming unable to pay vendors, including us; and employee impacts from illness, travel restrictions, including border closures and other community response measures.events. The full extent of the impact of public health crises, pandemics and epidemics on our business operations and financial results will depend largely on future developments and various factors beyond our control, such as the duration, severity and sustained geographic spread, and the impact and effectiveness of governmental actions to contain and treat such outbreaks, including government policies and restrictions; vaccine hesitancy, vaccine mandates, and voluntary or mandatory quarantines; and the global response surrounding such uncertainties.

We currently have drilling operations in South America (primarily Argentina and Colombia), the Middle EastEast, Europe, Africa and Australia. We expect the Acquisition to increase the geographic reach of our operations. In the future, we may further expand the geographic reach of our operations. As a result, we are exposed to several political, economic and other uncertainties not encountered in U.S. operations, including increased risks of social unrest, strikes, terrorism, war, kidnapping of employees, nationalization, and forced negotiation or modification of contracts; difficulty resolving disputes (including technology disputes) and enforcing contract provisions, expropriation of equipment as well as expropriation of oil and gas exploration and drilling rights; taxation policies; foreign exchange restrictions and restrictions on repatriation of income and capital; currency rate fluctuations; increased governmental ownership and regulation of the economy and industry in the markets in which we operate; economic and financial instability of national oil companies; restrictive governmental regulation; bureaucratic delays; increased compliance costs; and general hazards associated with foreign sovereignty over certain areas in which operations are conducted.

South American countries, in particular, have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and general economic and political instability. From time to time, these risks have impacted our business. For example, in Argentina, while our dayrate is denominated in U.S. dollars, we are paid in Argentine pesos and Argentina has a history of implementing currency controls, which limit our ability to access U.S. Dollars in Argentina and repatriate cash from our Argentina operations. Argentina’s economy is currently considered highly inflationary, which is defined as cumulative inflation rates exceeding 100% in the most recent three-year period based on inflation data published by the respective governments. Nonetheless, all of our foreign operations use the U.S. dollar as the functional currency and local currency monetary assets and liabilities are remeasured into U.S. dollars with gains and losses resulting from foreign currency transactions included in current results of operations. For fiscal year 2024,2025, we recognized aggregate foreign currency losses of $5.1$3.8 million in Argentina. Our aggregate foreign currency losses across all of our operations for fiscal years 2024,2025, 2024 and 2023 and 2022 were $5.5$9.7 million, $6.4$5.5 million and $5.9$6.4 million, respectively. However, in the future, we may incur larger currency devaluations, foreign exchange restrictions or other difficulties repatriating U.S. dollars from Argentina or elsewhere, which could have a material adverse impact on our business, financial condition and results of operations. 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. The execution of certain trades known as Blue Chip Swaps effectively results in a parallel U.S. dollar exchange rate. During fiscal years 2024 and 2023, we entered into Blue Chip Swap transactions, which resulted in $7.1 million and $12.2 million losses on investments recorded in Gain on investment securities within our Consolidated Statements of Operations. As a result of the Blue Chip Swap transactions, $13.8 million and $9.8 million of net cash was repatriated to the U.S. during fiscal years 2024 and 2023, respectively.

The physical and regulatory effects of climate change and a global transition to a low carbon economy could have a negative impact on our operations, our customers’ operations and the overall demand for our customers' products and services. ThereIn hasrecent been an increasing focus ofyears, international, national, state, regional and local regulatory bodies have focused on emissions of certain gases, commonly referred to as “greenhouse gases” (“GHGs”) including carbon dioxide and methane, and climate change issues. Legislation to regulate GHG emissions has periodically been introduced in the U.S. Congressintroduced, and such legislation may be proposed or adopted in the future. These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG reporting, tracking programs, attestation requirements and regulations that directly limit GHG emissions from certain sources. Some of the proposals would require industries to meet stringent new standards that would require substantial reductions in carbon emissions. Those reductions could be costly and difficult to implement.

TheIn recent years, the United States ishas currentlytwice aentered memberinto ofand withdrawn from the “Paris Agreement” that requires member countries to review and “represent a progression” in their intended nationally determined GHG contributions,contributions. whichRecent setchanges manyin, newand goals,resulting includinguncertainty GHG emission reduction goals every five years beginning in 2020. In 2023,around, the United StatesStates' joinedapproach theto internationalclimate community at the 28th Conference of the Parties (COP28), where the U.S.change and nearlyGHG 200regulation otherfurther countriescomplicate renewed their commitmentefforts to deliverprepare onfor thefuture aimspolicy of the 2015 Paris Agreement.changes.

It is not possible at this time to fully predict the timing and effect of climate change or the extent and contents of any additional GHG legislation, regulations or other measures adopted atby thegovernments federal,that statemay orimpact localour levels.business. However, more aggressive efforts by governments and non-governmental organizations to reduce GHG emissions have occurred and may continue based on the findings set forth in the IPCC Reports and any such future laws and regulations could result in increased compliance costs, reducereduced our returnreturns on investment, or additional operating restrictionsrestrictions. orThey may also affect the demand for our customers' products and, accordingly, our services. In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigationlitigation, legislation, or investigations brought by public and private entities against oil and gas companies in connection with their GHG emissions. As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring financial, actual, or other mitigation of the effects of climate change. For example, a coalition of over 20 governors of U.S. states formed the United States Climate Alliance to advance the objectives of the Paris Agreement, and several U.S. cities have committed to advance the objectives of the Paris Agreement at the state or local level as well. If we are unable to recover or pass through a significant level of our costs or are required to change our practices related to complying with climate changechange-related regulatory requirements imposed on us, it could have a material adverse impact on our business, financial condition and results of operations. Further, to the extent financial markets view climate change and GHG emissions as a financial risk, this could negatively impact our cost of or access to capital. Climate change and GHG regulation could also negatively impact the drilling programs of our customers and, consequently, delay, limit or reduce the services we provide. An increased focus by the public on the reduction of GHG emissions as well as the results of the physical impacts of climate change could affect the demand for our customers’ products and have a negative effect on our business.

The federal government and certain state governmentsGovernments have enacted, and are expected tomay continue to enact, laws and regulations that mandate or provide economic incentives for the development of technologies and sources of energy other than oil and gas, such as wind and solar. Such legislation incentivizes the development, use and investment in these technologies and alternative energy sources and could accelerate the shift away from traditional oil and gas. For example, the Inflation Reduction Act ("IRA") of 2022 contains tax inducements and other provisions that incentivize investment, development, and deployment of alternative energy sources and technologies. Also, in 2022, California mandated that all new passenger cars and light trucks sold in the state be electric vehicles or other emissions-free models by 2035, and other jurisdictions have adopted or considered adopting similar measures. If these future laws and regulations result in customers reducing their production of oil and gas, they could ultimately have an adverse effect on our business and prospects.

Several political and regulatory authorities, governmental bodies, and environmental groups devote resources to campaigns aimed at eradicating hydraulic fracking. We do not engage in any hydraulic fracturing activities. However, it is a common practice in our industry for our customers to recover natural gas and oil from shale and other formations through the use of horizontal drilling combined with hydraulic fracturing. Hydraulic fracturing is the process of creating or expanding cracks, or fractures, in formations using water, sand and other additives pumped under high pressure into the formation. The hydraulic fracturing process is typically regulated by state oil and natural gas commissions. Several states have adopted or are considering adopting regulations that could impose more stringent permitting, public disclosure, waste disposal and/or well construction requirements on oil and gas development, including hydraulic fracturing operations, or otherwise seek to ban fracturing activities altogether. In addition to state laws, some local municipalities have adopted or are considering adopting land use restrictions, such as city ordinances, that may restrict or prohibit the performance of well drilling in general and/or hydraulic fracturing in particular. Members of the U.S. Congress are analyzing, and a number of federal agencies have historically been requested to review, and, under the current or future administrations, may be requested to review again, a variety of environmental issues associated with hydraulic fracturing and the possibility of more stringent regulation. At September 30, 2024,2025, we had approximately 2537 rigs placed on federal land and fourthree rigs in federal waters. Any new laws, regulations or permitting requirements regarding hydraulic fracturing could negatively impact the drilling programs of our customers and, consequently, delay, limit or reduce the services we provide. For example, the Environmental Protection Agency has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act over certain hydraulic fracturing activities involving the use of diesel fuels. Widespread regulation significantly restricting or prohibiting hydraulic fracturing or other drilling activity by our customers could have a material adverse impact on our business, financial condition and results of operations.

We have developed, and may continue to develop and set, goals, targets, or other objectives related to sustainability matters. Statements related to these goals, targets and objectives reflect our current plans and do not constitute a guarantee that they will be achieved. Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and objectives expose us to numerous operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective, including with respect to emissions reduction, is subject to numerous factors and conditions, some of which are outside of our control. Examples of such factors include: (1) the extent our customers' decisions directly impact, relate to, or influence the use of our equipment that creates the emissions we report, (2) the availability and cost of low- or non-carbon-based energy sources and technologies or abatement technologies, (3) evolving regulatory requirements affecting sustainability standards or disclosures, and (4) the availability of suppliers that can meet our sustainability and other standards. In addition, standards for tracking and reporting on sustainability matters, including climate-related matters, have not been harmonized and continue to evolve. Our processes and controls for reporting sustainability matters may not always comply with evolving and disparate standards for identifying, quantifying, and reporting such metrics, including sustainability-related disclosures that may be required of public companies by the SEC or in-scope companies under U.S. state or federal regulations, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. Future acquisitions or dispositions may also impact our reporting, process, and progress on such goals. Our business may also face increased scrutiny from investors and other stakeholders, including from parties that oppose ESG initiatives, related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. If ourOur sustainability practices do notcannot meet all investor or other stakeholder expectations and standards, which continue to evolve, and our reputation, our ability to attract or retain employees or customers, and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.

The CCPA, as amended by the CPRA gives California residents certain rights in relation to their personal data, and imposes obligations on certain entities that do business in California to protect those rights, which may apply to us. As the interpretation and enforcement of the CCPA/CPRA evolve, new compliance obligations emerge and may modify understanding regarding obligations imposed under the laws and regulations. Complying with these obligations could cause us to incur costs and shift our business practices in a manner that does not align with our business objectives. TheSignificant financial penalties imposed by the CCPA/CPRA provides for civil penalties of up to $7,500 per intentional violation and $2,500 per unintentional violation. Additionally, California residents whose personal data has been impacted by a cybersecurity incident as a result of the entity’s failure to implement and maintain reasonable security procedures and practices have been granted a private right of action, which could result in damages of up to $750 per incident where the entity failed to encrypt or redact personal data. These significant financial penalties for noncompliance may materially adversely affect our business, results of operations and revenue. Similar legislation has been adopted in a number of other states, and is being considered by others.

The nature of our business makes us susceptible to legal proceedings and governmental investigations from time to time. We design much of our own equipment and fabricate and upgrade such equipment in facilities that we operate. We also design and develop our own technology. If such equipment or technology fails to perform as expected, or if we fail to maintain or operate the equipment properly, there could be personal injuries, property damage, and environmental contamination, which could result in claims against us. Our ownership and use of proprietary technology and equipment could also result in infringement of intellectual property claims against us. See above “—Technology disputes and limitations on our ability to protect or enforce our intellectual property rights could negatively impact our costs, revenues, and any competitive advantage we hold..hold." The Company also owns and operates a large fleet of motor vehicles, which creates an increased exposure to motor vehicle accidents. Also, we may be subject, and have been subject in the past, to litigation resulting from accidents involving motor vehicles. These lawsuits have resulted, and may result in the future, in the payment of substantial settlements or damages and increases in our insurance costs. In addition, during periods of depressed market conditions we may be subject to an increased risk of our customers, vendors, former employees and others initiating legal proceedings against us. Further, actions or decisions we have taken or may take as a consequence of COVID-19 may result in investigations, litigation or legal claims against us. Lawsuits or claims against us could have a material adverse effect on our business, financial condition and results of operations. Any litigation or claims, even if fully indemnified or insured, could negatively impact our reputation among our customers and the public, and make it more difficult for us to compete effectively or obtain adequate insurance in the future.

We are subject to income taxes in the United States and numerous other foreign and state jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are regularly audited by tax authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different than what is reflected in income tax provisions and accruals. An audit or litigation could materially affect our financial position, income tax provision, net income, or cash flows in the period or periods challenged. Tax rates in the various jurisdictions in which our subsidiaries are organized and conduct their operations may change significantly as a result of political or economic factors beyond our control. It is also possible that future changes to tax laws (including tax treaties in any of the jurisdictions that we operate in) could impact our ability to realize the tax savings recorded to date. Our ability to benefit from our deferred tax assets depends on us having sufficient future taxable income to utilize our net operating loss and tax credit carryforwards before they expire. In addition, Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), generally imposes an annual limitation on the amount of net operating losses and other pre-change tax attributes (such as tax credits) that may be used to offset taxable income by a corporation that has undergone an “ownership change” (as determined under Section 382). An ownership change generally occurs if one or more shareholders (or groups of shareholders) that are each deemed to own at least 5 percent of our stock change their ownership by more than 50 percentage points over their lowest ownership percentage during a rolling three-year period. As of September 30, 2024,2025, we have not experienced an ownership change and, therefore, utilization of our applicable tax attributes was not subject to an annual limitation (except for an immaterial portion thereof that we inherited in connection with an acquisition during 2017). However, if we were to experience ownership changes in the future as a result of subsequent shifts in our stock ownership, our ability to use certain pre-change tax attributes could potentially accelerate or permanently increase our future tax liabilities. Additionally, our future effective tax rates could be adversely affected by changes in tax laws (including tax treaties) or their interpretation. For example, the IRA,One passedBig Beautiful Bill Act signed into law on AugustJuly 16,4, 2022,2025, included amany 15provisions percentsuch corporateas minimumthe permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modification to the international tax applicableframework toand the restoration of favorable tax yearstreatment beginningfor aftercertain Decemberbusiness 31,provisions. 2022.The Welegislation dohas multiple effective dates, with certain provisions effective in fiscal year 2025 and others implemented through fiscal year 2027. Currently, the legislation should not believehave thea corporate minimum tax will materiallymaterial impact on our effective tax rate or tax liability. Also, the Organization for Economic Co-operation and Development (“OECD”) released Pillar Two model rules defining a 15% global minimum tax rate for large multinational corporations. The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Pillar Two Framework expected in the near future. We have evaluated the potential impacts of Pillar Two and do not believe it will have a material adverse effect on our tax liability.rate.

Many aspects of our operations are subject to various laws and regulations in the jurisdictions where we operate, including those relating to drilling practices and comprehensive and frequently changing laws and regulations relating to the safety and to the protection of human health and the environment. Environmental laws apply to the oil and gas industry including those regulating air emissions, discharges to water, and the transport, storage, use, treatment, disposal and remediation of, and exposure to, solid and hazardous wastes and materials. These laws can have a material adverse effect on the drilling industry, including our operations, and compliance with such laws may require us to make significant capital expenditures, such as the installation of costly equipment or operational changes, and may affect the resale values or useful lives of our drilling rigs. If we fail to comply with these laws and regulations, we could be exposed to substantial administrative, civil and criminal penalties, delays in permitting or performance of projects and, in some cases, injunctive relief. Violations of environmental laws may also result in liabilities for personal injuries, property and natural resource damage and other costs and claims. In addition, environmental laws and regulations in the United States impose a variety of requirements on “responsible parties” related to the prevention of oil spills and liability for damages from such spills. As an owner and operator of drilling rigs, we may be deemed to be a responsible party under these laws and regulations. Additionally, certain actions by federal, state and local regulators relating to the protection of threatened or endangered species or critical habitats may result in limitations on exploration and production activities, thereby reducing demand for our services.

We have paid a quarterly dividend for many years and commencing in fiscal 2023 paid a quarterly supplemental dividend in addition to the established base dividend as part of a supplemental capital allocation plan. On July 25, 2024, we announced that we would suspend our supplemental dividend in fiscal year 2025 as a part of the Acquisitionacquisition of KCA Deutag announced in July 25, 2024. Our most recent quarterly base dividend declared was $0.25 per share. In the future, our Board of Directors may, without advance notice, determine to reduce or suspend our dividends in order to maintain our financial flexibility and best position the Company for long‑term success. The declaration and amount of future dividends is at the discretion of our Board of Directors and will depend on our financial condition, results of operations, cash flows, prospects, industry conditions, capital requirements and other factors and restrictions our Board of Directors deems relevant. In addition, any elimination of, or downward revision in our dividend payments could have an adverse effect on the market price of our common stock. The likelihood that dividends will be reduced or suspended is increased during periods of prolonged market weakness or uncertainty. In addition, our ability to pay dividends may be limited by agreements governing our indebtedness now or in the future. There can be no assurance that we will not reduce our dividend or that we will continue to pay a dividend in the future.

There have been efforts within the investment community (including by investment advisors, investment fund managers, sovereign wealth funds, public pension funds, universities and individual investors) to promote the divestment of, or limit investment in, the stock of companies in the oil and gas industry. There has also been pressure on lenders and other financial services companies to limit or curtail financing of companies in the oil and gas industry. Because we operate within the oil and gas industry, if these efforts continue or expand, our stock price and our ability to raise capital may be negatively impacted.

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. As of September 30, 2024,2025, our drilling rig fleet included a total of 262367 drilling rigs. Our reportable operating business segments consist of the North America Solutions segment with 228223 rigs, the International Solutions segment with 27137 rigs, and the Offshore Gulf of MexicoSolutions segment with seven offshore platform rigs as of September 30, 2024.2025. 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 2024,2025, we had 170208 active contracted rigs, of which 100131 were under a fixed-term contract and 7077 were working well-to-well, compared to 164170 contracted rigs at September 30, 2023.2024. Our long-term strategy remains focused on innovation, technology, safety, operational excellence and reliability. 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.

Our revenues are primarily derived from the capital expenditures of companies involved in the exploration, development and production of crude oil and natural gas (“E&Ps”). Generally, the level of capital expenditures is dictated by 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,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.

On Julythe 25,Closing 2024,Date, H&P andcompleted certainthe Acquisition of itsKCA whollyDeutag ownedpursuant subsidiaries entered intoto the Purchase AgreementAgreement. toH&P acquirepaid KCA Deutag for totalaggregate cash consideration of approximately $2.0 billion, which consistsconsisted of the $0.9 billion unadjusted share purchase price of $0.9 billion and $1.1 billion which was used to contemporaneously repay or redeem certain of KCA Deutag'sDeutag existing debtdebt, uponincluding, consummationas 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 Acquisition.Company’s TotalTerm considerationLoan isCredit subjectAgreement, tocash adjustmenton ashand, setand forthmonetization of our investment in theADNOC Purchase Agreement. The transaction is expected to close prior to calendar 2024 year end, subject to customary closing conditions and regulatory approvals.Drilling.

Drilling contract backlog is the expected future dayrate revenue from executed contracts. We calculate backlog as the total expected revenue from fixed-term contracts and do not include any anticipated contract renewals or expected performance bonuses as part of its calculation. Additionally, contracts that currently contain month-to-month terms are represented in our backlog as one month of unsatisfied performance obligations. In addition to depicting the total expected revenue from fixed-term contracts, backlog is indicative of expected future cash flow that the Company expects to receive regardless of whether a customer honors the fixed-term contract to expiration of a contract or decides to terminate the contract early and pay an early termination payment. In the event of an early termination payment, the timing of the recognition of backlog and the total amount of revenue may differ; however, the overall associated gross margin is preserved. As such, management finds backlog a useful metric for future planning and budgeting, whereas investors consider it useful in estimating future revenue and cash flows of the Company. As of September 30, 20242025 and 2023,2024, our contract drilling backlog was $1.5$7.0 billion and $1.4$1.5 billion, respectively. The increase in backlog at September 30, 20242025 compared to 20232024 is primarily due to the Companycompletion finalizingof contractualthe termsAcquisition. withThe Sauditotal Aramcobacklog figures for a seven super-spec FlexRig® tender award for work in the KingdomInternational Solutions and Offshore Solutions reporting segments, as of SaudiSeptember Arabia.30, 2025 include $3.4 billion and $2.3 billion, respectively, are attributable to our recently acquired subsidiary, KCA Deutag. Approximately 53.322.6 percent of the September 30, 20242025 total backlog is reasonably expected to be fulfilled in fiscal year 2025.2026.

The following table sets forth the total backlog by reportable segment as of September 30, 20242025 and 2023, and the percentage of the September 30, 2024 backlog reasonably expected to be fulfilled in fiscal year 2025:

Operating Revenue Consolidated operating revenues were $2.8$3.7 billion and $2.9$2.8 billion during fiscal years 20242025 and 2023,2024, respectively. The $0.1 billion decreaseincrease was primarily driven by lowerthe activitycompletion levels.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 20242025 were $1.6$2.5 billion, compared to direct operating expenses of $1.7$1.6 billion in fiscal year 2023.2024. The decreaseincrease was primarily attributabledriven toby the aforementionedcompletion lowerof activitythe levels.Acquisition, Additionally,resulting wein recognizedan $6.7additional $789.7 million in direct operating expenses associated withduring the fair value adjustments of contingent consideration related to earnout payments associated with our business acquisition in fiscal year 2019,ended partiallySeptember offset30, by a gain on involuntary conversion of a rig of approximately $5.5 million.2025.

ResearchOther andOperating DevelopmentExpenses ExpenseOther Researchoperating andexpenses developmentwere expense was $41.0$56.0 million and $30.0$4.5 million induring fiscal years 20242025 and 2023,2024, respectively. The increase was primarily driven by the completion of the Acquisition, resulting in an additional $51.3 million of costs associated assetwith acquisitionBENTEC™'s duringmanufacturing theand fiscalengineering year ended September 30, 2024, as well as costs related to expanded project scopes.operations.

InterestResearch and DividendDevelopment IncomeExpense InterestResearch and dividenddevelopment incomeexpense was $41.2$34.1 million and $28.4$41.0 million in fiscal years 20242025 and 2023,2024, respectively. The increasedecrease was primarily duedriven toby $11.1an millionasset inacquisition dividendscompleted receivedduring from ADNOC Drilling compared to $3.4 million inthe fiscal year 2023.ended September 30, 2024, along with reductions in project scope implemented as part of the Company’s cost-reduction initiatives.

Interest Expense Interest expense totaled $107.8 million in fiscal year 2025 and $29.1 million in fiscal year 2024 and $17.3 million in fiscal year 2023.2024. The increase was primarily attributabledriven toby approximatelyinterest $9.2expense millionassociated ofwith commitment fees recognized during the twelve months endedour September 30, 2024 relatedsenior tonotes aoffering bridgeand loanTerm facilityLoan theCredit Company entered into during the period.Agreement. For additional information regarding commitmentdebt fees,agreements, refer to Note 67—Debt to the Consolidated Financial Statements.

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 compared to an income tax expense of $159.3 million in fiscal year 2023.2024. The effective income tax rate was (115.8) percent in fiscal year 2025 compared to 28.5 percent in fiscal year 2024 compared to 26.8 percent in fiscal year 2023.2024. The effective rates differ from the U.S. federal statutory rate (21.0 percent for the fiscal years 20242025 and 20232024) primarily due to non-deductible goodwill impairment, other non-deductible permanent itemsitems, and state and foreign income taxes.

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

Direct Operating Expenses Direct operating expenses decreased by $81.1$43.8 million during fiscal year ended September 30, 2024.2025. The decrease was primarily driven by lowerreduced activity levels, partially offset by an increase in per revenue day labor and materials and supplies expense.levels.

Depreciation and Amortization Depreciation and amortization expense increaseddecreased 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 as compared to $354.0 million during the fiscal year ended September 30, 2023.2024. The increasedecrease was primarily driven by $12.7 million of accelerated depreciation in fiscal year 2024 for components on rigs that were scheduled for conversion in fiscal year 2024 compared to $2.4 million in fiscal year 2023.conversion.

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. As of MarchJune 31,30, 2026, our drilling rig fleet included a total of 337333 drilling rigs. Our reportable operating business segments consist of the North America Solutions segment with 203202 rigs, the International Solutions segment with 130127 rigs, and the Offshore Solutions segment with four offshore platform rigs as of MarchJune 31,30, 2026. 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 the secondthird quarter of fiscal year 2026, we had 204216 active contracted rigs, of which 138 were under a fixed-term contract and 66 were working well-to-well,rigs compared to 208 contracted rigs at September 30, 2025. Our long-term strategy remains focused on innovation, technology, safety, operational excellence, and reliability. 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.

During the sixnine months ended MarchJune 31,30, 2026, we received notifications to resume operations on sevenmultiple rigs in Saudi ArabiaArabia, with reactivations initially scheduled for the first half of calendar year 2026. OfAs these,of sixJune 30, we've reactivated four additional rigs areand expecteddrilling commenced on a fifth rig in early July. These reactivations increased our operated rig count in Saudi Arabia to be22 operationalactive withinrigs, and we currently expect ot maintain that timeframe,level whileof the reactivation dateactivity for the seventh rig is yet to be determined. As a resultremainder of these resumptions, the total number of operating rigs in the country is projected to reach 23 by the middle of calendarfiscal year 2026.

In October 2025, we committed to a plan to scrap certain rigs and related assets across our operating segments as part of our fleet rationalization strategy. As a result, these assets were reclassified as held-for-sale and, where applicable, written down to fair value less cost to sell. This resulted in non-cash impairment charges of $97.9 million and $2.1 million in the North America Solutions and Offshore Solutions segments, respectively during the sixnine months ended MarchJune 31,30, 2026.

Additionally, in March 2026, we identified an international drilling rig within our International Solutions segment that met the asset held-for-sale criteria and was therefore written down to fair value less cost to sell. This resulted in a non-cash impairment charge of $23.3 million during the sixnine months ended MarchJune 31,30, 2026. During the sixnine months ended MarchJune 31,30, 2026, we also recognized a non-cash impairment charge of $2.8 million relatedto towrite down assets previously classified as held‑for‑sale to their estimated fair value less costs to sell. In June 2026, we identified two international drilling rigs that met the held-for-sale withincriteria, one of which was written down to fair value less cost to sell, resulting in a non-cash impairment charge of $1.2 million in our International Solutions segment.segment during the three and nine months ended June 30, 2026.

SubsequentDuring tothe Marchthree 31,months ended June 30, 2026, we completed the sale of Utica Square, a shopping center comprising approximately 371,000 leasable square feet located in Tulsa, Oklahoma, and included within our "Other" operations, receiving net proceeds of approximately $129.0$127.7 million,million. afterAfter deductingconsidering $4.9the million in selling fees. The property was classified as held-for-sale as of March 31, 2026, with aproperty's net book value and selling costs, the transaction resulted in a $114.8 million gain during the three and nine months ended June 30, 2026. The gain on sale is recorded in Other (gain) loss on sale of $12.9assets million.within our Unaudited Condensed Consolidated Statements of Operations.

SubsequentDuring tothe Marchthree 31,and nine months ended June 30, 2026, the Company fully repaid the remaining balance of $140.0 million and $200.0 million of the outstanding underbalance on the Term Loan Credit Agreement.Agreement, respectively. As a result of thisthe repayment,repayments, no amounts remain outstanding under the Term Loan Credit Agreement.

As of MarchJune 31,30, 2026 and September 30, 2025, our total contract drilling backlog, being the expected future dayrate revenue from executed contracts, was $8.3$9.1 billion and $7.0 billion, respectively. The increase was primarily due to an extension of antwo offshore operations and maintenance contractcontracts, withconsisting of (i) a five-year termcontract extension with multiple renewal options and additional(ii) a separate four-year contract extension with multiple renewal options. Approximately 13.328.2 percent of the MarchJune 31,30, 2026 total backlog is reasonably expected to be fulfilled throughout the remainder ofthrough fiscal year 2026,2027, as a majority of our contracts are long term.

The following table sets forth the total backlog by reportable segment as of MarchJune 31,30, 2026 and September 30, 2025:

(2)Included in the International Solutions reportable segment's backlog balance at MarchJune 31,30, 2026 is $0.5$0.6 billion 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 expected suspension period.

Net Income (Loss) Attributable to Helmerich & Payne Inc. We recorded income of $75.7 million ($0.74 diluted share) for the three months ended June 30, 2026 compared to a loss of $58.6$162.8 million ($(0.591.64) diluted share) for the three months ended MarchJune 31, 2026 compared to income of $1.7 million ($0.01 diluted share) for the three months ended March 31,30, 2025.

Direct Operating Expenses, Excluding Depreciation and Amortization Direct operating expenses were $661.2$684.9 million and $701.7$704.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease was also primarily driven by lower activity levels in our North America Solutions and International Solutions segments, partially offset by higher activity levels in our Offshore Solutions segment.

Other Operating Expenses Other operating expenses were $24.8$44.5 million and $3.5$31.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase was primarily driven by $21.3a $16.2 million ofincrease incrementalin BENTEC™materials and supplies expenses within our manufacturing and engineering costs resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.operations.

Depreciation and Amortization Expense Depreciation and amortization expense increased to $180.7$181.0 million during the three months ended MarchJune 31,30, 2026 compared to $157.7$179.5 million during the three months ended MarchJune 31,30, 2025. The increase was primarily driven by $22.3depreciation millionassociated with assets placed into service over the last twelve months partially offset by a reduction in depreciable asset balances associated with the reclassification of incrementalassets depreciationto and amortization expense resulting from an additional 15 days of KCA Deutag operationsheld‑for‑sale during the threefirst monthsquarter endedof Marchfiscal 31,year 2026..2026 within our North America Solutions and International Solutions segments. For additional information regarding our held-for-sale assets, refer to Note 3—Property, Plant and Equipment.

Selling, General and Administrative Expense Selling, general and administrative expenses decreasedincreased to $71.1$65.8 million during the three months ended MarchJune 31,30, 2026 compared to $80.8$65.5 million during the three months ended MarchJune 31,30, 2025. The $9.7 million decrease was primarily driven by a $3.1 million decrease in labor and labor-related expenses and a $6.6 million decrease in other miscellaneous expenses.

Asset Impairment Charges During the three months ended MarchJune 31,30, 2026, we recorded a non-cash impairment charge of $26.1$1.2 million primarily related to certain assets that were reclassified as held‑for‑sale within our International Solutions segment.sale. The reclassification required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment. SeeFor additional information regarding our held-for-sale assets, refer to Note 3—Property, Plant and EquipmentEquipment. for additional details related toDuring the three months ended June 30, 2025, we recorded a non-cash goodwill impairment charges.charge of $173.3 million associated with our International Solutions and BENTEC™ reporting units.

Interest Expense Interest expenses werewas $25.8$24.4 million and $28.3$29.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease was mainly attributable to lower debt balances due to advancedthe paymentsrepayment onof our unsecured term loan agreementagreement. .For Seeadditional information regarding our debt agreements, refer to Note 5—Debt for additional details related to our debt agreements.Debt.

GainLoss on Investment Securities During the three months ended MarchJune 31,30, 2026, we recognized an aggregate gainloss of $14.4$16.0 million on investment securities. The aggregate gainloss primarily consisted of a $19.5$14.3 million gainloss on our investment in Tamboran due to a change in the fair value of the investment. The gain was partially offset by a $5.0 million loss on a geothermal equity security due to a changechanges in the fair value of the investment. During the three months ended MarchJune 31,30, 2025, we recognized a gainloss of $27.8$0.3 million on investment securities. The aggregate gain primarily consisted of $14.4 million, $10.2 million, and $3.2 million of gains on various geothermal investments, our investment in Galileo, and our investment in Tamboran, respectively, due to changes in the fair value of the investments.

Income Taxes For the three months ended MarchJune 31,30, 2026, we recorded income tax expense of $9.3$72.4 million (which includes a discrete tax benefit of $3.9 million primarily related to return provision adjustments) compared to income tax expense of $29.0 million (which includes a discrete tax expense of $0.5$1.3 million primarily related to equity compensation and unrecognized tax benefits) comparedreturn to provision adjustments, a decrease to the deferred state income tax expenserate ofand $41.5certain millionforeign taxes) for the three months ended MarchJune 31,30, 2025. Our statutory federal income tax rate for fiscal year 2026 and 2025 is 21.0 percent (before incremental state and foreign taxes).

Operating Revenues Operating revenues were $517.2$562.9 million and $599.7$592.2 million in the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease in operating revenues was primarily due to lower activity levels and per revenue day pricing levels.

Direct Operating Expenses Direct operating expenses decreased to $302.0$321.7 million during the three months ended MarchJune 31,30, 2026 as compared to $334.1$326.0 million during the three months ended MarchJune 31,30, 2025. This decrease was primarily due to lower activity levels as discussed above.

Depreciation and Amortization Expense Depreciation expense decreased to $83.0$83.2 million during the three months ended MarchJune 31,30, 2026 compared to $87.2$88.1 million during the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by a reduction in depreciable asset balances associated with the reclassification of assets to held‑for‑sale during the first quarter of fiscal year 2026. SeeFor additional information regarding our held-for-sale assets, refer to Note 3—Property, Plant and Equipment for additional details related to our held-for-sale assets.Equipment.

Operating Revenues Operating revenues were $218.3$250.1 million and $247.9$265.8 million in the three months ended MarchJune 31,30, 2026 and 2025, respectively. The $29.6$15.7 million decrease in operating revenues was primarily driven by lower activity levels, includingpartially theoffset impactby ofhigher aper full‑periodrevenue rigday suspensionspricing in Saudi Arabia during the three months ended March 31, 2026 compared to partial‑period rig suspensions during the three months ended March 31, 2025.levels.

Direct Operating Expenses Direct operating expenses decreased to $206.8$219.1 million during the three months ended MarchJune 31,30, 2026 as compared to $221.0$231.7 million during the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by lower activity levelslevels, aspartially discussedoffset above.by an increase in materials and supplies expense.

Depreciation and Amortization Expense Depreciation expense increased to $79.3$74.5 million during the three months ended MarchJune 31,30, 2026 compared to $57.2$66.7 million during the three months ended MarchJune 31,30, 2025. The increase was primarily driven by $19.0depreciation millionassociated ofwith incrementalassets placed into service over the last twelve months offset by a decrease in depreciation anddue amortizationto expensechanges resultingin fromfleet an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.composition.

Asset Impairment Charges During the three months ended MarchJune 31,30, 2026, we recorded a non-cash impairment charge of $26.1$1.2 million primarily related to certain assets that were reclassified as held‑for‑sale. The reclassification required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment. SeeFor additional information regarding our held-for-sale assets, refer to Note 3—Property, Plant and EquipmentEquipment. for additional details related toDuring the three months ended June 30, 2025, we recorded a non-cash goodwill impairment charges.charge of $128.4 million associated with our International Solutions reporting unit.

Operating Revenues Operating revenues were $171.4$174.4 million and $149.1$161.8 million induring the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase was primarily driven by $19.1increased millionactivity ofassociated incrementalwith operatingour revenuesmanagement resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.contracts.

Direct Operating Expenses Direct operating expenses increased to $144.5$145.2 million during the three months ended MarchJune 31,30, 2026 as compared to $122.9$139.0 million during the three months ended MarchJune 31,30, 2025. The increase was primarily driven by $20.6increased millionactivity oflevels incrementalas directdescribed operating expenses resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.above.

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 of $48.6$69.8 million and $45.5$42.9 million during the three months ended MarchJune 31,30, 2026 and 2025, respectively, consisted of $19.5$17.3 million and $17.9$16.3 million in intercompany premium revenues recorded by the Captives, respectively. These revenues were eliminated upon consolidation. During the three months ended MarchJune 31,30, 2026 and 2025, operating revenues also consisted of $26.4$52.5 million and $24.7$23.7 million from BENTEC's manufacturing and engineering operations, respectively, of which, $3.2$4.4 million and $7.9$4.5 million are related to intercompany revenues that were eliminated upon consolidation, respectively.

Direct Operating Expenses Direct operating expenses of $50.6$64.1 million and $43.1$63.0 million during the three months ended MarchJune 31,30, 2026 and 2025, respectively, consisted of $3.7$(3.7) million and $10.3$29.3 million, respectively, in adjustments to accruals for estimated losses allocated to the Captives, rig and casualty insurance premiums of $11.8$12.6 million and $11.2$10.1 million, respectively, and medical stop loss expenses of $4.1$4.8 million and $5.2$4.4 million, respectively. The change to accruals for estimated losses was primarily due to actuarial valuation adjustments by our third-party actuary. During the three months ended MarchJune 31,30, 2026, direct operating expenses also consisted of $26.9$48.0 million from BENTEC's manufacturing and engineering operations, of which $3.2$4.4 million is related to intercompany expenses that were eliminated in consolidation. During the three months ended MarchJune 31,30, 2025, direct operating expenses also consisted of $12.2$20.6 million from BENTEC's manufacturing and engineering operations.

It is important to note that results presented for the sixnine months ended MarchJune 31,30, 2025 reflect a full 182273 days of H&P operations and 75166 days of KCA Deutag operations, as the Acquisition was completed on January 16, 2025.

Net Income (Loss) Attributable to Helmerich & Payne Inc. We recorded a loss of $155.3$79.6 million ($(1.570.81) diluted share) for the sixnine months ended MarchJune 31,30, 2026 compared to incomea loss of $56.4$106.3 million ($0.56$(1.08) diluted share) for the sixnine months ended MarchJune 31,30, 2025.

Operating Revenue During the sixnine months ended MarchJune 31,30, 2026 and 2025, consolidated operating revenues were $1.9$3.0 billion and $1.7$2.7 billion, respectively. The increase was primarily driven by completion of the Acquisition, resulting in an additional $352.8$367.3 million of revenue during the sixnine months ended MarchJune 31,30, 2026. The increase was partially offset by lower activity levels in the North America Solutions segment.

Direct Operating Expenses, Excluding Depreciation and Amortization Direct operating expenses were $1.3$2.0 billion and $1.1$1.8 billion for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. The increase was primarily driven by completion of the Acquisition, resulting in an additional $296.5$316.7 million of direct operating expenses during the sixnine months ended MarchJune 31,30, 2026. The increase was partially offset by lower activity levels in the North America Solutions segment.

Other Operating Expenses Other operating expenses were $56.1$100.5 million and $4.6$35.7 million for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. The increase was primarily driven by completion of the Acquisition, resulting in an additional $51.3$65.9 million of costs associated with BENTEC™ manufacturing and engineering operations during the sixnine months ended MarchJune 31,30, 2026.

Depreciation and Amortization Expense Depreciation and amortization expense increased to $362.7$543.6 million during the sixnine months ended MarchJune 31,30, 2026 compared to $256.7$436.2 million during the sixnine months ended MarchJune 31,30, 2025. The increase was primarily driven by completion of the Acquisition, resulting in an additional $101.6$106.8 million of depreciation and amortization expense during the sixnine months ended MarchJune 31,30, 2026.

Selling, General and Administrative Expense Selling, general and administrative expenses decreased to $141.5$207.4 million during the sixnine months ended MarchJune 31,30, 2026 compared to $143.9$209.4 million during the sixnine months ended MarchJune 31,30, 2025. The decrease was primarily driven by overall cost reductions, partially offset by higher selling, general and administrative expenses within our operating segments, including the impact of expanded operations following the completion of the Acquisition.

Asset Impairment Charges During the sixnine months ended MarchJune 31,30, 2026, we recorded a non-cash impairment charge of $129.2$130.3 million primarily related to certain assets that were reclassified as held‑for‑sale within our North America Solutions, International Solutions, and Offshore Solutions segments. The reclassifications required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment. SeeFor additional information regarding our held-for-sale assets, refer to Note 3—Property, Plant and EquipmentEquipment. for additional details related toDuring the nine months ended June 30, 2025, we recorded asset impairment charges.charges of $175.1 million primarily driven by a non-cash goodwill impairment charge of $173.3 million associated with our International Solutions and BENTEC™ reporting units.

Income Taxes For the sixnine months ended MarchJune 31,30, 2026, we recorded income tax expense of $20.5$92.9 million (which includes a discrete tax expense of $4.8$0.9 million primarily related to equity compensationcompensation, return to provision adjustments, and unrecognized tax benefits) compared to income tax expense of $63.1$92.1 million (which includes a discrete tax expense of $0.7$2.1 million related to equity compensationcompensation, return to provision adjustments, a decrease to the deferred state income tax rate and certain foreign taxes) for the sixnine months ended MarchJune 31,30, 2025. Our statutory federal income tax rate for fiscal year 2026 and 2025 is 21.0 percent (before incremental state and foreign taxes).

Operating Revenues Operating revenues were $1.1$1.6 billion and $1.2$1.8 billion induring the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease in operating revenues was primarily due to lower activity levels and per revenue day pricing levels.

Direct Operating Expenses Direct operating expenses decreased to $627.2$948.9 million during the sixnine months ended MarchJune 31,30, 2026 as compared to $666.4$992.5 million during the sixnine months ended MarchJune 31,30, 2025. This decrease was primarily due to lower activity levels as discussed above.