GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

9 Months Ended

Jun. 30, 2019

Condensed Financial Information Disclosure [Abstract]

GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

In March 2015, HPIDC, a wholly-owned subsidiary of the Company, issued senior unsecured notes in an aggregate principal amount of $500 million. In December 2018, the Company completed the Exchange Offer, pursuant to which $487.1 million aggregate principal amount of the HPIDC notes was exchanged for new senior unsecured notes of the Company in an equal aggregate principal amount (see Note 6—Debt). The $12.9 million of remaining HPIDC notes continue to be fully and unconditionally guaranteed by the Company. No subsidiaries of the Company currently guarantee such notes, subject to certain provisions that if any subsidiary guarantees certain other debt of HPIDC or the Company, then such subsidiary will provide a guarantee of the obligations under such notes.

In connection with the Exchange Offer, HPIDC fully and unconditionally guaranteed the Company’s newly issued $487.1 million of notes. No other subsidiaries of the Company currently guarantee such notes, subject to certain provisions that if any subsidiary guarantees certain other debt of the Company, then such subsidiary will provide a guarantee of the obligations under such notes. In February 2019, approximately $487.0 million aggregate principal amount of such notes was subsequently exchanged in the Registered Exchange Offer for substantially identical new notes of the Company registered under the Securities Act. See Note 6-–Debt to the Unaudited Condensed Consolidated Financial Statements for more information about the Registered Exchange Offer.

In connection with the notes described above, we are providing the following unaudited condensed consolidating financial information in accordance with the SEC disclosure requirements, so that separate financial statements of HPIDC are not required to be filed. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements. Unaudited condensed consolidating financial information for HPIDC and the Company is shown in the tables below.

CONDENSED CONSOLIDATING BALANCE SHEETS

(Unaudited)



	June 30, 2019
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	94,354		$	224,838		$	15,583	$	—		$	334,775
Short-term investments	—			44,071			1,677		—			45,748
Accounts receivable, net	(291		)	462,885			46,582		(993		)	508,183
Inventories of materials and supplies, net	—			118,530			31,596		—			150,126
Prepaid expenses and other	14,414			19,160			43,684		148			77,406
Total current assets	108,477			869,484			139,122		(845		)	1,116,238

Investments	15,774			32,226			291		—			48,291
Property, plant and equipment, net	45,450			4,270,440			267,783		—			4,583,673
Intercompany receivables	299,182			1,959,592			522,577		(2,781,351		)	—
Goodwill	—			—			67,902		—			67,902
Intangible assets, net	—			—			69,093		—			69,093
Other assets	318			6,471			5,393		—			12,182
Investment in subsidiaries	5,926,270			277,550			—		(6,203,820		)	—
Total assets	$	6,395,471		$	7,415,763		$	1,072,161	$	(8,986,016	)	$	5,897,379

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	84,703		$	45,946		$	3,789	$	(361	)	$	134,077
Accrued liabilities	25,190			205,630			26,113		(484		)	256,449
Total current liabilities	109,893			251,576			29,902		(845		)	390,526

Noncurrent liabilities:
Long-term debt, net	482,962			8,689			—		—			491,651
Deferred income taxes	(4,273		)	783,109			48,191		—			827,027
Intercompany payables	1,690,102			259,027			832,122		(2,781,251		)	—
Other	21,733			47,537			9,220		—			78,490
Noncurrent liabilities - discontinued operations	—			—			14,631		—			14,631
Total noncurrent liabilities	2,190,524			1,098,362			904,164		(2,781,251		)	1,411,799

Shareholders’ equity:
Common stock	11,208			100			—		(100		)	11,208
Additional paid-in capital	501,585			52,437			1,040		(53,477		)	501,585
Retained earnings	3,750,785			6,025,212			137,055		(6,162,267		)	3,750,785
Accumulated other comprehensive income (loss)	(16,085		)	(11,924		)	—		11,924			(16,085		)
Treasury stock, at cost	(152,439		)	—			—		—			(152,439		)
Total shareholders’ equity	4,095,054			6,065,825			138,095		(6,203,920		)	4,095,054
Total liabilities and shareholders’ equity	$	6,395,471		$	7,415,763		$	1,072,161	$	(8,986,016	)	$	5,897,379



	September 30, 2018
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	273,214	$	11,141	$	—		$	284,355
Short-term investments	—			41,461		—		—			41,461
Accounts receivable, net	(29		)	499,644		65,859		(272		)	565,202
Inventories of materials and supplies, net	—			127,154		30,980		—			158,134
Prepaid expenses and other	20,783			10,649		35,539		(573		)	66,398
Total current assets	20,754			952,122		143,519		(845		)	1,115,550

Investments	16,200			82,496		—		—			98,696
Property, plant and equipment, net	46,859			4,515,077		295,446		—			4,857,382
Intercompany receivables	161,532			2,024,652		294,206		(2,480,390		)	—
Goodwill	—			—		64,777		—			64,777
Intangible assets, net	—			—		73,207		—			73,207
Other assets	268			907		4,080		—			5,255
Investment in subsidiaries	5,981,197			172,513		—		(6,153,710		)	—
Total assets	$	6,226,810		$	7,747,767	$	875,235	$	(8,634,945	)	$	6,214,867

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	83,819		$	43,626	$	5,483	$	(264	)	$	132,664
Accrued liabilities	43,449			164,542		37,093		(580		)	244,504
Total current liabilities	127,268			208,168		42,576		(844		)	377,168

Noncurrent liabilities:
Long-term debt, net	—			493,968		—		—			493,968
Deferred income taxes	(7,112		)	834,714		25,534		—			853,136
Intercompany payables	1,701,694			178,759		599,837		(2,480,290		)	—
Other	22,225			48,836		22,545		—			93,606
Noncurrent liabilities - discontinued operations	—			—		14,254		—			14,254
Total noncurrent liabilities	1,716,807			1,556,277		662,170		(2,480,290		)	1,454,964

Shareholders’ equity:
Common stock	11,201			100		—		(100		)	11,201
Additional paid-in capital	500,393			52,437		1,040		(53,477		)	500,393
Retained earnings	4,027,779			5,910,955		169,449		(6,080,404		)	4,027,779
Accumulated other comprehensive income	16,550			19,830		—		(19,830		)	16,550
Treasury stock, at cost	(173,188		)	—		—		—			(173,188		)
Total shareholders’ equity	4,382,735			5,983,322		170,489		(6,153,811		)	4,382,735
Total liabilities and shareholders’ equity	$	6,226,810		$	7,747,767	$	875,235	$	(8,634,945	)	$	6,214,867

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Unaudited)



	Three Months Ended June 30, 2019
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating revenue	$	—		$	633,284		$	58,870		$	(4,180	)	$	687,974
Operating costs and other	2,942			780,880			76,383			(4,357		)	855,848
Operating loss from continuing operations	(2,942		)	(147,596		)	(17,513		)	177			(167,874		)

Other income (expense), net	(35		)	(12,639		)	330			(177		)	(12,521		)
Interest expense	(6,083		)	(132		)	(42		)	—			(6,257		)
Equity in net loss of subsidiaries	(145,440		)	(3,417		)	—			148,857			—
Loss from continuing operations before income taxes	(154,500		)	(163,784		)	(17,225		)	148,857			(186,652		)

Income tax (benefit) provision	183			(43,271		)	11,057			—			(32,031		)
Loss from continuing operations	(154,683		)	(120,513		)	(28,282		)	148,857			(154,621		)

Income from discontinued operations before income taxes	—			—			7,244			—			7,244
Income tax provision	—			—			7,306			—			7,306
Loss from discontinued operations	—			—			(62		)	—			(62		)
Net loss	$	(154,683	)	$	(120,513	)	$	(28,344	)	$	148,857		$	(154,683	)



	Three Months Ended June 30, 2018 as adjusted (Note 2)
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating revenue	$	—		$	574,252		$	74,647		$	(27	)	$	648,872
Operating costs and other	4,151			557,994			80,639			(218		)	642,566
Operating income (loss) from continuing operations	(4,151		)	16,258			(5,992		)	191			6,306

Other income (expense), net	107			1,854			278			(191		)	2,048
Interest expense	(108		)	(5,117		)	(768		)	—			(5,993		)
Equity in net loss of subsidiaries	(4,883		)	(2,093		)	—			6,976			—
Income (loss) from continuing operations before income taxes	(9,035		)	10,902			(6,482		)	6,976			2,361

Income tax provision (benefit)	(1,027		)	17,384			(5,822		)	—			10,535
Loss from continuing operations	(8,008		)	(6,482		)	(660		)	6,976			(8,174		)

Income from discontinued operations before income taxes	—			—			8,383			—			8,383
Income tax provision	—			—			8,217			—			8,217
Income from discontinued operations	—			—			166			—			166
Net loss	$	(8,008	)	$	(6,482	)	$	(494	)	$	6,976		$	(8,008	)



	Nine Months Ended June 30, 2019
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating revenue	$	—		$	1,951,221		$	202,447		$	(4,228	)	$	2,149,440
Operating costs and other	8,526			1,937,425			226,824			(4,896		)	2,167,879
Operating income (loss) from continuing operations	(8,526		)	13,796			(24,377		)	668			(18,439		)

Other income (expense), net	(77		)	(45,275		)	1,602			(668		)	(44,418		)
Interest income (expense)	(13,202		)	(4,844		)	901			—			(17,145		)
Equity in net income (loss) of subsidiaries	(55,331		)	6,254			—			49,077			—
Loss from continuing operations before income taxes	(77,136		)	(30,069		)	(21,874		)	49,077			(80,002		)

Income tax (benefit) provision	(2,303		)	(11,884		)	8,585			—			(5,602		)
Loss from continuing operations	(74,833		)	(18,185		)	(30,459		)	49,077			(74,400		)

Income from discontinued operations before income taxes	—			—			22,798			—			22,798
Income tax provision	—			—			23,231			—			23,231
Loss from discontinued operations	—			—			(433		)	—			(433		)
Net loss	$	(74,833	)	$	(18,185	)	$	(30,892	)	$	49,077		$	(74,833	)



	Nine Months Ended June 30, 2018 as adjusted (Note 2)
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating revenue	$	—		$	1,584,970		$	205,537		$	(64	)	$	1,790,443
Operating costs and other	12,360			1,542,815			227,186			(669		)	1,781,692
Operating income (loss) from continuing operations	(12,360		)	42,155			(21,649		)	605			8,751

Other income, net	210			5,226			1,019			(605		)	5,850
Interest expense	(274		)	(15,368		)	(2,152		)	—			(17,794		)
Equity in net income of subsidiaries	494,574			3,191			—			(497,765		)	—
Income (loss) from continuing operations before income taxes	482,150			35,204			(22,782		)	(497,765		)	(3,193		)

Income tax (benefit) provision	1,931			(459,571		)	(36,388		)	—			(494,028		)
Income from continuing operations	480,219			494,775			13,606			(497,765		)	490,835

Income from discontinued operations before income taxes	—			—			9,127			—			9,127
Income tax provision	—			—			19,743			—			19,743
Loss from discontinued operations	—			—			(10,616		)	—			(10,616		)
Net income	$	480,219		$	494,775		$	2,990		$	(497,765	)	$	480,219

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)



	Three Months Ended June 30, 2019
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net loss	$	(154,683	)	$	(120,513	)	$	(28,344	)	$	148,857	$	(154,683	)
Other comprehensive income, net of income taxes:
Minimum pension liability adjustments, net	78			148			—			—		226
Other comprehensive income	78			148			—			—		226
Comprehensive loss	$	(154,605	)	$	(120,365	)	$	(28,344	)	$	148,857	$	(154,457	)



	Three Months Ended June 30, 2018
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net loss	$	(8,008	)	$	(6,482	)	$	(494	)	$	6,976	$	(8,008	)
Other comprehensive income, net of income taxes:
Unrealized depreciation on securities, net	—			13,826			—			—		13,826
Minimum pension liability adjustments, net	101			236			—			—		337
Other comprehensive income	$	101		$	14,062		$	—		$	—	$	14,163
Comprehensive income (loss)	$	(7,907	)	$	7,580		$	(494	)	$	6,976	$	6,155



	Nine Months Ended June 30, 2019
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net loss	$	(74,833	)	$	(18,185	)	$	(30,892	)	$	49,077	$	(74,833	)
Other comprehensive income, net of income taxes:
Minimum pension liability adjustments, net	233			442			—			—		675
Other comprehensive income	233			442			—			—		675
Comprehensive loss	$	(74,600	)	$	(17,743	)	$	(30,892	)	$	49,077	$	(74,158	)



	Nine Months Ended June 30, 2018
(in thousands)	Helmerich & Payne, Inc. (Guarantor)		Helmerich & Payne International Drilling Co. (Issuer)		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	480,219	$	494,775	$	2,990	$	(497,765	)	$	480,219
Other comprehensive income, net of income taxes:
Unrealized appreciation on securities, net	—		5,657		—		—			5,657
Minimum pension liability adjustments, net	295		690		—		—			985
Other comprehensive income	295		6,347		—		—			6,642
Comprehensive income	$	480,514	$	501,122	$	2,990	$	(497,765	)	$	486,861

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Unaudited)



	Nine Months Ended June 30, 2019
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net cash provided by (used in) operating activities	$	(15,599	)	$	657,016		$	17,954		$	—	$	659,371

Cash flows from investing activities:
Capital expenditures	(7,355		)	(389,615		)	(6,600		)	—		(403,570		)
Purchase of short-term investments	—			(70,175		)	(1,677		)	—		(71,852		)
Payment for acquisition of business, net of cash acquired	(2,781		)	—			—			—		(2,781		)
Proceeds from sale of short-term investments	—			68,015			—			—		68,015
Intercompany transfers	7,355			(7,355		)	—			—		—
Proceeds from asset sales	6			32,585			3,636			—		36,227
Net cash used in investing activities	(2,775		)	(366,545		)	(4,641		)	—		(373,961		)

Cash flows from financing activities:
Intercompany transfers	235,058			(235,058		)	—			—		—
Dividends paid	(235,058		)	—			—			—		(235,058		)
Debt issuance costs paid	(3,912		)	—			—			—		(3,912		)
Payments for employee taxes on net settlement of equity awards	(6,420		)	—			—			—		(6,420		)
Proceeds from stock option exercises	2,901			—			—			—		2,901
Other intercompany transfers	111,339			(103,788		)	(7,551		)	—		—
Net cash provided by (used in) financing activities	103,908			(338,846		)	(7,551		)	—		(242,489		)

Net increase (decrease) in cash and cash equivalents and restricted cash	85,534			(48,375		)	5,762			—		42,921
Cash and cash equivalents and restricted cash, beginning of period	6,037			273,214			46,934			—		326,185
Cash and cash equivalents and restricted cash, end of period	$	91,571		$	224,839		$	52,696		$	—	$	369,106



	Nine Months Ended June 30, 2018 as adjusted (Note 2)
(in thousands)	Helmerich & Payne, Inc. (Guarantor)			Helmerich & Payne International Drilling Co. (Issuer)			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net cash provided by operating activities	$	1,914		$	350,557		$	18,957		$	—	$	371,428

Cash flows from investing activities:
Capital expenditures	(8,725		)	(306,278		)	(7,655		)	—		(322,658		)
Purchase of short-term investments	—			(52,159		)	—			—		(52,159		)
Payment for acquisition of business, net cash acquired	(47,886		)	—			—			—		(47,886		)
Proceeds from sale of short-term investments	—			52,470			—			—		52,470
Intercompany transfers	56,611			(56,611		)	—			—		—
Proceeds from asset sales	—			26,737			1,312			—		28,049
Net cash used in investing activities	—			(335,841		)	(6,343		)	—		(342,184		)

Cash flows from financing activities:
Intercompany transfers	230,368			(230,368		)	—			—		—
Dividends paid	(230,368		)	—			—			—		(230,368		)
Payments for employee taxes on net settlement of equity awards	(5,978		)	—			—			—		(5,978		)
Proceeds from stock option exercises	5,160			—			—			—		5,160
Payment of contingent consideration from acquisition of business	—			—			(10,625		)	—		(10,625		)
Net cash used in financing activities	(818		)	(230,368		)	(10,625		)	—		(241,811		)

Net increase (decrease) in cash and cash equivalents and restricted cash	1,096			(215,652		)	1,989			—		(212,567		)
Cash and cash equivalents and restricted cash, beginning of period	9,385			507,504			43,620			—		560,509
Cash and cash equivalents and restricted cash, end of period	$	10,481		$	291,852		$	45,609		$	—	$	347,942